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 »  Home  »  Procurement Management
Procurement Management
Controlled execution of key purchasing processes is imperative in a project / programme environment to minimise costs, minimise risk and maximise the effectiveness of strategic make-or-buy decisions. Key processes include:

- Planning of purchases, acquisitions and contracting – Planning of purchases and acquisitions involves ascertaining what is needed, and when it is needed. Then how to assure you have what you need when you need it. Planning of contracts involves documenting the products, services and results requirements and identifies potential sellers. It is also imperative to be aware of the strategic advantages of specific contract types and selection of the correct type based of your programme circumstances.
- Managing the Request for Information/Proposal lifecycle – This includes requesting vendor responses and selecting vendors. Requesting vendor responses involves obtaining information, quotations, bids, offers, or proposals from vendors as necessary to fulfil the strategic ‘make-or-buy’ decisions made for the programme. Selecting sellers involves reviewing offers and choosing the best vendor (this must be an analytical process which rates the vendors response based off a number of pre-agreed criteria (e.g. cost, functionality, usability, support arrangements, delivery timeline etc). The next step is to agree terms and conditions to be included in the contractual agreement between the programme and the vendor; and
- Contract administration and controlled closure – Contract administration refers to the management of all aspects of the contract and the relationship between the buyer and the vendor. This includes: managing vendor performance (against pre-agreed criteria including agreed contractual milestones), management of the contract change process (to provide an agreed framework for future project activity) and, importantly, the positive maintenance of a constructive vendor / buyer relationship. Controlled contract closure ensures timely completion and execution of all contractual terms of any contracts including the resolution of any open items and final contract sign-off and closure.

Procuring goods and services from external suppliers can be a critical path activity for many projects / programmes. In many instances the performance of the vendor is strongly correlated with the performance of the overall project team. Because of this it is crucial that you manage supplier relationships and performance carefully, to ensure that they produce deliverables which meet your expectations.


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