The Procurement process flowchart of a company aims to organize the act of acquiring goods, services or jobs from an external source.
It is crucial that the products, services or jobs are purchased at the best possible price to meet the company’s needs regarding quality and quantity, delivery time, availability and location.
Currently, several are and public bodies have defined a purchasing process flowchart to promote fair and open competition in their business, minimizing exposure to fraud, overpricing and collusion between suppliers.
Advantages of a company procurement process flowchart
In addition to the reduction of losses and fraud, we can also include:
- Cost reduction
- Agility and speed
- Documented learning
- Formal definition of those responsible and their responsibilities
- Greater bargaining power
Undoubtedly, companies that have optimized procurement processes come out ahead of the competition and create a sustainable environment for their development, creating competitive advantages that make all the difference.
The following is an example of the procurement process flowchart that can be applied in your business or adapted to the peculiarities of your business and the goals you want to achieve.
Procurement process flowchart example
HEFLO has made this example of a business procurement process flowchart available to you, providing most of the tasks that are usually used for this type of activity.
But as we said, it is fully adaptable.
As you can see, in this procurement process flowchart example there are 5 lanes defined in the pool:
- Applicant: The person from any area authorized to make purchase requests.
- Manager: Is responsible for the cost of the acquisition.
- Purchasing Clerk: The person responsible for the purchase of the product or service.
- Warehouse: The area of the company that receives and stores the acquired assets.
- Accounts Payable: Makes the payment and ends the process.
The procurement process flowchart occurs as follows:
- Armed with data, the applicant asks the manager to replace an item, to verify that it is exhausted or hit the replacement point.
- Upon receiving the message, the manager analyzes the acquisition and makes a decision regarding whether it is necessary, or disapproves the application and informs the applicant of the cancellation, ending the process, or asks the Purchasing Clerk to make a quote.
- The Purchasing Clerk collects the information needed to get at least 3 quotes.
- All quote data is consolidated into a report comparing prices. This report includes quantities, delivery dates, amounts, and payment. This report is submitted to the cost center that requested the purchase.
- The manager must analyze the quotes taking into account not only the value but also the supplier, cost benefit, and availability of cash. Then take one of three possible decisions: request quote adjustments from the Purchasing Clerk, refuse the quotes and communicate the cancellation of the purchase, ending the process or approve the purchase and send the request to the supplier.
The procurement process flowchart proceeds as follows:
- Registration and collection of the required data is done with the supplier.
- Armed with a purchase order, the Purchasing Clerk makes the purchase.
- The Purchasing Clerk uses the order data to confirm the purchase and determine delivery time.
- Next, there are two alternatives: In the case of services, the requester encourages the supplier, authorizes and validates the service. For products, the warehouse receives the purchase order and awaits the receipt of the request.
- Once the merchandise is received the warehouse sends the invoice for continuity in accounts payable.
This company procurement process flowchart example can be tailored to your needs.
Tailoring the flowchart of purchasing processes
With a simple drag of the elements or by clicking on them to change them, HEFLO allows you to adapt this process flow to the characteristics of your company.
For instance, your business may need the manager who requested the purchase to authorize the purchase again, after the financial analyst approves the quote. Just include these flows through connectors and detail the decisions to be taken.
And, sometimes the quality control department needs to evaluate the products purchased to see if they are within the company’s standards, in this case, you may want to create a new lane and indicate the tasks and connectors to define the flow.
HEFLO allows you to model and document processes in an agile and intuitive way, generating documentation with an excellent presentation. And all of this via the cloud, which is, of course, accessible from anywhere.