Comprehensive Report on Contract and Procurement Management

This report delves into the multifaceted world of contract and procurement management, exploring essential concepts and strategies for effective business operations. The report begins by defining contract management and its importance in guiding contract creation, execution, and analysis to impr...Read More

1
CONTRACT AND PROCUREMENT MANAGEMENT
CONTRACT AND PROCUREMENT MANAGEMENT
Student’s name
Institution affiliation
Date

2
CONTRACT AND PROCUREMENT MANAGEMENT
Introduction
Contract management can be termed as the process of guiding the creation of new
contracts, their execution as well as analysis to improve the company’s financial performance
and minimize business risks. It also enhances the company's operations. This contract shows
the terms of agreement of the partnering organizations and the activities each organization is
going to engage in, in the fulfillment of the terms of the contract. Contracts need to be
appropriately phrased so as to earn profit for each company and to strengthen business
relations between the partnering institutions.
Purchasing as a strategic resource
What I learned and knowledge acquired: -
Purchasing is the attempt to acquire or provide goods and services to an institution
through the integration of many functions in the most efficient and effective way. Effective
purchasing gives the organization a competitive lead, minimizes company costs and also
affects customer loyalty in a positive way. Purchasing affects the organization’s sales and
costs; where effective purchasing maximizes the organization’s sales while reducing costs.
sales improvement is as a result of engagement and a good relationship with efficient
suppliers. Purchasing should be aligned with business strategies to have consistency and
contribute to the accomplishment of the organization goals (Merzifonluoglu, 2017)
Sourcing approaches
What I learned and knowledge acquired: -
Sourcing implies the process of acquiring raw materials, goods or services and
suppliers that are needed in the business. Sourcing aims at finding the best suppliers who are
not expensive. Sourcing should be done strategically to gain a competitive advantage in the

3
CONTRACT AND PROCUREMENT MANAGEMENT
market and get the most reliable suppliers. Kraljic model for portfolio purchasing is a leading
strategic tool for guiding the strategies of sourcing for an organization. Partnership sourcing
is a combined approach where the buying company and its suppliers agree to work together,
aiming to improve the company's production and share the profits and the risks. This
partnership is always long term.
Supplier evaluation
What I learned and knowledge acquired: -
Supplier evaluation refers to the assessment process of possible suppliers to ensure
that the company gets the best suppliers. The process includes a quantitative and qualitative
assessment. Assessing the performance of suppliers enables the company to identify the
weaknesses of the supplier and ensure that the company’s requirements are met. The 10C
model can be used to assess the performance of the supplier (Govindan, Rajendran, Sarkis,
and Murugesan, 2015).
E-procurement for contemporary organizations
What I learned and knowledge acquired: -
E-procurement is a way of selling or buying supplies or services through the use of
software packages over the internet. The e-procurement involves the placing of the order,
authorization, and payment all done online. Kraljic model can be used to offer various e-
procurement strategic options. Different organizations need to identify an e-procurement
approach that works for them (Kim, Suresh, and Kocabasoglu-Hillmer, 2015).
Power and trust in buyer-seller relationships
What I learned and knowledge acquired: -

4
CONTRACT AND PROCUREMENT MANAGEMENT
Power can be illustrated as having the authority to bring someone else to be part of the
organization's activities organizations aim at improving its production processes to cope with
the demand, competition and meet the customers' needs. They do this by partnering with
other organizations and suppliers and seek to have control over the relationship.
Sustainable procurement
What I learned and knowledge acquired: -
Sustainable procurement is the ability of the organization to meet its business
requirements to carry out its production activities responsibly and in a healthier environment.
Sustainable procurement adheres to the legal frameworks by abiding by the government
obligations. Many factors drive organizations towards sustainable procurement, including the
creation of a good relationship with suppliers and attracting customer loyalty (Walker, and
Brammer, 2016).
Contract principles
What I learned and knowledge acquired: -
Contracts are promises which are legal and usually between two or more parties to
work together and share the benefits and risks as per the agreement. Contracts that are legal
and valid must possess all the vital contract elements. Contracts should also allow partnership
termination or cancellation under circumstances that one of the parties may want to quit.
Purchasing ethics and professional behavior.
What I learned and knowledge acquired: -
Purchasing ethics are principles that govern the relationship between the buyers and
the seller or the suppliers and the company. There are risks associated with unethical

5
CONTRACT AND PROCUREMENT MANAGEMENT
purchasing, including illegal behavior, which may cause enormous damage to the partnership
and the organization.
Conclusion
In conclusion, I have gained invaluable insight into the purchasing and procurement
sectors. I want to develop on e-procurement and the supplier evaluation sections. I have
chosen a supplier evaluation because suppliers form the backbone of every business. Making
the wrong choice of supplier would cause damages and losses to the company, while the right
choice of supplier would make the business get a competitive advantage and make huge
profits. I also chose e-procurement because technology is advancing every day, and this is the
way to do it because it is more efficient, reliable, and faster.

6
CONTRACT AND PROCUREMENT MANAGEMENT
References
Merzifonluoglu, Y., 2017. Integrated demand and procurement portfolio management with
spot market volatility and option contracts. European Journal of Operational
Research, 258(1), pp.181-192.
Kim, M., Suresh, N.C. and Kocabasoglu-Hillmer, C., 2015. A contextual analysis of the
impact of strategic sourcing and E-procurement on performance. Journal of Business &
Industrial Marketing, 30(1), pp.1-16.
Govindan, K., Rajendran, S., Sarkis, J. and Murugesan, P., 2015. Multi criteria decision
making approaches for green supplier evaluation and selection: a literature review. Journal of
Cleaner Production, 98, pp.66-83.
Walker, H., and Brammer, S., 2016. Sustainable procurement, institutional context, and top
management commitment: an international public sector study. In Sustainable Value Chain
Management (pp. 67-86). Routledge.