Requirements and Specifications for Procurement

Introduction

Procurement is defined as the process of acquiring goods or services. Generally, this process includes standards determination, supplier research, purchase planning, specifications development, value analysis, price negotiation, selection, supply contract administration, disposal, making the purchase, store and inventory control among other correlated functions . It is significant that the goods or services procured by the purchaser to be of good quality and quantity, procured at the right time, location and the best cost. This paper will critically analyse the requirements and specifications for procurement.    

Requirements and Specifications for the Procurement

            In any given company, management ought to know the procedures of acquiring services and merchandises. There are specific steps which procurement undergoes in order to indentify the requirement of the company through the concluding footstep of the award of the contract or merchandise. Below are the requirements and specifications steps for the procurement;

1)      Need Recognition

The business should understand that it necessitates new merchandise, either from internal or external supplies.  The merchandise may be either the one that necessitates to be reordered or a new item for the business.

2)      Specific Need

The company should indentify the right merchandise or service. A lot of the companies across the globe have various standards, which assist them to identify the specifications.

3)      Source Options

The business necessitates to understand whether it require to acquire the merchandise or service. There are various options of doing this, such as having approved vendor list among other notable methods. In addition, the company can either look for a supplier through purchase orders or conduct a research on other sources like the internet, magazines or sales representatives. Afterward, the business will be in the best position of coming up with the qualified suppliers who will bring the best merchandise for the company.

4)      Price and Terms

The company needs to conduct a severe research to find out the most excellent price and terms. However, this will depend on if the business necessitates the readily available merchandises or specialized materials. In most cases, the company will evaluate three suppliers before it reaches its ultimate decision.

5)      Purchase Order

The purchase order is generally used to purchase the materials between a seller and buyer. Moreover, the purchase order provides the price, terms and conditions and specifications of the merchandise or service as well as any extra obligations.

6)      Delivery

The purchase order has to be delivered, typically through email, fax, personally, mail or other notable electronic ways.  In some cases, the definite delivery way can be stipulated in the purchasing papers. Afterward, the recipient confirms receipt of the procured order. However, the two parties must keep that information on their files.

7)      Expediting

The purpose of the expedition is to stipulate the time that the purchase order will be delivered. This is very essential especially when a delay arises. The expediting report addresses issues such as delivery times, payments dates and work completion.

8)      Inspection and Receipt of the Purchases

The recipient should approve or reject the items immediately after receiving it from the sender. If the recipient approves the items, then it is obligated to pay the sender.

9)      Invoice Approval and Payment

There are three documents that have to sails in the same boat when an invoice requests payment, which are the original purchase order, the receiving document and the invoice. These documents provide an agreement that necessitates to be confirmed by both parties (the sender and receiver). Generally, payment can be made in form of check, credit letters, cash, and online among other notable payments methods.

10)  Record Maintenance

Both parties should keep their records properly in case of audits.