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What is a procurement plan?

A procurement plan is a document that lays out the need for the product within a project and justifies enlisting an external supplier. It includes the criteria for selecting the supplier, identifies organizational standards for compliance, mentions relevant costs and delivery schedule. It further identifies the contract to be made with the supplier, and proposes methods and relevant KPIs to measure supplier performance. Such a plan can include more than one supplier and identify all the qualified vendors for the project if necessary.

This plan essentially covers the aspects that follow need identification and lays down the path to need-fulfillment. Organizations can use procurement software to shorten the timeline of this plan. Employing a central, digital system makes the identification of needs and communication between stakeholders fast and supplier consolidation quick. It further facilitates risk management and automates multiple elements of the supplier cycle, including the measurement of procurement-related KPIs.

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