The process of obtaining goods and services from outside sources is known as procurement. In any organization, it plays a crucial role in ensuring that the resources needed to sustain daily operations are on hand. There are various forms of procurement, which varies based on the kind of goods or services being purchased, the manner of procurement, and the degree of risk involved. We shall examine the various forms of procurement and some of their primary attributes in this post. Different Procurement Methods
Direct procurement refers to the purchase of goods or services that are directly tied to the organization’s production of such goods or services. Long-term agreements with suppliers are prevalent in this type of procurement since the products or services are essential to the organization’s operations. Materials such as raw materials, machinery, and equipment are examples of direct procurement.
2. Indirect Purchasing
The buying of goods or services that aren’t directly connected to the organization’s creation of such goods or services is known as indirect procurement. This kind of procurement frequently entails shorter-term contracts with suppliers and is typically less crucial to the organization’s operations. IT services, travel costs, and office supplies are a few examples of indirect procurement.
A corporate activity or procedure may be outsourced to an outside supplier. This kind of procurement is frequently used to obtain specialist knowledge, increase efficiency, or lower prices. IT outsourcing, HR outsourcing, and logistics outsourcing are a few examples of outsourcing.
4. Offshoring is the practice of moving commercial operations or procedures to another nation. This kind of procurement is frequently utilized to benefit from cheaper labor costs, obtain access to specialized knowledge, or enter new markets. Call center operations, software development, and manufacturing are a few examples of offshore.
Depending on the curriculum and degree of study, a procurement course’s length may vary. While a bachelor’s degree program in procurement can take three to four years to finish, a certificate or diploma program might take six months to a year to complete. The completion of a master’s degree program in procurement could take one to two years.
You can pursue a job in supply chain management or procurement after studying the subject. Procurement officer, supply chain manager, logistics coordinator, and purchasing manager are a few of the occupations in this industry. You can also work for organizations that offer outsourcing or consulting services for procurement. The distinction between purchasing and procurement
Although they are not the same, procurement and purchasing are frequently used synonymously. The phrase “procurement” is more general and refers to the complete process of procuring products and services, from determining the need to paying for them. On the other hand, purchasing is a specific task inside the procurement process that entails making a physical purchase of products or services.
Where in South Africa Can You Study Procurement? In South Africa, there are numerous institutions that provide procurement courses. The University of Pretoria, the University of Johannesburg, and the Tshwane University of Technology are a few of the institutions. Additionally, a number of private institutions, like the Chartered Institute of Procurement and Supply (CIPS) and the Institute of Purchasing and Supply (IPS), provide courses in procurement.
The process by which public sector enterprises and government entities get products, services, and labor from outside vendors is known as public procurement management. It entails a variety of tasks, including as determining the need for procurement, creating tender documents, assessing bids, negotiating contracts, and managing supplier relationships. The main objective of managing public procurement is to maximize value for money while guaranteeing the fairness, transparency, and accountability of the procurement process.