LIVING LOGISTICS BLOG

One of the most common headaches for a company’s procurement department is launching an RFQ. The objective is always to achieve cost savings, efficiency and compliance, but it’s not so hard to lose the north when you have a lot of information to analyze and consider. The easiest solution is, of course, to outsource the handling of the RFQ, but selecting the company to achieve that task seems as hard as the task itself.

Jean-Jacques Laffont, a French economist, defined Procurement as "the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process."

Even though the core concept remains the same over decades, the reality is that in practice, procurement must evolve and adapt over time especially as technology advances around it.

Procurement is focused on making buying decisions that involve cost-benefit or cost-utility analyses but many debates still persist in acquiring Logistics services such as “do I enable my internal logistics department to make these decisions” or “do I centralize the process through an enterprise-wide procurement organization”.

Sometimes, having a good relationship with your suppliers can be a difficult proposition. Strategically planned interactions with third party organizations have to be precisely executed in order to maximize the value of the desired synergies.