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The procurement management process can be a difficult one—but it shouldn’t have to be. A project procurement management process flow diagram shows all process or required procurement steps that need to be completed to assist a stakeholder to complete a purchase or send a contract through the entire contract workflow.
Using an outdated system for the procurement management process can slow you down, leading to loss of efficiency, and ultimately, unhappy customers.
So, what are the typical five steps you should be working on in the contract management procurement process?
- Specification. What items do you need for your project? These procurement items need to be specified to the external vendors. Apply the category management process in procurement here, as you “divvy up” what you will spend on goods and services.
- Selection. Your team needs to choose the external vendors that you will ultimately use to procure the items you need, depending on the specific criteria and selection measures that you set.
- Contracting. Perhaps the most difficult part of the procurement management process, contracting requires settling on qualifications and pricing metrics that are important to all parties. Risk management in the procurement process is also important and should be considered at this crucial step as well.
- Control. The procurement department needs to exercise firm, yet flexible control of the process. They may have to arrange meetings with the vendors, stakeholders, change delivery dates, or adjust delivery expectations.
- Measurement. After planning for procurement management, the next process involves assessing the effectiveness of the entire procurement management process and sending appropriate documentation to all interested parties.
Within these five steps, you will also have to develop a concrete plan with your team. This may not be an easy process, especially if you are not using software that can organize and streamline the process for you.
Next, what should you include in your plan to make the process work best for you? Each procurement process will be slightly different, but all should follow some standard regularity in order to help make things work more efficiently. You don’t want to be robotic—but you do want to be efficient and thorough. This consistency ensures that all stakeholders remember and follow the correct procurement process.
When you’re developing a procurement management process plan, consider:
- What deliverables are to be procured
- The chosen model of funding
- The method of procurement (RFP, payments, etc.)
- Distinct stages of the procurement process
- Set QA and risk management protocols
- Strategies and negotiation protocols for contracts and obligations
There may be other items you want to include in your plan, but these are key ideas to keep in mind as you move forward.
Our process management solution provides you with one place to manage all procurement processes, which provides better visibility for both stakeholders and the procurement team. How many emails or calls do you receive asking for an update on this RFP or that contract, or when will that supplier be onboarded?
Imagine a central location where all those answers could be found by each individual in a self-service manner without talking to you.
EC Sourcing’s clients are using PM to organize many different processes—from the very simple “click here when you need procurement” to multi-step approval flows that include 12 steps across 4 different departments.
PM is very flexible, so adding new steps or new approvals can be completed in under an hour by an admin user. This includes procurement intake, routing contracts for approval, performing pre-RFP tasks or approvals, post-RFP (or pre-contract) approvals and just about anything else that occurs in your procurement management process today.
For more information on our solution and how to improve your procurement management process, or if you would like to schedule a demo, contact EC Sourcing Group today by calling (973) 936-9672, option 1.
Example Procurement Process
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Feedback:
We selected EC Sourcing to facilitate our purchased services and capital equipment bidding processes. Since implementation over 4 years ago,we’ve had great success using the solution to generate savings and leverage the automated web-based platform to increase visibility and cross functional team participation, improve bid process cycle time and overall organization to provide a more formal straightforward bidding process. We have found the solution to be easy for all parties with high vendor participation. We have used the solution to negotiate small buys and extremely large capital purchases with success on all levels. Lastly, EC Sourcing Group has provided a high level of support both on technical matters and strategic sourcing strategy.
Your software is great! I have been involved in many of these (e-Sourcing negotiations) and in fact just finished one last week for Schering Plough. Your software is much less complicated and more user-friendly than any of the other ones I have used.
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