What Is Strategic Procurement

Procurement can be defined as the process of obtaining supplies of something especially for a government, business or an organization. Strategic procurement is the process of strategic planning, group buying and scheduling by which an organization can experience notable profit. The procurement process differs company to company but the government organizations have some different procurement process than a privet organization.

Factors of strategic procurement

There are several factors of strategic procurement but the key factor is the good communication and analytical skill of the particular organization, because procurement always stands on the good relation and communication between the suppliers and the buyer and the financial services as well. Though the procurement process differs from product to product as the nature of the product, the importance of the product, quality of the product, quantity of the product and the cost of the product differ each other.

Another factor of the procurement is the cost of the product at which it is bought and in which amount also. As the amount of the goods and the cost of the goods are inversely proportional to each other but the quality of the product is also another consideration. Therefore if any organizations do it with proper planning then it will be a strategic procurement which is always needed for the prosperity and profitability of the organization.

Concept of strategic procurement

There are three basic concept of strategic procurement implementation of an organization these are,

  • Centralized procurement service.
  • Group buying.
  • Using the procurement service of data management.

Concept of group buying

The basic concept of the group buying is combining the requirement of the different departments of an organization in one single order. So that it will be larger in size than the multiple small orders. In turn it will also help the buyer to negotiate with the supplier for its lower per unit cost and also it will tailored the cost of delivery which is the common practice of the big firms.

Concept of centralized procurement

Concept of the centralized procurement is applicable for paying cycle which will include the cost of the stuff’s salary and support costs. Therefore this organized process will cut the extra costs.

Concept of data management procurement

The basic concept of the data management procurement is the use of most advanced and modern software which will deal with the accounting purpose in just one system so that it will be in record and will be helpful for any legal challenge. This type of data management procurement is helpful to determine the profit of the company as the overall cost and the savings are getting recorded to just one system.

Strategic procurement is the backbone of any organization as it deals with the different aspect of the organization in disciplined manner.