What is typically the first stage in the procurement and supply cycle?

The first stage in the procurement and supply cycle is understanding the need and developing a high-level specification. This stage involves identifying the requirements of the organization, which serves as the foundation for the entire procurement process. By clearly defining what is needed, organizations can ensure that they are aligned in their purchasing intentions, effectively communicate with potential suppliers, and develop appropriate criteria for evaluating options.

Understanding the need is crucial because it influences all subsequent decisions in the procurement process, including how to source, which suppliers to consider, and what to include in the final contract. A high-level specification provides a framework for what the product or service should achieve and establishes the criteria for measuring success and utility.

Other stages, such as selecting a supplier and conducting market research, come later in the process. These stages rely on the insights gathered during the initial understanding of need, making it imperative to start with a clear and well-defined requirement. Developing a detailed contract also occurs after the understanding of needs has been solidified, making it a later stage in the procurement cycle.