What is PROCUREMENT

Procurement is the act of finding acquiring buying goods services or works
from an external source often via tendering or competitive bidding process
the process is used to ensure the buyer receives goods services or works the
best possible price.

when aspects such as quality quantity time and location are compared
corporations and public bodies often defined processes intended to promote
fair and open competition for their business while minimizing risk such as
exposure to fraud and collusion almost all purchasing decisions include factors
such as delivery and handling marginal benefit and price fluctuations.

Procurement generally involves making buying decisions under conditions of
scarcity if good data is available it is good practice to make use of economic
analysis lessons such as cost-benefit analysis or cost utility analysis an
important distinction should be made between analyses without risk and those
with risk where risk is involved either in the costs or the benefits.

The concept of best value should be employed procurement activities are often split into two distinct categories direct and indirect spend direct spend refers to production related procurement that encompasses all items that are part of finished products such as raw material components and parts the first category being direct production related procurement and the second being
indirect non production related procurement direct procurement which is
the focus in supply chain management directly affects the production process
of manufacturing firms in contrast indirect procurement activities concern operating resources that accompany purchases to enable its operations.

In direct procurement comprises a wide variety of goods and services from
standardized items like office supplies and machine lubricants to complex and
costly products and services like heavy equipment consulting services and
outsourcing services procurement is one component of the broader concept of
sourcing and acquisition typically procurement is viewed as more tactical
in nature the process of physically buying a product or service and sourcing
an acquisition are viewed that's more strategic and encompassing the Institute
of Supply Management defines strategic sourcing as the process of identifying
sources that could provide needed products or services for the acquiring
organization the term procurement used to reflect the entire purchasing process
or cycle and not just the tactical components is M defines procurement as
an organizational function that includes specifications development value
analysis supplier market research negotiation buying activities contract
administration.

Inventory control traffic receiving in stores purchasing refers to
the major function of an organization that is responsible for acquisition of
required materials services and equipment the United States defense acquisition University Dell defines procurement as the act of buying goods
and services for the government thou defines acquisition as the
conceptualization initiation design development test contracting production
deployment logistics support LS modification and disposal of weapons and
other systems supplies or services including construction to satisfy.

Department of Defense needs intended for youth in or in support of military
missions acquisition and sourcing are therefore much wider concepts and
procurement multiple sourcing business models exist and acquisition models exist