The Six Different Types of Procurement Services

The six procurement services include the supply and purchase of various types of goods. These are the two components of the procurement service that interrelate with each other. Traditionally, the only intention of procurement subcontractors was to deliver goods from clients to the business owners to complete the production process. But today, the focus has been altered in a way that the procurement service provider’s offer is often bigger than the request made to them. In turn, this has led to an increase in the customer’s negotiation probability and hence, their buying power.

The growing inclination of the era towards the online world and the spread of news media has impacted procurement process types. To benefit from the procurement service, you first need to know the procurement process types to know which type can help you. Read on to know about the several types of procurement.

Single Procurement

This is a type of procurement triggered when a customer orders for a product and initiates the supplier’s production process.

Stock Procurement

This is a type of procurement in which the products are periodically shipped to the stock without the customer’s specific order. The appealing part of this type of procurement process is that the procurement consultant can forecast the demand. After the production process is completed, the consultants can wait for the customers to place the next order. One way of applying this process by customers is to understand the stock level. There is a limit for every stock level, and if the level falls below the defined limit, the procurement process is started. This is an efficient way of offering flexibility to customers.

Vendor Managed Inventory

This is a business model where a buyer provides the supplier with specific information about the product under demand. The supplier takes responsibility for optimizing the material’s inventory, generally at the buyer’s location. A crucial way to achieve a flexible and optimized process at a lower cost is to maintain a close relationship with the supplier.

Just in Sequence Procurement

This type of procurement process is dependent on the just-in-time idea. The defined time can be extended by the good’s supply in the required sequence, and thus, the procurement process can be complemented more efficiently.

Just in Time Procurement

With this type of procurement process, the procurement subcontractors can make a purchase plan only after getting the customer orders. The contractor then orders the minimum number of items based on the customer’s demand. The procurement process is mainly characterized by the decreased levels of product at the customer’s company. This, in turn, results in a cost-effective and balanced approach with smaller orders and frequent deliveries.

Ship to Line

In this process, both the supplier and the customer have to go through the minimum number of logistical steps. The products are directly supplied to the first value-added process of the customers from the last value-added process of the supplier.

Whether you are searching for raw materials or finished goods, it would help if you chose the from the types of procurement services mentioned above and select the procurement subcontractors to carry out the processes.

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