First of all, to answer this question, let’s start with the definition of procurement.
Procurement is a purchase(buying) of goods for further targeted use. The main questions that should be answered in the process of providing the businesses with means of labor: what to purchase, in what quantity and on what terms. In other words, purchasing only what is needed, what is more important, in terms of profiting the company, purchasing on time so that contracts with customers are carried out on time.
The essence of procurement logistics is the creation of a clear, reliable and uninterrupted communication between the supply of materials to enterprise and their further storage, use and sale.
Procurement planning, taking into account the wishes of consumers of materials.
Formation of mutually beneficial supplier relationships for ensuring an adequate pricing policy and convenient delivery terms. Creation of stocks of materials and their storage. Continuous monitoring possible shortage of materials, prices on the market and new, more high-quality development of components.
In conclusion, I want to say that procurement is an integral part of any area of human life, especially in Logistics. After all, purchases in Logistics are the main commercial activity in trade. Commercial work starts with procurement. Procurement enables to form an optimal assortment of goods of trade organizations, influence producers of goods. It is procurement that provides effective work of the trade organization.
