Procurement process flowchart: Cost reduction and transparency

The procurement process flowchart of a company serves to structure and streamline the acquisition of goods, services, or labor from external providers.

It is essential that these acquisitions are made at the best possible price, while also meeting the organization's requirements for quality, quantity, delivery time, availability, and location.

Today, many companies and public institutions have established procurement flowcharts to ensure transparency and fairness in their purchasing activities. These structured processes help prevent fraud, reduce overpricing, and discourage collusion among suppliers.

Benefits of a Well-Defined Procurement Process Flowchart

Beyond minimizing losses and fraud, a procurement flowchart offers several key advantages:

Companies that invest in optimizing their procurement processes gain a significant edge over competitors and build a foundation for sustainable growth. These process improvements contribute to long-term competitive advantages that are often decisive in the market.

Below is an example of a procurement process flowchart that can either be implemented directly or customized to fit the specific needs and objectives of your organization.

Example of a Procurement Process Flowchart

HEFLO provides the following example of a business procurement process flowchart, illustrating the key steps commonly involved in procurement activities.

This example includes most of the standard tasks typically associated with purchasing processes. However, as mentioned earlier, the flowchart is fully adaptable and can be customized to suit the specific needs, structure, and goals of your organization.

As illustrated in this example, the procurement process flowchart includes five distinct lanes within the pool, each representing a key role or department involved in the process:

• Requester: The individual from any department who is authorized to initiate purchase requests.
• Manager: Responsible for evaluating the request and approving expenditures related to the acquisition.
• Purchasing Clerk: Handles the procurement process, including quotes and placing orders.
• Warehouse: Manages the receipt and storage of acquired goods.

Step-by-Step Breakdown of the Procurement Process

Initiation
The Requester, based on inventory data, identifies the need to replace an item—either because it is depleted or has reached its reorder point—and submits a request to the Manager.

Managerial Analysis
The Manager reviews the request and decides:

• If the purchase is unnecessary: they reject the request and inform the requester, ending the process.
• If the purchase is valid: they instruct the Purchasing Clerk to begin the quotation process.

Quotation Process
The Purchasing Clerk gathers the required information and obtains at least three quotes from different suppliers.
A consolidated report is created comparing:

• Prices
• Quantities
• Delivery schedules
• Payment terms

This report is sent to the Manager or cost center for further analysis.

Decision on Quotes
The Manager evaluates the quotes based on factors such as:

• Cost-benefit
• Supplier reliability
• Availability of funds

Then chooses one of the following:

• Request quote adjustments from the Purchasing Clerk
• Reject all quotes and cancel the request
• Approve the purchase and authorize sending the purchase order to the supplier

Order Placement and Processing

• The Purchasing Clerk registers the order with the selected supplier and finalizes the purchase using the purchase order.
• A delivery timeline is established with the supplier.

Receiving Goods or Services
Depending on the nature of the procurement:

• For services: The Requester monitors delivery, validates the service, and approves it.
• For products: The Warehouse receives the goods and confirms the delivery against the purchase order.

Finalization
Upon receipt, the Warehouse sends the invoice to Accounts Payable, which processes the payment and officially closes the procurement process.

Explore and Customize This Flowchart in HEFLO

We invite you to open this procurement process flowchart directly in the HEFLO Modeler. With this powerful, cloud-based BPM tool, you can edit the diagram to match your company’s reality, print it for documentation or presentation purposes, and access a library of other ready-to-use business process diagrams. Take advantage of HEFLO’s intuitive interface to adapt and optimize your procurement workflow with ease.

Also, you can also download a complete, professional documentation of this process map example using the link below. The document was generated by HEFLO after capturing all the tasks.

Also check out our library of BPMN diagram examples, ready for download, editing, and customization. Each process comes with complete PDF documentation to make understanding and adapting them to your needs easier.