Posts Tagged With: Procurement

Supply Chain in Humanitarian Relief

In humanitarian organizations, the terms supply chain is basically used to describe the process of getting relief items from the source to the beneficiaries in a timely manner. The source could be suppliers as well as donors. And in some organizations, they used the terms supply chain and logistics both together to describe above mentioned process. Usually logistics also used to describe the function or division who is responsible for managing the process.

Basically, the nature of supply chain and logistics in business or commercial are essentially the same with humanitarian supply chain and logistics, the following are the significant differences:

  • Unpredictable demand in terms of timing, geographic location, type of commodity, quantity of commodity.
  • Short lead time and suddenness of demand for large amounts of a wide variety of products and services.
  • High humanitarian stakes regarding timelines in the face of sophisticated global media and the high anticipatory attention of the donors.
  • Lack of initial resources in terms of supply, human resource, technology, capacity and funding. (Source: Balcik and Beamon, 2008)


SCM2The main components of the humanitarian supply chain are:

  • Procurement
  • Transport
  • Warehousing and inventory



Procurement is a key activity in the supply chain. The procurement involves the sourcing, purchasing and covers all activities from identifying potential suppliers of relief items and services that are needed to meet the needs of the beneficiaries. There are three important principles of humanitarian procurement:

  • Transparency: all phases in the procurement process are fair and accurately documented.
  • Accountability: accountability to donors who may require certain rules to be followed when using the fund/money that they have provided.
  • Efficiency and cost effectiveness: meeting the six rights of supply: right price, right time, right quantity, right quality, delivery to the required places and from the most cost effective source.

The procurement function must guard and mitigate against risk, understand the market, build a trust relationship with suppliers, meet the needs in a timely manner, and constantly monitor performance to improve service provision.


In the humanitarian context, transport can be defined as the physical movement of relief items/goods from suppliers or point of origin to internal customers (in this case mainly is warehouse of humanitarian organization)  or directly to the beneficiaries. The transport component in the supply chain therefore is critical in connecting supply to demand. The aim of transport in humanitarian context is to physically move the relief items/goods in a reliable and safe manner, on time, cost effectively and efficiently to its destination.

Transport mode will depend on several factors including:

  • The type and volume of items/goods to be transported.
  • The urgency that items/goods are required.
  • The availability of different transport routes as well as different types of transport.
  • The destination to which the items/goods to be transported.
  • The cost of transportation.
  • The terrain through which the items/goods need to be transported.

Warehousing and Inventory

The third main component is warehousing and inventory. Recently, some of the experts said that in the perfect supply chain we do not need warehouses in order to reduce costs. In the humanitarian context, clearly there are reasons why items/goods have to be stored and why we need warehouses. In the humanitarian supply chain, there are types of responsibility to manage warehouses, e.g. supplier warehouses, donor warehouses, humanitarian organizations warehouses.

Types of warehouse space:

  • Commercial
  • Government
  • Transit warehouse
  • Bonded warehouses
  • Open storage
  • Pre-fabricated warehouses – non permanent structure

The role of inventory management in humanitarian context is to ensure that stock is available to meet the needs of beneficiaries when required.


In addition to those three main components, there are several subsidiary activities in the humanitarian supply chain, e.g. assessment and planning, fleet management, customs etc.

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Procurement Activities

As mentioned previously, procurement covers all process from the beginning until the end to obtain goods or services.

Procurement activity

Below are the activities:

1. Identification of goods or services as per requirement.

The companies should determine what products or services required based on the plan that have been made previously. The specified type or the required specifications have been created in that plan, even most of the company already has its own standards for goods or services required. Also at this stage, the company must know it needs for the goods or services, whether that needs to be reordered or it may be a new item.

 2. Conduct market survey or market assessment.

The companies might have list of references of suppliers or they have to find a new supplier using a variety advertisement sources, e.g. from magazines, newspaper or electronic media. What to be done in this activity includes:

  • Make list of suppliers.
  • Build a good relationship with suppliers.
  • Make suppliers appraisal includes their capabilities.
  • Selection of potential suppliers.
  • Get sample of goods from potential suppliers.

3. Selection and determine who will be the supplier.

This activity is usually done through a bidding / tender process. However, for some cases, the companies can directly enter into contracts with suppliers without going through a tender process, of course, this is done by strictly taking into account the terms and conditions. Usually direct contract is made if the goods or service is urgently needed or it needed within a narrow time.

4. Make and placing a procurement contract or purchase order with supplier.

All terms and conditions, specifications and price should be clearly stated in the procurement contract or purchase order. This contract or order should be made in two copies, each party need to keep one copy. Acknowledge receipt of contract from supplier to be kept by buyer.

 5. Expediting orders as per contract or purchase order.

Timely delivery is important, supplier has to notify if there is any delay. In principal, this activity should pay attention on delivery times, work completion and payment dates.

 6. Receipt and inspection of purchases.

The goods or services should be checked and inspected by the recipient prior sign any receiving document. The recipient could reject to receive if there is a defect or the goods/services are not same with specifications in the contract or order.

