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It ensures continuity of supplies and smooth operations {without stock outs}, leading to higher profitability.
Facilitates competitive procurement by following the best procurement practices. Eliminates the need to place rush orders that may entail higher prices.
Ensures higher internal customer satisfaction, better performance in procurement.
Procurement planning is the process of deciding what to buy, when and from what source. During the procurement planning process the procurement method is assigned and the expectations for fulfillment of procurement requirements determined.
Procurement Planning is important because:
1. It helps to decide what to buy, when and from what sources.
2. It allows planners to determine if expectations are realistic; particularly the expectations of the requesting entities, which usually expect their requirements met on short notice and over a shorter period than the application of the corresponding procurement method allows.
3. It is an opportunity for all stakeholders involved in the processes to meet in order to discuss particular procurement requirements. These stakeholders could be the requesting entity, end users, procurement department, technical experts, and even vendors to give relevant inputs on specific requirements.
4. It permits the creation of a procurement strategy for procuring each requirement that will be included in the procurement plan. Such strategy includes a market survey and determining the applicable procurement method given the requirement and the circumstances.
5. Planners can estimate the time required to complete the procurement process and award contract for each requirement. This is valuable information as it serves to confirm if the requirement can be fulfilled within the period expected, or required, by the requesting entity.
6. The need for technical expertise to develop technical specifications and/or scope of work for certain requirements can be assessed, especially where in-house technical capacity is not available or is non-existent.
7. Planners can assess feasibility of combining or dividing procurement requirements into different contract packages.
If the PP ratified simply the PO
Imposed deadline on himself to be met
The PO takes the initiative to start the process
Self reliance and confidence
Blue print to envisage the expected activities
Healthy behavior to bolster your grip on the activities
Time management
Contract management
