The Real Procurement Process: From Concept to Warehouse
Posted on
18, Sep. 2025
A warehouse in the supply chain is a facility used to bring products together to reduce transportation costs, achieve economies of scale in purchasing or manufacturing, offer value-added processes, and reduce response time. Warehousing is one of the key operations through which businesses can provide customized services to their customers and gain a competitive advantage. Warehouses can be used to store raw materials as well as finished goods.
Procurement is the logistics operation responsible in general for a warehouse, logistics center, production plant, or store to ensure that all the business activities (production, distribution, or sale) are carried out properly.
Advantages of an Efficient Procurement Process
- Builds long-term relationships
- Improves supply chain management
- Helps in reducing risk (financial, operational, contractual, etc.)
- Prevents disruption of the supply chain
- Increases efficiency by shortening cycle times
What Operations are Included in The Procurement Process?
To effectively implement the procurement process, you must consider the following operations:
- Need Analysis: What resources does the company need to carry out its activity over a given period? It is critical to determine the quantity and quality of materials, supplies, and services required to manufacture or sell a product.
- Finding the Right Manufacturers/Suppliers: You will need to do the following within this process:
- Conduct background checks as well as financial audits
- Perform on-site audits
- Check Quality Assurance (QA) procedures
- Review customer feedback/reputation
- Check fulfillment capabilities
- Location analysis
- Check the environmental practices followed by them
All this information will help you to make the most informed decision.
- Negotiating Contracts with The Chosen Suppliers/Manufacturers: Once you have chosen the supplier for you, you'll need to start negotiating contracts, which will include costs, terms and conditions, delivery times, pricing structures, and other details. Contract management takes a lot of time and requires a lot of communication to deal with all issues and information on time.
This stage is critical because it focuses on risk management and risk reduction in specific areas and parts (such as Product Development, Purchasing/FX transfers, Contract/Price/lead time Negotiation, Production Inspection, etc) of the process.
- Distribution and Logistics: This is the physical transfer of goods and services from the supplier to the end user. It can involve many organizations when working with international procurement. When considering logistics, you must take the mode of transportation into account, whether it be by air, rail, or sea.
- Audit your Delivery: It is critical to quality assure and check performance after invoices have been raised and payments have been submitted for processing. You should check and assess your procurement process regularly. Identify the strengths and weaknesses and look for areas where improvements can be made.
Problems With Inefficient Procurement
You run the risk of severe problems if procurement is not managed properly. The most common issues are:
- Shortages or Stockouts: Lack of stock means lost sales, reduced productivity, or, in the worst-case scenario, production downtime due to a shortage of the resources required for this activity. It’s advisable to have some safety stock that will enable you to deal with any unforeseen events caused by changes in demand and, thus, avoid stockouts.
- Dead Stock: This happens when you purchase more goods than you require and they end up becoming obsolete stock, resulting in unnecessary storage costs.
- Dependence on Suppliers: This happens when businesses use the just-in-time procurement method. In this technique, supplies are bought as and when they are needed. As a result, any incidents with suppliers will impact the entire procurement process.
Choose BuildMyInfra as your Procurement Partner
At BuildMyInfra, we can take care of all your procurement needs. We provide a ready procurement team from bottom to top. We are working with the best vendors who are capable of giving immediate three best quotations for capex & opex. We have a unique methodology for selecting certified vendors and OEMs at the best market prices. Contact us for more information.
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