Eskom Procurement Book 2015

THE PROCUREMENT PROCESS

2.2.5 SUPPORTING ORGANISATIONAL GOALS AND OBJECTIVES

One of the most important, if not the most important, objectives for procurement is to support overall organisational goals and objectives. It is therefore vital to understand how procurement can contribute effectively to organisational objectives and strategy. It is also important to understand how the organisational objectives and strategy can properly reflect the contribution and opportunities offered in the supply chain. By linking to and supporting corporate strategies (see Chapter 6), the procurement function becomes a valuable strategic partner within the organisation [1]. Procurement must be forward looking. In today’s world, firms face the challenge of prospering despite stiff, often global, competition. Procurement needs to relate effectively to outside environments, including social, economic, political, legal and technological. It also needs to anticipate changes, to adjust to these changes, and to identify and make the best of opportunities. In order to do this, procurement needs to formulate and execute strategic plans that will play a major role in generating future earnings and will be critical for survival. In progressive firms, procurement is actively involved in the corporate planning process and can provide supply market intelligence that contributes to strategic planning. Procurement is responsible for the development of effective sourcing strategies (see Chapter 4) and should play an integral role in the development of overall corporate strategies. 2.3 KEY STEPS IN THE PROCUREMENT PROCESS The procurement process is a cycle that consists of a number of distinct stages. These vary in different organisations and may have different names; and are dependent on whether procurement is sourcing a new item or an item that has been previously purchased. The procurement process includes the purchase of goods and services. The effective and efficient accomplishment of procurement activities can help to maximise value for buyers and suppliers. 2.2.6 DEVELOPING SOURCING STRATEGIES The sourcing process usually starts by identifying or anticipating the goods or services needs of a user. (This could be an individual or group within the procurement professional’s firm.) In some cases, existing needs must be re- evaluated because they change. The process begins either with a user or user group within the firm communicating a need to the procurement group and/or an individual within procurement identifying a need within the firm. Once this need has been identified, the sourcing process can start [1]. 2.3.1 IDENTIFY USER NEEDS

32 CHAPTER 2