Procurement and supply chain management involve a broad range of roles contributing to a company receiving the products and services they need to run efficient daily operations. When businesses don’t have time to source their own products and services, they rely on procurement specialists to do it for them. Understanding how procurement and the supply chain work might ensure you make the right decisions for your business. Learn more about procurement and supply chain roles below.
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Product and Service Purchasing
In this article, you can learn about an example of a business specializing in procurement with the critical job of buying products and services. This business uses proprietary company-developed software to source parts and accessories for aviation programs.
Product and service purchasing is one of the most integral parts of procurement. Not only do procurement companies buy products and services to keep their clients happy, but they also make sure suppliers comply with legal and company policies.
The job of a procurement analyst is to meet with vendors, test products, negotiate possible supply contracts, and create cost reports. Their job is essentially to ensure the viability of products for clients and ensure they’re going to meet their practical and financial needs.
Procurement Process Management
Procurement process management is a role involving managing internal processes. Employees with roles in this area are tasked with the critical job of ensuring current suppliers are compliant and bringing new suppliers on board as required.
Most of the best procurement businesses have access to legal counsel. Their job is to provide legal guidance, conduct research, draft any required legal correspondence, and ensure law compliance.
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Building Supplier Relationships
Building robust supplier relationships is crucial for procurement businesses to be able to deliver on their promises to their clients. People holding supplier relation roles work hard to keep suppliers happy while also ensuring they are pricing their products competitively and delivering goods and services as required for the benefit of their clients.
This role requires great care and balance. Not only are these employees taking care of their clients, but they’re also taking care of their suppliers in order to continue satisfying their client’s needs and meeting their expectations.
Procurement Policy Management
There are several factors involved in the average procurement policy, including:
- Requirement determination
- Supplier research
- Value analysis
- Purchase requests
- Purchase orders
- Contract administration
- Received order monitoring and evaluation
- Payment fulfillment
- Record keeping
Procurement policy management is important for ensuring all policies are implemented appropriately and adhered to. People in charge of procurement policy management must also remain updated with legislation changes.
Sustainability and Ethics
Most companies care about maintaining their company image and not breaking the law. While they might not source their products themselves, they rely on procurement businesses to make purchases with company reputation and law abidance in mind.
As a result, sustainability and ethics are important parts of procurement and supply chain management. The best procurement businesses source products and services that are sustainable and ethical from production through to transportation.
In most cases, procurement businesses aren’t involved in product manufacturing. However, it can sometimes be an integral part of companies with greater supply chain involvement. In that case, it can be of the utmost importance for procurement businesses to have processes in place to check product quality, price, and quantity for client satisfaction.
Business Goals and Objectives
Procurement professionals are trusted to source the products and services their clients need to perform their own jobs to a high standard. As a result, it’s essential for them to have a firm grasp of their client’s business goals and objectives. By understanding their client’s wants, needs, and aims, they might stand a better chance of sourcing the right goods at the right price and on the right timeline.
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When businesses handle procurement as well as supply chain management, they can often be involved in product merchandising. This involves being responsible for product packaging, descriptions, and even marketing. Typically, people in merchandising roles within procurement businesses work with marketing teams to develop a plan that ensures product success for their clients.
Transport and Logistics
Goods are transported all around the world to their final destinations, and some clients are particular about when they need them to arrive. For example, if the military requires a core component of an airplane before it can launch, they need an estimated time of arrival to plan their launch around it.
Procurement businesses typically work closely with transport and logistics providers to communicate timeframes on behalf of suppliers and transport companies to clients. Their role is critical for ensuring client needs are met.
Procurement businesses are complex but vital, with many skilled individuals required to work together for the benefit of their clients. These roles above are just some of the many that procurement businesses have to handle all parts of the procurement and supply chain process.