Decentralized Procurement - Meaning and Importance

What is Decentralized Procurement?

Decentralized definition specifies an activity or set of activities managed by several teams instead of a central authority. Similarly, the decentralization definition offers a similar context when it comes to procurement. Decentralized procurement enables other authorized individuals to undertake procurement decisions for their respective departments.

While comparing centralized vs. decentralized purchasing, it is evident that the former is suitable for smaller organizations, and the latter is best suited for larger corporations. The selection of either of these procurement models is determined by the respective priorities of a business. Some organizations also use a hybrid model powered by technological tools for purchasing that includes features of both centralized and decentralized procurement features.

Decentralized purchasing is best suited for organizations where different teams handle varied product categories. In such situations, departmental purchasing necessitates decentralized purchasing.