Procurement and Supplier Management in successful project delivery

• The following work will enlighten the students regarding supplier management’s role and responsibility in successfully delivering business projects for various organizations.
• It will highlight the need for a good structure of a business’s supply chain to cater to the problems and business goals.
  
  
• Globalization has made business more competitive and dynamic.  All the business houses engage in suppliers for commodities and services to maximize profits and performance. Suppliers are an indispensable part of any business.
• Supplier Management ensures the smooth functioning of business processes and activities by dealing with a supplier organization’s entire lifecycle.
• The identification, selection, and management of suppliers with evaluation ensure high value and performance.
• When the supply chain for business is established, the two factors are – 1) evaluating suppliers’ performance.  2) identification of areas of improvement with suppliers.
• To get back the utmost output of a supply service – 1) track the record. 2) measure performance. 3) regular communication and feedback are required to improve on the areas by finding a solution.

Role of procurement in successful project delivery 

• Procurement is the process of getting the goods and materials by the company’s needs. The supply chain management transforms the goods into products and distributes them to consumers further.
• The procurement ceases as soon as the company gets possession of the goods and gets profit in the business; the procurement amount must be less than the selling cost and after deduction of the cost of processing.
• The project procurement management is there to establish and maintain relationships with vendors of goods and services during the project. It includes procurement processes as part of supply chain management.
• There are 4 steps to planning the process of procurement for project management and delivery, and those are:-

1) Planning – It is the creation of an official procurement management plan. It includes internal procurement and external outsourcing of goods. Sample procurement documents attract potential vendors. It discusses the project scope, schedule, requirements, risks, and budget factors of the project.

2) Selection- It includes a comparison of vendors, advantages, disadvantages, and contractual offerings. Video conferences are being conducted for the bidders to allow and understand the project requirements. Proposals are evaluated, and if no proper bid, the team uses online ads to solicit new bidders.

3) Administering – It is an important task. It includes tools and processes to manage relationships with vendors. A system is added for monitoring and control. There are formal inspections, audits, and reviews of procurement operations to generate performance reports and feedback. It is managed by supply chain or project management software.

4) Closing- It includes ending the procurement contract, evaluating weaknesses, documenting processes for future needs, and summarization so that negotiations can be done to resolve contract disputes.

Factors for an increasing need for Suppliers Management Chain

• The complexity of supply chains has increased. Due to this, proper management of suppliers is required.
• The business scale has evolved and expanded vastly (local and global), so a managed chain of suppliers is needed.
• To achieve a long-term established relationship with the supplier, management is required.
• Having a competitive market of business, the supply chain needs to be managed to stand out in the market.
• When there is a growing risk in supply chains and easily identified, management becomes an inevitable part.
• Managing the supply data.
• Increasing the standard of quality of business needs management in supply.

Benefits of a good Supply Chain Management 

1. A good supply chain manages the supplier base effectively. It increases the complexity of supply chains as the scale of operations of business expands. A well-planned and structured supplier management organization manages the suppliers very easily.
2. Good supply chain management helps in cost savings by ensuring minimum resources are utilized with maximum benefits, thereby keeping a check on the quality control.
3. It improves the transparency supply of the business or organization by keeping in check the suppliers’ lifecycle. When there is transparency in managing supplies, it automatically creates a scope of improvement in performance areas. Also, leading to the personal involvement of suppliers in the business and designing strategies and improving structures.
4. By the creation of KPIs, the supplier performance could be evaluated and assessed.
5. After evaluation and improvement in areas that require attention, the supplier help in designing development programs.
6. Complex supply chains may deteriorate their quality, so a proper management chain helps assess and mitigate supplier risk. It creates value or quality service by devising appropriate risk mitigation measures.
7. Supply management improves relationships with suppliers by involvement and building trust and long-lasting relationship as it also helps the business in catering to problems and considering strategies.

Role of supply chain management in project delivery

The activities that are part of the organization’s developmental programs include technology deployment, cost reduction programs, deployment of corporate deals, inventory rationalization, etc.

All these activities require special skills and techniques to make a project successful. Therefore business employs skilled laborers to deliver projects effectively with minimal cost; otherwise, there might be a risk of project failure.

The project manager offers the procurement executive to make a good and effective procurement plan. So, there is no failure in effective project delivery.

5 Steps of Supplier Management Process

• Identifying the set of business goals and objectives.
• Criteria for selection of suppliers.
• Evaluation.
• Negotiation with suppliers.
• Evaluation of performance.

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