tions. The focus of critical procur

tions. The focus of critical procurement is on innovation to make the critical item provide greater market value to the finished product.
The preceding discussion of the quadrant technique emphasizes that not all items
and services purchased are of equal importance. It also suggests that the supply chain
manager must utilize varying procurement strategies based on the value and risk of the
item. Greater resources and attention should be directed toward procuring criticals
than toward generics. For example, one full-time procurement specialist may be assigned to purchasing one critical item-say, a computer chip-whereas one full-time
person may be assigned to the purchase of hundreds of generics-office supplies.
In the next section, our attention is directed toward managing the procurement
process.
Managing the Procurement Process. Managing the procurement process can be
difficult for a multitude of reasons, ranging from inflexible organizational structures to
inflexible organizational cultures. However, most firms should find the process relatively easy. What must be remembered when dealing with these activities is that all
firms are different and will have different requirements for the procurement process. A
four-step approach can be used and adapted to a firm's particular needs. Based on the
previous discussion of the procurement process activities, the following steps can be
used to maximize effectiveness:
1. Determine the type ofpurchase. In the procurement process, identifying the type
of purchase (the fourth purchase activity) will many times dictate the complexity of the entire process. For example, a straight rebuy situation will mean that
all of the procurement activities were completed previously (when the purchase
was a new buy or modified rebuy), and the only activities necessary would
probably be the fourth, ninth, tenth, and eleventh. A modified rebuy may also
not require all of the activities, but a new buy would normally require performing all of the activities discussed earlier.
2. Determine the necessary levels of investment. The procurement process requires
two major types of investments by the firm: time and information. Time is expended by the individuals involved in making the purchase; the more complex
and important the purchase, the more time must be spent on it, especially if it is
a new buy. Information can be both internal and external to the firm. Internal
information is gathered concerning user requirements and the implications that
the purchase will have for the firm. External information concerning the input
to be purchased may be gathered from supply chain members, from potential
suppliers, and others. The more complex and important the purchase, the more
information is needed for the procurement process to be effective. By determining the type of purchase (which is also a function of the user's needs), the procurement professional can determine the levels of investment necessary in the
procurement process. Problems can occur when not enough or too much investment is made to satisfy a p~rticular user's needs.
Determining the level of investment needed in time and information to adequately meet a user's requirements is a firm-specific process. Once the level of
investment is decided, the procurement process can take place.
3. Perform the procurement process. This is a relatively easy step to describe but
can be a complex step to perform, depending on the situation. It includes performing those activities necessary to effectively make a purchase and satisfy the
user's re uirements. This step also allows the procurement professional to col-