Procurement management is an essential part of project management, which you will often find that there are project management courses that deal with this subject field specifically. Despite the project management training that is available, there are still a lot of project managers not familiar with the practice. There are also those that simply overlook procurement management because they find the process daunting. No matter what applies, read on to discover more about the basics regarding procurement management.
First of all, let’s begin by explaining what procurement management is. This is the process or the practice of obtaining services and products from an outside vendor, with the purpose of maintaining or initiating business operations. At the very minimum, procurement management involves the process of determining requirements, carrying out research about the options that are available, acquiring information, seeking quotes, and getting proposals from numerous vendors. You also need to make final selections, approvals, and process vendor orders and payments. This can seem like a long list, and so it is no wonder why some project managers feel intimidated. But, there is no need to be.
There are four key steps you need to follow when it comes to the procurement process. These are as follows:
- 1. Planning – Firstly, you need to put together a plan for procurement management. This plan needs to identify all of the important details and requirements.
- 2. Plan execution – Next, you need to execute the plan. To do this, send the vendors a request for information. You will also need to request proposals and quotes at a minimum. You must assess all of the vendor information supplied during this phase, and compare it to your procurement requirements and plan. You also need to compare it with the overall project objectives. Once you have done this, you will be able to select a vendor’s services and products.
- 3. Control and monitor procurements – Once the plan is executed, you can then begin to control and monitor the procurement process. You need to manage the relationship with the vendor while also monitoring and assessing all aspects of what the vendor is offering. Of course, make changes as required.
- 4. Finalise the procurement – Once you have fully accepted the services and products provided by the vendor, you can officially close the procurements.
Now you know the process you need to follow when it comes to procurement management during your project. So, the final thing we are going to do is provide you with some top tips for effective procurement management at your business. This includes making certain that solutions and sustainable and offer future support – they should not be short-term unless, of course, this is the primary goal. Aside from this, don’t give into the temptation to base your final decisions on cost and cost alone. You also need to focus on the capabilities of the vendor and how their solutions are going to help you address obstacles and reach your goals. If you do all of this and implement the procurement process effectively, you should not experience any issues.