- Procurement: Procurement involves every activity involved in obtaining the goods and services a company needs to support its daily operations, including sourcing, negotiating terms, purchasing items, receiving and inspecting goods as necessary and keeping records of all the steps in the process. 4
- Logistics: Logistics refers to the overall process of managing how resources are acquired, stored, and transported to their final destination. Logistics management involves identifying prospective distributors and suppliers and determining their effectiveness and accessibility. Logistics managers are referred to as logisticians. 5
- Bid: A bid is a tender, proposal or quotation submitted in response to a solicitation from a contracting authority. 6
- Budget: A budget is a spending plan for your business, based on your income and expenses. It identifies your available capital, estimates your spending and helps you to predict revenue. 7
- Commercial negotiation: This process involves two or more parties and a channel of communication that seeks to reach an agreement or settlement of one or more commercial or supply chain issues where there are divergent views. 8
- Request for proposal (RFP): This is a document used to canvas potential solutions from suppliers when the specification is still unclear. 8
- Request for quotation (RFQ): An invitation to suppliers to bid on specific products or services. 8
- Service level agreement (SLA): This document outlines the expected minimum level of service between a service provider and a client. It clarifies the scope of the service. Responsibilities of each party and how to escalate, among other factors. 8
- Supplier appraisal: Assessment of a potential supplier’s ability to control quality, delivery, quantity, price and all other factors to be embodied in a contract. 8
- Supplier selection: Process of selecting a supplier to meet the specification and needs of an organisation based on the assessment of the supplier’s capabilities. 8
- Tender: An invitation to tender is a request sent out to potential suppliers asking them to formally quote for the supply of specific goods or services. 8
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