Pages 4 (756 words)
- Need Analysis: The first step in the procurement cycle for a school lunch will be to identify the need. To identify this need the school will first have to check what is the current lunch scenario. The school needs to identify how many students eat the school lunch and how many bring their own. After determining this number the school will also have to identify what kind of lunch they want to provide to their students. For example, the school might want to switch to healthy lunch options as compare to the recent one where junk food is served more often.
This step is extremely important as based on this step the school will identify its suppliers and set its budget for the school lunch.
- Gauge the suppliers: Once the school has identified the type of lunch it wants to give its students the next step will be to find a supplier to give the raw materials required for preparing the lunch.
For example if the school wants to start serving healthy lunches might putting more veggies in the diet, then the school needs to look at a supplier who can provide good quality organic vegetables to the school. This step is important to meet the main need of serving a healthy lunch. The supplier should be able to supply vegetables without any interruption. Any interruption in the supply will affect the students. If the supplier claims that the vegetables are grown organically, the school should visit the suppliers farm just to make sure the claims are true.
Along with uninterrupted supply, the supplier should also be stable financially. While choosing the supplier, stability and budget will need to be kept in mind.
- Asking for quotes: Once the suppliers are identified, the next step is for the school to ask for quotations from the suppliers. Getting multiple quotations is important to help the customer decide the best supplier and also keep a backup if the supplier chosen is not able to supply on time due to any circumstance. Getting multiple quotations also helps the school’s bargaining power in the suppliers market.
- Negotiating Prices and terms and conditions: Once the quotations are received, the school can then decide which supplier is able to provide the best quality vegetables at the lowest price . This step is very important as the school will sign an agreement with the supplier once the price is agreed upon. The terms and conditions including the regularity of the supply will be determined in this stage. What the school expects from the supplier in terms of the product and what the supplier expects in terms of the payment from the school will be decided in this step.
- Implementing the supply chain management: Once the basic terms and conditions are established the main step is setting up the supply chain. This includes the logistics as well as transfer of information from the school to the supplier and vice versa. This is the most important step of the procurement cycle. How the good will be supplied to the school, what time the goods will be delivered and what will be the frequency of the order. The transfer of information also includes the time frame that the supplier will need to keep the order ready and what can the supplier do in case of an emergency. A good supply chain management system will keep the process of preparing the school lunch smooth.
- Purchasing: Once the agreement is signed the school will place an order with the supplier. This order will outline the quantity to be delivered and the time of delivery. This order is important for the school as it will help the school keep a track of how much quantity is being ordered and how frequently the order is being placed. It helps the school in inventory management.
The steps elucidated above are all interrelated. For any procurement, the need for the procurement has to be identified. If there is no need then the following steps of identifying suppliers, getting quotes, and negotiating prices are negated. The first 4 steps are also required for the main objective of setting up a smooth and uninterrupted supply cycle.
The objective of the above cycle is to establish a sustainable supply chain cycle. As it can be seen from step 4 and 5, the main objective of both the steps is to see that the school gets an uninterrupted flow of raw material to prepare the school lunch as it is an activity that needs to be done on a daily basis.