Procurement

Overview

Framework:
RQF
Level:
Level 3
Unit No:
D/617/6664
Credits:
6
Guided learning hours:
48 hours

Aim

The aim of this unit is to provide learners with an insight into procurement as a concept and as a process where understanding the role procurement plays in the supply chain is key to determining the effectiveness and efficiency of an organisation’s approach to procurement.

Unit Learning Outcomes

1

Understand procurement.

  • Procurement
    Sourcing, negotiating and strategic selection of goods and/or services.
  • Purchasing
    The process which is used to order goods and services.
  • Stages
    Internal needs analysis – assess supplier’s market – collect supplier information – develop a sourcing strategy – implement the strategy – negotiate with suppliers – contract preferred supplier(s).
  • Role of procurement
    Seek better materials; seek better suppliers; develop strategic suppliers; involve suppliers in product or service design.
  • Roles in procurement
    Procurement director/manager; head of purchasing; buyers; procurement analysts.

Assessment Criteria

  • 1.1

    Differentiate between procurement and purchasing.

  • 1.2

    Explain the stages in a procurement process.

  • 1.3

    Assess the role of procurement in an organisation’s supply chain.

  • 1.4

    Explain the different roles involved in the procurement process.

2

Understand legal, ethical and sustainability factors related to procurement.

  • Legislation
    Contract Law; Law of TORT; Public Contracts Regulations; Sale and Supply of Goods Act; Public Procurement Regulations.
  • Ethics
    Transparency; non-discrimination of suppliers; confidentiality; principles of fair trade; codes of conduct/practice.
  • Sustainability
    Environmentally friendly; economic responsibility; develop long-term relationships with suppliers.

Assessment Criteria

  • 2.1

    Explain legislation relevant to procurement.

  • 2.2

    Explain the ethical issues relevant to procurement.

  • 2.3

    Explain the sustainability issues relevant to procurement.

3

Understand supplier relationships.

  • Characteristics
    Market; ongoing; partnerships; strategic alliances; backward integration.
  • Development
    Supplier management system; reactive approach; strategic approach; prompt payments; mutually acceptable agreements.

Assessment Criteria

  • 3.1

    Describe the characteristics of different types of supplier relationships.

  • 3.2

    Explain how to develop supplier relationships to improve the procurement process.

4

Understand the context of procurement.

  • Integration
    Logistics – storage and distribution of goods; right products, right place, right time; right quality; forecasting; materials resource planning; sales and operational planning.
    4.1 will be assessed by applying knowledge of procurement with knowledge of logistics to an organisation.
  • Business requirements
    Strategic intent; capabilities; resource usage; current and future projects; future expansion.
    4.1 will be assessed by applying knowledge of procurement with knowledge of an organisation’s business requirements.

Assessment Criteria

  • 4.1

    Explain how an organisation integrates procurement into its logistics function.

  • 4.2

    Explain how an organisation’s business requirements influence its approach to procurement.