Procurement is the process of finding, agreeing terms and acquiring goods, services or works from an external source which ensures that buyer receives goods, services at the best possible price, when aspects such as quality, quantity, time, and location are compared. Procurement includes all purchasing functions that pertain to obtaining goods, works and services including description of requirements, selection, invitation of tenders, preparation and award of contract.
The difference between Procurement and Purchasing can be best illustrated by the organogram, as shown below.
Managing Procurement Cycle with 5Ps
When it comes to procuring goods and services at the best possible price, in the right quantity and quality, in the right place and from the right source, there are key essential factors that must be put in place to benefit from a good procurement management. And without these key essential factors in place, all your time and effort invested in making sure that every procurement project is a success will be wasted.