Initial Purchasing
Category
- Education & continuous development
- Skills, leadership & career
- Procurement strategy & organization
Course, handouts & User case connections
- All Courses, Handouts & User Cases
Topics
- Procurement, Purchasing
- Total Cost of Ownership (TCO),
- Value-Based Procurement
- Strategic Sourcing
- Supplier Selection
- Procurement Strategy, Category
- Management, Cost Reduction
- Procurement Training
- Purchasing Academy
Every successful procurement project starts long before negotiations begin.
In this Initial Purchasing course, you'll learn how to manage the first three phases of the procurement process—Specify, Select, and Contract—using a structured methodology that combines business focus, behavioral psychology, and practical procurement techniques.
We recommend completing the Purchasing Mindset course and the first chapter of the Purchasing Management course before starting this course. These provide the foundation for understanding the complete Purchasing Academy methodology.
During this course, you'll discover how to:
- Analyze stakeholder requirements and define clear procurement objectives
- Distinguish between must-haves and nice-to-haves when creating specifications
- Assess the balance of power between buyers and suppliers
- Analyze costs, cost structures, and cost drivers
- Develop an effective purchasing strategy based on business objectives
- Conduct supplier qualification and vendor appraisals
- Build practical supplier scoring models
- Execute professional tender and quotation processes
- Compare supplier proposals objectively
- Prepare for successful negotiations and contract implementation
With a Silver, Gold, or Tulip Membership, you'll also gain access to downloadable Word, Excel, and PowerPoint templates, detailed explanatory videos, and realistic user cases that demonstrate how each methodology can be applied in practice.
Whether you're a buyer, procurement specialist, sourcing manager, category manager, contract manager, or purchasing professional, this course provides a practical framework for making better procurement decisions and delivering stronger business results.
Build a solid procurement strategy before entering the market.
Dare to be different.
Questions and answers
What is the purchasing/procurement process?
At Purchasing Academy, we divide the purchasing process into two distinct parts:
Initial Purchasing and Contract Management.
Each part contains three phases. Initial Purchasing covers:
- Specify
- Select
- Contract
In short, these three phases determine what an organization really needs, which supplier is best positioned to deliver it, and how the final agreement should be structured and negotiated.
Purchasing Academy teaches these phases as an integrated methodology rather than as separate activities.
That matters because decisions made during specification directly affect supplier selection, negotiation, contracting, and ultimately contract performance.
What are the main stages of the purchasing/procurement process?
There are many procurement process models, but Purchasing Academy uses a practical six-phase approach divided into two parts.
The first part, Initial Purchasing, consists of:
Specify → Select → Contract
The second part is Contract Management.
The Initial Purchasing course focuses on understanding your organization and its clients (business focus), understanding requirements, translating them into a Final Specification or Purchasing Strategy, qualifying and comparing suppliers, conducting tenders, negotiating, and contracting.
The key principle is that procurement should be approached as a connected process, and behavioral science and business focus should be adapted in all sequential steps.
A weakness in an early phase often creates problems later.
Why is specification important in purchasing/procurement?
Because suppliers can only deliver successfully when the organization has clearly defined what success actually means.
Purchasing Academy therefore places specification at the very beginning of the purchasing process.
A good specification starts with stakeholder requirements and identifies:
- desired Outcomes;
- required supplier Outputs;
- demands, or must-haves;
- desires, or nice-to-haves;
- cost structures and cost drivers;
- market information;
- internal policies;
- contract management requirements;
- and much more.
These inputs ultimately contribute to a Final Specification or Purchasing Strategy.
A strong sourcing process starts long before suppliers are invited to submit an offer.
What is the difference between an outcome and an output in purchasing/procurement?
An Outcome describes the result the organization wants to achieve.
An Output describes what goods, services, or information the supplier must provide to help achieve that result.
The distinction is important.
Organizations sometimes specify solutions (output) too quickly instead of first asking what business result they actually need.
Purchasing Academy teaches professionals to analyze stakeholder requirements, identify Outcomes, and then translate those into supplier Outputs. And leave room for suppliers’ knowledge and creativity.
