Procurement encompasses procurement planning, which involves designing departments, roles, policies, and procedures in organizational design to achieve company objectives.
Planning – The process of setting goals for the organization and choosing various ways to use the organization’s resources to achieve the goals.
Organizational design considerations include the following:
1. Will the acquisition of materials and services be considered tactical or strategic, involving purchasing versus procurement?
2. Is purchasing/procurement going to be centralized or decentralized?
3. Will the job of inventory planning include both material planning and procurement (buyer), or will it be a combination of both roles (planner/buyer)?
4. In the role of planner/buyer, a single individual is responsible for both inventory planning and placing orders with suppliers. This allows the buyer to focus on strategic relationships with suppliers rather than just transactional interactions.