Essentials of Business Processes and Information Systems

3

The Procurement Process

Learning Objectives

After completing this chapter you will be able to:

• Describe the steps in the procurement process.
• Explain the role of different functional areas in efficiently and effectively completing the procurement process.
• Identify the key steps in the procurement process and the data, document, and information flows associated with the process.
• Explain the financial impact of the steps in the procurement process.
• Explain the role of enterprise systems in supporting the procurement process.

When John Boeve started SSB, Inc., he used his connections from his competitive skateboarding days to help him get started. Initially, when sales were modest, he was able to simply call a supplier he knew and ask him to send some products. Over time, however, SSB grew more rapidly than John had anticipated. Today the company has expanded to the point where John can no longer manage all the purchasing himself. He needs a more formal way to order the products that he needs and to keep track of which goods SSB received and how much it owes to its suppliers. In other words, John needs to define a procurement process for SSB.

A procurement process is a series of steps that a company takes to obtain or acquire necessary materials. It is also referred to as the requisition-to-pay process. The term materials can have two meanings. For firms that manufacture their ...