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How the Procurement Department Functions?


The procurement department is responsible for all the purchasing done in a public limited company. Transparency and clarity in the whole process is their topmost priority.

First, when a need for raw materials or goods is there, the requirement is raised by the appropriate department. They have to detail the requirement along with the money that needs to be allotted. 

Once the money is allotted by the management and accounting, the procurement department gets to work to find the correct supplier or vendor to fulfill this requirement. 

The procurers have a list of potential vendors and suppliers who can fulfill their requirement. In fact, under certain circumstances, the procurement department may even reach out to the vendors to directly fulfill the order without the need of the whole process. But this happens only under special circumstances. 

But in most cases, a tender is released stating their requirement. All the details are given in the tender like the quality and quantity of the goods, the expected date of delivery, and the price range they are willing to pay. 

The people who are interested in replying to the supply requirement, have to put in their bids and state the price they are willing to take. Their bids have to come in before a certain date that has already been mentioned in the contract. 

The procurement department selects the winning bid and the supply order is given to that supplier.  

This is how the whole procurement process takes place. Of course, there are many other detailed steps as well, about which you can learn if you enroll into one of the many procurement training programs