Everything About Project Management Procurement
Procurement is an inevitable bolt of any organization; hence ensuring a fool-proof procurement plan and its impeccable execution is the prime step for a business considering the procurement aspect. Project management in procurement essentially ascends the gamut of procurement from a robust plan and aligns the non-erroneous execution till its completion.
Procurement Project Management and its Implications
Conventional procurement management chiefly bases itself on the grounds of the acquisition of goods and raw materials. Since procured raw materials are the conduits of the products made thereof, companies must be utterly vigilant and watchful of what the quality of products is along with the estimated time of their arrival, facile logistics, facilitated and adequate supply chain, and so on.
Project Management in procurement is cardinally about the operational excellence, strategic irreproachability, and unblemished functionality of its procedural alignment. It is primarily about expunging vulnerability, eradicating discrepancies, and settling in the apt nuances leading to excellence in the procurement process.
Moreover, researchers underpin the viability of the reputation and performance of the industry to its procurement. In that case, the essence of having sturdy project management becomes even more crucial in this regard. Encompassing the strategy part to maintaining the list of dealers and vendors to partner with and getting the furnished goods delivered, an effective procurement plan is all that comes under the scope of project managers in the procurement department of an organization.
Roadmap to an Effective Procurement Project Management
Irrespective of the nature of the task, the first thing that seeds are a plan to base the foundations of execution on. So is the case with procurement. Hence, the roadmap to extensive and effective procurement management starts with the nature of the procurement (outsourcing procurement industries or in-house procurement team), the raw materials to shortlist, the lines of deliverables, documentation, legal nuances, etc.
Planning the Procurement
The baseline for a procurement plan should be to understand the business's needs and nature. Once the idea is apparent, the next thing that comes is understanding the best resources to cater to the product class and product lines the business offers.
The planning part could include the following:
- Assessing the product manufacturing methodology.
- Assessing the best raw materials to manufacture the product.
- Evaluating the inventory and marking the deficit.
- Assessing the most economical and adequate resource availability in the market.
- Curating the list of vendors to partner with.
Once the procurement plan is made and the prerequisites have been taken care of, the part that comes next in the procurement project management is choosing the vendors.
Shortlisting vendors could be jotted as one of the most crucial aspects of procurement. Having made the product list, the suppliers' list must be curated to emasculate the less viable names and cull the best ones.
The basis of shortlisting should start with striking off the less apt ones. That's when the team of market analysts, price analysts, etc. comes. Hence a project manager should have a synergistic and coordinated collaboration with the team of analysts.
The basis of the annulment of the vendors could be as follows:
- Based on Price Analysis: This step makes the most sense as all that matters, in the end, is net revenue. Companies can't afford a significantly higher input than the output crossing the scope of economics. Hence, the removal of suppliers incurring higher procurement and purchasing cost makes the most sense.
- Based on Product Suitability: Not every option that the companies find providential and pocket-friendly would be notably apt. Hence, depending on the science and production of the product, picking the most suitable raw material is quite essential.
- Based on Logistical Viability: Not every affordable and suitable product would be easy to get delivered. Therefore, the third most important criterion for analyzing the logistical viability of the goods comes. Goods that are easily transportable, the most suitable, and the most affordable are the best combination.
However, prioritizing the aforementioned criteria is immensely subjective based on the economy, requirement, product category, and nature of the business.
Documentation Part and Legal Connotations
Documents such as RFPs, invoices, and terms and conditions are critical aspects of procurement, and effective project management can't afford to skip this part. Hence, understanding and assisting the legal team in inferring the implications of procurement is quite imperative.
Documentation is the most fundamental part of procurement, starting with the Request for Proposal. IRFPs are essential for any procurement and partnership with vendors, to begin with. It starts with first-hand approval by the finance team and transcends to begin the procurement process. Any mistake could incur significant anomalies in the entire process of procurement.
Similarly, the purchase order, invoice generation, and adherence to the legal terms are exceptionally pivotal to a smooth and hassle-free procurement for any organization, failing which could lead the organization into a legal rigmarole despite having procured the product as per the strategy part. Hence, project managers need to be watchful of this.
Conducting market research, analyzing competitors, and implementing a smooth trajectory to a flawless procurement could be a bit of a task for some organizations, especially with a smaller workforce. In this case, resorting to procurement experts, such as Procurement Resource, becomes ineluctable.
With expert market researchers and industry veterans, Procurement Resource has made a significant mark in helping industries scale over the years.
Senior Content Writer at Procurement Resource
Prakhar Panchbhaiya is an accomplished content writer and market research analyst. With over 4 years of experience in content creation and market analysis encompassing many industries, including pharmaceuticals, nutraceuticals, biochemistry, healthcare, ed-tech, and Food & Agriculture, he has been creating quality content for multiple sectors. He is a Biochemistry major with sturdy backing in a PG diploma in digital marketing, helping in the exhaustive content creation based on extensive research and competitive marketing.