Project Management Procurement: Supply and Purchase Research Paper

Introduction

Project procurement refers to the venture management that relates to the systematic acquisition of goods and services. The process defines how institutions obtain various products that propel operations in their business units with an aim of leveraging performance.

The process is initiated to enable the acquisition of standardized goods ad services from the outside companies. Evidently, institutions with strong performance aspirations are under obligation to perform effective procurement process in the acquisition of core business items.

This is critical since the items hold the capacity to influence general performance of the institutions. According to researchers, most institutions perform dismally due to inferior procurement procedures that fail to enable the acquisition of quality products that are cost effective.

It is identified that cost efficiency and acquisition of quality products can only be attained if credible procurement process is undertaken through conventional techniques.

The techniques define procedures of item evaluation and the company that produces the products to establish their suitability. Managers in the institutions should follow due procurement process to facilitate purchasing and supply of superior products that matches the user’s needs.

It is proper for the managers to establish the evident gaps and varied needs in the institutions that require integration before the initiation of the procurement process. This is to ensure that the right products are purchased to bridge the gap within the operating sequence to advance productivity.

Due to magnitude and cost related involvement in the procurement process; it is significant for managers to acquire adequate information on the items to be purchased from the users. That is the process should be user centered to guarantee purchasing of relevant items.

Variably, feasibility nature of the items needed and the company’s capacity should be evaluated to ascertain the ability of the administration to meet the user needs in a sustainable manner.

There is a clear-cut procurement procedure that managers should follow to eliminate loses and acquisition of technologically compromised equipments. In particular, there should be a detailed contracting system that entails creation of requirements needed in diverse business units to aid production and request for seller responses.

As noted, request for seller responses entails the identification of vendors and their geographical set up including the products they supply.

The selections of appropriate seller that follow vendor evaluation where the procurement officer chooses the most reliable institutions to execute the delivery of the items under requirement form a crucial step.

Similarly, contact address where detailed relationship with company is sought by the procurement department that leads to closure of the transaction is paramount.

This is a credible process that institutions should follow to ensure proper acquisition of the needed items to serve respective purpose in the pursuit for customer satisfaction and growth.

This paper evaluates project management procurement where purchasing and suplly administration, steps and etc is discussed.

Purchasing and Supply Management and Importance to the Business World

Purchasing and supply management is a critical element that institutions must execute with at most diligence and adherence to the procurement sequence. This is to ensure that needed items are stocked and timely supplies are made to consumers.

Indeed, purchasing and supply management is the process of procurement, storage and monitoring of goods sold or disposed to various consumers. The process remains crucial since it influence the overall performance of the institution (Johnson, Leenders & Flynn, 2010).

It is advisable for managers to institute purchasing and supplies department in institutions to control and coordinate the purchasing procedures.

This is to ensure reliability and effectiveness in the administration of the process. Supply and purchasing is critical due to the cost involved to ensuring success of the processes.

Purchasing department in institutions should be administered by experts in diverse field of operation to aid performance of comprehensive evaluation of analysis of the companies and items that are sought based on quality ideals.

The experts should include pricing analyst, market researchers and market personnel with requisite professional potentials to advance effectiveness.

Purchasing involves acquisition of relevant items that are required to propel activities in the production process and in turn lead to good revenue generation (Johnson, Leenders & Flynn, 2010).

The process is cost involving due to the relevant procedures that must be undertaken to ensure its success. This calls for its professional administration through credible systems that are devoid of inconsistent or malpractices.

Supply system requires effective formulation and identification of reliable distribution network that hold the capacity to reach out to customers promptly.

Inferior distribution channels may delimit the institutions achievement of set goals interns of return on investment (ROI).

The two elements are integral success drivers in institutions that administrators should undertake using superior procedures. There should be a perfect match between sales and purchasing of goods in the institutions to facilitate proper accountability and exemplary performance (Johnson et al, 2010).

As noted, institutions cannot meet excellent performance benchmark with inferior match between expenditure and income.