This creates more room for suppliers to contribute expertise and can prevent buyers from unnecessarily prescribing the solution.
The better the desired Outcome is understood, the better the organization can determine what it should actually buy.
What is the difference between demands and desires in purchasing/procurement?
Purchasing Academy distinguishes between:
Demands: requirements that must be met.
Desires: requirements that add value but are not essential. They’re ‘nice to have’
This distinction makes specifications clearer and supplier evaluations more professional.
If every requirement is treated as mandatory, the procurement process may unnecessarily exclude potentially strong suppliers.
If important requirements are treated as optional, the process may select a solution that cannot meet the organization's essential needs.
Separating Demands from Desires therefore helps to make better trade-offs between requirements, competition, value, and cost.
How do I write a good purchasing/procurement specification?
Start by understanding what the business and its stakeholders actually, and ultimately your organization’s clients, need.
Purchasing Academy recommends combining several perspectives:
- business focus
- stakeholder requirements;
- desired business Outcomes;
- supplier Outputs;
- Demands and Desires;
- market research;
- corporate policies;
- contract management requirements;
- costs, cost structures, and cost drivers;
- the balance of power between customer and supplier;
- and much more.
These elements should not be analyzed independently.
Together they determine the tactics and eventually lead to the Final Specification or Purchasing Strategy.
A good specification is therefore not simply a technical description.
It is the foundation of the entire purchasing process.
What are the biggest mistakes when writing purchasing/procurement specifications?
One of the biggest mistakes is not understanding your business focus and how this particular purchasing process will affect your organization’s customers.
Another one is starting with the product or solution (Output) rather than the required Outcome.
Other common risks include unclear requirements, treating every requirement as mandatory, failing to involve stakeholders properly, ignoring market capabilities, and not considering how the resulting contract will be managed later. And there are many more.
Purchasing Academy approaches specification as a structured analytical phase.
The objective is not merely to create a document suppliers can quote against.
It is to create a solid foundation for supplier selection, negotiation, contracting, future performance, and contract management.
Poor specification creates downstream problems. Good specification prevents them.
How important is stakeholder management in procurement?
Critical.
Purchasing professionals rarely own the underlying business requirement themselves. They depend on stakeholders to explain what is needed, what success looks like, and which requirements truly matter.
Purchasing Academy therefore combines structured purchasing methodology with behavioral science.
Good procurement is not only about analysis.
Professionals also need to ask the right questions, challenge assumptions, understand interests, create cooperation, and turn multiple stakeholder perspectives into a clear purchasing strategy.
That is why Purchasing Academy considers effective people skills a prerequisite for purchasing professionals.
Questions and answers
What is supplier qualification?
Supplier qualification determines whether a supplier is capable and suitable to participate in the purchasing process.
Purchasing Academy teaches professionals to qualify suppliers through a Vendor Appraisal aligned with the Final Specification.
Rather than selecting suppliers primarily on reputation or familiarity, procurement should assess whether suppliers meet relevant requirements and performance criteria.
Combined with emotional validation, this creates a good starting point for supplier selection and helps procurement focus its evaluation effort on suppliers that can realistically deliver what the organization needs.
How should suppliers be evaluated?
Supplier evaluation should be systematic, transparent, and connected to the specification.
Purchasing Academy teaches professionals to define relevant performance areas and use them to build a scoring model.
This makes it possible to compare supplier responses professionally rather than relying mainly on personal impressions or price.
The important point is that the scoring model should not be designed independently from the purchasing strategy and should be embraced by your stakeholders.
The criteria used to select suppliers should reflect the Outcomes, requirements, priorities, risks, and value drivers identified earlier in the process.
Specification and supplier evaluation should therefore be directly connected.
Also, the results of any supplier evaluation should be emotionally validated with your stakeholders. Purchasing is not an exact science, but it’s people
Should purchasing/procurement always choose the lowest-priced supplier?
No.
Price is one component of a purchasing decision, but it should not automatically determine which supplier creates the most value.
