Our guide to the procurement process, and your free downloadable procurement process flow!
What is Procurement?
Procurement is a vital function of any organisation and involves the sourcing and purchasing of required goods and services from an external source.
There are typically three different types of procurement, these are:
- Direct Procurement: Relates to the procurement of raw materials and products an organisation requires to make, sell, and retail its own product or services.
- Indirect Procurement: Concerns all aspects of products and services utilised by an organisation during daily operations, such as travel costs.
- Services Procurement: Relates to the procurement of human resources, such as contractors.
Procurement is important to the success of any organisation ensuring that the highest quality goods or services are obtained and at the most competitive rate.
What is a Procurement Process Flow and why is it important?
The procurement process flow outlines all the steps necessary to ensuring that your organisation acquires the highest quality and most competitively priced goods and/or services.
Having a thorough procurement process flow can help streamline procurement whilst still ensuring you have the best chance to find a supplier most suitable to the needs and requirements of your organisation and the best value for money.
A robust procurement process flow will also help reduce the possibility of any potential risks to your supply chain, such as slowdown in production by ensuring a constant steady flow of goods and/or services.
How to create your own Procurement Process Flow.
The procurement process is never the same for any one business as it varies according to the requirements and objectives of each organisation.
Our free example, which you can download below gives you a rough idea of how a procurement process should run but you should be sure to specifically tailor it to your organisation.
To create your own streamlined procurement process flow, you should begin by considering what the scope of the process is and what objectives you are aiming to achieve with it.
For a procurement process your main objective will be obtaining the most suitable, highest quality goods and/or services at the most competitive price.
Once you have determined your scope and objectives, you now want to determine the start and endpoints of your process flow.
In our example, we chose to start our procurement process with submission of a purchase requisition request and end it with recording the outcome of the procurement.
After you have confirmed your starting and endpoints, you can now fill in the connecting steps required to move the procurement process through from start to finish.
Consider every step that needs to happen within your procurement process to ensure it is effective, such as sending quotation requests, examining the delivery, and processing payment to the supplier.
Once all the steps have been outlined, you now want to focus on the specific roles that will play a part within your procurement process and the steps they will be involved in.
Think about the employees that need to be involved, their responsibilities, and the information they will need to effectively complete the task at hand.
Based on these factors you can then determine the specific roles and their responsibilities at each step of your process and establish accountability.
Our example uses broad role names like ‘Procurement Team’ and ‘Purchase Requester’; however, your organisation will want to tailor these more specifically to your individual circumstances.
With Jomo247, customisable roles are seamlessly built into our workflow designer and can be easily associated with certain steps in your process with one click making controlling task security and efficiency effortless for your organisation.
Using Jomo247 to create your own Procurement Process Flow.
Now that you have finalised all your planning, you can create your own procurement process flow.
You may want to use traditional methods that allow you to create a basic image of your flow template.
However, we recommend using a software like Jomo247 that enables you to not only design but also automate your process with ease.
To read more about automation as the future of task management click here.
Once you have finished designing your procurement process flow it is now time to implement it into your daily operations.
Remember it is essential when implementing a new process that you constantly monitor its performance in case it underperforms and requires alterations.
Undertaking and recording continual improvement of your processes is key to ensuring your organisation is conforming to ISO 9001:2015.