SUMMARY OF PROCUREMENTS

HELLOOO...

First of all i wanna introduce my self, my name is Rifa Oktavia AL-Zahra and this my first time writting in my blog. in this case i wanna telling about PROCUREMENT. i hope this can help u, and ejoyed it guys^^

PROCUREMENT

In this era when you all heard Procurement, maybe you can be like "What is the Procurement?" So, let me tell you about this. Procurement is the act of acquiring or buying goods and services of works from another or external source. The first thing of Procurement is the people who runs procurements must make a strategy to runs procurements, and the strategy of procurements is will be like the aim of the strategy is to ensure procurement activities are undertaken efficiently and economically whilst contributing to the realisation of the economic, social and environmental benefits as set out in the community strategy

Procurements have the 5M or the subject and object about the Procurement, the 5M is:

• Man, man here means the people who can runs the process about the procurements

• Money, money here means how much we will spends the modals when we doing the procurements

• Machines, manchines here mean what the tools we will choose when we doing the procurements

• Materials, materials here means what the material we will choose when we doing the procurements

• Methods, methods here mean the way we will choose when we running the procurements to be better.

 Than, procurement also has a process to run properly, and the process of procurements is:

first we will make a Planning (process set organizational goals and how to achieve it)

the seconds is Organizing (the process of setting and allocation of tasks, authority and resources to achieve goals)

the thirs is Actuating (the process of moving people to be motivated to do the task)

and the last is Controling (process to ensure that the activity remains on target).

Probably the procurements procees is ENGAGEMENT, ANALIZE, STRATEGIZE, IMPLOMENT, MONITOR and if we paint the process of procurements it will be like .

      Procurement have the Principle to make the procurements better, and the principle of procurements is:

• Efficients (The principle of efficiency in the procurement of goods and services is to use the available resources acquired goods and services in quantity, quality expected and obtained the optimum time)
• Effective (Effective principles in the procurement of goods and services is the available resources acquired goods and services that have the highest value of the benefit.)
• Healthy Competitions (Principles of healthy competition in the procurement of goods and services is competition among potential providers of goods and services based on ethics and procurement norms in force, not fraud)
• Transparrants (The principle of transparency in the procurement of goods and services is the provision of comprehensive information on the rules of the procurement of goods and services to all potential suppliers of goods and services and the public interest.)
• Accountability (The principle of accountability in the procurement of goods and services is the accountability of the procurement of goods and services to the parties concerned and society based on ethics, norms and provisions of the legislation in force.)

 And, if we talk about the part of Procurements that Procurements is devided into two categories, and the categories of Procurements is:

1. TRADITIONALS PROCUREMENTS METHODS, is which the procurements departments and the suppliers in two different organizations.
2. ALTERNATIVE PROCUREMENTS METHODS, is the development of the traditional procurements system that felt not longer able to keep up with technology. 

Procurement life cycle in modern businesses usually consists of seven steps:

• Identification of Need: This is an internal step for a company that involves understanding of the company needs by establishing a short term strategy ( three to five years) followed by defining the technical direction and requirements.
• Supplier Identification: Once the company has answered important questions like: Make-buy, multiple vs. single suppliers, then it needs to identify who can provide the required product/service (P/S). There are many sources to search for supplier and trade shows.
• Supplier Communication: When one or more suitable suppliers have been identified, requests for quotation, requests for proposals, requests for information or requests for tender may be advertised, or direct contact may be made with the suppliers. References for product/service quality are consulted, and any requirements for follow-up services including installation, maintenance, and warranty are investigated. Samples of the P/S being considered may be examined, or trials undertaken.
• Negotiation: Negotiations are undertaken, and price, availability, and customization possibilities are established. Delivery schedules are negotiated, and a contract to acquired
• Supplier Liaison: During this phase, the company evaluates the performance of the P/S and any accompanying service support, as they are consumed.Supplier scorecard is a popular tool for this purpose.When the P/S has been consumed or disposed of, the contract expires, or the product or service is to be re-ordered, company experience with the P/S is reviewed. If the P/S is to be re-ordered, the company determines whether to consider other suppliers or to continue with the same supplier.
• Logistics Management: Supplier preparation, expediting, shipment, delivery, and payment for the P/S are completed, based on contract terms. Installation and training may also be included.
• Additional Step - Tender Notification: Some institutions choose to use a notification service in order to raise the competition for the chosen opportunity. These systems can either be direct from their e-tendering software, or as a re-packaged notification from an external notification company.

Overview

Almost all purchasing decisions include factors such as delivery and handling, marginal benefit, and price fluctuations. Procurement generally involves making buying decisions under conditions of scarcity. If good data is available, it is good practice to make use of economic analysis methods such as cost-benefit analysis or cost-utility analysis.

An important distinction should be made between analyses without risk and those with risk. Where risk is involved, either in the costs or the benefits, the concept of expected value may be employed.

Direct procurement and indirect procurement
		TYPES
		Direct procurement	Indirect procurement
		Raw material and production goods	Maintenance, repair, and operating supplies	Capital goods and services
F E A T U R E S	Quantity	Large	Low	Low
	Frequency	High	Relatively high	Low
	Value	Industry specific	Low	High
	Nature	Operational	Tactical	Strategic
	Examples	Crude oil in petroleum industry	Lubricants, spare parts	Crude oil storage facilities

   

        Based on the consumption purposes of the acquired goods and services, procurement activities are often split into two distinct categories. The first category being direct, production-related procurement and the second being indirect, non-production-related procurement.

        Direct procurement occurs in manufacturing settings only. It encompasses all items that are part of finished products, such as raw material, components and parts. Direct procurement, which is the focus in supply chain management, directly affects the production process of manufacturing firms. In contrast, Indirect procurement activities concern “operating resources” that a company purchases to enable its operations. It comprises a wide variety of goods and services, from standardized low value items like office supplies and machine lubricants to complex and costly products and services; like heavy equipment and consulting services.

         Procurements have the keys to make the procurements runs better, is Procurements lost the on things about that the Procurement can runs well, so here the Keys of Procurement:

• Procurement Strategy

• Supplier Qualification Process

• Supplier Development & Maintenance

• Negotiation & Contract Development

After we learn about the part of procurement, here I will tell you what the purpose of procurements? The purpose of procurements is Manage the purchasing activities of the project and the life cycle of the procurement contract.