12 Steps for International Procurement
The foreign procurement process refers to the steps and procedures involved in acquiring goods or services from suppliers located in other countries. Here is a general overview of the foreign/international procurement process:
1. Identify the Need: Determine the goods or services required and establish the specifications and quantity needed in the company.
2. Market Research: Conduct market research to identify potential suppliers and gather information about their capabilities, pricing, and quality standards. For better sourcing strategy consult with users.
3. Supplier Selection: Evaluate and select potential suppliers based on criteria such as reputation, quality, price, delivery terms, and compliance with relevant regulations based on the product requirement.
4. Request for Quotation (RFQ): Prepare and issue an RFQ to the selected suppliers, specifying the required goods or services, delivery terms, payment terms, and any other relevant information.
5. Quotation Evaluation: Receive and evaluate the quotations received from suppliers. Consider factors such as price, quality, delivery time, technical specifications, and after-sales support.
6. Negotiation and Contracting: Engage in negotiations with the chosen supplier(s) to finalize the terms and conditions, INCOTRMS, payment method, LC clause etc. Once both parties agree, open LC as discussed or pay TT amount.
7. Supplier Performance Monitoring: Follow up the supplier’s performance to ensure compliance with the agreed-upon terms, including quality, delivery schedules, and other contractual obligations.
8. Import and Customs Clearance: Arrange for import procedures, including documentation, customs clearance, and any applicable duties or tariffs with C&F agent.
9. Shipment and Logistics: Coordinate the logistics of transporting the goods from the supplier’s location to the destination, including shipping, insurance, and tracking with your or suppliers shipper.
10. Receipt and Inspection: Receive the goods and conduct an inspection to ensure they meet the specified requirements and quality standards.
11. Payment: Process the payment to the supplier as per the agreed-upon terms and conditions via Bank.
12. Supplier Relationship Management: Maintain a positive relationship with the supplier, addressing any issues that may arise, and seeking opportunities for future collaborations.
It’s important to note that the specific steps and requirements may vary depending on the nature of the goods or services being procured and the regulations of both the buyer’s country and the supplier’s country. Additionally, organizations may have their own internal procurement policies and procedures that need to be followed.
It’s always advisable to consult with legal and procurement experts who can provide guidance and ensure compliance with relevant laws and regulations throughout the foreign procurement process.
