Types of Procurement/Purchasing Process, Advantages and Disadvantages.

 

Q. What type of procurement/purchasing process do INGOs typically have? Advantages and Disadvantages. 

Purchasing, in the context of business and supply chain management, can be categorized into various types. Here are some common types of purchasing:

Centralized Purchasing: Centralized purchasing occurs when a single department or team within an organization is responsible for all purchasing decisions.

Advantage Cost Savings Consistency Supplier Management Strategic Focus

Disadvantage Lack of Flexibility Slow Decision-Making Limited Local Knowledge Resistance to Change

Decentralized Purchasing: Decentralized purchasing is a practice of distributing the purchasing authority across different departments or business units within an organization. In such a setup, each department or unit is responsible for making its own purchasing decisions.

Advantage: Flexibility Local Knowledge Faster Decision-Making Ownership

Disadvantage: Duplication Lack of Standardization Limited Bargaining Power Supplier Management

Hybrid Purchasing: Hybrid purchasing is a flexible strategy that combines multiple methods to meet an organization's needs and goals. Organizations set a limit of purchasing authority across different departments or business units within an organization.

Advantage Flexibility Cost Optimization Risk Management Supplier Relationships

Disadvantage Complexity Potential Conflicts Resource Allocation