The procurement department covers a wide range of functions that are related to the company’s purchase and supplier management. The main intent of the procurement function is to ensure uninterrupted supply of material requirements, compliance to regulations, and risk management. The key functions in procurement include:
once a requirement has been identified, the procurement team needs to work on sourcing the goods/services. A list of approved suppliers is looked up for goods or services that are purchased earlier. For new items a new list of vendors needs to be created.
Purchase of goods/services:
purchase of goods or services required by the business is the main function of the procurement department. Once a purchase request is raised the procurement department processes the purchase order for procuring the required items. Upon fulfillment of the PO, the procurement department raises an invoice that is approved by the finance department.
Managing the procurement cycle:
the procurement cycle manages internal purchase processes, supplier relationships, and compliance. Procurement personnel need to monitor and manage the entire lifecycle.
establishing and managing vendor relationships is an important procurement function. The procurement department usually maintains a vendor database for procuring goods and services.
Budgeting and forecasting:
the procurement manager needs to create a budget and forecast the expenses for the procurement department.