How to choose the right procurement method?
The right procurement method for you will depend on the context you’re ordering in. let’s go through a few example situations. Let’s say a critical supplier of the company can not suddenly deliver products because of geopolitical tensions. If the company’s extremely short on time and has a backup plan and another supplier ready, it can go for single-source procurement and only order from its backup vendor. This saves administrative effort and makes risk assessment straightforward.
However, if the organization has some time to spare in such a situation and does not want a competition-free environment, it can use RFQs and get some price quotes.
If your company needs a non-specialized good that can be easily replaced (say, office supplies), it can go for open-tendering and open bids to all qualified bidders. Encouraging competition will make the company benefit from savings.
On the other hand, if a particular good or service is highly specialized and quality of utmost importance, it can go for restricted tendering to retain some competition but control quality more tightly.
If the team needs to look for available solutions before confirming a PO, they can go for RFPs or two-stage tendering.
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