Introduction to Procurement

Procurement is the process of acquiring goods, services, or works from external sources. It involves identification of needs, sourcing, negotiation, and managing contracts. It's essential for maintaining the supply chain and operational efficiency.

Procurement practices date back to ancient civilizations. The Egyptians used procurement strategies to build pyramids, sourcing materials and labor. The Chinese developed sophisticated procurement systems during the Tang Dynasty, balancing trade relationships and resource management.

E-procurement, the use of digital technologies to manage procurement, has transformed the field. Organizations now use online platforms to streamline processes, enhance transparency, and reduce costs. This shift has led to a 15-20% cost reduction for many companies.

Sustainable procurement considers environmental, social, and economic impacts. Companies adopt green procurement policies to minimize their carbon footprint. For example, IKEA aims to source 100% renewable or recycled materials for its products by 2030.

The future of procurement lies in AI and blockchain. AI can predict demand and optimize sourcing, while blockchain ensures transparency and security in transactions. These technologies promise to make procurement more efficient and reliable.

In World War II, efficient procurement of penicillin saved thousands of lives by treating bacterial infections, demonstrating the critical impact of procurement on global health.