Procurement Abbreviations

 Procurement Abbreviations You should know!!!

Procurement & Sourcing #RFP (Request for Proposal): Invitation for suppliers to propose solutions and pricing. #RFQ (Request for Quotation): Request for price quotes for specific products/services. #RFI (Request for Information): Inquiry to gather general supplier capabilities. #PO (Purchase Order): A formal commitment to buy goods/services. #PR (Purchase Requisition): Internal document requesting procurement. Supplier & Contract Management #SLA (Service Level Agreement): Defines performance standards for services. #KPI (Key Performance Indicator): Metrics to measure procurement/supplier performance. #SOW (Statement of Work): Detailed description of tasks, deliverables, and timelines. #TCO (Total Cost of Ownership): Full cost of a product/service, including indirect expenses. #EPC (Engineering, Procurement, and Construction): Contract model for project delivery. #ERP (Enterprise Resource Planning): Software for business process management. #MSA (Master Service Agreement): Broad contract outlining terms for future transactions. #NDA (Non-Disclosure Agreement): Legal contract protecting confidential information. #LTA (Long-Term Agreement): Contract for repeated procurement over time. Financial Terms #COGS (Cost of Goods Sold): Direct costs in producing sold goods. #AP (Accounts Payable): Money owed to suppliers. #AR (Accounts Receivable): Money owed by customers. #CAPEX (Capital Expenditure): Funds for acquiring/upgrading assets. #OPEX (Operational Expenditure): Daily business expenses. #ROI (Return on Investment): Measure of investment profitability. Compliance & Standards #ISO (International Organization for Standardization): Quality and safety standards. #SOX (Sarbanes-Oxley Act): U.S. law for corporate accountability. #PPM (Parts Per Million): Defect measurement in quality control. #CSR (Corporate Social Responsibility): Ethical/environmental business practices. #HSE (Health, Safety, and Environment): Workplace safety and environmental impact. Logistics & Delivery #INCOTERMS (International Commercial Terms): Defines buyer/seller responsibilities in trade. #FOB (Free On Board): Seller delivers goods to the shipping point. #CIF (Cost, Insurance, and Freight): Seller covers shipping and insurance. #EXW (Ex Works): Buyer is responsible for transport from seller’s location. #DDP (Delivered Duty Paid): Seller handles all costs, including customs duties. #ETA (Estimated Time of Arrival): Expected delivery time. Cost & Financial Analysis #NPV (Net Present Value): Investment profitability evaluation. #SIC (Standard Industrial Classification): Categorizes industries for procurement. #PPV (Purchase Price Variance): Difference between standard and actual purchase prices. #LCC (Low-Cost Country): Sourcing from cost-efficient regions. #CI (Cost Improvement): Strategies to reduce procurement costs