What is Project Procurement Management and Success Planning

This third party is going to be the partner in that particular project. When you are learning about what is project procurement management, you need to have an idea of what you are talking about.

When thinking or talking about what is project procurement management, it is all about dealing with the third part in the way that it becomes part of your project. It is not all about having a project partner but about choosing the partner after bidding on different offers and finding the best option.

What is project procurement management?

What is project procurement management and why do we need to learn about it to run a successful project? Project procurement management is about developing and maintaining relationships with third parties like contractors, suppliers, and sellers.

The project managers are responsible for finding a good and competent vendor. Just like hiring employees, the project managers communicate properly with the vendors to buy things needed for the project.

By bidding, they find a good match for the project, either for buying services or the products. They are responsible for choosing the best partners and signing contracts with them for the whole project. So, they become part of the project just like the team, and a project manager is responsible for developing good relationships and maintaining them until the project ends.

All responsibilities fall on the shoulder of a project manager who will not only grab a good partner by writing a proposal letter to place his offer. The contractors will bid, and by mutual understanding, they will sign a contract in which both parties will agree on some points by adopting win-win thinking.

How to precede project procurement management?

Now, you know well what is project procurement and eagerly waiting for the steps necessary to perform during it. So, here is the proper step-by-step guide to understand how project procurement management will take place. It includes four major processes.

Proper planning to start with

Planning is key to success no matter which level of project you are starting. Every little project needs a proper planning before execution as it saves time, resources, and money. Through planning, you can successfully manage your things.

When managers plan, they consider the project's budget and enlist the things accordingly. The project managers know very well about the resource they need for this project and what they should exclude they already have. So, while planning for the project, they consider the following details.

·   The resource they need for the project execution.

·   Qualities of the vendor from which they will buy resources

·   Finalize the budget

·   Enlist the contract requirements

·   Terms and conditions for the contract

·   Legal terms for their project

·   Deadlines

So, the project procurement managers must be much more proactive and arrange to make their project successful.

Conduction process

After planning comes the conduction of procurement, in which the manager looks for bids from vendors. He accesses the bids, communicates with the vendors, and gets the best offer. When both parties, i.e., vendor and organization, both agree, they go for a contract. Both parties share their terms and conditions for the contract and sign after reading carefully. It is the time when the manager finalizes the deal and makes the payment for purchasing the products.

Controlling and managing important parts

Planning is done on your part, and you have signed the contract now. It is time to look for the proper working and quality of the products or services you are taking from the vendors. In this process, you need to ensure the services or the products are working perfectly or not.

Keep checking it till the project completes. During this process, you will be inspecting the process and products, keep checking the payments, checking the progress of the project, and progress and updating the products from the vendor.

Closing

The last process of this project procurement management is closing, in which the project manager is responsible for end-up the partnership in a good way. He needs to clear all payments and matters by reviewing the contract. The manager will check whether the vendor delivered quality material or not. By signing at the end after reviewing, it is proof that the vendor provided the exact thing he claimed at the time of the contract. 

Why do we need to do project procurement management?

Thinking of why do you need to go for project procurement management? Yes, the same question knocked my nerves when I started, but then I found the reasons.

Every company cannot produce nor have everything.

When an organization starts a project, it needs some raw material or already prepared products. For example, in the case of electronic devices, companies order prepared PCB assembly as they are not specialized in the manufacturing of PCB and PCB assembly, so they prefer to order these products from the PCB manufacturing companies instead of manufacturing them at their workplace.

They need to invest a huge amount in starting another project of manufacturing PCB and hiring a new team of engineers and PCB designers. It will become hectic for them to run two projects under a single roof. So, by learning what is project procurement management, you make the right decision if you can control it.

To save time and money.

When you hire a team for the product manufacturing your need for your project, you will invest a lot of money. So, it is better to buy products from other companies or vendors by going through the project procurement management method.

Even can work with low labor.

It is obvious when you enhance the work or start a new project with the previous one. You need more labor. If you go with the manufacturing of the product you need to complete your project, you will hire more labor.

But if you buy the products from another company, you will pay for that product only instead of paying for labor, buying machinery, consuming energy, and buying raw materials. So, you need to quit this plan but go with project procurement management.

To avoid things of the circle of no control.

As you do have experience in your field and have a team with the skills you need for your project so, it will not be a wise decision to start other another project for the completion of a previous project when you do not have a grip over things. Choosing project procurement management will help you to avoid things which not in your circle of control.

How proactive should project procurement managers be?

A project manager should be a sharp-minded, proactive, and self-motivated person. He should keep looking for the best alternatives instead of wasting time and energy in the wrong direction.

·   Takes responsibility for initiating the project procurement

·   They must have an end in mind before starting the project

·   They should communicate well

·   They must create coordination with stakeholders

·   They should also influence vendors

What are the advantages of project procurement management?

While researching what is project procurement management, you will observe a lot of advantages. Some of the advantages of project procurement management are:

Low risk

The project managers need to be much more active and sharp-minded while meeting with vendors in the sense of the quality material of the products they are buying and the contract as well. As this process is well-planned and the organization knows about the cost, quality of product, and services the vendor will provide so, there is a low risk of a cheat.

By having a written contract, you can also ensure that there is nothing against the rules, terms, and conditions mentioned in the contract after the mutual agreement.

High-quality products

You do not need to compromise on the quality of products you buy from the vendor, as you have the option to negotiate with vendors and choose the best quality products. It depends on you which vendor you choose. You can choose the best and most well-reputed vendor for buying the products and enhance your confidence in your project by choosing a high-quality product.

The cost of the project does not exceed the limits

When you choose a vendor after communicating with different vendors, you are playing on the safe side as you are going to limit the cost of the project. By communicating with the project partner, you can fix the cost of the product at the start project and keep it under control.

Conclusion

When exploring what is project procurement management, you will find it is the best way to find a competent vendor working as a team member and get things done in time and within budget. To win a project and make it successful till the end, a project manager needs to much proactive and plan for the completion of a project.