The specific tender process required is based on the type of good or service being tendered for, but in essence a tender process can be defined as the process of procuring goods, works or services by companies or government organizations. A tender process is issued by creating a requirement documentation, then a tender notice and related invitation is sent to relevant interested suppliers to take part in bidding (or is made public in case of government organizations tender process).This category includes all those activities associated to the definition and creation of the different components requested to have a tender launched, managed and finalized.
Strategic Procurement is an organization-wide process composed of different types of activities and actions and it requires inputs from different sources, departments and functional areas of the company. The targets of Strategic Procurement must be aligned with the company long-term business strategy and targets (usually three to five-years).Strategic Procurement incorporates actions aimed, as example, at reducing the supplier base, negotiations, communication and maintaining long-term relationships with suppliers.
Tactical Procurement defines a plan with the aim to establish a set of activities crafted with the aim of achieving short-term goals (such as % savings on direct or indirect purchases, services, etc.), where short-term generally means within a year’s maximum time frame or less. A Tactical Procurement activity is used to pursue shorter-term goals that can add up to achieving a strategic (and more long-term) goals of the company.
Operational Procurement embeds those day-by-day (or business as usual) activities to source or procure goods, works or services that are required to sustain daily production or business activities. The activities include also the administration and management of deliveries as well as dealing with any related issue.
Vendor Management is a process that enables organizations to control costs, drive service excellence and mitigate risks to gain increased value from their vendors throughout the deal life cycle. It helps selecting the right suppliers, categorizing them properly to ensure the right contract, metrics and relationship, and determining the ideal number of suppliers; mitigate risk when using suppliers.
This category includes those activities not directly related to the execution of Procurement roles but rather listing a set of activities useful for the definition and setup of an optimal Procurement Organization, including governance, processes and tools definition. These activities, driven by a senior person, can help any company to establish (or review) a proper and effective Procurement team that will work in light of clear goals defined by the company management. Need expert procurement advice, or want to offer your professional services? Login or sign up to join the Link2Sourcing community!