What is procurement?
Acquiring or taking control of material for a specific purpose which tracks the quality, quantity, sourcing and timing so we can obtain the goods at the best price. Procurement is a way of securing materials via tendering or bidding.
It is a strategic level activity and proper analytical and technical skills are required to complete this process.
Procurement includes identifying the material that is required, analyzing the vendor, complying with the specifications, managing logistics while maintaining budget and quality standards of the material that is being procured.
Why is procurement important for the construction industry?
Procurement is an integral part of the construction industry.
The success of a project depends on how much the contractor has saved at the end of the job which undeviatingly depends on what he has procured and in how much.
Let it be hiring subcontractors or acquiring high quality of material, the procurement department is responsible to assign contracts to the right people who are having ample amount of talent to maintain the quality and standards and who can finish the project within the budget and time.
Every penny that is being spent should be accounted for, so that all the parties involved have fair amount of returns on their investment. No project can be closed without its procurement department procuring and providing the required material.
What is the difference between procurement and purchasing?
The main difference between procurement and purchasing is that while purchasing we usually do not concentrate on specifications, estimations, pre qualifications or quality of the material. Whereas procurement is a long-term activity which includes getting material, adhering to the requirements, handling logistics with quality assurance and guarding net profits.
Purchasing is seen as transactional while procurement is strategic and analytical.
What are the steps involved in procurement?
- Identifying material
- Choosing suppliers/vendors
- Raising request for quotation(s)
- Quotation analysis
- Negotiating with respect to cost and the lead time
- Raising purchase orders or amending contracts
What are the challenges faced during procurement?
- Sending or Managing RFQs
- Delays caused by logistics
- Tolerating unnecessary risks
- Limited or lack of transparency
- Complying with the specifications or requirements
- Understanding supplier capabilities
- Cost optimization
What are the traditional ways of procurement?
- Picking out the material that must be procured
- Searching for suppliers who can comply with the specifications
- Sending an email requesting for quotation
- Comparing quotations using Excel/PDF
- Printing the summary to take approvals
- Releasing purchase orders
- Manually generating reports to maintain track
What is e-procurement?
Electronic Procurement is the method of converting requisitions into purchase orders over a centralized system with the use of internet. It helps the contractor communicate with the vendor on a platform designed to improve the process seamlessly.
With advancing technology and digitalization becoming the need of the hour, converting the existing manual procurement process and creating an automated structure for the organization.
Many organizations are adapting to E-Procurement platforms, given its potential to eliminate irregularities and prevent unnecessary costs.
What are the benefits of e-procurement?
- Eliminating the use of paper
- Lesser manpower required
- Faster transactions
- Improved transparency and efficiency
- Automated quotation analysis
- Electronic approvals
- Automatically generated reports
- Reduced errors
- Streamlining confidentiality and security of information
What is Kasper?
Kasper solutions digitally connect buyers, sellers and other teams, providing complete visibility and management of data, documents and costs across all stages of a procurement cycle in the construction industry. It is an effective way for contractors and vendors to find and transact with each other online.
Kasper helps organizations have a powerful, cost-effective, and a secure cloud-based procurement platform.
What solutions does Kasper offer?
- Eliminates the never-ending use of printer and paperwork
- It helps contractors search and transact via our supplier database or network
- Less time consumption doing approvals with regular notifications
- No more old school ways of keeping a track of the money being spent
- Assessment from the past vendor evaluations before making any transaction
- Automated quotation analysis can ensure faster compliance for your organization
- Timely report generation for more efficient budget management
- Increases the vendor sales through significant exposure within the market using our supplier directory
- Track and monitor your inventory with ease