What is procurement analysis

procurement

Procurement is one of the company's basic functions. Its object is the acquisition and provision of production factors (labor, operating resources, materials) for the fulfillment of the company's purposes.

Procurement is an operational function. Procurement in the broader sense means the procurement of personnel, capital, operating resources, materials and information. Since the procurement of personnel is assigned to the human resources function, the procurement of capital to the financing function and the procurement of information to the IT function, they are removed from the procurement function in the broader sense. Procurement in the narrower sense then includes the procurement of materials and resources. Because the procurement of operating resources is assigned to the plant management, the procurement term can be defined even more narrowly. Procurement in the narrowest sense then only refers to the procurement of materials.

(Eng. procurement) Procurement comprises all activities that are aimed at making available to a company the objects it needs but not self-created objects. In addition to production and sales, it is a main function of manufacturing companies. The concept of procurement is closely related to that of purchasing; both terms are sometimes used synonymously. Often, however, “procurement” is understood more comprehensively and more strategically, with “purchasing” then forming a sub-function of procurement alongside procurement planning. A modern, also strategically oriented procurement supports, as part of the company management, the securing of the company's viability through components such as the long-term security of supply, the minimization of costs (costs), the market orientation, the consideration of interdependencies with other company areas and the environmental orientation. The scope of the objects to be provided by procurement is defined very differently, narrowly or broadly. For industrial procurement, materials (raw materials, supplies, supplies, semi-finished products and merchandise), capital goods (buildings, land, plants, machines, transport facilities), services and rights (patents, licenses) should be taken into account. The procurement tasks can be broken down in different ways, e.g. Procurement according to the phases of the procurement process:

1. Tasks of procurement preparation:

Determination of procurement needs

Specification of procurement needs

2. Tasks of procurement initiation:

Search for potential suppliers

Obtaining offers by issuing inquiries

Offer analysis

Supplier selection

3. Tasks of the procurement completion:

Contract negotiations

Conclusion of contract

Order

4. Tasks of the procurement realization:

Monitoring of the timely fulfillment of the contract

Bridging space between the supplier and the purchasing company

Receipt of goods

Incoming storage

A large number of procurement tasks are not taken into account in this breakdown. This includes procurement market research, which provides information about procurement objects available on the world market. These can be of great importance for the determination of the requirements and (after a make or buy decision) of the procurement program, as they contain important points of reference for the product and process development and the product change. In addition, a procurement policy has to be developed that can be broken down into the purchasing policy, the communication policy, the product policy, the remuneration policy and the service policy. The planning of these instruments to be used is therefore of great importance, as this is the only way to ensure a company-wide coordinated and coordinated processing of the procurement markets. The procurement policy defines, for example, how a company reacts to quality defects or late deliveries by suppliers, how the number of suppliers is determined for an object, which contract types are used or at what intervals deliveries should be made (e.g. procurement just-n-time concept). Another area of ​​responsibility concerns the design of the company's internal procurement requirements. These include the definition of the number and qualifications of employees, the procurement organization (centralized or decentralized, etc.), the procurement processes, the information systems and the planning and control mechanisms. Content-wise overlaps exist primarily with materials management, which sees procurement as one of its tasks, with the cross-sectional function of logistics (e.g. procurement with regard to procurement logistics) and production planning and control (e.g. procurement with regard to determining requirements).

Procurement is one of the market-oriented basic functions (sales). In the course of the provision of services, input factors such as Procurement of material goods, services, financial resources etc. partially or completely used up (potential or repetition factors) and must therefore be supplemented if the economic organization is to continue to exist. If the addition can be made from within the organization, it is a special act of service creation. Whenever this is neither desired nor possible, the input factors must be obtained from other economic entities. Procurement generally means that "forces and materials for the realization of economic purposes" (SANDIG) are made available externally. Procurement is a "cross-border" subsystem of an organization. This concept of procurement with a very wide, comprehensive object area must be supplemented by other, restricted terms: procurement in the broadest sense (objects: all input factors), procurement in the broad sense (exclusion of capital procurement), procurement in the narrower sense (exclusion of procurement of work , ie the recruitment), procurement in the narrowest sense (exclusion of the procurement of goods of the »fixed assets). In its narrowest version, only raw materials and supplies are considered as procurement objects. The term “purchase” is particularly familiar to practitioners; This can be seen in the designation of those persons and / or institutions that are involved in the procurement of current assets. The functional or institutional view has been supplemented in the recent past by an object-related perspective, possibly even suppressed. Problems with the procurement of material goods (especially for the ongoing need for the provision of services) are dealt with in the context of materials management, personnel management is responsible for recruitment, finance management is responsible for the procurement of financial resources, etc. An independent theory or doctrine of the procurement industry in a comprehensive sense has not yet been developed. The under-developed theoretical status corresponds to the relatively little importance that the practice attaches to procurement: input-related tasks are seldom seen only as a management challenge.

In the environmental economy:

Materials management, ecological

one of the basic economic functions of commercial enterprises. During the provision of services, input factors (potential or repetition factors) are partially or completely consumed and must be replaced. The task of procurement is to obtain from the environment (procurement markets) the input factors required to maintain operational processes, which are not available to a company itself, or which cannot or should not be made available. The procurement objects can be broken down as follows: (1) tangible goods (materials), (2) information, (3) energy, (4) legal title, (5) personnel or services, (6) capital. In the narrowest version, procurement refers to the supply of a company with raw materials and supplies. In practice, this task is often referred to as purchasing and assigned to materials management (material procurement). In accordance with the object orientation, recruitment in human resources management, capital procurement in finance management, information procurement in information management and asset procurement in plant management (investment policy) are assigned in a similar manner. This subdivision of content is a major reason why an independent, integrative theory or teaching of procurement has not yet been developed. In the early days of modern business administration, procurement received considerable scientific attention (cf. the work of F. Findeisen, Curt Sandig, Karl Banse). Johann-Friedrich Schär even valued the "art of purchasing" more highly than solving sales-related problems (Allgemeine Handelsbetriebslehre, 1911). The strong emphasis on computational, production and investment theoretical aspects, however, suppressed questions of procurement in the period that followed. Drastic changes in the procurement markets in the mid-1970s have redirected scientific interest to the problems of resource management. Procurement is currently experiencing a sustained increase in importance. The reduction of performance processes to the key competitive areas (lean production) inevitably leads to an expansion of the procurement task and thus to greater responsibility for costs and results. Literature: Theisen, P., Fundamentals of a theory of procurement policy, Berlin 1970. Grochla, E., The way to a comprehensive business procurement theory, in: DBW, 37th year (1977), p. 181 ff. Arnold, U. , Strategic Procurement Policy, Frankfurt a. M., Bern 1982.

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