Procurement is a critical unit within the supply chain responsible for acquiring goods and services necessary for an organization's operations. This involves identifying suitable suppliers, negotiating contracts, and ensuring timely delivery of materials at the best possible price and quality.
Key functions of procurement include:
- Supplier selection: Identifying and evaluating potential suppliers based on factors like cost, quality, reliability, and sustainability.
- Contract negotiation: Negotiating favorable terms and conditions for contracts with suppliers, including pricing, payment terms, delivery schedules, and performance guarantees.
- Purchase order management: Creating and managing purchase orders to formalize the buying process and track orders.
- Inventory management: Coordinating with inventory control to ensure adequate stock levels of purchased items.
- Supplier relationship management: Building and maintaining strong relationships with suppliers to optimize performance and collaboration.
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