Not every business has the resources to have a procurement professional working for them, and yet every business, regardless of size or complexity needs to follow sound procurement principles to maximise the chance of success.
One way to accomplish this is to use what procurement professionals refer to as the five rights of procurement.
Right Quality
Do you have the specifications for what you are requiring correct? There is huge expense that can be incurred in ordering the wrong item. Always beware of promotions, marketing and salespeople trying to sell you the item that they want to move, but which may not be the one that you want to buy.
If this is a new commodity or category that your business is investing in, be certain not to rush. Rather, invest the time, do the research and be comfortable with the decision.
Right Quantity
Now that you have the quality of the product determined, what is the quantity that you need? Remember inventory is money. Just because there is a discount on the unit price for buying in bulk, does not mean that buying in bulk is the correct solution for your needs.
Interrogate the supply chains of your key suppliers. If your key suppliers have no difficulty in replenishing stores of your essential items and they have the capacity to hold the stock, then there may be no reason for you to do the same. Calculate in the cost of replenishment into your operating costs, however, is there a delivery fee? do you need to go and collect which consumes your time? time is money.
Are you better off carrying a small stock and replenishing once the stock levels drop below a certain point?
Think of the Just-in-Time (JIT) models. These can be useful, but as Covid demonstrated a Supply Chain shock and JIT may no longer work for you. What would a supply shock of these items look like for your nosiness?
All these things need to be considered when looking at the Right Quantity.
Right Time
Now is the time to decide when you want your procurements. Unless you are merely restocking, there is going to be a time when you want your procurements on hand. This is when you need to ensure you have a strong understanding of your key suppliers’ supply chains and capacity. There is no point in deciding you need a product urgently if your supplier does not have it in stock.
Are there alternate suppliers that you can source the same product for in the case of one supplier not being able to deliver?
Understanding your own supply chain means knowing where alternative sourcing options are available.
Right Place
For businesses with complex operations, the pace at which you require the item may not be available at your location, site, city, or even a country.
Have you factored in the right amount of lead time for delivery and potentially customs?
Is the delivery point ready to receive delivery?
Are special conditions required?
Are key personnel in place and ready for the delivery?
Right Place is not just about a delivery arriving. There are other considerations that need to be factored in and checked are correct before the delivery can take place.
Right Price
I have left this Right until last as it is usually the one that businesses think of first in their haste to maximise profits. Non-procurement professionals often focus on the price and forget the other four Rights. There is a mistaken belief that price should always been the primary consideration and yet look at any failed project, business venture, start up, or company and it is often not price that leads to failure. It is the lack of understanding of the entire procurement process.
When considering Right Price, have you also considered the possible exchange rate change? In a connected global economy, there is no guarantee that you are not buying in one currency, adding additional features in another and then selling into a third.
How will this affect the finished product, and will adjustments be necessary for other parts of your supply chain?
As you can see there are many factors that overlap in the Five Rights and many considerations that need to be considered. Planning and a thorough understanding of your businesses supply chain is key. Applying these consistently will help your business make the right decisions at the right time and avoid the need for costly corrections.
M. Hamilton
Copyright 2026 Procure Horizon
