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Breifly and from my personal view, the answer is FALSE. why?
first thing, there is distingwish between Procurement and Expenses "Administration, Facelities, Internall IT equipments...etc." in many points, as same as the distingwish between Sales and Revenues. some of these points:
example:
Mcdonald's is a restaurant for selling burgeres, sandwiches, snacks, drinks and another kinds of various coocked dishes.
Sales are selling the meals --> Operations are preparing the sold meals --> Procurement Dept. is the main responsable to purchase the meals contents "chicken, beef, bred, vegitables, sauces, oils, french fries, pepsi and drinks, sweets/ packing materials"
Still Mcdonald's need to purchase another requirements:
printers for employees uses, employees cars "not the delivery cars", employees workstations and PCs, buldings, and many requirements which is not related to the company selling field.
Mcdonald's can sell burgers to the customers not buildings or printers, even if they can sell the building to another person - but this will not be through Sales Dept.
the building will turn some revenues to the company - but still not in the selling field - this considere as different profit.
the main profit and the main selling field is selling meals.
or, it can work in reverse direction:
Ikea is a furniture stores:
Procurement are purchasing furniture parts --> Sales are providing and marketing the purchased goods.
Now the below cleared
- Procurement can turn profit in same company field either expenses not.
- Procurement is more related to the work enviroment either expenses is more related to the intrnal services requirements.
- Procurement reflects and affects on the sales and invoices either expences not.
- Procurement more related to the customers either expenses is more related to the internal services
The expenses can be considered as:
- Administration
- Facilities and Maintenance can be under Administration dept.
responsabilities.
Thanks..
Generally it is true. However, in some exceptional cases other departments make their own purchases. The reason is very simple: Each department performs specialised function for which they are equipped and so is the Procurement Department.
The answer relevant to purchasing goods, materials & hiring services :-
1. When we take a larger picture, Procurement Dept. is part of Supply Chain Management ( SCM ). It is variably called as Procurement or Purchasing Department.
2. The responsibility falls on Procurement Dept. to assess / determine the re-order level of the company ( Trading ) or ( Manufacturing ) or ( Service ) for sourcing.
3. The required products, materials or services must be decided with the relevant / concerned department and quantity / service required of the company may largely depend on PD.
4. Unless, otherwise standing order with particular / regular sources with whom the orders can be activated soon and make them available, any other goods / services or new products need to be decided by calling for quotations.
5. Quotations from 3 or more sources can be mandatory to decide the market trend can can be chosen on the basis of :-
Reliability, Trust / Quality / Price / On-time Delivery / Acceptable Terms
6. The whole process of < Assessing requirement, Sourcing, Purchasing & Delivery > falls on Procurement Dept. and eqaually this Dept. is responsible, accountable to the company in this process.
M. Fauzil ( Sri Lanka )
The Procurement Department is the office responsible for the acquisition of supplies, services, and construction in support of the Authority’s business. The Procurement Department is the entity within both Authorities authorized to issue Invitations to Bid, Requests for Proposal, Requests for Quotation and issue contracts. The Procurement Department issues purchase orders, develops term contracts, and acquires supplies and services. The Procurement Department also disposes of all surplus property and equipment.
The Procurement Department is very conscious of its responsibility and accountability in the expenditure of public funds. Therefore, the Procurement Department maintains a competitive bidding process in accordance with Federal and State laws, regulations, and applicable Municipal codes and ordinances. It is the Procurement Department's policy, to encourage the participation of qualified vendors in the bidding process, emphasizing opportunities for small businesses and disadvantaged and women owned businesses. Preference may be given to Alaskan bidders when not prohibited by the funding source.
Projects and requirements for the Authority’s vary widely and as a result, rely heavily upon the Alaskan business and contractor community to meet its needs. The Authority’s encourage the business and contractor community to participate in the various bidding processes offered. The use of minority and women owned businesses are highly encouraged, and participation goals for sub-contracting may be required depending on the source of funding.
The Authority’s overall objective is to ensure that goods and services are obtained expeditiously and economically, that operational requirements are satisfied, and that applicable state and federal procurement requirements are met.
The Authority’s management clearly understands the importance of the procurement function and has tasked the Procurement Department with the responsibility of accomplishing the following objectives:
