HBC 2214: Procurement and Logistics Management Notes

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Jomo Kenyatta University of Agriculture and Technology
Bachelor of Commerce
HBC 2214: Procurement and Logistics Management Notes
Document Size: 91 Pages

Brief Overview:

LESSON 1
Overview of procurement
Lesson outcome
At the end of the lesson, students should be able to;
1. Show an understanding of procurement and the procurement process
2. Distinguish between private and public procurement
3. Be able to undertake cost and price analysis in a procurement process
Procurement is defined as the acquisition by purchase, rental, lease, hire purchase, license, tenancy, franchise, or by any other contractual or legal means of any type of works, services or goods including livestock or any combination.
1.1. Difference between Public procurement and Private procurement
By their very nature public and private sector businesses are very different organizations operating to fulfill different objectives. While public sector businesses are under a mandate to operate efficiently their primary objective is public good since they utilize public funds. Conversely private enterprises generally exist to generate a profit and return for shareholders. Both public sector and private sector procurement professionals share similar demands, constraints and responsibilities such as proving value for money, being accountable for spending decisions and adherence to procurement and financial policies. However there are several key distinctions procurement professionals identify between working in public and private enterprise which this article will explore.
• Agility
Procurement professionals working in the private sector often must be more agile and able to respond to change quickly.
• A focus on the bottom line
As private enterprises focus on generating profit, procurement professionals often are constrained by meeting cost reduction targets.

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