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Procurement is the acquisition of goods and/or services in terms of :

  • Right Price: at the (best possible) right price
  • Right Quantity: in the right quantity
  • Right Quality: of the right quality
  • Right Time: at the right time
  • Right Place: in the right place for the direct benefit or use of the organization.

The Purchasing Unit in Oando is responsible for fixed assets to all departments and entities in the Oando Group.

In November 2007, the company automated best prices for all customers!  its purchasing function by introducing Oracle application.

The key benefits of the new application include the following:

  • Standardization of suppliers across the Group
  • Standardization of items across the Group
  • Better price negotiations
  • Ease of payment processing
  • Faster processing time of requests
  • Central control of inventory
  • Standardization of our processes in line with best practices all over the world

The advent of Oracle as the application of use in the company has moved us towards rendering better services along the supply chain with significant reduction in processing time of requests, right from request generation to order processing and payments.

Designated buyers based on commodities are responsible for process with the Supervision of the Head of Procurement.

In order to achieve greater economies of scale, Oando’s procurement functions are within Shared Services Unit. This combines several small procurement agents into one centralized procurement system.

Procurement Steps
Procurement life cycle in modern businesses usually consists of seven steps:

(1) Information Gathering: If the potential customer does not already have an established relationship with sales/marketing functions of suppliers of needed products and services (P/S), it is necessary to search for suppliers who can satisfy the requirements.
(2) Supplier Contact: When one or more suitable suppliers have been identified, Requests for Quotation (RFQ), Requests for Proposals (RFP), Requests for Information (RFI), Call for Tender (CFT) or Requests for Tender (RFT) may be advertised, or direct contact may be made with the suppliers.
(3) Background Review: References for product/service quality are consulted, and any requirements for follow-up services including installation, maintenance, and warranty are investigated. Samples of the P/S being considered may be examined, or trials undertaken.
(4) Negotiation: This is the process by which we search for terms to obtain what we want from interested organisations.

Negotiations are undertaken to agree on terms such as price, availability, and customisation possibilities are established. Delivery schedules are also negotiated, and a contract to acquire the P/S is completed.

(5) Fulfillment: Supplier Order preparation, shipment, delivery, and payment for the P/S are completed, based on contract terms. Installation and training may also be included.
(6) Consumption, Maintenance and Disposal: During this phase the company evaluates the performance of the P/S and any accompanying service support, as they are consumed.
(7) Renewal: When the P/S has been consumed and/or disposed off, the contract expires, or the product or service is to be re-ordered, company experience with the P/S is reviewed. If the P/S is to be re-ordered, the company determines whether to consider other suppliers or to continue with the same supplier.