Evaluate and describe the purchasing process and assess the degree to which the Company uses the purchasing process to reduce its operating costs.

Introduction:
The Procurement process could be divided into three stages. Phase 1 is the pre-contractual phase (demand management), which includes: identification of need and development of a specification for the physical and performance characteristics of the required goods or services, identification of potential sources of supply (market research), qualification of potential suppliers and their goods or services, design of the request for each proposal/quotation, and the solicitation of bids. Phase 2 comprises of the selection and contracting process, bid evaluation, supplier selection, and negotiation of contractual terms and conditions with selected suppliers. Finally, Phase 3 covers post-contract and relationship management (soft management tasks), monitoring of supplier performance, and the management of ongoing supplier relationships.
The purchasing process covers all activities performed to obtain and manage materials required for manufacturing a product (or providing a service). It involves a transactional flow of data with the supplier from the point of order right up to the point of fulfilment of the actual order, and payment for the product or service.
Main Task:
Select an organisation.
1. Evaluate and describe the purchasing process and assess the degree to which the Company uses the purchasing process to reduce its operating costs.
2. Concentrating on one of the aspects of the procurement stages (e.g. sourcing, contracts, purchasing etc.), describe it, including the role of ‘sustainability’ at this stage of the procurement process (sustainable procurement considerations should occur at all stages throughout the procurement process). Assess the degree to which the Company’s procurement process is fit for purpose in order to achieve effective sustainable procurement.
Use secondary sources of data.

Assessment criteria and weighting:
– Selection and use of academic/professional sources, and understanding and interpretation of key findings (30%)
– Effective coverage of point 1 (30%)
– Effective coverage of point 2 – critical discussion and depth of analysis (30%)
– Quality of report: presentation, structure, flow and readability (10%)

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