Procurement and Risk Management: Stages and Key Risks

PROCUREMENT AND
RISK MANAGEMENT
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TABLE OF CONTENTS
Executive summary..........................................................................................................................3
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
A Stages of procurement process.................................................................................................4
B Analyse key risks that company faces at different stages of the procurement........................7
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................12

Executive summary
Procurement risk is potential for the failures of procurements process plan to purchase products,
resources or services. There are many procurements changes such as lack of technology, lack of
communication, poor supplier relationship etc. The report discusses the procurement process and
also evaluate key risks that the organization is actually facing at different stages of procurement.
And also, elaborate risk resistance. Moreover, report also includes risk response strategies such
as remove the risk, transfer the risk, accept the risk, contingency plan and reduce the risk.
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INTRODUCTION
Procurement risk management is a process of determine both external and internal risks
to company supply chain. The effective risk management manage and eliminate situation which
put company at unnecessary risk (Hong, Lee, and Zhang., 2018.). Risk management is
continuous and critical process, and proper risk assessments that should be reviewed, managed
and undertaken throughout the procurement process. Unilever is a multinational company,
located in London United Kingdom. Company deal in various products such as ice cream,
personal care, food, clearing agents, condiments and beauty products. Company is deal in retail
sector that is consumers goods. Unilever provides good quality services and goods at the fair
price. Company target group is households and individuals. This report will elaborate the
different stages of procurement process that help business to achieve competitive advantages by
using appropriate theory. Such stages include specialization, selection, contracting, ordering,
Expediting and evaluation and Follow up. Moreover, the report also discuss risk in relation with
two different stages of the procurement.
MAIN BODY
A Stages of procurement process
Effective procurement process includes stages are as follows:
Specification: company have good specification on their products so its give positive impact.
The first think is to identify the need. The need identification process starts when a manager
submits request to department. Here, request can be complex or relatively simple. But the request
required in to be submitted in the written and includes sufficient details. The department
determine the need of purchase. Thus, company strength is they are more specific about the
products (Khan., 2018).
Selection: After the specification that is need identification, the next step is vendor selection.
The department needs to analyse vendors, then request quotes for products or items needed, then
the company select a vendor. Selecting vendor is an important part because cost, reputation,
dependability and speed of services need to be analysed before making decision.
Contracting: the next stage is contracting with the suppliers, if company select their vendor then
they have to contract them for the further process. Here the company must submit purchase
requisition. Now, it is a time to acquire approval for purchase. After, a manager known the