95
Lesson 8
Outcomes:
- Describe regulations governing procurement of goods and services
- Explain how to work with your purchasing agent
- Discuss how to manage inventory
Regulations Governing Procurement of Goods and Services
In Canada, procurement of goods and services, particularly for government entities, is governed by a framework of laws, regulations, policies, and trade agreements. Here’s an overview of the key regulations and principles governing procurement in Canada:
| Regulations Governing Procurement in Canada | Description |
| Government of Canada Procurement Policy | – The Policy on Government Procurement and the Code of Conduct for Procurement provide guiding principles for federal government procurement. |
| – Emphasizes fairness, openness, and transparency in procurement processes. | |
| – Ensures procurement withstands public scrutiny. | |
| Trade Agreements | – Canada is part of various trade agreements influencing procurement. |
| – Includes international agreements like NAFTA (replaced by CUSMA) and WTO-AGP. | |
| – Domestic agreements like AIT promote non-discrimination and equal treatment for suppliers. | |
| Public Services and Procurement Canada (PSPC) | – PSPC is the central purchasing agency for federal government procurement. |
| – Responsible for procurement on behalf of federal departments and agencies. | |
| – Provides guidelines and manages major procurement projects. | |
| Transparency and Competition | – Canadian procurement emphasizes competition and transparency. |
| – Tenders are often published on websites like MERX. | |
| – Criteria for evaluation are clear and public. | |
| Value for Money | – Canadian procurement prioritizes best value over the lowest cost. |
| – Considers factors like lifecycle costs, quality, and vendor reliability. | |
| Integrity Provisions | – Recent emphasis on ensuring suppliers adhere to ethical standards. |
| – Measures to prevent corruption, bribery, and unethical behaviors. | |
| Sustainable Procurement | – Aims to incorporate environmental considerations into product and service selection. |
| – Focuses on reducing environmental impact and promoting sustainability. | |
| Supplier Diversity | – Recognizes diversity and inclusion’s importance. |
| – Promotes procurement from Indigenous and minority-owned businesses. | |
| Accountability | – Federal departments and agencies must maintain records detailing procurement history. |
| Contract Management and Dispute Resolution | – Provides mechanisms for post-award contract management. |
| – Includes monitoring performance, ensuring compliance, and dispute resolution. | |
| Special Provisions for Emergencies | – Allows exceptions from usual procurement processes in specific situations, like natural disasters. |
| Provincial and Municipal Regulations | – Each province and territory in Canada has its own procurement regulations. |
| – Municipal governments may have additional rules and guidelines. |
It’s important to note that this is a broad overview, and specific procurement activities might be subject to additional regulations and policies, both at the federal and provincial levels. As with any regulatory environment, it’s essential to consult specific guidelines and possibly legal counsel when engaging in procurement activities in Canada.
How to Work with a Purchasing Agent
Working effectively with a purchasing agent (or procurement officer) requires clear communication, collaboration, and understanding each party’s role and responsibilities. Here’s how to work effectively with your purchasing agent:
- Understand Their Role: Recognize that purchasing agents have specific responsibilities, such as obtaining the best value for money, ensuring compliance with procurement policies and regulations, and managing supplier relationships.
- Clear Communication: Clearly convey your requirements, including specifications, quantities, delivery times, and other essential details. The more specific you are, the better they can serve you. Also, Provide them with a well-defined scope of work or product specifications.
- Plan Ahead: Give the agent sufficient lead time. Last-minute requests can lead to rushed decisions and might not yield the best results.
- Understand the procurement cycle and the time it takes for different types of purchases.
- Be Open to Alternatives: Purchasing agents may suggest alternative suppliers or products that offer better value or meet specifications in a better way. Be open to their expertise and recommendations.
- Regular Updates: Check in regularly, especially for critical or large purchases, to know the status of the order, potential delays, or any changes.
- Understand Procurement Policies and Procedures: Familiarize yourself with your organization’s procurement policies and any regulations that might apply. This will help in aligning expectations and understanding potential delays or challenges.
- Provide Feedback: If a particular supplier or product didn’t meet expectations, inform the purchasing agent. This feedback is valuable for future orders. Also, recognize and appreciate when the agent goes above and beyond or provides excellent service.
- Collaborate on Negotiations: Sometimes, you might have specific knowledge or expertise about a product or service that can aid in negotiations. Collaborate with the agent to ensure the best terms.
- Manage Conflicts Constructively: If disagreements arise, address them directly and professionally. Remember that both of you are working towards the organization’s best interests.
- Engage in Continuous Learning: Industry standards, technologies, and best practices evolve. Engage in training sessions or workshops together to stay updated.
- Documentation: Ensure that all communications, especially changes or special requests, are documented. This helps in accountability and clarity.
- Build a Relationship: Establishing trust and rapport makes the working relationship smoother. Understand their challenges and constraints, and they will be more likely to go the extra mile for you.
- Leverage Their Network: Purchasing agents often have a wide network of suppliers and industry contacts. Use this to your advantage when looking for new products, services, or solutions.
