Project Procurement Management
Due to high competitiveness, outsourcing has become a popular business strategy. The influence that suppliers have on the success or failure of projects is significant since their performance affects the results of the entire business effort. Moreover, selecting an appropriately qualified supplier improves stakeholders’ confidence since this is more likely to lead to project goals being achieved.
In this context, excellence in the procurement process is essential in order to achieve good outcomes in any project. Therefore, selecting the right supplier for an assignment, as well as evaluating this supplier’s performance while the contract is being implemented, plays an important role in ensuring a good outcome. Thus, managers should pay special attention to two phases of the project procurement process: (1) supplier selection and (2) supplier evaluation.
In this Course, we call supplier selection the stage during which a company chooses adequate suppliers to whom they will contract-out services. Cheng and Li affirm that this is one of a company’s primary activities since it must select appropriate suppliers to ensure that projects are completed successfully. Moreover, the choice is critical because it has a direct impact on the client’s financial health and production capability. Evaluating suppliers is the process in which suppliers who are already working with the organization are assessed by observing their performance while a contract is being carried out.
A supplier’s performance should be supervised and controlled on a regular basis so as to identify problems and make repairs without further losses or delays. Choosing criteria is an important issue when selecting and evaluating suppliers as these influence the entire process. However, the criteria may be in agreement with the clients’ needs and may change in line with a company’s or stakeholders’ judgments, the industry and the context. Furthermore, the selection process must be improved by taking into account high-level selection criteria or long-term possibilities, for instance.
Moreover, another topic that highly influences these processes is what methods are used to select and evaluate suppliers. The importance of choosing an appropriate procurement method. This choice depends on various aspects, such as the type of criteria and the quantity of information required. So you may be asking yourself, what exactly is project procurement management? Well, it is a collaboration with outside suppliers in order to obtain or purchase goods and services for projects.
These relationships are often created based on a contract so that the needed items or services are received on time and meet the standards requested by the purchasing company. Like many aspects in a business, project procurement management has a process. This process helps ensure that the supplies and goods are ordered and received, and the project is completed. In this context, the project procurement process is an area of vital importance and interest to organizations responsible for delivering project outcomes.
Upon completion of this course, students should be able to
- Identify criteria and methods widely used for selecting suppliers in project
- Identify criteria and methods used for evaluating the performance of suppliers in projects
- Understand the Basic Concepts of Project Management
- Understand the Basic Concepts of Project Procurement Management
- And many more.