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Procurement: Supply Management Procurement Purchasing

Procurement involves acquiring goods and services from third parties through direct purchasing, competitive bidding, or tendering processes. It ensures the right quality and quantity are obtained. Supply management handles the entire production flow from raw materials to finished goods in the most economical way. It relies on various functions working together in an integrated manner. Purchasing is the organized acquisition of goods and services on behalf of an entity to obtain needed items on time and at a reasonable cost, especially important for manufacturers.

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67 views14 pages

Procurement: Supply Management Procurement Purchasing

Procurement involves acquiring goods and services from third parties through direct purchasing, competitive bidding, or tendering processes. It ensures the right quality and quantity are obtained. Supply management handles the entire production flow from raw materials to finished goods in the most economical way. It relies on various functions working together in an integrated manner. Purchasing is the organized acquisition of goods and services on behalf of an entity to obtain needed items on time and at a reasonable cost, especially important for manufacturers.

Uploaded by

Lorraine Lagasca
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Procurement

 Supply Management
 Procurement
 Purchasing
PRO
CURE
ME NT
Definition of
Procurement

• Procurement can be defined as the process of acquiring


goods and services from a third party vendor through
direct purchasing, competitive bidding, and tendering
process while ensuring the right quality and quantity.

• Procurement is most commonly associated with


businesses because companies needs to solicit services or
purchase goods usually on a large scale.
Process of Procurement

Identification of
1 6
Delivery of the Purchase
Requirement Order

2 7
Determination of the
Expediting
Specifics of the Req.

3 Sourcing 8 Receive and Inspection

Negotiation and Finalize


4 of Price and Terms 9 Payment Process

Purchase Requisition Record Keeping and


5 and Order 10 Review
c e s Direct Procurement

ff e re n Purchase of the input that a


Di business requires in order to
manufacture its end product

Indirect Procurement Service Procurement

Procurement of the services or Procuring and managing


input that are not directly contingent workforce and
used in the manufacturing consulting services
SUPP
MAN LY
AGE
MEN
T
Definition of Supply
Management

• Supply management is the handling of the entire production flow


of goods and services that includes all processes for converting raw
materials into final products.

• Supply Management practice depends heavily on industrial


engineering, systems engineering, operation management,
logistics, procurement, information technology and marketing,
and strives for an integrated approach. It is the broad range of
activities required to plan, control and execute a product’s flow
from materials to production to distribution in the most
economical way possible.
Process of Supply Management

1 The plan or strategy

2 The source of raw materials or services

3 Manufacturing

4 Delivery and logistics

The return system for defective or


5 unwanted products
PURC
HAS
IN G
Definition of Purchasing

• Purchasing is the organized acquisition of goods and services on


behalf of the buying entity.

• Purchasing activities are needed to ensure that needed items are


obtained in a timely manner and at a reasonable cost.

• A purchasing department is especially necessary in a


manufacturing business, where large amounts of raw materials
and components must be obtained on a recurring basis.
Process of Purchasing

1 Identifying Needs

2 Sourcing

3 Establishing Sale Contract

4 Delivering

5 Requesting Payment
Types of Purchasing
The consumer
purchases for the The purchaser is
consumption of buying to convert
themselves, then material into
they fall into this finished goods and Government
very important Facilitated by product. agencies or
category class. middlemen for the institutions are very
intention of re-sale important, critical,
to meet others they purchase in
requirements. Industrial bulk for public
Personal Purchases Purchasing utilities.

Mercantile Institutionalized or
Purchasing Government
Purchasing
Procurement Purchasing Supply
Management

Procurement gives Purchasing focuses Supply management role

more importance to an more on the cost than encapsulates everything from

the raw material stage until


item’s value than how value it possesses.
the final product is in the
much it costs.
hands of a customer.
Thank you
for
Listening

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