Procurement is much more than buying something at the lowest price available in the market. A well-executed procurement strategy is often the difference between a business making a profit or losing money. But it is much harder than it looks. To start, we need to ask the question: “How important are purchased goods and services to the overall success of your business?”
The answer determines the settings for your overall procurement policy as described in Step 14 – Governance.
There is no right or wrong way of procuring something. It always depends on the circumstances of the business and often involves trading off conflicting objectives.. This page focusses on the basic steps required, more or less, for each procurement activity. Part 3 of our Guide “Procuring for Success” covers them in much more detail.
Let’s work through the process systematically. For an individual procurement, executed under your Procurement Policy, these are the 14 key steps:
