VAE 511: Livestock Entrepreneurship (1+0)

PROCUREMENT MANAGEMENT

• Procurement is the acquisition of goods and/or services at the best possible total cost of ownership, in the right quality and quantity, at the right time, in the right place and from the right source for the direct benefit or use of companies, individuals, or even governments, generally via a contract.
• Procurement covers the act of buying goods and services whereas acquisition is a much wider concept than procurement, covering the whole life cycle of acquired systems.
  

• Simple procurement may involve nothing more than repeat purchasing. Complex procurement could involve finding long term partners – or even 'co-destiny' suppliers.
• Economic analysis methods such as cost-benefit analysis or cost-utility analysis could be applied for purchasing decisions, when the data is accurate and available.

Characteristics of Major Categories to be procured under Direct and Indirect Procurement
Features	Raw Material and Production Goods	Maintenance, Repair and Operating (MRO) Supplies	Capital Goods and Services
Quantity	Large	Low	Low
Frequency	High	Relatively high	Low
Value	Industry specific	Low	High
Nature	Operational	Tactical	Strategic
Examples	Feed, Fodder, Medicines	Spare parts in feed machines and equipments. Example for Milking machine, Feed chaffer, Hatcher etc.,	Milking machine, Feed chaffer Computers, Hatcher etc.,

• Direct procurement is seen in manufacturing settings only.
• Direct procurement directly affects the production process of manufacturing firms.
• It comprises a wide variety of goods and services, from standardised low value items like office supplies and fuels to complex and costly products and services like milking machine and consulting services of Veterinary Experts.