There are two types of procurement plan:
1. Consolidated procurement plan
2. Individual procurement plan..
Consolidated procurement plans
Consolidated procurement plans are often developed for the whole organization, but depending on the structure and level of decentralization these may be developed at the corporate, divisional, country office or business unit level – or even at a number of these levels. Responsibility
At the organizational level the responsibility for preparing the plan would normally lie with the authority responsible for procurement policy and planning, but in smaller business units it may lie with the procurement officer. Consolidated procurement plans would normally be prepared annually, but in some environments where the needs are more difficult to define, e.g. because business focus is on emergency relief or on procurement agency services, these may be done more frequently, though not normally more than quarterly.
The procurement plan is always based on estimates of procurement operations to be carried out in the specified period. Some procurement needs cannot be anticipated, and the plans can therefore never be accurate. However, a procurement plan based on estimates is still better than no procurement plan.
The information for the procurement plan should be collected by the responsible person from a variety of sources depending on the particular organization. In some cases the information can be collected by asking requisitioners and clients to complete questionnaires, while in other cases the information can be collected through Management Information Systems or ERPs. Typically
the information is collected from requisitioners, clients, project plans, forecasting systems etc. Data collected varies from organization to organization, but as a minimum would include:
- Requirement for goods/services/works
- Delivery time requirements
- Estimated budget.
Once this data has been collected from all the appropriate sources it should be consolidated into the overall procurement plan. Analysis of the plan provides an opportunity to identify potential consolidation of procurements to achieve economies of scale, to better utilize resources, and to provide an overview of the magnitude of the procurement activity. In addition, when used as a
management tool, plans can identify periods of time in which a large percentage of procurement actions are required. This information can assist in planning and distribution of workload between various projects and operational units.
It is good practice to publish these consolidated procurement plans, for example on the organization‘s website. This provides advance information to the outside world of upcoming procurement activities and advances the key principle of transparency in procurement.
Individual procurement plan
Once a requisition or project plan is received determining an actual requirement, the procurement officer is then responsible for developing the individual procurement plan. The scope of the individual procurement plan will depend on the complexity of the requirement. While it is good practice to always make a plan, in the case of low risk/low spend requirements the plan should be simple, but should include an overview of the necessary steps of the process and associated timeline. At the other end of the scale, managing the procurement of an extremely high risk/high spend requirement is in fact project management and should entail a
thorough and comprehensive planning process.
It is the responsibility of the procurement officer to ensure that an appropriate level of procurement planning is conducted depending on the particular requirement.
Particular focus needs to be made in developing plans for ―significant purchases‖. Significant purchases are those goods, services of works that have been identified as being of high relative expenditure and/or are difficult to secure. An example of a significant purchase could be one annual purchase valued at Millions of US dollars, such as a complex consulting assignment. Alternatively it could be a large number of low value purchases within one year, which could be more economically addressed.