Procurement Outsourcing

From Buyers Manual

Procurement outsourcing is the term used when key procurement tasks are given to a third party. This may be because of costs, lack of expertise or so an organisation can concentrate on its core area of business.

Procurement specialists identify two types of procurement activity:

• Direct Procurement – all goods purchased by a company that are directly used in the production process of products such as packaging.

• Indirect Procurement – all goods or services that enables the company’s activity such as utilities, marketing or IT services.

Using a third party procurement service allows a business to benefit from experienced procurement specialists without having an in house team which would use a lot of time and money to get the same level of experience and knowledge. Outsourcing procurement activities enables any company, who have no in house procurement experts, to gain advantage from procurement actions. Outsourcing the procurement function does not necessarily mean a complete transfer of control it just means a business can utilise a procurement specialists knowledge.

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Some companies may already have an internal procurement team but may just want to outsource specific tasks. This may be because they are not as strong with certain elements of procurement, have little time available to do a good job or are unfamiliar with indirect materials and services.

Procurement service providers have a strong expertise in procurement outsourcing and the majority of procurement tasks required are indirect. They usually ask for a fixed sum for their services and aim to produce saving for the business they are working with. Some providers may work on incentives or a percentage of costs saved. Procurement service providers can also provide assessments such as spend analysis.

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As with our Buyer Consultancy, In-tend are able to offer your organisation assistance with tendering. If you are new to public procurement tendering; have an EU value tender to issue or simply don’t have the time to manage the process with a heavy workload, allow In-tend to assist you and issue the tender documentation on your behalf via our Shared Services portal. For more information please visit www.in-tend.co.uk/procurementbureau or call 01709331077.