Importance of Procurement Process and Strategies for Effective Buying Decision

Procurement

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Overview of company..................................................................................................................3
Step One.......................................................................................................................................3
STEP TWO..................................................................................................................................6
CONCLUSION..............................................................................................................................10
REFERNCES.................................................................................................................................12

INTRODUCTION
Procurement refers to the process of purchasing, usually for commercial purposes, products
or services. It is most frequently identified with corporations since, typically on a very broad
scale, firms tend to request services or buy products. This usually applies to the actual purchase
law, and it may even involve the overall acquisition process that can also be strategically relevant
for firms immediately prior to the final buying decision (Amann and et. al., 2014). Firms may be
sellers and buyers from both aspects of the selection process, although here they concentrate
exclusively on the claimant producer side. In order to better understand the importance of
relevant topic “Bumper Wood” a small company have been selected.
In this report, importance of Procurement process, strategies are discussed and the value of
chief procurement officer is also elaborated that help company in effective buying decision so
that desired growth can be attained.
MAIN BODY
Overview of company
Bumper Wood is a small sized furniture manufacturing company location in Brisbane,
Australia, which use to prepare different time of wooden tables, chairs, Designer bed, wood
flooring as well as also provide modular furniture on demand of customers. The company is
doing well in the competitive market by adding value to the customer money (producing and
delivery of goods as per demands), but is lacking behind an effective procurement strategy.
Step One
Procurement applies to the collection of procedures involved in purchasing the materials and
resources that the enterprise needs to run (Ambe and Badenhorst-Weiss, 2012). Consumer goods
and services acquisition is normally divided into two major categories: direct as well as indirect
procurement that is discussed in the context of Bumper woods:
Direct acquisition requires the buying of raw resources, merchandise, and facilities used by
businesses to manufacture their final products. For instance, commodities / services through
direct procurement might include items such as minerals, OEM parts, and finishing activities.

Conversely, indirect procurement focuses on the acquisition of services and goods which help
the need of the enterprise to operate, instead of the production of the final piece of the firm.
Those goods and facilities include items like chairs, office equipment and resources for
preparation.
The sourcing group aim is to have the right services and goods at the highest costs again from
best retailers. ince they make acquisitions on account over the divisions of an enterprise using
company revenues, the procurement committee is associated with other sections of the business
which perform a significant part within the financial performance of the respective company. As
a chief Procurement officer there have been various duties which needed to be performed in
appropriate manner so that valuable results can be made for company (Caldwell and Howard,
2014). These are discussed underneath:
The primary role of the CPO would be to oversee and coordinate the procurement staff in all
areas of purchasing and supply quality management. CPOs use a multitude of management
capabilities as core executives in an enterprise to balance multiple critical leadership roles. There
are some of such that include:
 Handling the actual strategy for procurement
 Trying to balance up a budget
 Being continuously cautious about seeking systemic sourcing and enhancements to the
supply chain
 Developing priorities, norms and benchmarks to keep track of main success measures
(KPI)
 Enhancing performance procedures.
 It is also critical for the CPO to guarantee that the recruitment plan is properly matched
with the overall business strategy of the organisation. As such, choices are also based not
solely on the volume and consistency of the currency, but on other considerations (Chen,
2012). For instance, if a corporation has chosen to be a symbol of management and
sustainable practises, then when sourcing vendors, procurement activities should consider
all options.
 The most popular company practise among most survey participants (78 percent) was
cost cutting.
 Since 2017, 61% of purchasing leaders have reported increased year-over-year savings.