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102 CHAPTER 4 The Procurement Process

Demo 4.6: Review goods movements
and movement types

PROCESS
Now that you are familiar with the basic concepts involved in procurement, we
shift our focus to the process itself. At the beginning of this chapter we introduced
a very simple procurement process that included a few key steps. In this section
we discuss a more complete process. We also examine each step in detail.
In this section, we discuss the purchase of a standard item. The steps
used to procure standard items are diagrammed in Figure 4-12. The fi gure
indicates that the procurement process is triggered by some event that results
in a requirement to acquire materials. The trigger is often a result of an event in
another process. For example, the company cannot fulfi ll a production order
(a step in the production process) until it purchases certain necessary materi-
als. Alternatively, the materials planning process may alert the company that
it needs to increase its inventory of certain materials. Regardless of the trig-
ger, the result is a requirement to obtain materials. This requirement typically
takes the form of a purchase requisition.

Figure 4-12: A detailed procurement process

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