Purchasing Academy encourages professionals to analyze not only prices, but also Costs, Cost Structures, and Cost Drivers, while evaluating supplier performance against relevant requirements.
A supplier with the lowest initial price may ultimately create higher costs, greater risks, or poorer business outcomes.
Professional purchasing therefore requires a broader comparison.
The question should not simply be:
"Which supplier is cheapest?"
It should be:
"Which supplier and solution best support the business outcome we are trying to achieve?"
What are cost drivers in procurement?
Cost drivers are the factors that determine why a product or service costs what it does.
These can include materials, labour, energy, logistics, capacity, complexity, volumes, specifications, market conditions, or many other factors.
Purchasing Academy incorporates the analysis of Costs, Cost Structures, and Cost Drivers into the specification phase.
Understanding these drivers gives purchasing professionals a much stronger basis for sourcing and negotiation.
Instead of simply negotiating the final price, they can discuss the underlying economics.
That changes procurement from price negotiation toward commercial understanding.
How can procurement reduce supplier costs without simply asking for lower prices?
Understand what drives the cost.
If procurement only negotiates the final price, the discussion quickly becomes a battle over margins.
Purchasing Academy encourages professionals to analyze Costs, Cost Structures, and Cost Drivers before entering negotiations.
That can reveal alternative opportunities.
Specifications may be changed. Volumes can be combined. Complexity may be reduced. Planning may improve. Risks can be allocated differently. Logistics or processes might be redesigned.
Costs may be eliminated together. Profits can be shared.
The strongest procurement professionals don't only negotiate prices.
They understand why costs exist and how buyer and supplier can influence them together.
What is the difference between an RFP and an RFQ?
An RFP (Request for Proposal) is typically used when suppliers are expected to explain how they propose to meet the organization's needs. When they are asked to offer a solution to meet your demands and desires, preferably describes as demanded outcomes and desired outcomes.
An RFQ (Request for Quotation) places greater emphasis on obtaining comparable commercial quotations for predefined services and goods (outputs)
Purchasing Academy teaches professionals how to translate outcomes into Requests for Proposals or outputs into Requests for Quotes and subsequently use them to compare offers professionally.
The choice should therefore follow from the purchasing situation.
Don't start by selecting a tender document.
Start by understanding what you need from the market.
How do I compare supplier proposals objectively?
Build your comparison methodology before being influenced by the proposals themselves.
Purchasing Academy teaches professionals to use specification requirements and relevant performance areas to develop a scoring model.
Supplier responses can then be assessed against predefined criteria.
This makes comparisons more transparent and reduces the risk that attractive presentations, relationships, isolated features, or individual opinions dominate the decision.
Don’t forget to emotionally validate the results.
Professional supplier selection combines judgment with structure and behavioral science.
The scoring model supports the decision.
It should not replace professional judgment and emotions.
How do I develop a successful procurement strategy?
A successful procurement strategy starts with understanding the business strategy and the needs of your internal colleagues and external customers, not with suppliers, tenders, spend, or cost savings. Procurement should explore how external resources and supplier markets can help the organization achieve its broader objectives.
The key is to move from “How can we buy this better?” to “How can procurement help the business perform better?”
At Purchasing.Academy, we develop procurement professionals to make exactly that shift. We see a strong procurement strategy as a combination of business focus, market intelligence, structured analysis, stakeholder management, and execution.
In our methodology, procurement strategy results from a thorough process of understanding what the business really needs and determining how the supply market can best contribute. We call the result “The Final Specification”: not simply a description of what needs to be purchased, but a strategic foundation for the entire purchasing process.
It includes elements such as outcome and output, stakeholder analysis, market research, power and dependency analysis, TCO analysis, and the structured definition of purchasing tactics.
Our practical course Initial Purchasing guides professionals through these steps. Our Handouts provide the tools to apply them, while our Use Cases demonstrate how the methodology works in practice.
A successful procurement strategy is ultimately not about buying at the lowest price. It is about using external resources and supplier markets to create maximum sustainable value for the organization.
