What Is Procurement?

By Motley Fool Staff – Updated Nov 18, 2024 at 1:28 PM

Key Points

Procurement includes sourcing, purchasing, and managing goods; it's crucial for operational success.
AI is reshaping procurement, boosting decision-making and efficiency in major firms.
Investors should monitor companies' procurement strategies as they significantly impact performance.

Loading paragraph...

Shopping cart wheels. — Source: Getty Images

Loading paragraph...

Good procurement practices also follow a process, generally specific to the individual company but generally a specific set of rules that govern who does what, when, and where. A well-designed process ensures that goods and services arrive in a timely manner, payment is swift, and accurate records are maintained.

Finally, no procurement process is complete without paperwork. The paperwork helps individuals engaged in the process to track what they’ve bought, who they’ve bought it from, how much they’ve paid for it, and when more goods or services might be required. Well-organized paperwork minimizes costs, maximizes efficiency, and ensures that the company has what it needs for production of a good or service.

Loading paragraph...