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Procurement Management

Introduction 
A Procurement Management Process is a method by which items are purchased from external suppliers. The procurement management process involves managing the ordering, receipt, review and approval of items from suppliers. 

E-Procurement
Procurement refers the managerial activity that goes beyond the simple act of buying and includes the planning and policy activities, research and development, service selection, etc. Thus procurement is buying material/service of the right quality, the right quantity, at the right time, at the right price from the right source with delivery at the right place (figure 2.4). 

E-procurement simply means buying products and services over the internet. In this sense, most companies are already using e-procurement. However, the term is fast becoming - 'the automation of the whole purchasing process and making order and requisition information available along the entire length of the value chain via the internet'. 

E-procurement reduces the operational costs across the whole supply chain and improves management control. A company needs a financial solution first so that it can use e-procurement to leverage advantages right through to customers, suppliers, and other partners. The objective is a true end-to-end solution that enables companies to enter into truly collaborative relationships with customers and suppliers.

Figure 2.5 depicts the e-procurement concept. These are as below: 
  1. Analyse: Conduct company-wide spending analyses to identify and prioritise savings opportunities, including supply base rationalisation and purchase aggregation (buying in bulk). 
  2. Plan: Develop optional sourcing and procurement strategies based on existing and future purchase requirements across the enterprise. 
  3. Source: Identify, evaluate, negotiate, and configure optional trading relationships. 
  4. Buy: Communicate, execute, and settle payment against negotiated trading agreements and contracts.
  5. Monitor: Track and enforce internal content compliance and external supplier performance. 
  6. Collaboration: Engage in intra- and inter-enterprise collaboration across all procurement processes. 
  7. Process Control: Standardise and enforce common processes across the enterprise and supply chain. 
  8. Procurement Intelligence: Provide a single point of truth of all procurement-related information.
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