 7. Payment.

Payment is made if all data and numbers in three documents are match. The receiving document, the invoice and the contract/purchase order must match. Any discrepancies must resolved before executing the payment.

 8. Make supplier performance evaluation.

This activity is important because the result of supplier performance evaluation will determine whether the supplier will be able to continue to be used or not. Observed performance is from the beginning since the contract / order is signed up to the invoice or payment. This performance evaluation also important for audits. All documentations should be kept in properly manner.

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Aktivitas-aktivitas Pengadaan

Procurement activity

Seperti yang dibahas sebelumnya, pengadaan meliputi seluruh aktivitas yang dilakukan dari tahap awal sampai tahap akhir untuk mendapatkan barang atau jasa tersebut.

 Berikut kita akan melihat aktivitas apa saja yang dilakukan:

1. Identifikasi barang atau jasa apa yang dibutuhkan.

Perusahaan menentukan barang atau jasa apa yang diperlukan berdasarkan rencana yang telah dibuat sebelumnya. Dalam rencana yang dibuat itu telah ditentukan jenis atau spesifikasi yang dibutuhkan, bahkan sebagian besar perusahaan telah mempunyai standar tersendiri untuk barang atau jasa yang dibutuhkan. Juga pada tahap ini perusahaan mengidentifikasi apakah barang atau jasa yang diperlukan itu pernah dibuat/didapat sebelumnya sehingga mereka hanya perlu untuk memesan kembali atau benar-benar merupakan sesuatu yang baru yang belum pernah dipesan/dibuat sebelumnya.

 2. Melakukan survei atau kajian pasar.

Dalam hal ini perusahaan bisa memakai referensi tentang pemasok yang mereka punyai atau benar-benar melakukan kajian untuk menemukan pemasok yang baru. Iklan baik yang ada di media cetak atau media elektronik akan sangat membantu dalam survei atau kajian ini. Dalam aktifitas ini yang harus dibuat antara lain:

  • Membuat daftar para pemasok.
  • Membangun hubungan dengan para pemasok ini.
  • Melakukan penilaian performa terhadap para pemasok tersebut termasuk kemampuan mereka.
  • Menentukan para pemasok yang potensial.
  • Mendapatkan contoh barang dari para pemasok yang potensial tersebut.

3. Menyeleksi dan menentukan siapa yang akan menjadi pemasok.

Aktivitas ini biasanya dilakukan melalui proses tender. Namun untuk beberapa kasus  bisa langsung membuat kontrak dengan pemasok tanpa melalui proses tender, tentu saja hal ini dilakukan dengan memperhatikan syarat dan kondisi yang telah ditetapkan oleh perusahaan. Biasanya kontrak secara langsung ini dilakukan jika barang atau jasa yang diperlukan sangat dibutuhkan pada saat itu juga atau dalam waktu yang sempit.

 4. Membuat kontrak pengadaan atau order pembelian.

Semua syarat dan kondisi serta spesifikasi barang dan harga termasuk cara pembayaran harus tercantum secara jelas dalam kontrak pengadaan atau order pembelian yang dibuat. Kontrak atau order ini harus dibuat rangkap dua, pembeli dan penjual masing-masing harus memegang satu salinan.

 5. Pengiriman barang atau jasa oleh pemasok sesuai dengan kontrak atau order yang telah disetujui.

Yang harus diperhatikan dalam aktivitas ini adalah ketepatan waktu baik waktu pengiriman barang atau jasa, penyelesaian order dan waktu pembayaran.

 6. Penerimaan dan pemeriksaan pembelian.

Penerima harus melakukan pemeriksaan sebelum menandatangani bukti serah terima barang atau jasa. Jika ada barang yang cacat atau tidak sesuai dengan kontrak/order maka penerima berhak untuk menolak.

 7. Pembayaran.

Sebelum melakukan pembayaran, pembeli harus memastikan bahwa data dan angka yang ada di tagihan, kontrak/order dan bukti penerimaan barang harus sesuai dan tidak ada perbedaan.

 8. Mengevaluasi kinerja dari pemasok.

Aktivitas ini penting karena dari hasil evaluasi kinerja ini seorang pemasok akan bisa terus digunakan atau tidak. Kinerja yang dilihat adalah dari awal sejak kontrak/order ditandatangani sampai dengan proses invoice atau pembayaran. Evaluasi kinerja pemasok ini juga penting untuk proses audit. Semua dokumen harus disimpan dengan baik.

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Procurement >> Preliminary

We have seen five basic components of SCM previously, i.e. plan – source/supply – make/production – deliver – reverse.

These five components cannot be separated. A simple example is if we have a necklace. Of course that necklace has to be in good form in order for us to use it. If one part, e.g. the hooks are damaged then we need to fix so we can use it again. Maybe there will be a slight defect or the looks will not as good as before. And maybe at first we only had the money to buy a silver necklace, but after a while we’ve got enough money to buy a gold necklace. We will take care of that gold necklace properly because it is valuable goods.

Above example is same with SCM, each component is unity and should be managed properly to achieve value / profit as per the goals, it has to be sustained and improved.