That is administrators should monitor customer behavior to ensure that items under purchase meet their needs and facilitate effective supply.

This is to ensure effective administration and coordination of the inventory that result to the realization of high returns.

Steps of the creation of a project supply, service, and material budget

Creation of a credible project supply system is paramount as a performance measure to ensure effective coordination and control of resources. The process should be undertaken in cognizance to the set steps to ensure engagement of suppliers with unquestionable business operatives.

This is to ensure acquisition of quality and reliable items with immense capacity to serve the rightful need of the users in propelling production (Trent & Roberts, 2009).

Scholars asserts that inferior procurement procedures leads to immense loses and acquisition of substandard products with low functional capacity.

Managers should follow set guidelines of purchasing to achieve a perfect match between quality and the resources used in purchasing.

Major steps that administrators should consider include performance of a comprehensive contracting process. The process requires stakeholder involvement to ascertain the needs of the users.

This is achievable through monitoring of procedures and execution of research on the various needs that are hindering effective performance and delivery of efficient services.

The needs are initiated by users to enable purchasing of relevant products to improve user efficiency. It would also reduce stock hold up in storage facility since purchases are made and sales are executed systematically.

This limits wastage of resources and storage space that causes low performance (Trent & Roberts, 2009). Comprehensive research on the supplying institutions and the state of the condition in terms of operation form a paramount step that purchasing department is under obligation to evaluate.

The research should be done using available resources for example the internet on the diverse institutions that trade in the identified products needed. This enables the procurement department to develop a list of vendors over which probable choices are made to execute the supplies.

This stage will advance the establishment of the institution s operating settings, geographical location, distribution network and their reputation in the global arena (Barrar & Gervais, 2006). This is to establish their credibility and reliability in service delivery.

Systematic evaluation of the venders forms the next step in the purchasing process. The step provides clear strategies of scrutinizing the supplying agency based on diverse factors that influence buying decisions.

It has to be noted that buyers are influenced by product quality, reliability of the items, price, serviceability and the technological process involved in the production chain.

These elements are crucial since they contribute in defining products suitability and the institutions reputation.

According to Trent & Roberts (2009) purchasing department should make negotiations with the institutions that hold favorable business operating guidelines that emphasizes on quality and fair pricing to avert over expenditure.

Therefore, evaluation entails ascertaining the price levels of the products needed in various companies. The establishment of the quality standards, distribution network, procurement procedures and suppliers core business line of operations paramount.

These are crucial information that helps in identifying credible institutions to engage in business contracts (Johnson et al, 2010). The evaluation process is fundamental since it enable the acquisition of quality and price effective goods with limited cost implication (Trent & Roberts, 2009).

In addition, establishment of the institutions primary customers and its financial stability is a relevant step that purchasers should undertake to enable formulation of viable and informed buying decisions.

How to select the most qualified suppliers

Procedures of selecting qualified suppliers are designed to promote fairness and to ensure that consumers are compliant to the binding guidelines.

Evidently, the practice is used by purchasers to advance competition and ensure that relevant transaction principles are employed in the procurement process.

The guidelines are to equip consumers with pertinent knowledge and understanding of the purchasing process as provided by the vendors (Johnson et al, 2010).

This is to facilitate communication and a guiding purchasing checklist that assist consumers in obtaining accurate price quotes of products.

Due to the complex nature of selecting appropriate suppliers, there are superior strategies that individuals can adopt to facilitate the identification of credible institutions with superior products (Trent, 2007).

The major strategy is the execution of comparison shopping through request for Quotation (RFQ) from various institutions.

The quotation document entails fundamental information of the institutions and the products. The inclusive information that is included in the document explains all the factors that determine individual’s choice to certain products.

It aid decision making since it gives information on the quality, price, useful life and the operating capacity that eases purchasing choice making.

The benefits and costs of outsourcing, and the growth

Outsourcing is a business practice where institutions acquire operating items based on temporary agreements. The agreements can be referred to as “lease contracts” that require superior negotiation.

