8/2/2019 Procurement Management 2

1/13

Materials Management 1

Procurement Management

8/2/2019 Procurement Management 2

2/13

Materials Management 2

Describes the processes required to acquire

goods and services from outside the performingorganization.

Discussed from the perspective of the buyer inthe buyer-seller relationship

8/2/2019 Procurement Management 2

3/13

Materials Management 3

12.3. Request

SellerResponses

12.2. Plan

Contracting

12.4. Select

Sellers

12.5. Contract

Administration

12.6. Contract

Closure

12.1.Plan

Purchases

&

Acquisitions

First

Process

Is P.P

Procurement Steps

Planning

Process

Group

Executing

Process

Group

Monitoring &

Controlling

Process Group

Closing

Process

Group

8/2/2019 Procurement Management 2

4/13

Materials Management 4

12.1. Plan Purchases & AcquisitionsDetermining what to procure and when

12.2. Plan ContractingDocumenting product requirements and

identifying potential sources12.3. Request Seller Responses

Obtaining quotations, bids, offers, or proposals

8/2/2019 Procurement Management 2

5/13

Materials Management 5

12.4. Select SellerChoosing from among potential buyers

12.5. Contract Administration

Managing the relationship with the seller

12.6. Contract Closeout

Completion and settlement of the contract,including resolution of any open issues

8/2/2019 Procurement Management 2

6/13

Materials Management 6

Input:- enterprise environmental factors

- organizational process assets

- project scope statement- WBS

- WBS dictionary

- PM plan

risk register

risk-related contractual agreements

resource requirements

project schedule

activity cost estimate

cost baseline

8/2/2019 Procurement Management 2

7/13Materials Management 7

Tools/Techniques: Make or Buy Analysis

To determine if production is cost-effective forperforming organization

Expert Judgment Contract Type Selection

8/2/2019 Procurement Management 2

8/13Materials Management 8

Output: Procurement Management Plan Contract Statement of Work

Clear, complete, concise description ofprocurement item for prospectivesellers to determine if they are capableof providing item

Make-or-buy decisions Requested changes

8/2/2019 Procurement Management 2

9/13Materials Management 9

9

Input:- Procurement management plan- Make or buy decisions- Contract Statement Of Work- Project management plan

risk register

risk-related contractual agreements

resource requirements

project schedule

activity cost estimate

cost baseline

8/2/2019 Procurement Management 2

10/13Materials Management 10

10

Protocol Get to know each other

Probing

Each party identifies issues of concern Scratch bargaining

Bargaining occurs, concessions are made

Closure

Two positions summed up and final concessionsmade

Agreement Both parties have identical understanding of

agreements

8/2/2019 Procurement Management 2

11/13Materials Management 11

Input: Payment Request Tools/Techniques: Completing and settlement

of contract, including resolutions of open items(audits)

Output: Contract File

Person/organization responsible forcontract admin should provide seller with

formal written notice that contract iscomplete

12.6. Contract Closure

8/2/2019 Procurement Management 2

12/13

Materials Management 12

It Is Not AlwaysEconomical For TheCompanies To Make All

The Materials Used InManufacturing.

Some Items AreProcured From Others,

And Some Are ProducedIn The Company.

8/2/2019 Procurement Management 2

13/13

Materials Management 13

Some Reasons For Making:- Lower Production Cost

- Unreliable Or Unsuitable Suppliers

- Assure Adequate Supply (Quantity)- Utilize Surplus Labor Capacity

- Obtain Desired Quality

- Protect Special Design Or Quality