- Be Transparent: If there are budget constraints, specific preferences, or any other considerations, be upfront about them.
In essence, an effective relationship with a purchasing agent is built on mutual respect, clear communication, and collaboration. Both parties should remember that they are on the same team with the shared goal of obtaining the best value and quality for the organization.
How to Manage Inventory Effectively
Managing inventory effectively is crucial for many businesses, especially those in retail, manufacturing, and distribution. Effective inventory management can reduce costs, improve cash flow, and ensure timely delivery of products to customers. Here’s a detailed overview of how to manage inventory:
| Inventory Management Steps | Description |
| Set Clear Objectives | Understand the purpose of holding inventory: meet demand, buffer, or take advantage of discounts. |
| Choose the Right Inventory System | – Periodic System: Counts done at specific times. – Perpetual System: Real-time tracking. |
| Inventory Classification | ABC Analysis: Classify based on importance (A: most valuable, C: least). Prioritize efforts. |
| Demand Forecasting | Use historical data and trends to predict future demand for stock planning. |
| Safety Stock | Maintain buffer stock to handle unexpected demand or supply delays. |
| Reorder Point | Determine when to reorder by setting a threshold for low inventory. |
| Economic Order Quantity (EOQ) | Calculate optimal order quantity to minimize holding and ordering costs. |
| Cycle Counting | Periodically count parts of inventory to ensure accuracy without full audits. |
| Use Inventory Management Software | Utilize software tools like QuickBooks, Oracle NetSuite, or Zoho Inventory for automation and insights. |
| First-In-First-Out (FIFO) | Sell the oldest inventory first, crucial for perishable goods. |
| Regularly Review Suppliers | Assess supplier performance in terms of quality, reliability, and prices. |
| Reduce Excess Stock | Identify slow-moving items and apply strategies like discounts or promotions. |
| Set Inventory KPIs | Establish key performance indicators (e.g., turnover rate, days on hand) for measurement. |
| Plan for Seasonality | Adjust inventory levels based on seasonal fluctuations in demand. |
| Implement Tighter Control for High-Value | Apply stricter controls and more frequent counts for expensive items. |
| Warehouse Organization | Efficiently organize storage areas, consider vertical storage or automation. |
| Loss Prevention | Implement security measures (CCTV, personnel, RFID) to prevent theft. |
| Train Your Staff | Ensure staff understands their roles and the tools they use. |
| Continuously Improve | Regularly review and refine inventory management processes. |
| Contingency Planning | Prepare for disruptions like supply chain issues, natural disasters. |
By managing inventory effectively, businesses can reduce costs associated with holding too much stock, avoid missed sales due to stockouts, and improve overall operational efficiency. It’s a balancing act that requires attention to detail, strategic planning, and a proactive approach.
Journal Question:
Using the forum labelled “Course 8: Chapter 3” make a journal entry responding to the prompt below. Ensure that you title the entry “Lesson 8”. After writing a journal entry, go and make a comment on two other posts from your classmates. It can be about anything you noticed, liked, agreed with etc. The idea is to continue the dialogue about the topic.
Prompt: How do the principles of fairness, openness, and transparency in the Policy on Government Procurement impact the overall procurement process in Canada?
*View the journal entry and journal comment rubric to see how they will be marked
|
Criteria |
Exemplary |
Accomplished |
Developing |
Beginning |
|
Purpose |
Strong voice and tone that clearly addresses the purpose for writing. |
Appropriate voice and tone. The purpose is largely clear. |
Attempts to use personal voice and tone. Somewhat addresses the intended purpose. |
Demonstrates limited awareness of use of voice and tone. Limited evidence of intended purpose. |
|
Understanding |
Many interesting, specific facts and ideas are included. |
Many facts and ideas are included. |
Some facts and ideas are included. |
Few facts and ideas are included. |
|
Conventions |
All grammar and spelling is correct. |
Only one or two grammar and spelling errors. |
A few grammar and spelling errors. |
Many grammar and spelling errors. |
|
Reply |
Made two significant contributions to the online forum. Highly supportive of others. |
Made one contribution to the online forum. Supported group members. |
Attempted to contribute to online forum but was vague and unclear in the writing. |
Minimally involved. Offered limited support to online group members. |
Works Cited:
Canada, P. S. and P. (2018, September 28). Government of Canada. Canada.ca. https://www.canada.ca/en/services/business/doing-business/how-to-sell/procurement-policies.html
Chegg. (n.d.). Purchasing agent. Chegg Internships. https://www.internships.com/careers/purchasing-agent
IBM. (n.d.). What is Fixed Asset Management. https://www.ibm.com/topics/fixed-asset-management#:~:text=Fixed%20asset%20management%20enables%20organizations,improve%20an%20asset’s%20lifetime%20value.
Jenkins, A. (2020, September 17). What is Inventory Management? Benefits, Types, & Techniques. Oracle NetSuite. https://www.netsuite.com/portal/resource/articles/inventory-management/inventory-management.shtml
McHugh, R. (2023, September 29). How to improve security of Records. Record Nations. https://www.recordnations.com/blog/different-types-security-in-records-management/