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There are several aspects and ways to reduce corruption. A few points are noted below.
Need analysis and quantification. : What is the appropriate item we need to purchase and how much based on current stock and need forecasting. Specifically, for govt. sector purchasing this is quite important.
Ensuring Transparency:
1. Issuance of bid document to all qualified /enlisted suppliers
2. Receipt and opening of bid in public in presence of all intending bidders and bid opening staffs( one office staff shall be from department other than procurement)
3. Signing of receipted bid in all pages by bid opening staffs.
4 To read out bid price and other a few relevant info. aloud in presence of bidders.
5. For bid tabulation and evaluation, at lest 2 staff members shall be involved
6. Sharing of purchase order with all relevant staff ( Store keeper, Finance Officer, User department)
7. Auditing of procurement files on yearly basis through independent auditors( may be from in-house or outsourced)
Efficiency and effectiveness: To get feedback from user sections whether they received the goods in time and whether that served the purpose effectively.
There are many good answers given/copied from the internet ... I only can say, it is tricky and each buyer needs to have good ethicts, integrity and being honest ...
Audits are good, but not every vendor used more often is subject to this, aspecially if he/she is giving good pricing, quality and delivery on time ... with other words good service.
It is very clear if some one favors a vendor which has a high %ig of anual "kick backs", has a bad track record of on time delivery or pricing is constantly an issue... that there are other things in play than having the best interest of a company in mind.
The question is what are you doing if your Manager orders you to place more orders from such a vendor? I have told my Manager the problems in hand and found myself loosing the battle... this was one reason to find myself an other job....
Nor is it honest/proper to offer some one a "get rich scam" ...posing as a vendor to sell their company an item, which they could purchase for a better price ...
This violates my ethics and integrity ... quite frankly this turns my stomach...
I am very disapointed finding people with no honor, ethics and intregrity on this site proposing such a thing to me
1. Purchase from a reliable companies in the market
2. Proceed purchasing according to official quotations
3. Make allocation between stuff periodically
4. Make periodic meetings with your suppliers to negotiate on cost
5. Update purchasing scheme on system like SAP or other system
To be able to prevent corruption in Procurement, one needs to ask himself, why some people are apt to corruption?
Your specific and accurate answers will lead you to the ways to prevent people from indulging in corrupt practice.
Below, I can list some of the ways, which I think can help in eliminating such behavior in Procurement or any other similar areas in companies:
- > Selecting the wright employees (using systematic approach, interview teams, comprehensive cv/history analysis, HR expertise, personal instinct etc.)
- > Increasing Ethics awareness among employees
- > Strong & Strict discipline rules in company
- > Controlled and effective Policy & procedures
- > Good Motivation & Incentive system
- > Strict Authority Matrix (taking in consideration the speed of Procurement Process)
- > Eliminations or Severe Reduction in cash handling (Petty Cash Purchases) thru outsourcing of acquisition items
- > In addition to professional & ethical oriented vendors/contractors
In addition to implementing procurement principles such as:
- transparency,
- separation of duties
- 4 eye principle
and prescribing regulated process with or without sourcing tool use (tools are great for transparency!) via procurement manual, regular audits and periodic shuffling between categories (and internal users) should do the trick.
Thanx for the invite ;)
The simple answer, delegation limits and random audits.
If your purchasing is conducted on a computer, there is in most cases, the option of setting up staff profiles and this will include limits to spend. Conduct random audits so that the staffs are aware that their actions are accountable.
corruption in procurement can be minimized by adopting following measures - (a) insist in minimum three quotations for technical and commercial comparisons, all three should be comparable standards of vendors and acceptable as per track record (b) regular audits (c) technical comparison should be preferably concluded by technical department and should be very professional and intensive to ensure strict compliance to specifications, quality, international standards, fast response time for non conformance, procedure for easy claim of warranty as per written site report with comments whereas commercial comparison should be left to the procurement and top management (d) maintain an approved list of vendors and blacklist if any vendor found guilty (e) better to divide and rotate vendors among procurement department junior staff; (f) all employees should sign code of conduct and refrain from taking gifts and gratitude of any kind from vendors considering it as a serious offense which can lead to termination; (g) penalizing staff found guilty of misconduct
- You have to have right and strict procedures and policy
- You should talk to them for their social lives
- You should mentor them regularly and keep watching how they execute their job, are they follow the procedures all the time
- You should audit randomly and regularly
- You should keep them satisfied as much as you can and encourage them
1. The very first is, the employee should be well paid ( appropriately paid) for his/her job so that he would always think that if he is getting a best deal, he should give the best deal
2. Over to it, the working culture/ teammates/ Boss should always give him/her a feel that he is a trustworthy and very much important for organisational growth
3. 'Zero' based costing is another fundamental, which is very much useful for getting exact need and its tentative cost... this also gives a feel to the purchaser that everybody in an organisation knows about its cost/ supplier/ quality so on so forth...
To prevent such un proper practice:
1- First company must has clear rules like code of ethics standard all employee must follow, because sometime maybe procurement members use un proper ways to push supplier to reduce price.
2- Avoid single point of decision, always must have multi approval line start from employee then direct mangers, .....
3- Adapt purchasing strategy depend of deep analysis to material cost like cost tables to define base price then procurement team use as reference.
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