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Procurement Strategy – Environmental Scanning

The first step in developing the procurement strategy is internal and external environmental scanning. The objective of this step is to provide procurement management with a complete understanding of the total business environment and how procurement can contribute to the firm’s competitive strate

Internal Business Scanning

When determining the match between the procurement strategy and the business’s internal strategy, planner/buyers or buyers must begin by reviewing the requirements placed on procurement by the business strategy and any trends that are occurring in the marketplace.

Some of the internal business strategies procurement must be able to support include such elements as:

  • establishing the stage of enterprise technological development
  • the nature of corporate culture and values
  • the perception of supplier partnering
  • outsourcing initiatives
  • procurement’s organizational structure

External Business Scanning

Once the competencies of purchasing’s ability to manage the business’s internal environment have been established, the next step is to match the procurement strategy with the external demands stemming from the supply chain.

Some of the external business strategies purchasing must be able to support include such elements as:

  • mapping international sources of supply
  • currency and other financial issues
  • communications technologies capabilities
  • political and social issues
  • government and environmental regulations
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