Tag: procurement process cycle

procurement process

6 Key Steps to Improve the Public Procurement Process to Increase the Value for Money

In today’s changing economic environment, public works provide the corporate sector with immense opportunities to compete for profitable work. Therefore, understanding the public procurement process is critical to compete for such projects and be eligible for work.

All levels of government, including Federal, state, and local agencies select potential vendors through competition. Public organizations advertise, collect information, and accept offers to secure the necessary goods and services. The process includes Invitations for Bid, Request for Proposals, Requests for Qualifications, Requests for Letters of Interest, and Invitations to Negotiate. The responses are then evaluated based on the needs of the organization without price being the determinative factor. However, many organizations still face certain challenges when it comes to improving the public procurement process. Here are the key steps involved in the public procurement process.

Want to know how you can improve the public procurement process flow? Request a free proposal and we will get back to you in 48 hours with information on public procurement best practices.

Steps Involved in the Public Procurement Process

Step 1: Requirement identification

Organizations must determine the objectives for the procurement and have a detailed clear scope of requirements. They should also research the market and gain insights to understand capabilities and restraints. While doing so, organizations should also ensure probity arrangements and meet government transparency requirements.

Step 2: Scope of the procurement  

Rights products are vital for organizations. Some organizations have standards to help determine specifications. Selecting the goods or services to be purchased are subject to coordinated procurement arrangements that must be used. Then, estimate the value of procurement and comply with the rules set by the government entity.

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Step 3: Determine the procurement method

In a public procurement process, it depends on the organization whether they want open tenders or limited tenders. Open tenders generally involve one stage (Request for Tender) and need to be advertised on the official website. Limited tenders are directly asked from or more suppliers. In this, the organization qualifies suppliers to determine the best products.

Step 4: Explore sourcing options

Notify the market to obtain products. For open tenders, ensure that the minimum requirements are met. Include essential information in the request documentation to enable suppliers to develop and lodge competitive and compliant submissions. Also, use appropriate limitation of liability and standard contract clauses to improve the public procurement process.

Inability to improve the public procurement process can restrict companies to procure the best products for their businesses. Stay a step ahead by requesting a free demo of our procurement platform to gain exclusive insights to improve the public procurement process cycle.

Step 5: Evaluate Submissions

Deal with unintentional errors in tenders in accordance with the set guidelines. Undertake a financial viability assessment of preferred suppliers to improve the public procurement process. Also, provide sufficient documentation and information to the delegate to enable them to make an informed decision.

Step 6: Manage Contracts

Developing a contract management plan is crucial for organizations to assist the entity to understand and implement obligations under the contract. If possible, assess contract extension options on a value for the money basis in accordance with the terms of the contract.

To gain detailed insights regarding the public procurement process cycle, request for more information from our analysts.

procurement process

3 Strategies to Get More Out Of Your Procurement Process

SpendEdge, a leading provider of procurement market intelligence solutions, has announced the launch of their latest newsletter on the strategies to get more out of your procurement process.  A robust procurement process can help you to realize immediate upfront cost savings by procuring items, services, and contracts at the best prices.

Why It’s Time to Improve the Pharmaceutical Procurement Process?

Our analysts have noted that aggressive competition on generics pricing, expensive clinical trials, slow drug approval process and growing expectations of patients are creating different challenges for companies, globally. While top companies are opting for better procurement management to save costs, we have noticed that there are certain challenges that you need to address to ensure profitability in the pharma industry. This article will help you understand how an improved procurement process can control spend and improve supplier efficiency to create more opportunities for innovation. Also, it will provide key insights regarding the role of the procurement process in managing the indirect spend.

Truth About Purchasing and Procurement

Most of us have started using the terms purchasing and procurement interchangeably. But that does not mean they are same. They have certain similarities but have different meanings. This article will help you differentiate between the purchasing and procurement process.

