What is Procurement?

Procurement describes the process of purchasing services or goods from a third-party supplier. This process usually refers to buying on a large scale to serve a specific business purpose.
In procurement, there are five pillars that procurement departments should keep in mind. These principles will ensure that the procurement system remains economical and efficient.

What are the 5 Pillars of Procurement?

Value for money

Procurement should be driven by value, not price. If lower price means compromising on the products’ quality, companies should think twice before purchasing. As buyers, we should aim for products that offer the best value for money instead of paying attention to the ones with the lowest price possible. This will ensure that the finished goods or services of the companies remain stable and reliable for customers

Open and Effective Competition

The process of selecting vendors should be transparent and bias-free. Such open competition is not only fair for suppliers but also beneficial for the buyer as they will get the best value for money.

Ethics and Transparency

Procurement Departments when going through the process of evaluating suppliers must be completely honest and transparent. There should not be any unethical practices such as accepting bribes and gifts from suppliers because this will directly affect the quality and value of the finished output.

Accountability and Record-Keeping

Buyers should be accountable for every decision being made and sellers should also be able to account for their plans and strategies. Additionally, record-keeping should be handled carefully and clearly so every step of the procurement process can be managed with ease.

Equity

Government will take actions to ensure that enterprises from all industries receive an equal and uniform procurement environment.

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