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Procurement Process In Small Or Micro Enterprises

1393 words - 6 pages

The two main products sold of the supermarket are Indomie which is instant noodle and Pokka green tea. For Indomie, the supplier is from Carrefour, which the business imported from Indonesia whereas Pokka green tea’s supplier is Intradco which operating in Australia. These suppliers usually deliver the products to the business 3 three times a week to keep maintaining the stocks. Regularly the products arrive with around 15-20 boxes. For the payment of these products, usually manager pays in every last month to make effective and efficient in the process of purchasing by using check. Also the manager has a contract to both suppliers. The contract is compulsory to maintain mutual trust between both parties and also maintain the time delivery of the products. By that way, manager can keep tracking on the supplier performance.
Comparative Procurement Process

Three of these organisations are small scale of businesses and they are in different market. In supply chain concept, Business 1 and Business 2 are in the same position, they are both retailer. In contrast Business 3 is the wholesaler. The first step of procurement process that applied by three organisations is identify the requirement of their major products. At this stage, other department in these three organizations identify their requirements to the procurement department and normally they will provide description like quantity, requirement date, and preferred vendor. This first stage is critical because any faulty might costs the organization.
The second stage of Business 2 and Business 3 is to select and identify their supplier whereas Business 1 must first clarify with the owner and then supplier identification is taken next. In the next stage Business 2 and Business 3 choose to have contract with their supplier because the volume of goods they need are much more compare to Business 1 which they prefer cash on delivery after they receive the orders. In last stage Business 2 and Business 3 will receive their orders and receipt document and settle the payment within 30 days since the invoice being issued.
Business 1 Procure to Pay Process diagram (restaurant industry)
Identify the requirements
Clarify with other department
Supplier selection
Negotiate
Receive orders and COD

Business 2 Procure to Pay Process diagram (clothing industry)
Identify the requirements
Supplier identification
Request for quotation
Contract
Receive the orders
Settle the payment

Business 3 Procure to Pay Process diagram (Oriental supermarket)
Identify the requirements
Supplier selection
Contract
Receive orders & document
Settle payment (30 days)

Based on the diagrams above, it clearly shows that Business 2 and Business 3 have more similar procurement process. Both of the businesses have the legal agreement with their supplier which will provide better guarantee. For example, with contract Business 2 and Business 3 have a frame time to settle the payment within 30 days while Business 1 pays with...

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