Procurement Management

Procurement Management

Introduction

Project's procurement management plan can have a very positive effect on the success of the project and the budget plan. Procurement management is an essential administrative function that can have far reaching effects on the future of the organization. There is a distinct cause-effect relationship between monitoring and procurement management in impacting EVM calculations and the project budget. Project managers must explain to management the interactions and dependencies of the EVM calculations, the procurement plan, and the project's budget. (Project Management Institute, 2008).

Discussion

Project's procurement management plan allows the project manager to define procurement requirements and its management. It allows for timely procurement with items justified in the justification statements. It gives a brief detail of the contract currently in use and how undesirable events affiliated with procurement are reduced. In simple words it helps to manage risk associated with procurement. It promotes the success of project by mitigating risks via insurance and contract performance metrics (Love, 2002).

Project's procurement management plan helps in determining costs associated with items that are to be procured and the management of multiple suppliers. Suppliers kept at stead contribute to the success of project and helps in appropriate preparation of budget plan. Since it lists decision criteria and the contract approval process it allows for smooth procurement process that is vital for the success of the project and budget plan. Since it clearly defines deadlines and contract deliverables consequently it ensures that the procurement process is timely and without delays. A process that is lean and delay-free assures the success of project. Project's procurement management plan ensures that contracts are coordinated with schedule, budget and project scope and effectively deals with limitations related to procurement and its management (Burke, 2003).

Perhaps the biggest driver for success of project and budget plan is the ability of project's procurement management plan to allow for vendor management. Management of vendors is the ultimate responsibility of project manager. For each procured item progress is discussed by the project manager or his subordinate with each vendor and purchasing department as this will ensure that goods procured are of high quality and are procured on a timely basis. Goods if procured on time and are of sufficiently high quality can ensure that project is to a great extent successful and in budget constraints. It also allows to reconcile and review the specification of goods to received to what was ordered initially. Compliance with requirements is sought in this part of the vendor management process as detailed in the project's procurement management plan. Vendors are allowed a chance to ask necessary questions and also invite suggestions to amend contracts and its requirements (Dvir, 2008).

Project's procurement management plan can contribute to the success of the project and impact it by identifying, assessing, evaluating and managing risks associated with procurement. While risks will be managed in accordance the risk appetite and tolerances specified by the plan there are certain risks that require special consideration. The following (most typical) risks if are addressed by ...