Back to procurement, for most ordinary people, procurement is same with purchasing. But actually both are different. Below we can see what the difference between procurement and purchasing:

Procurement Contract

Procurement: the complete process for acquiring goods or services from external party or supplier. Procurement covers all process from the beginning until the end to obtain goods or services. It includes identifications of goods or services as per requirement, market survey or assessment, obtain sampling based on the required specifications, tender process until award for the winner, make a contract, ordering includes logistics arrangement (transport & warehouse if necessary), monitoring and make performance evaluation of the supplier. Almost same with logistics missions, procurement is acquiring goods or services in the right quantity & quality, at the right time & place and from the right source at the right price.

Purchasing: the specific activity of committing expenditure (money or equivalent) and tends to focus on the price rather than others. We can also say that purchasing is a part of procurement and more for administrative aspects. There are several companies set their own standard for purchasing, it can vary greatly between companies.

Going forward we will discuss steps in the procurement process.

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Pengadaan >> Pendahuluan

Kita telah melihat lima komponen dasar dari SCM, yaitu rencana– sumber/suplai – buat/produksi – kirim – kembali.

Kelima komponen itu tidak bisa dipisahkan satu dengan yang lainnya. Contoh sederhana adalah jika kita mempunyai kalung, tentu kalung tersebut harus dalam bentuk yang utuh untuk bisa dipakai. Jika pengait kalung tersebut rusak maka kita harus memperbaikinya untuk bisa dipakai kembali. Mungkin akan ada sedikit cacat atau penampilannya kurang begitu bagus dibandingkan dengan sebelum rusak. Pada saat pertama kita membeli kalung, kita hanya punya uang untuk membeli kalung perak, namun setelah beberapa saat kita sudah punya cukup uang untuk bisa membeli kalung emas. Tentu kalung tersebut akan kita rawat dengan baik karena merupakan barang berharga.

Contoh di atas sama persis dengan SCM, setiap komponen yang ada merupakan suatu kesatuan, harus dikelola dengan baik untuk bisa mendapatkan nilai/keuntungan yang diinginkan dan berkelanjutan. Keuntungan bisa terus meningkat jika SCM itu berjalan dengan baik dan terus ditingkatkan mutu dan efisiensinya.

Kembali ke judul di atas, yaitu pengadaan. Mungkin bagi sebagian besar masyarakat awam, pengadaan sama dengan pembelian. Sebenarnya kedua hal ini berbeda. Berikut adalah pengertian dasar mengenai kedua hal tersebut:

Procurement Contract

Pengadaan :   suatu proses untuk mendapatkan barang atau jasa dari pihak lain. Proses tersebut meliputi seluruh aktifitas yang dilakukan dari tahap awal sampai tahap akhir untuk mendapatkan barang atau jasa tersebut. Biasanya dimulai dari identifikasi apa yang dibutuhkan, melakukan survei atau kajian pasar, mendapatkan contoh barang yang diinginkan sesuai dengan spesifikasinya, melakukan proses tender, membuat kontrak pengadaan, melakukan pemesanan termasuk mengatur masalah logistiknya (transport & gudang jika perlu),  memonitor posisi barang atau jasa tersebut sampai dengan mengevaluasi performa dari pemasok. Hampir sama dengan misi logistik, pengadaan mempunyai misi untuk mendapatkan barang atau jasa dengan jumlah dan kualitas yang tepat, pada waktu dan tempat yang tepat serta dari sumber yang tepat dengan harga yang tepat juga.

Pembelian : suatu aktifitas yang melakukan pengeluaran (uang atau setara dengannya) dan biasanya lebih cenderung ke pertimbangan harga daripada lainnya. Boleh dikatakan bahwa pembelian adalah salah satu bagian pengadaan dan bersifat lebih ke masalah administratif. Beberapa perusahaan menetapkan standar untuk proses pembelian namun proses ini sangat bervariasi.

Ke depan kita akan membahas langkag-langkah yang dilakukan pada proses pengadaan.

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Supply Chain >> Supplier & Production

We will see about supplier & production at the same time because both are very closely related.


As discussed earlier in the planning stages, one important factor is to get accurate information about market demand. We can find out what is desired by the market in several ways such as conducting market research, customer orders, customers feedback, information from other stakeholders, and so on.

Based on demand information, the companies / factories then make design products including raw materials needed to make these products as well as who will be the suppliers. At this stage, procurement contracts with supplier should be made. The procurement contract should mention all the terms and conditions required especially about material specification, delivery period & conditions and payment schedules. Would be better to get sample of the material from supplier prior of signing the procurement contract.

Then we go into the manufacturing process. At this stage production is based on demand information that has been made before. The manufacturing process should be made flexible and efficient to be able to respond if there are changes in the market. The manufacturing process consists of several important parts, e.g. product design, production scheduling, quality control and other supporting activities such as handling of products, packaging, storage and delivery plans.

In general, we can describe flow of the processes as below:

Planning: demand information -> Supplier: procurement contract -> Production: product design, production scheduling and supporting facilities.

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