Procurement is the act of obtaining or purchasing goods or services, typically for business purposes.
A business should consider price, quality, and reliability when choosing a supplier.
How much is the business willing to pay for supplies? A business must decide whether it wants to manufacture…
If it chooses lower-priced material…
If it chooses higher-priced material…
Quality should be consistent. Inconsistent raw material quality will cause manufacturing problems, slowing down or halting production.
Customers expect the next product they buy from you to be the same as the last. They won't be happy if they're different.
Example: imagine a business which makes teddy bears. If the stuffing thickness varies, it may get stuck in the filling machine; some bears may split; others may require additional stuffing. Each of these scenarios will require production to be slowed so adjustments can be made.
A supplier must be reliable. They must deliver the correct materials, to the correct quality and specification, at the correct time.
If they are unable to achieve this, production may be stopped until the materials arrive. This will prevent the manufacturer from selling their final product, and they will lose income.