Regardless of your industry, the effectiveness of your supply chain is closely tied to the success of your company.
Instead of calling them by their true names, procurement and purchasing operations, the terms sourcing, dealing, and buying are frequently thrown throughout the market.
Procurement is the starting point of your supply network and comes to an end when you have all you need to produce your services and goods.
As part of their daily processes, most businesses have a procurement division. However, many personnel in these corporations are often ignorant of the buying department’s role.
The Basics of Procurement
Procurement refers to the process of selecting suppliers, determining payment conditions, negotiating contracts, and acquiring commodities. It is, in essence, the umbrella word under which purchasing may be located.
Because procurement encompasses multiple fundamental business operations, it should be seen as an essential component of every organization’s strategic planning.
Primarily, the procurement department is concerned with sourcing and managing purchase contracts through a number of practices and controls.
However, there is often a misconception that procurement is only about purchasing, which is commonly defined as the transactional operation of procuring products or services.
Paying and receiving are frequently included in the buying cycle. As a result, the purchase should be seen as a component of procurement.
Why Is Procurement Important in The Cannabis Business?
In this new market, where international investors are flowing in, it is critical to make sound judgments that will benefit your whole corporation.
Today procurement has progressed from a purely administrative function to a strategic one inside the corporation.
Procurement teams in the cannabis business have the unusual issue of decreasing commodity supply while raising concerns about sustainability.
Many procurement departments want to save costs, but they must square that ambition with structural and societal issues that may have an effect on the company brand.
Your company operations should mirror your image as part of your entire business plan. Customers are drawn to businesses whose values and practices are consistent with their own. As a result, coordinating your procurement activities with your business strategy is critical.