"Procurement methods" refer to the various methods or strategies that a company can use to procure materials, products, or services. These procurement methods may differ in terms of the relationship with the supplier, the type of contracts, pricing, and other factors.
Typical procurement methods include:
Single Procurement: Materials or services are procured individually from a supplier as needed, without long-term agreements or contracts.
Framework Agreements: Long-term agreements are made with suppliers that establish certain conditions such as prices, delivery times, and quantities. Orders are then placed as needed while considering the framework agreement.
Tendering: The company publicly invites suppliers to submit bids for providing materials or services, and selects the supplier with the best offer.
Supplier Contracts: Long-term contracts are made with suppliers that grant exclusive deliveries, discounts, or other benefits to the company.
Strategic Partnerships: The company develops long-term relationships with selected suppliers to achieve common goals, drive innovation, and gain competitive advantages.
Just-in-Time (JIT) Procurement: Materials are procured only when they are needed for production to minimize inventory costs and increase efficiency.
Typical functions of software in the "procurement methods" area could include:
Contract Management: The software assists in managing framework agreements, supplier contracts, and other agreements with suppliers.
Tender Management: It allows for the creation, publication, and evaluation of tenders, as well as the selection of the best offer.
Supplier Management: The software helps in managing supplier relationships, evaluating supplier performance, and selecting appropriate procurement sources.
Order Processing: It supports the processing of orders according to the agreed procurement methods and contracts.
Analysis and Reporting: The software provides features for analyzing procurement costs, supplier performance, and the effectiveness of procurement strategies.