2.2 FACTOR OF PROJECT PROCUREMENT MANAGEMENT
From research paper of “The Four Faces of Procurement”, shows skills procurement executives need in 2020 to meet the challenges organization will be facing. In the paper, it tells about the key success factor for procurement professionals in any sectors. The procurement activities are automated largely and at the same time budget need some strategic market or supplier management activities (Peter Smith, 2012). This happens in a few areas with technology becomes more powerful and need for human judgment no signal. Therefore, the supply chain activities increase in process manufacturing, commercial and judgment issues such as offshoring, outsourcing, and reputation management. In the sector of services or public procurement, managing the internal stakeholder and related of the external market with a supplier for procurement. Making sure the public sector in political and social goals cannot be simply automated. But, it does not see procurement disappearing and it needs to change.
So, in order to change the failure of procurement activities into successful, procurement executives will wear “four faces” to develop skills through two dimensions. The dimensions are the internal
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The important of the procurement plan is all needs will be listed and to be obtained over a period time. When procurement schedule develops, all the procurement process will be timelines and fulfillment. Furthermore, procurement plan allows one contract consists of similar needs or division needs into several contract packages. With procurement plan, it allows to monitoring procuring process to determine actual performance compare with planned activities and to alert the related departments and adjust the procurement plan. Hence, it enhances the transparency and liability of the procurement
First, the top solution is not to enter into a single source procurement situation in the first place. It is very important for the public procurement there is no charge of corruption can be levied at either party, government or organization should rigorously review their purchasing strategies to ensure that this does not happen.
According to the Project Management Institute (2013), plan procurement management is the process of documenting project procurement decisions, specifying the approach, and identifying potential sellers. This step helps the organization determine whether or not they should acquire outside support. If done correctly this step should help the organization know exactly what they need to acquire, how to acquire the appropriate services or products and finally how much it will cost the organization. For example, in the above case study Providian Trust has determine that they would benefit from an outside vendor, they have also decided to go with the Access Plus software to help them achieve their goals. Additionally, they have determined the price and timeframe; the project was to last for 20 months and cost $18
A basic definition for the procurement is “the way the building is realised” and “involves assembling and organising the skills and services of a team of construction professionals”. (the Construction Round Table, 1995). More precisely, the construction industry describes procurement as “a system that establishes the roles and relationships which make up a project organisation”; hence the overall organisation and communication structure for the management, administration and control of a project is established by the procurement system. (D.C.H Coles, 2010)
In this assignment I will be writing a formal report that will explain a typical procurement process, I will outline a variety of methods of supplier reimbursement and contract relationships; I will also outline the pros and cons of each contract type. As well as this, I will explain a typical supplier selection process through the use of Carters 10 C’s and a typical selection process model.
Once I have a clear Statement of work and the previous vendors are interested in bidding; I will compete this procurement to the best practices of government procurement are achieves.
Procurement management is the processes to purchase or acquire the products, services or results needed from outside the project team to perform the work. Project Procurement Management involves not just purchasing products, services or results, but also ensuring that those that are purchased are right for the project, meets standards and is based on project requirements. This life cycle includes tracking from order through deployment and completing with invoice reconciliation.
Procurement is the process of selecting suppliers and signing contracts for the purchase of goods and services. While simple in definition, quite the opposite is true when it comes to execution. When speaking about public and private sectors, they are two entirely different entities. They have different work principles, different functions and responsibilities in the economy, and different limitations to do work. In the case of government acquisition, the leading and primary objective is for public good, not profit. For a private venture, it is profit for the shareholders. A private company has to have profit as the first priority when awarding procurement contracts. Due to this obvious dichotomy, contractors generally either service
Although competitive bidding will continue to be used, especially in the public sector, to ascertain market prices for non-strategic items, many of these items will be outsourced to third-party buyers or consortia to conduct the bidding. Moreover, organizations will continue to purchase most non-strategic products and services under master contracts, some of which will be negotiated by consortia that have leveraged and buying expertise. A trend is expanding for the continued use of third-party purchasing by primarily private sector firms pursuing all forms of competitive advantage possibilities.
Procurement by public entities is guided by primary law principles of transparency, equal treatment and non-discrimination, procurement laws sets up an extensive legal framework regarding the procurement of work, supply and service contracts. There are two main reasons for the use of specific procedures i.e. why contracting authorities do not just negotiate or simply buy from the closest supplier. First, it provides for more public accountability and therefore less cases of corruption practices. Additionally, tendering procedures aim to ensure the best value for money by making it necessary for suppliers to act highly competitive. As a result, market mechanisms will help in facilitating the best possible practices. In situations where market mechanisms are not effective, tender procedures might lose their effectiveness as well. If for example there is lack of competition due to certain complexities or as a result of lower bidder interest, negotiations with just one or two suppliers may be the most efficient manner to handle the process. Therefore, we discuss the inherent advantages and disadvantages of sealed bidding and contracting by negotiation as procedural frameworks for tendering.
It is quite challenging to discuss about procurement management without stating the importance of its strategies. There are four main basic procurement strategies that serve different functions within a procurement management. To begin with, a “Partnership” strategy focuses mainly on constructing mutual commitment in long term relationship with suppliers. While a “Secure Supply” strategy aims to secure short and long term supply while reducing risk from suppliers. In addition, a “Category Management and E-Procurement solutions” serves as a tool to reduce logistic complexity, improve operational efficiency, and attempts to reduce the number of suppliers. Lastly, a “Competive Bidding” strategy emphasizes on obtaining the “Best Deal” for short term transactions with suppliers.(van weele) Each of these four strategies involves a unique purchasing methodology, which implies that the complexity is embedded in an individual strategic implication. Therefore, it requires different tools to accomplish the specific strategical characteristics. A business entity may need to support and execute procurement decisions with other strategic apparatus with analytical methods, including market analysis, uncertainty analysis, price forecasting, supplier relationship and along with others.(Harvard)
Comparing to the option of upgrading the whole procurement system, my recommendation aligns with Russell Menere (National Procurement Manager of BAL)’s idea, which is to implement short term improvements based on current procurement system in
Procurement intends to explore supply market opportunities and to implement resourcing strategies that deliver the best possible supply outcome to the organization, its stakeholders and clients (Kidd, 2005). Therefore, construction procurement exists to purchase a construction project as requirement of firms or organizational entities to achieve its goals. However, the choice to use external resources is the part of firms’ decision-making
Procurement’s keep getting changed and people just need to note the need and certainty with which their purchases will be imminent and a sound background is put in to action with resource allocation more discrete in different phases of development
About PCV procurement, more rational procurement mechanisms, prioritising procurement systems, and giving pooled procurement more prominence and consideration could address the challenge. Comprehensive multi-year strategic plans (cMYP) for
• Ray: “Your telephone message about an error in your tender was a waste of time. You can’t change the rules. The best you can do is to withdraw”