The procurement process is a strategic pillar of supply chain management. Far beyond the act of purchasing, it encompasses a set of coordinated activities designed to ensure the availability of resources essential to the company, while optimizing costs, lead times and quality. Faced with increasing competition and ever-changing markets, a structured, high-performance procurement process is becoming an essential competitive lever.
Procurement is part of a global flow management dynamic, closely linked to logistics, inventory management, production planning and customer satisfaction. Supply chain planning plays a key role plays a key role here, helping to anticipate needs, synchronize operations and reduce uncertainties. One of the main sticking points is the volatility of supplier lead times, which can disrupt the entire production cycle and impact on the quality of service delivered to the end customer.
This process is based on several fundamental stages, which we will explore in detail below. However, it is essential to make a clear distinction between the notions of purchasing and supply, which are often confused but have very different rationales.
Sourcing and purchasing: what's the difference?
The terms “procurement” and “purchasing” are often used synonymously, yet they refer to two very distinct functions within the supply chain. Each plays a specific role in resource management, and their complementarity is essential to a company’s overall performance.
Purchasing is a strategic process. It involves selecting suppliers, negotiating commercial terms, contractualizing commitments and managing long-term relationships. This function aims to obtain the best conditions in terms of price, quality, delivery times and guarantees, while respecting compliance and social responsibility objectives.
Procurement, on the other hand, is an operational task. It handles order processing, logistics follow-up, goods receipt and inventory management. The aim is to guarantee the availability of products or services at the right time, in the right quantity and according to defined specifications.
Purchasing decides what to buy, at what price and from whom. Procurement ensures that goods are delivered on time and to specification. Smooth coordination between these two functions helps to avoid disruptions, control costs and enhance the organization’s responsiveness.
Better supply chain planning offers several advantages. We invite you to read our dedicated article : Why supply chain planning?
What are the different stages and steps in the supply chain process?
Identifying supply needs
It all starts with a rigorous analysis of internal requirements. This stage involves a precise forecast of future consumption, based on sales history, production plans and current stock levels. The aim is to determine the quantities needed, the lead times required and the technical specifications of the products or services to be acquired.
Supply planning must also take into account the notion of safety stock, in order to prevent shortages and guarantee optimum service levels. This anticipation makes it possible to synchronize incoming flows with operational requirements, while avoiding costly overstocking.
Request for proposals and tenders
Once requirements have been clearly identified, the company begins the process of consulting potential suppliers. This may take the form of a request for proposal (RFP) or a call for tenders, depending on the complexity and value of the purchases envisaged.
This stage aims to gather competitive bids, by evaluating suppliers on criteria such as price, quality, reliability, delivery times and contractual conditions. It also enables us to compare the technical solutions on offer, and identify the partners best suited to the company’s requirements.
Supplier selection
Supplier selection is a strategic phase in the process. It is based on in-depth sourcing, aimed at identifying the players capable of meeting the identified needs. The evaluation of suppliers takes into account their production capacity, financial soundness, reputation in the market, and compliance with norms and quality standards.
In some cases, audits may be carried out to verify facilities, internal processes and commitments to corporate social responsibility. The choice of supplier is therefore not limited to cost considerations, but is part of a global vision of sustainable partnership.
Ordering
Once the supplier has been selected, the purchase order formalizes the purchase commitment. A purchase order is issued or a contract signed, specifying quantities, prices, delivery times and payment terms.
This step is essential to provide a legal framework for the transaction and ensure traceability. It also enables data to be integrated into the company’s ERP systems, facilitating the monitoring and management of flows.
Logistics management and goods receipt
Procurement logistics takes over as soon as the order is validated. It involves organizing transport, coordinating deliveries and ensuring physical receipt of goods. Meeting delivery deadlines is crucial to avoid production interruptions or delays in the value chain.
On receipt, a conformity check is carried out to ensure that the products delivered correspond to the order specifications. Any anomaly (incorrect quantity, quality defect, damage) must be reported and dealt with promptly. Good logistics management helps to streamline operations and enhance process reliability.
Inventory control
Once goods have been received, it is necessary to update inventories and check that quantities received match planned requirements. This step enables us to detect discrepancies, adjust stock levels and prevent shortages.
Inventory management relies on real-time monitoring tools, which facilitate the analysis of rotations, the detection of overstocks and the optimization of future supplies. It plays a central role in overall logistics performance.
Billing and cost control
Goods receipt triggers the invoicing process. Invoices must be checked against purchase orders and deliveries. Any errors or inconsistencies can lead to disputes or delays in payment.
Cost monitoring is not limited to the purchase price: it includes the total cost of ownership (TCO), including transport, storage, maintenance and administrative costs. A detailed analysis of costs enables us to identify optimization levers and boost purchasing profitability.
Supplier evaluation and process optimization
Once the procurement cycle has been completed, it is essential to evaluate supplier performance. This assessment covers the quality of products delivered, on-time delivery, responsiveness to problems, and the ability to collaborate effectively.
Feedback enables us to adjust procurement methods, improve internal procedures and strengthen supplier relations. The integration of KPIs (performance indicators) facilitates process management and supports a continuous improvement approach.
Team training and management
Finally, the success of the procurement process depends on the skills of the teams involved. Training in purchasing management, supply chain management and the use of ERP tools is essential to ensure efficient operations.
Setting up a dedicated team with a strategic and operational vision enables us to coordinate actions, solve problems quickly and anticipate market developments. Adopting agile methods such as Kanban can also help to streamline workflows and optimize production scheduling.
Sustainable procurement: reconciling performance and responsibility
Sustainable procurement management aims to reconcile economic performance, social responsibility and respect for the environment in purchasing and sourcing decisions. It’s not just about choosing ethical suppliers or preferring environmentally-friendly materials: it involves a comprehensive overhaul of procurement practices, integrated with corporate strategy and supply chain planning.
This approach is based on several levers:
Evaluation of suppliers according to ESG criteria (environment, social, governance)
Reducing the carbon footprint of transport and logistics
Promoting the circular economy and local supply chains
Traceability of raw materials and transparency of supply chains
Long-term collaboration with partners committed to a responsible approach
One of the main challenges lies in the lack of visibility of subcontractors’ practices, particularly in complex global chains. This lack of transparency can expose the company to reputational, regulatory or operational risks, and compromise its CSR commitments.
Sustainable sourcing should not be seen as a constraint, but as a strategic opportunity: it strengthens supply chain resilience, improves customer loyalty and prepares the company for future market demands.
Mastering procurement for an agile, resilient supply chain
The procurement process is more than just an operational function: it is a genuine performance driver for the company. By mastering every stage, from needs identification to supplier evaluation, organizations can reinforce the reliability of their flows, optimize their costs, gain agility and consolidate their market position.
In the face of increasing digitalization, the complexity of global supply chains and environmental challenges, procurement is becoming a key driver of transformation. A structured, flexible and collaborative approach enables companies to anticipate risks, adapt to change and build a resilient supply chain.
