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Procurement and Management of Construction Module



Procurement and Management of Construction Module

Introduction

The methods of procurement have been developed throughout the history and have evolved in various forms. One of contemporary method of procurement is strategic procurement process. There is a major distinction between traditional procurement and strategic procurement in terms of convenience and cost concerns attached to each. Construction companies in the UK, owing to the increased competition and increasingly getting complex project specifications due to the complex demands from the clients, are now turning towards innovative solutions to the procurement and employing innovative methods not to minimize their cost and elapse time to complete the project, but also to give adding more value to the clients' money they are spending on the construction project (Chan et al., 2002, Pp. 120).

Background Literature Review

The traditional procurement approach brings the responsibility of design and the project team solely on the shoulders of the client. Though the approach is good to achieve the sustainable results however, it lacks the separate duties and responsibilities of the involved parties that might give a way to the culture of blaming. This might add to the ineffectiveness of the project and plus the design of the project might not get ready at the time of the commencement of the project work which will add to the ambiguousness of the tasks assigned and the proper understanding of the final outcome (Das et. al., 2001, p. 396). There are several shortcomings of the traditional procurement model. Some of them are as follows.

Weak Degree of Business Information Sharing

In traditional procurement, most of the procurement operations and negotiations with suppliers are done over the telephone without any documented records such as written records, purchasing information and vendor information on the part of each partner in the supply chain which results in less information sharing. This results in weak traceability of business problem once it is occurred, which makes it difficult to investigate and resolve. Moreover, traditional procurement is highly dependent on the humans and thus subject to human error and less standardization and streamlining of all the processes and activities because when employees, who are involved and undertake procurement function, changes, it put a considerable impact on the smooth functioning of procurement department.

Overemphasis on Initial Low Cost

Traditional procurement is like a blind pursuit of the lowest price, simple orders, expediting, which makes the construction companies to neglect their business relationship with their suppliers who then becomes eliminated in the whole process. Sometimes this overemphasis add additional lifetime cost to the project and force the contractors and sub-contractors to compromise on the quality just to complete the project within the mutually agreed upon budget with the client. In the traditional procurement, under construction responsibilities are scattered and poorly defined, which always creates shaded areas for the final quality of the product (Charitamara et al., 2002, Pp. 269).

The Characteristics of UK's Construction Industry and Its Clients

The construction industry all over the world is unique in its characteristics because it employs different production activities ...