This research study on ‘Procurement Planning’ is by Sri Sruthi Konda, a Post Graduate Diploma in Risk Management (PGDRM) student at GRMI. Prior to opting for a career in risk management in India, Sri Sruthi was working as an ML Data Associate with Amazon. She is a B.Tech graduate who saw scope in risk management careers worldwide and that made her choose a career in risk management.
Here’s the research study:
Procurement Planning
By Sri Sruthi Konda, PGDRM July’21-22
Procurement Planning
Procurement planning is the process of identifying and consolidating requirements and determining the timeframes for their procurement. The entire process of procurement (from the time the need for an item, facility, or service is identified till the need is satisfied) is designed to achieve such a right balance i.e Optimal level. “Good planning is 80% of the task completed”
The 5 R’s of Procurement
Optimum Balance
- Procurement aims to buy just the right quality with clear specifications of the Procuring Entity’s requirements, a proper understanding of functional value and cost. Technical Specification is the most vital ingredient. It is essential to give due consideration to Value for Money while benchmarking the specification.
- There are extra costs and systemic overheads involved with procuring a requirement too frequently or we may lose on discounts if we procure scarcely. So, It should be an appropriate quantity.
- The concept of price is not just the price paid for the requirement but also other costs such as maintenance costs, operational costs, and disposal costs.
- An unrealistic time schedule for the completion of a facility may lead to delays, claims, and disputes. Similarly, issues related to delivery and logistics.
- Identifying the right source is key for any business to ensure transparency and accountability
Steps in Preparing a Procurement Plan
Assess/list the needs or requirements.
– Collect the list of needs from the user departments
– Research the local market for the prices and availability of goods
Determine the quantities and estimated costs
Determine when the requirements shall be needed for use
Identify the interrelationships between and among the requirements
Consolidate similar requirements
Identify appropriate procurement methods and processes
Schedule lead times for each process
Prepare an implementation table and/or a bar chart identifying key dates for each process
Drivers Of Change
Risks Vs Controls
Get the full study here: Procurement Planning
Disclaimer
This report has been produced by students of Global Risk Management Institute for their own research, classroom discussions and general information purposes only. While care has been taken in gathering the data and preparing the report, the student’s or GRMI does not make any representations or warranties as to its accuracy or completeness and expressly excludes to the maximum extent permitted by law all those that might otherwise be implied. References to the information collected have been given where necessary.
GRMI or its students accepts no responsibility or liability for any loss or damage of any nature occasioned to any person as a result of acting or refraining from acting as a result of, or in reliance on, any statement, fact, figure or expression of opinion or belief contained in this report. This report does not constitute advice of any kind.
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