Procurement is the process of identifying and obtaining goods and services. It includes sourcing, purchasing and covers all activities from identifying potential suppliers through to delivery from supplier to the organisation. This varies enormously dependent on the firm you are working for. Purchasers buy merchandise, raw materials, services, repair and operating supplies. Generally there are 2 categories of buyer:
- Merchant buyers, wholesalers and retailers who are purchasing goods for resale e.g. Selfridges
- Industrial buyers who purchases raw materials for conversion, services, capital equipment, components or supplies in order to execute their own operation e.g. Nissan
If you worked for a retailer, then you would be involved in selecting and purchasing the actual stock that they sell. This could vary from clothes, to beauty products, to accessories to food. Buyers tend to specialise in a particular area. Other more industrial firms would need to purchase products, parts or materials. If you worked for an airline, you could be buying anything from fuel, to small bottles of water for the airline! Most companies will employ buyers and the larger ones will tend to employ more.
It tends to be a critical role in many organisations, particularly when it is the buyer’s role to select the merchandise. The price products are acquired at will give a firm a competitive edge, or not, as will the selection of the goods. Its also most often a global role, in that suppliers can be based anywhere around the globe.
The over arching objectives of procurement is to ensure an uninterrupted flow of raw materials and products at the lowest possible cost. In addition to ensure and improve the quality of the goods purchased and continuously seek better materials and more reliable suppliers.
What sort of things may a buyer be involved with?
- Understanding and researching the trends in the industry – to gain a clear picture of what people are buying or might be buying
- Research possible suppliers
- Meeting & building relationships with suppliers.
- Sampling/examining/testing suppliers products
- Negotiating contracts
- Organising logistics to ensure supplies are delivered on time and in the right quantities
- Contract management
- Contract drafting
- Liaising internally to understand demand and requirements
- International travel to meet overseas suppliers
- Checking supplier factories to check working conditions
- Working on product design with suppliers