WHAT IS PROCUREMENT? WHAT ARE MAIN PROBLEMS?

 Procurement is simply the acquisition of materials and services from product sellers or service providers on a specified schedule. As an individual, we all, with or without awareness, engage in activities such as scanning the online market for products we need, reading the contents of the product, following the consumer reviews of the product, following the promotions and planning the right time at the point of purchase. In fact, companies roughly make these stages for larger purchases.


What is the procurement cycle?
 The procurement cycle basically includes certain stages:


1- Defining the need,
2- Sourcing of potential supply channels, researching new channels,
3- Determination of conditions such as payment, procurement time,
4- Purchase Order (PO) and Logistics,
5- Quality control and invoicing,
6- Recording the process in the system for maintenance or repurchase situations,


 While the cycle follows each other, both the procurement team and the supplier are followed with certain key performance parameters. With the supply channel, issues such as the purchase agreement, delivery time, payment method, acceptance of the service or product, warranty period, settlement of disputes are followed.


On the team side, situations such as order completion time, vendor defect rates, Order form (PO) invoice rate, unplanned purchase rates, total cost per invoice and order form, determination of company expenses of the purchasing department, reaching competitive prices are analyzed.


What are the problems in the procurement cycle?
 Separating the procurement process from the purchasing process is an important point in problem identification. Basically, purchasing is interpreted in 2 titles as direct and indirect  The procurement process often consists of direct purchases. Direct purchases are purchases that can be planned. Major problems:


1- International procurement process,
2- Uncertain in supplier delivery time,
3- Wrong planning where excess stock may occur,
4- Planning for products considered as perishable or hazardous materials,
5- Procurement process of products with very long delivery times (2-5 years),
6- The deficiency in the articles in the order agreement,
7- Not benefiting from technological innovations,
8- Extraordinary conditions such as illness, earthquake.


What are the industries with the most problems?
 When the international procurement process is examined, issues such as the policies that countries follow against each other, the sensitivity rate of the materials, the preparation of special permits in the transportation process gain importance. At this point, pharmaceutical / medical equipment industry and military / defense industry are the industries with the most problems in procuring products.


 In summary, when all processes are examined, the right planning and strategy, researching the right supply sources, determining the production, logistics and delivery times correctly, digitalization and the use of technology gain importance. An effective procurement process can be realized by carefully monitoring key performance parameters in the process.

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