Stage 1: Need Recognition
- Can be generatet internally or externally (Suppliers, Salepeople, Competitors)
Stage 2: Product Specifications
- Suppliers use to develop proposals (Can be done with Suppliers)
Stage 3: Request for Proposals (RFP) Process
- Buyers invite suppliers to bid on supplying needed components.
Stage 4: Proposal Analysis, Vendor Negotiation, and Selection
- Several vendors negotiate against each other.
- Considerations other than price play a role in final selection.
Stage 5: Order Specification
- The firm places its order
- The exact details of the purchase are specified
- All Terms are Detailed including Payment
Stage 6: Vendor Analysis
- After purchase, the buyer conducts a vendor analysis to see if they will buy from supplier again.