Procurement is defined as a systematic act of
acquiring items that requires preparation,
processing of demand of supplies and equipment
as well as obtaining the receipt & getting the
approval of payment from the management.
3. To obtain the required Supplies & Equipment's in affordable cost.
To get good durable items with a high quality & of a good brand.
To ensure that the items are delivered at the required time at a
To delegate and circulate the total work load in a well planned
manner to avoid the overburden.
To maximize the inventory management by adopting the
scientifically proven procedures.
Objectivesof Procurement System
It is defined as the supervision of stocked up items, whether they are adequate in terms of
supply and accessibility, in the stores so that the items are readily available when needed.
1. To provide consistent optimum equipment supply services with maximum efficiency &
2. To provide good cohesion between the suggested & demanded material.
1. Determination of quantity of order
2. Determination of recorder point of record level.
1. To reduce financial investment.
2. To facilitate smooth production.
3. If an offer of discount comes for a bulk purchase, to decide whether to go for it or not.
It's the series of processes that are essential to get
products or services from requisition to Purchase
Order and Invoice approval.
Every Procurement management process consists of 3
Ps', namely :
What Is a Procurement Process?
6. • Process
The list of rules that need to be followed while reviewing,
ordering, obtaining, and paying for goods/services.
Checkpoints/steps increase with the complexity of the purchase.
These are stakeholders and their specific responsibility in the
procurement cycle. They take care of initiating or authorizing
every stage of the process. The number of stakeholders involved
is directly proportional to the risk and value of the purchase.
This refers to the paperwork and documentation involved in
every stage of the procurement process flow, all of which are
collected and stored for reference and auditing reasons.
What Is the ProcurementProcessFlow?
To keep the procurement
management process fair,
transparent, and efficient, a good
understanding of the procurement
process flow is key. Although the
procurement process of
organizations differs from each
other, the flowchart below sums up
the important steps in a
Every procurement management process involves
several elements, including requirements determination,
supplier research, value analysis, raising a purchase request,
reviewal phase, conversion to purchase order, contract
administration, monitoring/evaluation of received order, three-
way matching, payment fulfilment, and record keeping. These
are the important stages in the procurement process flow:
Stepsinvolvedin a ProcurementProcess
Stages of Procurement Process
• Step0: Needs Recognition
The preliminary step in a procurement process is recognizing the need for a
product. Be it a brand new order or a recurring purchase, needs are analyzed and the
availability is double-checked before creating a request for purchase.
• Step1: Purchase Requisition
Typically, a procurement process starts with a purchase requisition. The requester
sends a request for procurement (paper form, electronic, or phone) to the purchasing
• Step2: Reviewof Request
The purchase request is then reviewed by the procurement/finance team. Approved
requests become POs, while rejected requests are sent back to the requester with the reason for
rejection. All these can be handled with a simple purchase order app
12. • Step3: Budget Approval
In enterprises, once the procurement team raises a PO, it is forwarded to the accounting
department to receive budget approval.
• Step4: Quotation Requests
Once the budget is approved, the procurement team forwards several requests for quotation
(RFQ) to vendors with the intention to receive and compare bids to shortlist the perfect vendor.
• Step 5: Negotiation & Contract
Once a vendor is selected, the contract negotiation and signing are completed, and the
purchase order is then forwarded to the vendor. A legally binding contract activates right after a
vendor accepts a PO and acknowledges it.
• Step 6: Receive Goods/Services
The vendor delivers the promised goods/services within the stipulated timeline. After
receiving them, the purchaser examines the order and notifies the vendor of any issues with the
13. • Step7: Three-Way Matching
At this step, three documents purchase orders,
packaging slips (that arrive with the order), and vendor invoices
are lined up and reconciled to pinpoint discrepancies and ensure
that the transaction is accurate. Discrepancies should be
addressed once they are discovered.
• Step8: Invoice Approval Payment
Once three-way matching is complete, the invoice is
approved and forwarded to payment processing depending on
• Step9: RecordKeeping
After the payment process, buyers make a record of it
for bookkeeping and auditing. All appropriate documents right
from purchase requests to approved invoices are stored in a
Check for the availability of latest technological supplies.
Facilitates & provision for maintenance of equipment available
all the time.
Affordable expense for post warranty repair.
Possibilities to upgrade the equipment.
Obtaining the goods from a reputed manufacturer.
Availability of non durable goods.
Goods available at low affordable or reasonable cost.
Availability of installation guidelines along with the supplies.
Procurement of Equipment's
16. Space provided for storage should be adequate according to the type of
Equipment should be labelled & stored in correct place & in proper manner
from where it can be easily accessible.
Separate cataloguing system in alphabetical order should be made to identify
the supplies quickly.
Follow the principal of first-in goods to first-out.
Adopt the standardized system of double shelf system to handle the storing of
There should be a system of reservation of stock to manage the lack of stock
crises. Also keep buffer time to get adequate stock.
Criteria for storage