Procurement Management

MBS641Project Management

Dubai Trimester 2 2011

Assignment 1

Prepared by:Ali Sadeddin 31542474

Procurement Management

What is procurement and procurement management?

The difference between procurement and purchasing.

Types of procurement strategies; projectized procurement and centralized procurement.

Procurement Processes Negotiation Skills

How Procurement Management can affect the success or failure of the Project.

Procurement Managment

Procurement is the acquisition of appropriate goods and/or services at the best possible total cost of ownership to meet the need of the purchaser in terms of quality and quantity, time and location.

Procurement Management is implementing procedures and processes to do so.

http://www.en.wikipedia.org

Procurement Vs Purchasing

“Procurement” is the comprehensive function that describes the activities and processes to acquire goods and services.

“Purchasing” refers to the process of ordering and receiving goods

Purchasing is part of procurement process

http://purchasinginsight.com/resources/what-is/definition-of-procurement-procurement-vs-purchasing

Procurement: Centralized Vs Projectized

Projectized: Project Manager with his team will take care of procurement processes.

Centralized: Independent department will take care of procurement as per project needs.

Procurement Processes

Procurement Processes is a combination of procedures and techniques which ends with acquisition of goods or services necessary for the project execution.

Procurement Processes are:A. Plan ProcurementB. Conduct ProcurementC. Administer ProcurementD. Close Procurement PMBOK 2008 4th ED, P313

Procurement Processes

http://www.guinnesspartnership.com

Procurement Process

http://www.undp.org/procurement/operate.shtml#_Procurement_Process

Plan Procurement

Specification Budget Vender List Stakeholders Specific Requirement (if any) Work Breakdown Statement (WBS) Market Place Conditions Procurement Policies

PMI, PMBOK 4th ED, 2008, P316-321

Conduct Procurement

Request For Quotation (RFQ) Invitation For Bid (IFB) Request For Proposal (RFP) Suppliers/Venders Quotations or Proposals Evaluations Suppliers/Venders Short Listing Negotiations with the Short Listed

Suppliers/Venders Awarding a Contract or Issuing a Purchase OrderPMI, PMBOK 4th ED, 2008, P328-334

Administer Procurement

Manage the Contract or Purchase Order

Monitor the Supplier performance

Evaluate the Supplier

Close Procurement

Receive the Goods and Products.

Complete the Services

Testing and Commissioning

Negotiation

Negotiation is an interactive process between two or more parties seeking to find common ground on an issue or issues of mutual interest or dispute where the involved parties seek to make or find a mutually acceptable agreement that will be honored by all the parties concerned

http://www.negotiations.com/definition/

Negotiation Attitudes

Self Limiting Expectations

Comfort Seeking Inertia

Attitudes to Money Driven

Lack of Self Control Self Absorption Ego

:// . . / /http www negotiations com articles attitu- /de mind

Procurement Management: the Success or Fail for the Project

Select Wrong Vendor/contractor

Having inappropriate type of contract

Conclusion

Having the procurement processes done and followed probably will result with selecting the right venders, closing the best deals and writing the appropriate contract. Doing so will ensure that all goods, services, technologies and deliverables required by the project will be on time and executed probably within the project time plan. All of these will conclude a successful project, failing to do so, will crucially affect the project and lead to its fail :// . / - / - - -http kareemshaker com project management why projects fail

/procurement

The End

Thanks for your listening