What is strategic contracts?
The primary concept of strategic public procurement is that through advanced planning, planning and initiatives to buy groups, the company can experience considerable cost savings. In addition to the hard savings of the dollar, further savings will be caused by more efficient business operations and thus increased profitability. Implementation of strategic public procurement within the company requires three concepts of contracts: purchase of groups, centralized public procurement services and use of data management systems. Even a simple concept, such as the encouragement of the planned purchase, can cause major operating problems if it is not discussed with a business unit. For example, a bakery can order dry goods every week based on planned work orders for this period. If the Purchase Department is more cost -effective to order these materials every two weeks, the bakery will have difficulty storage, accessand the prevention of loss.
Group is a process of combination of total resource requirements for different departments within the company and issuing one permanent order. This single order is for more than more smaller orders. Therefore, the supplier can be agreed with lower costs per unit. If the department is physically located in a number of buildings, the contract may set delivery windows and solve the problem of delivery costs. This practice is quite common in large companies as part of the integrated business plan of strategic public procurement.
Administrative direction is the cost of organizing for the entire purchase on the cycle. This includes salaries and costs of supporting public procurement employees, OIC invitation, production control and suppliers' questions. The organized, controlled process eliminates a significant amount of these costs because it occurs only once for each commodity.Centralized Public Procurement Staff can provide business units with a greater level of support and ensure that policy is observed.
Public Procurement or Purchase management systems are often provided as part of a large accounting or solutions for planning business resources. This module is used to create requirements for purchasing and purchasing orders and their invoices and income to process goods. In addition, the tools for analyzing and reporting built into this type of system allow the separation of public procurement to be controlled by a business process, determine the total institution costs and identify potential savings possibilities. Reports can also be used to ensure compliance with policies and as evidence in response to any legal challenge.