Procurement process flowchart

How it works

1. Rename the lanes to the roles you actually have

   Replace Requesting department, Procurement, Finance, Supplier and Legal with your real functions. Smaller organisations have no separate procurement team, in which case merge that lane into Finance and keep the steps. Use one lane per decision-maker rather than per person, so the chart survives someone changing job.

2. Set the thresholds that drive the route to market

   The "Existing approved supplier?" and "Single source justified?" decisions are where your rules live. Write down the value bands: below which figure a single quote is enough, where three quotes start, and where a full tender becomes mandatory. State the currency, and state whether the threshold applies per order or per supplier per year, otherwise orders get split to stay under it.

3. Define what a single-source justification must contain

   Name the fields on the "Record single-source justification" step: why no other supplier can meet the requirement, what was done to test that, the value, the duration, and who authorised it. Give each justification an expiry date and re-test it at renewal, because non-competitive awards are the first thing an auditor will pull.

4. Fix the award criteria before the tender goes out

   Add your evaluation criteria and weightings to the "Evaluate bids against award criteria" step and settle them before bids are opened. Record how clarifications are handled and how scores are captured. Criteria agreed after the bids are in cannot be defended, whether the challenge comes from a losing bidder or an internal auditor.

5. Decide where this process hands over to procure-to-pay

   This chart closes the sourcing cycle at the performance review. Goods receipt, invoice matching and payment belong to the purchase order process, so either link the two charts at the "Raise purchase order" step or extend this one, but do not document the same steps in both and let them drift apart.

6. Close the loop and keep one current version

   The "Review supplier performance" step is the one most often skipped. Give it a cadence and named criteria: ISO 9001 clause 8.4 expects an organisation to determine criteria for evaluating, selecting, monitoring and re-evaluating external providers, and to retain records of those activities. Circulate the finished chart to procurement, finance and legal, capture their approval, and link the approved version from your procurement policy so nobody is working from a screenshot in an old training deck.

Frequently asked questions

What are the main steps in a procurement process?

Identify the need and write a specification; decide whether to make or buy; confirm funding; agree a sourcing strategy; choose a route to market, either a call-off against an existing agreement or a competitive tender; issue the RFQ or tender pack and evaluate bids against published criteria; select the supplier and negotiate; review and sign the contract; raise the purchase order; take delivery and accept it against the specification; then review supplier performance and decide whether to renew or retender. Organisations differ mainly in how formal each step is and at what value it becomes mandatory.

What is the difference between procurement and purchasing?

Purchasing is the transactional end: raising the order, receiving the goods, paying the invoice. Procurement is the whole cycle around it, including specification, market analysis, the decision to compete or call off, evaluation, negotiation and contract management. In this chart everything from "Identify business need" through to "Review and sign contract" is procurement, and "Raise purchase order" onwards is where purchasing, or procure-to-pay, takes over.

When is a single-source award acceptable?

When only one supplier can genuinely meet the requirement, for example proprietary technology, a compatibility constraint or a real emergency, and the reason is documented before the award rather than reconstructed afterwards. The test is whether the constraint is real or created by your own specification, since a requirement written around one product manufactures its own single source. The template gives the justification its own record so the reason, value, duration and approver sit in one place, and it should carry an expiry date so it is re-tested rather than renewed out of habit.

Do I need a full tender, or can I call off an existing agreement?

If the requirement is already covered by a framework or standing contract with agreed rates and terms, a call-off is the faster route and just as defensible, which is why the template sends it straight to the purchase order and skips the tender and contract phases. Run a tender when no agreement is in place, when the value sits above your competition threshold, or when the existing agreement no longer reflects the market. If you are a public body, the thresholds, notice requirements and standstill periods come from the procurement regulations you work under; this template is a general commercial flow and does not encode them.