Wednesday, October 25, 2023

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

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