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What is decentralised procurement?

Updated: 9/16/2023
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14y ago

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A national company with many operating units must buy goods and services from a range of suppliers and sources.
In some cases there are economic and practical advantages to having all purchasing done by head-office. This is called centralised procurement. An example of this might be printed stationery, where head office decides the styles, identifies the best source, and makes a contract with one supplier. In this way they benefit from (a) bulk buying bargaining power, and (b) harmony of image throughout the country.

Decentralised procurement delegates the buying responsibility to regional offices. In this way their scattered divisions have relative autonomy.

There are pros and cons re centralised v. decentralised. Often it is found that some procurement needs are best dealt with centrally, and other matters are best left to the local offices to handle.

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