Definition of mixed procurement
Mixed procurement refers to part of the needs of a unified centralized procurement by a department, part of the procurement by the demand unit itself. For example, Singapore's Ministry of Finance has centralized procurement of products with bulk such as computers, paper, etc., while other items are procured by the departments themselves; the U.S. Federal General Services Administration is uniformly responsible for the provision of office space, office equipment and internal services for the federal government departments, while other items are procured by the relevant federal government departments themselves. Strictly speaking, mixed procurement is not an independent procurement model, which has both centralized and decentralized procurement characteristics.
Basic Principles of Hybrid Procurement
The basic principle of hybrid procurement is that the products or services that need to be centralized and decentralized are determined based on economies of scale. Generally, large companies tend to use centralized purchasing methods for their physical commodities, such as food producers for cocoa and sugar, and automobile manufacturers for raw materials such as steel. However, if the subsidiary has strong bargaining power, it can use decentralized purchasing, which can take advantage of price differences in different markets to find arbitrage opportunities and reduce price fluctuations in the international market. Of course certain circumstances should allow subsidiaries to decentralize the procurement of local goods. For example, restaurant chains generally use mixed procurement, both centralized and decentralized local procurement, such as the purchase of fresh vegetables and bread.
Advantages and disadvantages of mixed purchasing
Advantages: It is conducive to enterprises to choose to adopt different organizational structures according to their special needs and business priorities, which is flexible and can be adjusted in a timely manner according to changes in the external environment and business activities.
Disadvantages: the organizational structure is not standardized, which is easy to cause confusion in management; the departments established are very different from each other, which is not conducive to coordination and cooperation, and is not conducive to the establishment of a complete image of the company in the world.
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