Procurement Risk and Contract Management

Procurement Risk and
Contract Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
1. Evaluate how the different stages of the procurement process can help the organisation to
achieve competitive advantage...............................................................................................1
2. Analyse the key risks that the organisation faces at the different stages that you have
identified.................................................................................................................................5
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................12

INTRODUCTION
The report discusses about the different stages of procurement procedure of TESCO
which mainly assist the firm to achieve the competitive advantage (Bag and et.al., 2020). It this
report the procurement process means that it assists the firm to find an appropriate supplier.
TESCO is a multinational company which deals in supermarkets and in into the retail business.
Apart from this in another part it also explains that the type of risk company face in each and
every stage of the company and how it influences the projected task of the organization and
create disruptions in an operational activity of the firm.
TASK
1. Evaluate how the different stages of the procurement process can help the organisation to
achieve competitive advantage
Theories of procurement process
The company TESCO also use the procurement process in their grocery business to select
the appropriate supplier in a reasonable price. Before describing the procurement process firstly,
it is important to understand the concept of procurement, it play a very significant role in a
business work. It handles productively and completed well, it can also assist to maximize the
firm's profitable condition. It also involves the part of task which mainly includes in sustaining
the products and services such as creating purchases, sourcing, terms negotiating and tracking
the records when suppliers are keeping and received (Boadu and et.al., 2022). This process of
procurement its need to be daily monitored and find any weak point or inefficiency.
Procurement process is mainly important in the companies also for knowing the supply chains,
because it assists the firm to identify some appropriate suppliers. It can provide rivalry price of
products and services that equalize the organization's requirements. For example: if a firm
required a new supplier to give an ongoing service for an unfixed duration of time like an email
safety solution in this case procedure of procurement assists the firm to select the supplier that
better achieves all the firm's necessity in an appropriate price. It includes the firm to eliminate
the wasting of time, money and valuable funds dealing with an appropriate way.
Declining the cost is one of the major prospect of bettering the procedures of procurement. But
it's also play an important role to determine suppliers that give the superiority of products and
1

services that the firm requires and have the potentiality to supply appropriately and a track record
of performing.
The procedure of procurement is determining and accepting the terms and getting products,
services or functions from an external origin, frequently through tendering or the procedure of
rivalry bidding. The process of procurement is mainly includes to creating the purchasing
decisions below the scarcity conditions. It explained about the kinds of procurement and multiple
techniques of procurement which are mainly utilized for sustaining the superiority products and
services.
The department of procurement is answerable for getting the products and services for a
company. It may include about the purchasing of the products at rivalry prices, managing all the
legal process connected with receiving a contract, products budgetary expenses, and researching
financial trends to confirm that organizational money is being wisely spent.
The process of procurement can be classified in certain manners. It can be categorized as direct
or indirect procurement, which depends upon on how the firm will utilize the elements that are
being procured. It can also be classified as products or services which depends upon the thing
that are being procured.
 Direct procurement: It can be define as for acquiring anything that is needed to
manufacture the ended- good. For the production firm, it involves raw material and
factors. For a seller, it belong of any elements acquired from a distributor for selling to
consumers.
 Indirect procurement: It mainly includes the elements which are purchases ad
necessary for the daily operational activity but do not share instantly to the firm's lower
line. It can involve providers office and furniture to advertise the drives, services of
consultancy, and the maintenance of tool.
 Commodities procurement: It highly shows to the physical elements of procurement
process, but it can also involve items such as subscriptions of software. Procurement of
functional products mainly it depends on the supply chain of product administration
exercises. It may involve both the procurement such as direct and indirect.
2