Description

Understanding Procurement, Products and Services

Procurement is an essential part of doing business. It involves the process of acquiring goods or services on a large scale, usually in preparation for a purchase. Companies can be both buyers and sellers in the procurement process.

Procurement and its related processes can take up large chunks of a company's budget to execute. A successful procurement strategy is often vital to profitability, making it a vital component of any given firm. To ensure that all purchases are made according to appropriate guidelines, most organisations will maintain centralised control over the procurement process through their accounts payable division. As part of the extended procedure, purchase planning, specifications determination, supplier research and selection, price negotiation and inventory controlling may all have to be undertaken for effective results. It takes a village when it comes to procuring goods or services; thus many larger firms require support from multiple divisions within the same company.

Businesses can use a variety of procurement methods to acquire the goods and services they need to operate. This includes direct procurement of goods and services used during production, such as raw materials or machinery; indirect procurement for goods and services that support business operations, such as office supplies or marketing materials; and goods or services procurement for physical goods or services provided by people. All of these procurement methods provide businesses with the necessary resources for success.

About this course

•  Training Provider: OHS.com.au
•  Location: Online
•  Course length: Varies average 20 minutes
•  Time: Self-paced
•  Certification / Accreditation: Certificate of Completion

Background – Difference between Procurement and Purchase
The difference between procurement and purchasing may seem small, but understanding the distinction is key. Procurement considers value more than price when acquiring goods and services; it's a strategic process with proactive steps. Purchasing, on the other hand, focuses more on cost than value; it is used in situations where an immediate need needs to be fulfilled. Businesses should prioritize their approach to these two processes depending on their goals and what they are looking for in terms of results.

In the modern business environment, procurement costs are closely integrated into financial accounting protocols. Companies may even hire a chief procurement officer (CPO) to lead these efforts and ensure contract compliance. This individual is responsible for overseeing procurement standards, working with accounts payable for efficient payments and integrity of budgetary objectives, and represent the company on procurement teams for completing competitive bidding tasks. Practically speaking, companies vary in their approach to managing direct and indirect costs according to their service- versus goods-driven methods; however all organisations should strive
towards strategic cost management inside their current administration framework.

For manufacturing enterprises, direct costs involve the acquisition of raw materials and components that are destined to become part of finished products. Companies specialising in retail will incur these same costs but associated with merchandise instead. Services companies, on the other hand, primarily cover their labour expense as a cost-of-goods element in direct spending. Direct procurement is essential since it directly affects the firm's gross profit margin.

In contrast, indirect procuring hinges around operational expenses – those not related to production. Thus, it covers office supplies and paraphernalia, marketing items and events, consulting offerings and so forth. Separate budgeting is usually referred to for managing both direct and indirect expenditures as such requirements may differ for each type of purchase operation.

Procurement is a distinct process from purchasing, though the two are related. The former generally refers to the sourcing and selection of suppliers, while the latter focuses on costs and purchases. Together, they form an important part of a business practice known as supply chain management.

Course Outline
This Procure, Products and Services training course is designed for professional procurement and contract management officers who wish to develop the skills and knowledge required to manage large-scale, complex goods and services procurement and contracting activities.

This training course will teach you how to plan, source and manage medium-high value/risk procurement activities, including evaluating offers, negotiating and performance managing complex contracts.

Learning Outcomes

•  Being equipped to create a governance structure for intricate procurements.
•  Design a comprehensive procurement strategy.
•  Identify and mitigate risks.
•  Implement a complex procurement process.
•  Assess complex procurements.
•  Successfully negotiate procurement results, and oversee a complex contract as   well   assupervise contractor performance.