Figure C10b.3 Procurement – Purchasing
Figure C10b.3 Procurement – Purchasing
Figure C10b.3 respects present Project management (PM) rules and describes Purchasing in the procurement processes via components (steps) of today's frequently used. The Purchasing function is concerned with acquiring goods and services for use by a buyer.
These will include, for example, raw materials and components for manufacturing, steel structure assembling, and production equipment. Purchasing, like Sourcing, is divided into six steps. The below-described steps reflect the present stages of Procurement (e.g., by Wikipedia).
Their adaptation to the new project paradigm is a task of future teams. Similarly, like Sourcing steps, all Purchasing actions (steps) should be transformed into the Smart Contract technology in the environment of the Blockchain operations (see chapter B, Challenge).
The triad of a goal of the Purchasing covers:
Purchase requisition (PR): A purchase requisition form is an internal document used by an employee to purchase goods or services.
The purchase requisition is a process and plays a crucial role in Procurement. It ensures that fraud is prevented, and organizations get the value for their money (such a request must go through some approvals to ensure its accuracy and need).
Purchase order (PO): purchase order is an official document issued by a buyer committing to pay the seller for the sale of specific products or services to be delivered in the future.
By accepting the purchase order, the seller agrees to sell the listed products and quantities at the prices set forth by the buyer. The seller then issues an invoice to the buyer based on the purchase order.
Invoice match payment: Invoice matching is an accounts payable process that validates & compares information on the purchase order (PO) with the vendor invoice and product receipts.
When an Organization or Project wants to use the goods or services, it raises a purchase order with detailed requirements. Invoice matching compares information on the invoice with supporting documents such as a purchase order, goods receipt, and contract.
The triad of a path of Purchasing covers:
Identify needs: a needs identification process defines why buyers plan to buy goods, works, or services. When starting your procurement planning, it's essential to determine why a buyer needs to purchase goods, services, or works and plan for associated risks.
Therefore, e.g., project procurement needs to obtain all of the materials and services required for the Project (in a proper time and the source schedule used in project stages). Project procurement management encompasses the processes used for making sure project procurement is successful.
Approval in Procurement: a system that governs the procurement/purchasing process. Approval outlines the steps from requisition to permission to purchase to receipt of goods, services, or works.
It is about the requisition approval process. It is an example of a workflow process initiated when you create a new requisition to purchase a specific item.
Goods, services, and works receipt: goods receipt means the moment when goods (services, works) are received, and the responsible person (receiving them) inspects (quantity and quality parameters), and damages caused during transport, in stocks, etc. (e.g., if the packaging is good, the recipient forwards the goods to the department that ordered them).
Figure C10b.3 - diagram's reading follows the same methodology, and the reader of this text is asked to read about the diagram themselves. The purpose of the charts is to assist with scaling (e.g., if such a form of recording of logical consequences is needed).