March is Procurement Month and offers a perfect time to go back to basics. Here's a quick refresher on the fundamentals for any purchase with a brief explanation of why.
What people don't realize is that professionals are sensational because of the fundamentals. ~ Barry Larkin
Price: Material/service obtained at the right price, meaning that it is reasonable, fair and competitive. This includes cost analysis, negotiation and competitive pricing.
Time: Delivery to the correct point, whether tangible, packaged and transported or within service- or construction-based milestones. This includes distribution planning and/or project management. The timing of purchases is critical depending on a number of variables.
Quality: Material/service obtained is of satisfactory quality and fit for their purpose, such as accurate specification of product or type of service required. The right quality is the suitability of material/service purchased for a given purpose.
Quantity: The right quantity obtained to meet demand and maintain adequate service levels. The right quantity is what may be purchased at a time with the minimum total cost and overstock but avoids shortage of materials. This includes forecasting and inventory management.
Source: This is the supplier who can provide the material/service of right quality as ordered, in right quantity as ordered, at a right time at which the materials/services were required to be supplied, at an agreed price with the supplier, that will honor the contract and has the financial capacity and resources to handle the purchase. This includes responsibility and responsiveness.