‘Procurement heart function of an organisation’
I Nour previous articles we have unpacked what procurement is and why it is deemed to be a strategic function as opposed to being clerical. Furthermore, it has become more apparent that with the right mindset, organisations are becoming more proactive by hiring skilled and qualified procurement practitioners.
Larger companies are more aware of the wins and gains of recognising this profession by introducing executive positions like; head of supply chain, head of procurement, chief procurement officer.
Studies have shown that; in a manufacturing organisation, procurement accounts for about 60 per cent of the annual budget. That is why it is highly commendable to have skilled personnel to run the procurement in companies.
1.The strategic value of having a procurement unit:
(a) The Department Maintains records of all procurement proceedings;
(b) Ensure that all communications with tenderers and suppliers are in writing;
(c) Keep confidential the information that comes into their possession relating to procurement proceedings;
(d) Procurement planning to eliminate emergency procurements which become expensive;
(e) They document requirements and obtain authorisation before initiating procurement proceedings; (f) They define end-user needs in a statement of requirements which gives a correct and complete description of the goods, works or services and use invitation documents evaluation and contracts; (g) They advise on the use of appropriate tender documents issued which are in line with the category of procurement;
(h) Clearly stale the methodology and criteria to be used in the evaluation of tenders and the determination of the best evaluated tender; (i) Enforce compliance with such other rules as are specified in this Act and public procurement or the organisation’s procurement policy; (j) This unit will drive the supply chain strategy and meet the organisation’s goals and objectives.
2. There are a number of procurement best practices which can boost an organisation’s integrity.
I. ACCOUNTABILITY
(a) Procurement demands for a high level of accountability at all times (b)Be willing to give an account for any decision taken at any stage of the procurement process.
(c)Any malice practices in procurement have impact on individuals and the organisation as a whole. (d)No supplier wants to deal with an organisation that engages in unethical practices.
(e)We are all responsible for our actions in the procurement space.
II. ETHICAL BEHAVIOUR AND RESPONSIBLE PROCUREMENT
Ethical Procurement refers to a wide range of issues that can impact the ethical and sustainability goals of a business; (GEP, 2022) procedure which should be included in the policy;
(c)Fraud and corruption policy; (d) Sustainable procurement and supply chain management practices and expectations from suppliers; (e)A Corporate Social Responsibility (CSR) Policy.
III. RELATIONSHIP MANAGEMENT IN THE SUPPLY CHAIN
The COVID-19 pandemic has taught the global market how much supplier relationship management is Important. How does an organisation ensure best practices in relationship management?
(a) Relationship management is meant to drive partnerships and create win-win situations between the buying organisation and the supplier;
(b) Security of supplies is fostered by sound relationship management; (c) Good relations shifting from tactical to core-destiny have a good effect on risk management;