Learning Outcome 9 Flashcards
9.1 Explain the purpose, typical content of a procurement strategy
RRMCCCPPSSVEET
To ensure that Pj/Pg/Po within an Org has the right resources to meet objectives
WHAT- MAKE or BUY
WHY- When the PM develops the PROCUREMENT STRATEGY they seek to understand and decide on the factors surrounding the question. Does the organisation of the ability to create it? Or do we have to purchase it in? Is it cheaper to purchase or make? Will we get a better-quality product if purchased? Also, weighing up the factors of control and lead time of the product if sourced or made, is it more efficient to purchase and have resources working on another aspect of project.
WHAT- PLANNING
WHY- Having a good procurement strategy allows for effective planning. Knowing when and where products will arrive during DEPLOYMENT means that resources can be matched accordingly by the PM as they develop their PMP. If resources are not available, then schedules and deliveries can be moved around to facilitate as long as it does not affect the critical path of the project.
WHAT- SUPPLIER SELECTION
WHY- The PM will work out where they will get the best deal for COST vs QUALITY to be able to enter the information into the COST BREAKDOWN STRUCTURE.
Payment mechanisms- How and when PRAM
9.2 Differentiate between different methods of supplier reimbursement
STRUGGLING
9.3 Difference between contractual relationships
WHAT- INTERFACE
WHY- Projects using single supplier route have much simpler interfaces to manage, with the PM just needing to liaise with a single company for all their purchase requirements. Whereas projects using a multiple suppliers will have a much more complexed set of interfaces to manage which inherently will be more time consuming.
WHAT- PRICING
WHY- Projects using a single point of sourcing or purchase may not get best price from supplier
Whereas projects using multiple are more likely to be able to negotiate a more competitive pricing for resources.
WHAT- FORM OF AGREEMENT
WHY- If a project was to enter into a TURNKEY contract agreement for example to supply materials and build a house, they may be able to negotiate a much better price then if the PM was to use separate suppliers and resources for the different tasks.
9.4 Explain a supplier selection process
DEFINE
LONG LISTING/ PRE-QUALIFICATION QUESTIONAIRE
INVITATION TO TENDER
FINAL SELECTION
WHAT- LONGLISTING
WHY- Long listing takes place after the DEFINE element of the process. The PM will address the extensive list of Org’s received taht would are interested in the task. By developing a PRE-QUALIFICATION QUESTIONAIRE they can outline the requirements devised by the PM to qualify to be Invited to tender. It ensures that that the Org’s have the correct qualifications such as experience, geographical location, skill sets, rescues and actability to carry out the work detailed.
WHAT- INVITATION TO TENDER
WHY- Invitation to tender is a process by the PM to SHORT LIST the Org’s they believe to be the best fit for the task, the information sent out to Org’s is a very detailed outline of work, schedule and information on how bids will be SCORED for TRANSPARENCY The COMPETEING Org’s will put their bids for the work forward.
It allows the PM to find the most suitable applicants, hitting all the criteria’s outlined, hopefully ensuring capability and quality of proposed work. It allows the PM to get the best price as Org’s are in competition.
WHAT- FINAL SELECTION
WHY- Evaluated bids are received by the PM for competing Org’s. These are then evaluated and scored, allowing comparison and a final selection of a handful of most suitable Companies. Then allocation of the work to the contract winner.
It allows the project to gain the best contact with a balance of cost and quality, the final few may be invited to return SEALED BIDS for work or have a reverse auction, meaning that that the project could achieve the work for less than estimated.
