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If we consider the transactions then it is procurements other wise Auction is a little bit different if I am not wrong.
I HAVE BEEN PROCURING from auctions in usa for the last12 years.
an auction is a supplier and will be in our material management ,sap system branded as a supplier.
it certainly is.
Considering that there are the buyer & seller and that an item is bought for a certain monetary consideration, the transaction is spot buying, which can be considered to be equivalent to buying an item for daily/personal needs and this does not require a professional background.
However, the function of 'Procurement' encompasses a number of principles, practices, and other considerations which are made by a Procurement Professional. 'Procurement' is a term generally used by government agencies.
Other terms for the Procurement function are - Purchase (in manufacturing organisation); Buying (in a retail set-up); Inbound logistics.
Yes, auction is a transaction involving both activities Sale and Purchase. In case of Procurement as well, both these activities take place. As such, all those principles which are applicable on procurement, should be considered good for auction as well.
I do agree with you both (Nadeem & Iqbal) on considering auctions transaction and similarities, but If you are a procurement officer of a governmental entity and you know it well that Public money is used through tendering to procure required goods, works and services and sign the contract with the lowest evaluated bid price, while in auction, you just sale governmental properties, through auctioning to increase the value of the said property/surplus goods or whatever. How can you justify that it is procurement?
logistic is holistic defintion which PO lies under it
the correlation between aquision and the life of the item intended to be sold constitute the core to decide
the anwser depend on the jod Des.
Legally speaking, auction is a mechanism used to sell products/services to the highest bidder. Procurement is a more wider aquisition concept/mechanism used, generally, by governmental entities. In a procurement process, you set the highest price to buy and expect offers (which comply with the maximum price limit) during tendering. At auction you are the one to make the bid and to overprice the other buyers in the endeavour to obtain the goods. Buying goods from auction involve the cost risk, because you don't know the final value of aquisition. Obtaining good by procurement mechanism and tendering process allows you to set the cost limit for aquisition. Procurement shall be seen as a process during which you expect offers from sellers of the goods and auction is regarded as a process where you play an active role as a bidder. So, if you take in consideration the narrow definition of procurement/auction process, auction is very different from procurement. If you are using the wider definition of procurement, yes can cover a "reverse auction" mechanism on the procurement stage of tendering.
