Explain G-NG-LF Analysis/ GOLF Analysis

G-NG-LF Analysis/ GOLF Analysis: Criterion employed – Source of procurement, that is, foreign,  local, government, etc.

G-NG-LF Analysis, or also called GOLF Analysis, categorizes items based on the nature of suppliers. The nature is fixed or determined on the basis of quality of suppliers, lead time of supply, terms of payment, continuity and regularity of supply, extent of administrative work involved in the procurement, etc. The analysis classifies items into four broad groups – G, NG (O), L and F. it is similar to the grouping made under the SIDE analysis.

G group covers all those items which are procured from government suppliers, namely State trading Corporation. Minerals and Metal Trading Corporation (MMTC) and various public sector undertakings. The procurement transactions with these category of suppliers normally involves a long lead time. Many times these suppliers demand payment for goods in advance.

NG (which is represented by the letter 0 in the word GOLF) comprises of all those items which are procured from various Non-Government, or, Ordinary suppliers. Transactions pertaining to purchase of items under this category involve purchase from those suppliers who deliver goods in a moderately reasonable time. Further, the suppliers also offer credit which may range from to 45 days.

L group consists of those items which are purchased from local suppliers. These items generally consist of cash purchases.

F group consists of items purchased from foreign suppliers the transactions with such suppliers involve the following:

a)      There is a lot of administrative and paper work involved before the actual delivery of goods takes place.

b)      The company may have to search for reliable foreign suppliers.

c)      Opening of letters of credit, procuring necessary bank guarantees etc. will have to be obtained.

d)      The company may have to make necessary arrangements for shipping, port clearance and transport.