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Procurement Planning: The Procurement Management Plan
- 1. Procurement Planning: The Procurement ManagementPlan Lecture 3 By Dr Sadia Hanif Assistant Professor (Project Management) Riphah International University
- 2. Procurement Planning Process diagram •1. Identifying procurement needs • 2. Developing procurement strategies • 3. Establishing procurement schedules • 4. Defining procurement budgets
- 3. Procurement Management Plan. •The procurement planning process culminates in a formal document known as Procurement Management Plan. 1. Coordinated and endorsed by all key functions 2. Contributions from major organizational functions impacted by procurement 3. Guides procurement activities throughout the project 1. Ensures alignment with organizational objectives 2. Incorporates expertise from various functions 3. Fosters communication and coordination
- 4. Common function contributingto Procurement process 1. Finance 2. Operations 3. Logistics 4. Legal
- 5. Plan Contents • Procurementobjectives • Procurement strategies • Sourcing plans • Contracting plans • Risk management plans • Monitoring and control plans Benefits • Clarifies procurement roles and responsibilities • Ensures alignment with project objectives • Enhances communication and coordination • Reduces procurement risks
- 6. Defining Project Scope •Effective project management relies heavily on a clear and concise definition of project scope. This foundational element ensures project success by: Clarifies project objectives and deliverables 1. Establishes project boundaries and limitations 2. Prevents scope creep and unauthorized changes 3. Facilitates accurate resource allocation and planning 4. Ensures customer understanding and acceptance 5. Provides a baseline for project monitoring and control Discuss Consequences of Poor Scope Definition
- 7. Best Practices forScope Definition • Collaborate with stakeholders and customers • Clearly outline project objectives and deliverables • Define project boundaries and limitations • Establish a scope statement or project charter • Obtain customer acceptance and approval • Regularly review and update the scope statement
- 8. Avoiding Scope Creep •Set clear change management processes • Document and approve changes • Communicate changes to stakeholders • Monitor and control scope deviations • Avoid "minor refinements" without formal approval
- 9. Key Components ofa Scope Statement • Project objectives and outcomes • Deliverables and products • Boundaries and limitations • Assumptions and constraints • Acceptance criteria • WBS can be used
- 10. Deciding who will perform thework: "Make" or "Buy" Analysis
- 11. Matching Project Requirementswith Market Availability: Locating Potential Sellers • General Techniques • Conduct market research to identify potential suppliers • Utilize industry associations and directories • Leverage professional networks and referrals • Review supplier historical databases • Evaluate supplier capabilities and qualifications • Addressing Single/Sole Source Suppliers • Negotiate prices and terms • Consider alternative materials or specifications • Develop a contingency plan for potential supply disruptions • Monitor supplier performance and reliability • Identify potential substitute suppliers • Addressing Newly Created or State-of-the-Art Items • Collaborate with suppliers to develop custom solutions • Partner with research institutions or innovation hubs • Consider joint development agreements • Evaluate prototype or beta versions • Assess supplier capability to scale production
- 12. Cont… • Strategies forHandling Limited Market Availability • Develop a flexible procurement strategy • Identify potential substitutes or alternatives • Build relationships with key suppliers • Monitor market trends and developments • Consider near-shore or local sourcing options • Best Practices • Maintain open communication with suppliers • Foster collaborative relationships • Monitor market conditions and trends • Continuously evaluate and improve procurement processes • Ensure compliance with regulatory requirements • Key Considerations • Technical feasibility • Cost implications • Delivery timelines • Quality standards • Supplier reliability and reputation
- 13. Full Funding Considerations. . . the Impact of Procurements • It is most efficient for any project to be completely defined, and then for management to allocate all of the funds needed to completely perform the work. • Often projects find themselves in the position of being funded piecemeal. Piecemeal funding is expensive anytime, but particularly with procurements.
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