What Is The Difference Between Procurement And Supply Chain Management?
We’ve previously explained what is meant by supply chain management, but how does procurement differ? And what are the procurement steps in supply chain management?
Procurement refers specifically to obtaining goods or services. Though often used to describe the process of procurement, procurement generally describes the final stage in that process and the actual purchase. Supply chain, however, refers to the steps taken to deliver those goods and services. So while there are procurement steps in supply chain management, they are two different processes.
What Are The Procurement Steps In Supply Chain Management?
Below is a basic outline of the procurement steps within the supply chain process. While this is a simplified version, both parties should strive to maintain these basic steps in a timely manner where possible. There are areas of the procurement process that can take a significant amount of time, ultimately costing both the client and supplier resources and money to try and reach an agreement. Therefore, planning at an early stage is essential to avoid any unnecessary complications at a later stage of the procurement process.
Establish The Need For Goods Or Services
In this phase, a company identifies a need to hire the services of a third-party company and a budget will be set.
Identify Suitable Suppliers
This research phase is a period when companies consider a list of suppliers and deem their suitability to the needs established in the first stage. It can be a lengthy process, especially in areas where a company has not previously done business.
Negotiate The Deal
On identifying a suitable supplier for the goods or services, companies will enter into a negotiation phase. This negotiation will cover price and terms of service, including timescales and deliverables. To further reduce risk, it is during this stage that companies may introduce a Service Level Agreement (SLA) or contract for services to establish the specifics of what is expected from each party. Being thorough in the negotiation process leaves little room for interpretation and provides clear expectations to reduce margin for error.
Payment Of Invoice
Once the terms of the contract have been negotiated, the supplier will issue an invoice and the client should pay on receipt of the invoice or in accordance with the agreed payment schedule.
Delivery Of The Goods Or Service
Within the agreed time frame, the supplier will then deliver the goods or services as ordered by the client.
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How Accreditations Can Speed Up Procurement
As mentioned, the above procurement steps in supply chain management can take several weeks. Often this time is spent researching companies, as well as waiting for responses from suppliers and making comparisons between several options. The negotiation stage should not be the most time consuming but can hold up proceedings. A company can take certain precautions to reduce the time spent on the procurement steps in supply chain management. 
Reducing risk in your supply chain will decrease the chances of costly delays to your procurement. Accreditations such as the CHAS Common Assessment Standard help mitigate that risk in a number of ways. For CHAS contractors, one of the benefits of being accredited is prequalifying for business opportunities. This gives contractors the edge over competitors who aren’t accredited, as they can’t necessarily demonstrate the same levels of compliance in risk management. This can save time in bidding on contracts.
CHAS clients can save time during the procurement phase of a project by gaining access to a pool of accredited contractors who have already proven their compliance. CHAS clients can easily search and access over 35 thousand accredited contractors to expand their supply chain with confidence. This saves time in researching and sourcing contractors.
To benefit from the accreditations that can help speed up procurement, contractors can sign up for these and other membership benefits. Clients can sign up for free for access to pre-approved contractors.
