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Procurement Processes
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Flashcards
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Supplier Shortlisting
Narrowing down the list of potential suppliers based on the evaluation of their proposals or quotations.
Vendor Managed Inventory (VMI)
A streamlined approach to inventory management and order fulfillment where the supplier is responsible for maintaining the buyer's inventory levels.
E-Procurement
The business-to-business sale and purchase of supplies and services over the Internet.
Proposal Evaluation
The process of reviewing and comparing supplier proposals based on factors like price, quality, and service to select the best option.
Goods Receipt
The act of receiving goods from a supplier and the verification that the goods meet the order specifications and quality.
Supplier Development
The strategic process of working with certain suppliers to improve their capabilities for the buyer's long-term needs.
Supplier Negotiation
A strategic discussion between the buyer and the shortlisted suppliers to agree on terms, prices, delivery schedules, and other contract specifics before finalizing the purchase.
Request for Proposal (RFP)
A formal document that outlines the procurement requirements and asks possible suppliers to submit bids detailing how they can meet these requirements.
Supplier Performance Evaluation
The on-going process of assessing and scoring the supplier based on their performance to ensure compliance with service level agreements (SLAs) and other contractual obligations.
Request for Quotation (RFQ)
A document that requests a detailed price quote and timelines from suppliers for a specific number of products or service specifications.
Three-Way Matching
A control process in accounts payable where the purchase order, receiving report, and supplier's invoice are matched to ensure consistency and correctness before payment is made.
Strategic Sourcing
An approach to supply chain management that formalizes the way information is gathered and used so that an organization can leverage its consolidated purchasing power to find the best possible values in the marketplace.
Needs Identification
The initial step in procurement where the company identifies the need for goods or services.
Purchase Requisition
An internal document used to communicate the need for items or services before initiating the procurement process.
Supplier Identification
The process of finding qualified suppliers who can provide the required goods or services.
Contract Awarding
The formal process of signing a contract with a supplier after negotiations are concluded, which legally binds both parties to the terms and conditions outlined.
Payment Processing
The action of completing a financial transaction which compensates the supplier for the goods or services provided.
Spend Analysis
The practice of collecting, cleansing, classifying, and analyzing expenditure data with the purpose of decreasing procurement costs, improving efficiency, and monitoring compliance.
Sustainable Procurement
This procurement process considers not only the economic aspects of purchase but also the environmental and social aspects, aligning with wider sustainable goals.
Order Management
The administration of business processes related to orders for goods or services including placement, tracking, and fulfillment.
Supplier Selection
The decision-making process where the most suitable supplier is chosen from the shortlisted candidates to fulfill the procurement needs.
Purchase Order (PO)
A formal document issued by a buyer to a supplier to request the supply of goods or services as per agreed terms.
Order Expediting
The process of ensuring the ordered goods or services are delivered on or ahead of the agreed schedules.
Invoice Approval
The process of verifying an invoice received from a supplier against the PO and delivery documents to ensure all charges are accurate and justified.
Request for Information (RFI)
A document sent to potential suppliers to gather general supplier information or capabilities before more detailed sourcing activities.
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