Why Procurement Planning is important?

Procurement planning is a clear road map for buying required resources for a task, activity or project. It is important because it ensures the timely availability of required resources to enhance timely implementation; Just In Time delivery.

The two factors which determine success of any Procurement Activity are : Cost of Procurement and Time. Both of these factors are subject to many variables within and outside the procurement organization. Control over and proactive policies to face situations so as to meet the targeted Cost and Time can only be achieved through proper and timely planning.

In order to secure the product or service in time or ahead of time required for the project, the procurement planing is very necessary.

Procurement Planning has a vital role linked with in time completion and delivery of products to the customers.It determines the success in business and the confidences of your valued buyers.

Sound procurement planning leads to business success. No short deliveries.Increased profits. Stable Prices.Business growth is obvious reward.

 procurement planning  is key to success  of any project with profit and helps  to complete the project in time.Project profit totally depends on material planning and budegeting 

1- Cost reduction - economy od scale

2- Better cash situation

3- Get better payment terms

4- Better space usage

5- Get higher quality

Procurement planning is vital for any entity be it profit or non profit making. It ensures that all departments in the organisations work together in order to come up  with a plan if action that will save the company on costs that will be passed to the consumer. Procurement planning will definitely make or break an organisation.

Effective Procurement Planning is essential for all procuring entities in the implementation of the purchasing objectives for the following reasons:

1. An effective plan saves time and money

2. An effective plan serves as a conduit to achieving entity’s objectives

3. An effective plan ensures compliance with regulatory policies

4. An effective plan provides a framework to guide procurement officers in the achievement of their tasks and duties.

Procurement Planning will help  :

• Decide what to buy / when to buy / where to buy & how much to buy
• Better Price negotiation
• Logistic optimization through consolidation & mode of shipment.
• Warehouse space optimization
• Fund management (Supplier invoice, freight cost etc)
• achieve zero out of stock situation

Not only with planning you will be able to work in a budget, but you be able to timely evaluate the possibilities, market and offers.