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Procurement department

01 July 2015
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The world is full of changes. They are coming faster and faster, some announced, some not. The development of technology, the world in the palm of your hand, global availability - these are all elements that shape not only tomorrow, but also our present. We are all adapting to current trends, and so have the companies. As someone said, today there are only two types of companies - those that change and adapt and those that collapse.

The first department in a business organization, which must monitor the market and the anitcipate the upcoming changes, which first has to adjust and most importantly to tranfer all of this to the rest of the organization - is the procurement department.

Its role is to provide (to find, buy and deliver) the adequate input resources that will allow optimal operation of the production, sales and other activities within the company. It supplies the company with raw material, equipment, devices, services and energy in order to accomplish a specific business task. It must skillfully balance between the minimum amount of stock, delivery at the last minute and the use of working assets available to the company.

 

In broad terms, the procurement department is in charge of the development of strategic plan of action:
- monthly, quarterly and / or annual planning in agreement with sales and manufacturing department

- market research: the search for suppliers, quality resources, more modern technologies, monitoring trends and prompt response to changes
- calculating the optimal inventory and planning the necessary working assets
- analysing past activities, controling the work done
- cooperating with other departments when introducing a new product
- nurturing good business relationship with suppliers
- managing human resources within the department (continuous training, rejuvenation)

 

In the narrow sense procurement includes:
- receipt and verification requirements for procurement
- proper preparation and sending inquiries to suppliers
- receiving and comparing bids
- negotiations about the best conditions (price, payment, delivery)
- ordering
- tracking delivery
- receipt of goods and input control of goods and accompanying documents
- addressing complaints and insufficient (inadequate) documentation
- record keeping of inventory and procurement

 

An employee in the procurement department must pay particular attention to:
- appropriate quality and functionality of purchased products and services
- choosin the best option in the given situation
- ordering the optimal amount (without deficits, the minimum redundancy)
- having the goods arrived on time (to ensure continuous operation without interruption)
- organizing necessary transport and accompanying documents
- minimizing any risk to the company
- providing excellent support during and after delivery
- maintaining good relations with partners

 

In the metalworking and steel industry, where requirements and needs of customers change every few years, procurement has a crucial role in quick and painless adapting to new trends and market demands. One vital input for tthe procution, can suddenly become unavailable on the market. Procurement department must be able to anticipate such case and have already two or three tested variants in reserve.

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