What is a procurement system, and what methods can be used to assess procurement systems?

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krishna-agrawala | College Teacher | (Level 3) Valedictorian

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Procurement system refers to the collection of procedures and methods used in an organization for purchase of goods and services required by it. It includes activities such as ascertaining the specifications and quantities of items to be procured, authorization for procurement, identification and selection of sources of supply or vendors, finalization of terms of procurement with the vendors, placement of purchase orders, follow up for supply of items ordered, inspection and approval of goods and services received against orders placed, and approval of payment for the same.

The method for assessing procurement system will consist of:

  • Identifying and defining the objectives of procurement, the inputs used for meeting these objectives, and developing parameters of measurement of efficiency and effectiveness in terms of these objectives and input resources.
  • Installing a system for collecting data on actual results obtained and resources used, analysing the data to determine the levels of performance in terms of the defined parameters of measurement.
  • Making the analysed information available to the concerned persons by way of periodical reports, as well as special reports and on-line information, made available on demand.

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