Procurement is defined as the act of obtaining or procuring something. Your Sourcing team and your Procurement team work hand in hand to create the pathway for an efficient and successful supply chain experience.
What does the Procurement team do?
In general terms, Procurement is taking items from the 'Need State' using a system (P2P, S2P, etc) to help the end user create a Purchase Requisition. The requisition is then moved through the approval chain and, when approved, turned into a Purchase Order. Once the vendor has received and processed the order, physical items are then shipment tracked, received and matched with an invoice (3 Way Match, P.O., Receipt and Invoice). After this process is complete, the invoice is then sent to the Accounts Payable team for payment.
Sounds simple right?
The process sounds simple, however it is a lot more complicated than it sounds. The procurement of items looks different for every business model however the general outline remains the same. In today's world, procurement has become a challenge with many new obstacles daily. As the world shifts, so must the businesses and vendors in which we have relationships with. Businesses want to move fast which is great for growth but could reek havoc on success without a solid foundation. The pandemic has created new timelines, renegotiated contracts, supply and demand issues, inflation, and so on which has highlighted a constant strain on the world supply chain to keep up, ultimately affecting the bottom line profits. You need a strong Procurement team with
background knowledge, experience and skill, who can think outside of the box. They need to be able to problem solve quickly and efficiently while maintaining a consistent positive flow of product at the best rates possible.
Is your Procurement team making the cut?