Role of procurement Flashcards
What is procurement?
the process of purchasing raw materials from a supplier
What are the 2 different types of procurement?
direct- buying raw materials used to make final product / service eg school books and computers
indirect- buying raw materials not used to make final product / service but required for a business to operate eg heating cleaning and gardening
Why is choice of suppliers important?
is critical for a business because it will affect the success of what they do
What factors does the choice of suppliers involve?
Quality and reliability
flexible and speedy
good service
value for money
good communication
finanicial security
Quality and reliability
help the business provide same to customer
good qp improve reputation and can justify high prices
Flexible and speedy
speedy delivery helps meet customer needs
flexible supplier allows businesses to respond to change in demand
Good service
a good supplier provides good service eg timely delivery communication and quality
Value for money/ cost
product provided has a quality which justifies the price
Good communication
a good supplier communicates to find out what the business needs
Financial security
must be secure enough for the future
ensures future supply to the business
What is the supply chain?
refers to all the businesses, people and activities that take place in the production processes
What factors do you consider when choosing a supply chain?
timely delivery
length of supply chain
good customer service
Why is it important for a business to have a good relationship with its supplier ?
Will ensure:
high quality products
trust
good prices
availability of suppliers
timely delivery
What are logistics?
refers to the movement of goods, services, information and money throughout the production processes
what does a business need to do when i grows?
oder larger quantities of production inputs eg shirt materials and wood