The article will show how procurement is used as an umbrella term that includes several core business functions apart from purchasing. Procurement deals with the sourcing activities, negotiation and strategic selection of goods and services whereas purchasing mainly deals with the process of ordering goods and services. Purchasing can also be described as a transactional facet of the overall procurement process. The understanding of basic difference purchasing, and procurement process will help you effectively manage the entire procurement process and reduce revenue spent on purchasing goods.

Procurement Process Steps You Need to Know

An efficient procurement and sourcing process can successfully lower costs, enhance efficiency, increase profit margins for companies and improve contract management. However, you must agree that the procurement  and sourcing process is more complex than it might seem to be.

To help you improve the process and reap above mentioned benefits, you need to select the most reputable vendors and minimize order delays and mistakes. The article will help you gain knowledge about the key steps involved in improving the procurement process. This will ensure that you don’t end up paying too much while procuring goods and services. The article also highlights how vendor selection, getting approvals from internal departments that control finances, and complying with guidelines is critical for the procurement process.

IR15

Procurement Cycle Challenges and Ways to Overcome Them

Modern companies are operating in increasingly intense scrutiny driven by technology, customer reviews, and expectations for service improvements. Their main objectives are to minimize cost by improving the procurement cycle, manage risks, maintain vendor relationships, and streamline processes.

However, reducing costs still remains the top priority for businesses. Procurement professionals need to think before making any purchase. It might sound an easy task, but only experts will understand the difficulty involved in selecting and creating purchase orders for every request that comes to their desk. This is where unnecessary expenses start. Therefore, it is important for companies to profile the challenges faced during the management of the procurement cycle that can lead to the failure of the project.

Key procurement cycle challenges

#1 Inaccurate planning

Mostly, the decisions made while planning for purchase and delivery are crucial as they affect the overall schedule and total cost of the operations. Improper planning in the procurement process may result in material shortages or surpluses, cash flow problem, and unnecessary delays. Therefore, companies should follow procurement best practices and prototype planning models to facilitate pre-tender and procurement processes and improve their procurement cycle.

Want to avoid unnecessary material shortages and cash flow problems? Get in touch with our experts and know how they can ensure best in class procurement cycle for your organization.

#2 Reducing costs

The process begins with the proposal of the annual budget. However, the reduction of costs majorly depends upon effective supply chain management. Even small reductions in material costs in a company’s total operating budget can impact the organization positively by increasing its profit margins. Therefore, professionals managing the procurement cycle must adopt procurement best practices and negotiate effectively to obtain materials of the highest quality at the lowest cost.

#3 Legal and political environment

Legal environment refers to a broad legal framework that governs all business activities including research and development apart from procurement rules and regulations. It involves various aspects such as manufacturing, finance, marketing, and contracts of the procurement management system. Similarly, the political environment includes trade associations, professional associations, and business firms or companies that are engaged in the procurement process.  Their varied interests affect the overall budget of the procurement management system and disturb the complete procurement cycle. Such an environment requires companies to include detailed provisions in their contracts and develop a strong coalition among policy makers, bureaucrats, and interest groups to get their procurement process in place.

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#4 Maintaining vendor relationships

Vendor relationship management is an intellectual approach to manage relationships with vendors who supply goods and services to the organization. The methodologies of vendors pre-qualification in the procurement cycle vary from company to company but the relationships strengthen when procurement professionals follow mutually agreed upon standards to assess the performance. 

How to manage your procurement cycle?

Our team of procurement experts at SpendEdge realizes that ensuring efficiency in the procurement process has a positive chain reaction within the entire organization. Therefore, we are highlighting four steps that are critical to step-up your procurement cycle:

  • Incorporate a contract management system
  • Maintain a good supplier relationship
  • Automate processes
  • Employee training and development

Making changes in the procurement cycle may seem a daunting task at first but it is extremely beneficial in the long run. Request a free demo and know how our experts can help you improve the procurement cycle.

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