How to Create a Procurement Requirement
Introduction
Procurement requirements can suck at times.
As soon as you sit down (virtually) with your internal stakeholder to map out what you need, they turn into a trigger-happy person who wants to write everything down in the most implausible detail.
Have fun pissing your supplier off here.
If you’ve ever tried to buy something as simple as a new computer or car, you know how challenging it can be to get what you want.
Just trying to map your requirements with their specifications can be a challenge.
If you’re considering creating a requirement but aren’t sure where to start, here are some tips for getting started on this vital task:
What is a requirement?
A procurement requirement is a document that describes what you need to fulfil your business objectives.
It can also be referred to as sourcing, product, or service requirement.
The purpose of writing procurement requirements is to:
Establish the scope of work for suppliers and contractors by describing what (and how) you want them to provide;
Ensure that everyone involved has the same understanding of what they’re supposed to do; and
Create an audit trail so that if there’s ever a problem with the deliverables at any point along their journey from concept through delivery, everyone will know where it came from so it does not happen again.
Once you’ve agreed on all of this, you’ll tie this up nicely into a contract to ensure that you all get what you believed you would…and yes, problems arise all the time even though you have a contract. It can be painful, so getting this right is a must-have.
Why do companies create requirements?
Companies create requirements to:
Reduce costs by getting the right product or service at the right time, place and price.
Minimise the risk by getting the right product or service on time, in the right place, in quantity and at the right price.
Determine who’s involved in the process.
Before creating the requirement, you need to know who the people involved in the process are.
Who will be involved?
Who are the decision-makers?
Who are the stakeholders?
Who might be affected by this decision?
You want to ensure everyone is involved at the right time. This might be the sourcing evaluation or contract signature at the business decision stage (this should be in place now). Your role as a procurement professional is to ensure this all happens as required.
Assess the market and product.
After you have determined your needs, the next step is to assess the market and product. This involves identifying the type of product or service you need, its key features and its price range.
In addition, you should identify your delivery requirements. You may want a specified shipping date or location where your order will be delivered.
Document the requirement.
You can use a template to create and manage your procurement requirements. Or, better than this, make use of sourcing software (procurement software/procurement tech) that can assist you with this).
Make sure it is clear, concise, and easy to understand by all parties involved in the process.
Include critical information about your company, its products or services, and what you are looking for in a supplier. Include criteria to help you select the best supplier when multiple bids come in.
Your procurement requirement should focus on three main goals:
basic information about your company
why do you need the product or service
what you’re looking for from potential suppliers.
First, start by including basic information about yourself as a buyer. This includes things like your name, title and email address. You can also add other relevant contact details like phone numbers or addresses if needed—but keep this section short enough so that it doesn’t distract from the rest of your document!
Second, include details about what you want from suppliers regarding products and services. This may be helpful if some suppliers don’t know how much time they have to respond and allow them to plan their response with their other bids.
Conclusion
Creating a procurement requirement is a simple process that can be done quickly. It’s important to remember that this document aims to inform potential suppliers about what you need from them and give them an idea of how they can help your business succeed. By taking these steps, you’ll have all the information you need to find new suppliers and start working with them immediately!
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