Procurement process

Procurement process

Introduction

The art of obtaining goods and services for business purposes is known as procurement. This is commonly associated with businesses that need to importune products and services in large quantities. This refers to the final action of purchasing. It is important to note that this can include the procurement process, which is essential and essential for organizations in making their final decisions. This paper will help us understand procurement on an in-depth analysis by reviewing several questions.

Body

1. List and explain the four goods movements in the procurement process.

There are four goods movements in the procurement process. This includes goods issue, stock transfer, stock posting, and goods receipt. Goods receipts are used to record the inventory into storage. This increases the stock of the organization. Goods issue, on the other hand, is used when goods and services are removed from storage. An organization needs to record the movement of their products and services. A stock transfer is used to record the movement of goods from one location to another in the business entity. Lastly, a transfer posting is used to alter the state of a material. This involves the status and type of content. It is essential to ensure that the first three include the physical movements of goods. The last one, however, does not involve the physical movement of goods.

2. Explain the use of conditions in the procurement process.

After an organization selects its preferred suppliers, a procurement contract needs to be drawn. This contract is supposed to specify the terms and conditions of the business. Then terms and conditions agreed in the contract helps the organization manage relationships between the supplier and the organization. Secondly, this can be used against KPIs, which enable the organization to resolve any issues that may arise during the procurement process. The organization needs to maintain a healthy relationship with its suppliers. This helps in the long term success of the procurement process. It may also influence other procurement contracts to be drawn.

3. The difference between the distribution channel and distribution chain.

A chain of businesses or intermediaries through which goods pass until it reaches the consumers is known as the distribution channel. It is important to note that a distribution channel includes the wholesalers, the retailers, the distributors, and the internet. The shorter the distribution channel, the cheaper the product, and the longer the distribution channel, the more expensive the product becomes. A distribution channel is different from a supply channel. A supply chain is a network between the suppliers and the organization. This network involves resources and people and is aimed at getting the product to the buyer. In most cases, organizations have contracts with their suppliers constituting the supply chain.

4. Explain the roles of partner functions in the fulfillment process.

The four partner functions include ship-to-party, bill-to-party, sold-to party, and payer. It is important to note that all these functions can be filled by multiple of one consumer. A consumer who gives the order is known as the sold-to-party. If the order submitted instructs that the goods be shipped to a specific location or that the invoice should be sent to another party, this becomes the ship-to-party and the bill-to-party functions. Lastly, if another customer is instructed to make the payment, he or she becomes the payer.