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Sourcing Strategies & Procurement Processes

| Not long ago, purchase function was seen to be a desk job, monotonous paper work, dull and passive and more of an administrative function. The purchase managements were the fall guys whose only aim was to keep feeding shop floor and avoiding stock out situation.Today the situation has changed totally. Procurement function is considered to be a strategic initiative and seen to be adding value to entire business process. Profile of the procurement managers has changed and expectations from these managers are different.Modern day procurement managers manage procurement and sourcing function both at strategic and operational levels. They are proactively engaged in building supplier networks, estimating, controlling and reducing costs besides performing other functions and ensuring service levels. Their job functions are increasing becoming cross functional together with supply chain and manufacturing functions.Procurement process and paper work is today managed by the ERP systems which drive the procurement business process. |

Procurement Function

Procurement function as explained above is one part of the sourcing function. In an ERP enabled environment, procurement function consists of detailed indenting process, procurement budget management, purchase order release, shipment schedule planning with seller coupled with ensuring compliance with documentation and system updating processes. All these processes are driven by ERP.

Procurement function deals not only with procurement of raw materials and components, but also with capital equipments, project procurement, spare parts procurement for after market, managing rejections, defective returns, warranty replacement process with suppliers too.

Vendor development is a key function in procurement. Sourcing and vendor development are some of the skill sets required to be developed by Procurement team.

Procurement...