The Procurement cycle is the cyclical process of key steps when procuring goods or services, from identification of a need and conducting market analysis through to the process of selecting the supplier, managing their performance and reviewing lessons learnt.
Potential suppliers should:
1) Have capacity to deliver.
2) Have financial capabilities.
3) References from previous work.
4) Workforce i.e. skilled labour.
5) If suppliers is socially and environmental friendly.
6) Uses best practices(ethical)
Appraisal of Suppliers.
1) Supplier visits.
3) Financial statements.
4) Request for demonstration or sampling.
Generic Procurement Cycle.
1. Define the need. (specification)
2. Develop contract terms.
3. Source the market. (Identify potential suppliers)
4. Appraise selected suppliers.
5. Invite quotations (R.F.Q) or tenders (ITT)
6. Analyze quotation and select most promising supplier.
7. Negotiate best value (where appropriate)
8. Award the contract.
9. Need identification.
10.Contact administration/supplier management (monitor, review and maintain performance) The procurement cycle is a series of steps that must take place to supply a production line or to replenish stock in a distribution centre.