Procurement is essential to many industry sectors, from private enterprise to government departments. And because it revolves around valuable cost-saving measures, procurement professionals are in high demand!
In our Procurement Specialist Program you will study how to effectively manage the procurement, purchasing and contract management processes within departments or organisations — both big and small. You’ll explore how to navigate the procurement process, identify procurement requirements, conduct procurement activities, and assist with supplier selection and performance management.
Basically, you’ll learn to love the sound of ka-ching!
Outcomes achieved by undertaking procurement courses include:
- Learning about plan purchasing including how to prepare invitations and quotes or tenders
- Exploring retail purchases and legislative requirements
- Studying how to evaluate sources, identify suppliers and prepare invitations to offer
- Gaining insights into policies and procedures
- Understanding how to conduct briefings and prepare recommendations to purchase
- Learning how to obtain specialist expertise and evaluate offers
- Exploring purchasing performance, the evaluation process and purchasing criteria
- Studying purchasing requirements and how to purchase goods and services
- Understanding purchasing strategies and limits and specialist purchasing roles
- Learning about selection discretion and how to purchase goods and services
- Studying direct, credit card and online purchases
- Understanding supply agreements, quotes, formal tenders and approval for purchases
- Learning how to select suppliers, make the purchase and receive goods
- Exploring invoices, receipts, advices and petty cash vouchers
- Gaining insights into project procurement management
- Understanding how to determine procurement requirements
- Learning about contracts and how to plan purchases and acquisitions
- Exploring how to delegate authority and determine inputs and project scope
- Studying a statement of work and a make or buy analysis
- Gaining insights into contract types, planning and terminology
- Understanding how to select sellers, evaluate criteria and determine a seller rating
- Learning about seller performance and how to contract audit
- Studying how to negotiate contracts with suppliers without prejudice
- Gaining insights into negotiating issues and determining desired outcomes
- Understanding document contract requirements and how to draft, prepare and finalise them
- Learning about trade practices, consumer protection and sales of goods legislation
- Studying how to monitor supplier performance
- Gaining insights into the four key aspects of evaluation
- Understanding supplier performance and non-conformance
- Learning about ethical practices and how to conduct an external customer audit
- Exploring quality importance, information security and privacy principles
- Studying the purpose and qualities of goods and services
- Gaining insights into push and pull inventory management models
- Understanding effective negotiations and cost-saving strategies
- Learning about procurement planning and procedures
- Exploring outputs, evaluation and the approval process
- Studying the supplier selection process including evaluation and screening
- Gaining insights into audits and records management
Top Five Procurement Trends for 2020
Procurement courses can prepare teams to face ongoing challenges including tough competitors, volatile markets and increasing production costs. However, keeping up with trends requires fast adaption and ensures teams can deliver products or services on time and to a high standard. So what are the top five procurement trends for 2020?
#1 – Thinking Green
As of 2018, 33 per cent of all greenhouse gas pollution in Australia was due to electricity and 18 per cent due to transportation — and both areas are crucial components to supply chain networks. Progressive companies are starting to adopt processes and systems that reduce their carbon footprint. A climate-focused strategy when planning supply chains has also helped them to identify sustainable resources.
#2 – Circular Supply Chains
These are increasingly replacing traditional linear supply chains, which move in three steps — from manufacturing to distribution to the final destination. In the future, a fourth step will be added, known as a ‘recycling/reusing’ dimension. In this step, products that are not sold (and may have been once thrown away) will be put back into circulation wherever possible. It also enables businesses to save costs and stay compliant with waste disposal laws and standards
#3 – Globalised Outsourcing
Trends suggest that moving forward, 80 per cent of manufacturers will have multi-country operations, and there will be a need for competent and skilled workers. In order to bridge gaps in the emerging workforce, more companies will outsource certain processes to overseas countries. The highest outsourcing areas include distribution and logistics, manufacturing, finishing and packaging.
#4 – Transparency
Consumers are becoming more vocal about the treatment of workers, environmental impacts, and the overall ethical nature of the products they are purchasing. More companies will join the trend to be transparent about all aspects of their supply chain, from product conception right through to delivery. In the future, it’s likely that consumers will also expect companies to provide details about their processes to appease their buying choices.
#5 – Artificial Intelligence (AI)
AI is slowly being adopted in areas such as sales, marketing, HR and project management. In the area of procurement, it will affect management, production and customer experiences. AI will be used to anticipate events that could be disruptive to procurement processes and predict shifts in demand. The most obvious impact of AI will be large-scale automation which will increase productivity and efficiency.
Government Procurement Practices
Those who study procurement courses often find themselves working in the public sector — at a national, state or local level. The main difference between public and private sector procurement is in the area of funding. Budgets in the public sector are more likely to be preemptively delegated and distribution tougher to alter.