The program facilitates effective administration of resources and elimination of unwarranted systems or costs that may compromise exemplary performance.

Indeed, outsourcing of resources for example expertise and technological equipments at lower costs is enabling small institutions with limited resources to gain good performance (Trent, 2007).

It is a practice that if done objectively, holds the capacity to revolutionize operation in institutions. It presents immense advantages that include effective utilization of available resources.

The practice provides requisite guideline where an institution only acquires what is needed to execute certain activity at the time of want.

This reduces the daily maintenance cost incurred in the management of the equipments that translate to colossal amount on yearly basis that may be unsustainable.

It focuses on the core activities of the business to ensure the achievement of maximum returns. This explains why managers outsource equipments based on the needs for specified period of time to propel the execution of activities in the core business units.

Variably, it advances efficiency in savings that is fundamental for growth especially in small institutions (Trent, 2007). Savings in operating cost is vital since high expenditure of operating procedures is detrimental to the realization of exemplary performance.

It also leads to the reduction of overhead cost of executing back-office functions that consumes immense resources.

This explains the imperativeness of outsourcing of the resources that can be moved with ease. Consequently, outsourcing whose application is gaining momentum enable the development of effective operational guidelines and staffing flexibility.

It advances consistency in service delivery and risk management that eliminate uncertainty in the supply processes.

Although, outsourcing present noble operating incentives it fails to guarantee continuity in the production process since the equipment are only hired when need arises.

This limits daily production and performance that is necessary for growth. As noted by Trent (2007) it compromises innovation and creativity in institutions in terms of service delivery since it delimits holistic and consistent nurturing of employees to high levels of creativity.

Additionally, it may lead to the acquisition of equipments with compromise operating capacity.

Evaluation of the purchasing benchmarks in institutions

Authorities in diverse settings are currently emphasizing the adoption of credible procurement procedures especially in the current environment that is characterized with severed economic complications.

In particular, multinational companies, for example Nokia, sum sang and Toyota ltd are practicing the conventional purchasing procedures that define acquisition process for relevant items that advances their productivity.

The institutions recognize the significance of the purchasing and supply systems that guides the identification of products, quotation procedures and the ordering process.

Clearly, the institutions operate well staffed purchasing departments that coordinate supplies and buying of diverse equipments that propel service delivery (Barrar & Gervais, 2006).

The departments are formulated with clear mandate of ensuring perfect match between expenditure and return on the investment (ROI).

This is achievable through designing credible sales and distribution network to reduce stock ties and wastage of resources.

The department for example in Nokia company is made up of pricing analysts with the responsibility to evaluate price tags on diverse products as presented by various vendors.

Variably, market researchers who are to perform effective research on the consumer needs are integrated in the department.

This is to ensure that comprehensive research is carried out based on diverse factors that influence procurement decisions. It is imperative to note that the companies operate under defined procurement procedures that enhance their contracting engagement with suppliers.

This enable them to adequately evaluate institutions based on purchasing guidelines for example quality, price and reliability hence develop superior buying decisions.

Conclusion

Indeed, institutions that seek to leverage their performance should adopt superior procurement procedures to streamline their purchasing and supplies.

This is a fundamental aspect since inferior execution of procurement procedures is detrimental to organizational growth.

Therefore, it is professionally advisable for managers to institute purchasing department in their institution s to coordinate the acquisition process of diverse commodities.

References

Barrar, W. & Gervais, R. (2006). Global outsourcing strategies: An international reference on effective outsourcing relationships. Aldershot: Gower

Johnson, P., Leenders, M. & Flynn, A. (2010). Purchasing and supply Management. Boston, MA: McGraw-Hill Irwin.

Trent, R. & Roberts, L. (2009). Managing global supply and risk: Best practices, concepts, and strategies. Ft. Lauderdale, FL: J. Ross Pub

Trent, R. (2007). Strategic supply management: Creating the next source of competitive advantage. Ft. Lauderdale, FL: J. Ross Pub