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'Sourcing' or 'Selection of source/s' is a major
challenge for any Purchasing manager. Source of supply
of required materials is basically selection of a
suitable supplier. The Purchasing manager has to ensure
, getting the material / service from the right source
(one of 5 R).
Once the Indent (also called requisition or Material
Procurement Requisition/ MPR) is received in the
Purchase department ,the concerned dealing person
scrutinizes it , in respect of :
- The complete
specifications including drawings, if required
- Consumption
pattern
- Stock in hand and
dues in
- Budget
availability
- Availability of
all prescribed enclosures and certificates,
- Estimates
- Inspection
guidelines, if any
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On being fully satisfied that the next
stage activities i.e. sourcing is now
called for, the mode of selection of
source , often called mode of tendering is
decided.
In many firms , if the number of items is
not large then the sources are known and
on the basis of suppliers record the
Purchase order can be placed.
However, in government firms where
opportunities are supposed to be given to
any eligible supplier, tendering is
resorted to.
Tendering is a process by which a
potential source is contacted through a
notice called Notice Inviting Tender
(NIT).
The NIT contains the details of material /
service required , the terms and
conditions applicable for entering into an
agreement |
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with the seller, offers made in response to NIT
by the probable seller (Bidder) , for finally
reaching the point of agreement between the
selected bidder and the buyer. |
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NIT is issued by the buyer and Tender is
submitted by the interested bidders /
tenderers.
Depending upon various reasons, mainly emanating
from the extent of knowledge about the existence
of a source (supplier), the mode of tendering is
decided. |
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Different popular modes of tendering for
selection of a supplier are as below: |
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