For example, at the Australian Government Department of Finance, there are two main principles. The first is that officials must seek to achieve value for money in accordance with the Commonwealth Procurement Rules (CPRs). The second is that they must ensure they conduct procurements within their entity’s relevant Operational Guidelines and Accountable Authority Instructions
In terms of practice, there are seven steps:
Step 1: Plan the Procurement
- Identify the need and determine the objectives.
- Detail a clear scope of requirements.
- Consult the Central Procurement Area for advice where appropriate.
- Seek specialist advice where appropriate.
- Research the market to understand restraints and capabilities.
- Ensure probity arrangements are considered where appropriate.
- Document relevant justifications and decisions.
- Understand and incorporate Australian Government transparency requirements.
Step 2: Scope of the Procurement
- Determine whether the goods or services to be purchased are subject to coordinated procurement arrangements that must be used.
- Determine if the relevant entity already has a panel that could be used.
- Consider whether there are opportunities for cooperative procurement.
- Undertake detailed research of the market if appropriate.
- Estimate the value of the procurement.
- Where procurements are unable to be reliably valued, they must be treated as if they are over the relevant threshold.
- Unless a specific exemption applies, entities must comply with the Division 2 – “Additional Rules For Procurements At or Above the Relevant Procurement Threshold”.
Step 3: Determine the Procurement Method
An Open Tender
- This involves a one-stage (ie. Request for Tender), or multi-stage (eg. an Expression of Interest followed by a Request for Tender) open approach to the market.
- The ‘default’ for all procurements should be valued above the relevant thresholds (ie. $80,000 for non-corporate Commonwealth entities)
- The Open Tender must be advertised on AusTender.
A Limited Tender
- This involves procurement based on quotes being sought directly from one or more suppliers.
- It includes what was previously referred to as ‘sole source’ and ‘select’ or ‘restricted’ source procurements.
- It can be undertaken for any procurement under the relevant thresholds where it represents value for money.
- It can only be used for procurements above the relevant thresholds where it is specifically allowed by the CPRs
- The value and reasons for the direct source must be documented.
Step 4: Prepare to Approach the Market
- Put in place appropriate governance arrangements.
- Identify the contract characteristics of your procurement.
- Prepare the tender evaluation plan and request documentation that appropriately incorporates Procurement Connected Policies.
- Where applicable, include:
- consideration of relevant regulations and/or frameworks;
- application and verification of standards;
- the consideration of broader economic benefits of the procurement to the Australian economy.
- Seek delegate clearance/approval to approach the market.
Step 5: Approach the Market
- Notify the market – for open tenders this involves (as a minimum), publishing the opportunity on AusTender.
- For open tenders, ensure the minimum time requirements of the CPRs are met.
- Include essential information (eg. closing time, lodgement mechanism, evaluation criteria and methodology, process rules, contact officer and the possibility of an industry site visit, briefing, and/or mid-term review) in the request documentation to enable suppliers to develop and lodge competitive and compliant submissions.
- Include a draft contract and statement of compliance in the request documentation.
- Use appropriate limitation of liability and standard contract clauses where available.
- Do not use unnecessary mandatory language (i.e. ‘must’, ‘will’), jargon and acronyms from the request documentation.
- Ensure clarifications or additional materials are made available to all potential suppliers in a timely and equitable manner.
- Do not materially change the evaluation plan after the opening of submissions.
Step 6: Evaluate Submissions and Conclude the Tender Process
- Deal with unintentional errors in tenders in accordance with the CPRs.
- Deal with late tenders in accordance with the CPRs.
- Ensure the procurement process is/was fair, equitable and will stand up to scrutiny, including that the evaluation is conducted in accordance with the Tender Evaluation Plan.
- Ensure the process is consistent with the CPRs, including in relation to handling complaints.
- Undertake a financial viability assessment(s) of the preferred supplier(s) if necessary.
- Provide sufficient documentation and information to the delegate to enable them to make an informed decision.
- If required by your entity’s Accountable Authority Instructions, obtain delegate approval in accordance with s18 of the PGPA Rules and two signed copies of the contract (one for the entity, the other for the service provider).
- Advise unsuccessful tenderers and where requested provide a de-brief.
- Report contracts valued at $10,000 (GST inclusive) and over on AusTender.
Step 7: Manage the Contract
- Develop a contract management plan to assist the entity to understand and implement obligations under the contract.
- Assess contract extension options on a value for money basis in accordance with the terms of the contract.
- Ensure compliance with the Supplier Pay on-Time or Pay Interest Policy.
- Appropriately consider and, as appropriate, issue contract variations.
- Consider any obligations that survive the contract end-date or termination of the contract such as confidentiality.
Source: 2020, Procurement Process Considerations, Australian Government Department of Finance
Keen to positively contribute to an organisation’s bottom line? Our Procurement Specialist Program will enable you to confidently contribute to your organisation’s procurement process and join the cost-saving crusade!