Understanding the Procurement Management Principles
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Understanding the Procurement Management Principles Course
Introduction:
The implementation of effective strategies for acquiring goods, equipment, and services is crucial for organizations aiming to reduce costs and enhance quality and productivity. This program focuses on key concepts and current challenges in strategic procurement. It is designed for individuals seeking to develop highly efficient purchasing organizations. Participants will gain a comprehensive understanding of procurement best practices and learn how to successfully implement processes and methods for attaining world-class performance.
Course Objectives:
By the end of this program, participants will have a clearer understanding that purchasing makes a real and positive contribution to the organization in all sectors. The course aims to highlight that without a meaningful specification, a supplier will not be able to deliver what we need, leading to potentially costly disagreements.
This program will approach terms and conditions from three angles:
- The buyer's commercial requirement
- The underpinning legal considerations
- The supplier's objectives in including a given term or condition.
Who Should Attend?
This course is aimed at individuals who are new to the profession or function and are seeking to become more aware of the basic principles and techniques of purchasing. This course offers an excellent foundation for the "new" buyer and is designed to provide a solid grounding to benefit from the fundamentals of purchasing.
Course Outlines:
General principles of Procurement
- The role of purchasing
- Stages of the purchasing process
- The positive financial contribution of purchasing to all organizations
- Understanding and implementing the 'purchasing rights'
- Communications - relationships with suppliers and relationships with the customers of the
Purchasing Service
- The impact of e-purchasing, internal relationships
- Practical aspects of purchasing - basic documentation, records, information, and data flow,
- systems, processes, and procedures
- The essentials of a valid contract under English Law
- The consequences for organizations and their people if basic processes are not followed
Financial Aspects
- Understanding key financial statements - profit and loss accounts, balance sheets, and cash
- flow statements
- The difference between profitability and cash flow
- Capital expenditure, revenue expenditure, and depreciation
- Management of working capital
- Appreciation of the key accounting ratios
- The dangers of overtrading
- Cash flow forecasting
Legal aspects of Purchasing
- The impact of the law on purchasing
- Law applicable to purchasing
- Contract sale of goods law
- Sources of purchasing law: international; EU and national law
- Forming and concluding agreements: the essential elements of a valid contract
- Can oral agreements be legally binding?
- The law on tenders and letter of intent
- Can contracts be made electronically?
- Why the buyer’s terms must be the terms of the contract: "the battle of the forms”
- How to win the "battle of the forms"
- What buyers can sue for (remedies): consequential losses
- Which country’s law? (Jurisdiction/governing law) product liability
- Overview of other significant law and legislation
Negotiation
- What are the negotiation and its role in purchasing
- The negotiation process
- Styles - competitive/co-operative
- Relationships – both business and interpersonal
- Successful behaviors
- Delegates’ personal negotiation profiles
- Preparation and planning objectives and targets
- Selected strategies and tactics
- Information gathering - constructive questions
- Roleplay to develop skills
Exploring and Developing Terms and Conditions
- The form and structure of contracts
- differing functions of terms and conditions
- performance definition clauses
- performance incentive clauses
- risk allocation clauses
- excusal of performance clauses
- specimen contractual terms (suppliers and buyers) for discussion
- some do's and don'ts of contract drafting
Environmental purchasing and responsible procurement
- Environmental strategy and policy
- The relationship between environmental management and the P&SM process
- Developing a business case
- Legal implications
- Where action will be appropriate
- Where it fits in relation to risk and wider company policies
- Whole life costing models
- Supplier selection evaluation, contract management
- Environmental criteria for tender evaluation
- Sources of information
- Risk analysis to determine priorities for environmentally sustainable procurement activity
- Risk analysis to focus on capacity building and delivery of sustainability objectives
- Working with suppliers to deliver environmental improvements