The Logistics Procurement Process

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Procurement is one of the main area in logistics. One may ask, “what is the Procurement?” It is the whole process used to obtain material for the purpose of manufacturing, sourcing services or work from sources outside the company, or negotiating for the right price. It is one of the key elements to measure supplier’s performance and to manage the organization and suppliers’ relationship. Mostly all decision made by a company has some kind of implication that can affect cost and the business success. This process is not a one stage process but there are several processes to make the procurement process successful and profitable. Procurement is looking at the big picture, and is the stage where things may not be for certain from the get go. …show more content…

In doing so, they also rally to have their products delivered within the timelines and also keep on top of payments. At my workplace in order for things to run smoothly focus is placed quotations received that was requested for a particular product, purchase orders, schedule of procurement & payments. This avoids lots of confusion and paying for a product. Also, when quotations are received from different supplier’s prices are compared and most times this is how the final decision is made to get product or machine. With procurement, a list of are certain criteria that is considered before settling on a supplier. They are set based on their quality, geographic area, price, reliability, reputation and availability. These are all things that should be considered in the procurement in logistics.
One of the process of procurement is to establish product policy like the product packaging, warehousing and storage and details regarding manufacturing. This factor might seem simple, but it is more complex and important from a cost point of view. It has proven that it is just as important as any other profession in an …show more content…

Distribution is determined based on customers wants and need of the product. It depends on when, where and the cost of the product they are demanding. Distribution is more than just dishing out the final product, it also involves managing the warehouse, and destination the right size and kind of transport for distribution. It will not be worthwhile to have an eighteen-wheeler to distribute one hundred small items. Hence the reason thoughts should be put into organizing transport. Another critical decision is whether distribution will be air, land or sea. At this stage, it is kind of risky because it might tend to get loss and insecurity are sometimes high. Communication and monitoring is a bit difficult because there is less direct control. Technology has evolved so much that companies can invest in a program that can coordinate to monitor shipment. Failure to deliver the right goods will cause customers to return, cause delay if they need their supplies urgently and also cost the company to incur unnecessary

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