Project Management and How it Relates to Purchasing and Supply Management - Coursework Example

PROJECT MANAGEMENT AND HOW IT RELATES TO PURCHASING AND SUPPLY MANAGEMENT Introduction Project management is among the core aspects of a business that require a certain level of knowledge for an organization to ensure effectiveness. In the past, very few businesses gave the necessary attention to project management but with various advancements in the recent past, everything has changed (Michael 2009). Specialists and business professionals from different markets provide multiple tactics, strategies and approaches that facilitate the success of the dissimilar organizational projects. Currently, every corporation has one or more strategies set aside for this purpose due to the adverse remunerations. In fact, project management is a profession that most businesses embrace and there is a high possibility that the field will develop over the years. Typically, the general idea behind project management is not different from that of purchasing and supply because the methods, processes and approach applied aim at minimizing the chances of failure or forfeiture. However, there is more to the relationship of the two aspects apart from the common similarities such i.e. they both need professional managers. In purchasing and supply management, the experts engage in the management of the procurement procedures, all those that involve the goods and services (Zigiaris 2000). Definitely, ample management skills apply but the most critical responsibility involves managing the supply chain. This requires negotiations involving the contracts required for the upkeep of an organization’s production sequence. Decisively, a great relationship exists between project management, and purchasing and supply management, not necessarily in terms of the results and goals, but in the essence of knowledge and skills required. Consequently, this research paper focuses on analyzing both factors as a way of establishing the core relationship between the two. Evaluation revolves around aspects such as the concepts of procurement and contract management, RFP selection tools, procurement planning and its legal characteristics. Generally, the discussion entails a comprehensive assessment of these foci as the basis for the argument on the relationship. Discussion Obviously, almost all companies use procurement professionals for the purchasing and supply management requiring them to have resources, tips and tools for all modules in the chosen strategies. The common expectations for the procurement professionals entail being able to produce savings, managing contracts effectively, maintaining productive supplier relationships, negotiating and administering best deals (Zigiaris 2000). These are a few factors determine the effectiveness of purchasing and supply chain management; however, critical evaluation shows that unlike project management it requires more detail. Concepts of Procurement and Contract Management Procurement entails the acquirements of products inform of goods and services from a peripheral supplier and the major concept behind the process is ensuring that the results are up to the set standards. Typically, it is the work of the management body to ensure that the contract meets the acquirer’s desires on eminence, measure, spell and locality (Michael 2009). In procurement and contract management, most of the work is on management of the whole process, which is separate from the organizational management hence it requires special knowledge and understanding of that specific field. The specialists play the major roles to ensure that the competition is fair and open; moreover, the process should not promote deceit and conspiracy. The decisions in procurement revolve around delivery, handling, benefits and cost fluctuations; generally, the purchasing and supply management happens in conditions of scarcity. This prompts the procurement specialists to employ different approaches to make the best out of the situation i.e. skills acquired from project management such as those in bargaining and negotiations might apply to acquire the best cost (Storey 2007). Conversely, the whole process requires a clear distinction on risk and non-risk factors concerning the critical facers such as the cost and benefits. Normally, the concept of expected value commonly applies in such a situation as it promotes rationality hence creating better understanding of core issues such as those that result from the two distinct categories of procurement. Different corporations have dissimilar perceptions of procurement but the most common notion involves the splitting of it into two categories (Moore 2005). This entails the direct production related procurement and the non-production related. Contrariwise, the direct procurement revolves around manufacturing settings as the indirect concerns the resources purchased by a corporation for the purpose of the overall operations. Decisively, there is a lot to procurement and contract management, most of which apply unswervingly in the management of the whole process; however, establishing the importance forms the basis for all operations making it easy for everything to thrive. RFP Selection Tools and Assessment Proposals Naturally, a curriculum’s acquirement approach discourses the acquirement’s goals, the restrictions, access to resources, the strategies to apply, contract’s management, terms and conditions, jeopardies and the logistics deliberations for the subsequent products. Typically, the procurement plan sets a basis for development of RFP and selection of the source evaluating on both competitive and non-competitive contexts (Moore 2005). The RFP selection tools and assessment proposals are the key determinants of the success or failure of a scheme for the set period of a given corporate initiative. This put the management at a complex position and the whole program at stake; however, application of the necessary knowledge and processes of management will definitely play a significant part in facilitating the success. Most of the time, competitive procurement has multiple contractors and the only way for fair selection is the evaluation of their proposals. Definitely, facets such as the administration RFP apply but the only best way to ensure the program’s success is employing primal and efficient selection tools. Concurrently, activities following competitive procurement are provision approaches leading to progress of the acquirement stratagem (Zigiaris 2000). Resultantly, this creates a basis for evolving the RFP and applying the necessary selection tools relative to the assessment proposals. This calls for the fabrication of solicitation forms, assessment standards and source assortment tactic; largely, it can entail steps and levels for elimination such as the competitive prototyping. Generally, RFP selection tools are not only a recommendation but also a requirement as prompted by the procurement conditions. This might be a long way from the results but it is a significant step requiring management knowledge like any other level of the purchasing and supply prompting the involved personnel to be conversant with the basics and much more. Concepts of Procurement Planning and Strategies for Project Success Essentially, any activities in purchasing and supply management should not inaugurate if there lacks a flawless comprehension of the project strategies and well-established specifications. Naturally, the specifications entail documentations describing the product (goods or services) for procurement. With this in mind, the only way for the project to succeed is if the corporation advocates for the adherence of the reputable and astringent processes. Definitely, this will clearly state out the remunerations and consequences leading from failure to execute the necessary processes. Proper implementation of procurement processes addresses the preparation of acquisitions and contemplation of probable sellers, especially if the consumer anticipates applying a certain notch of influence over contacting decisions. Assertively, professional procurement decree effectively applies in the development and modification of the evaluation processes for the seller’s proposals. Typically, the requisites and reservations of the project management personnel should be part of the procurement planning process, as a way of making it easier to meet them. Obviously, identification is the initial process, which prompts detailed information that will critically assist in producing the best processes for the purchasing and supply management (Storey 2007). Moreover, this prompts them to increase the input and participation in the processes. Significantly, some of the recommendations under the matter include; the evaluation of the potential contracts, management of multiple providers’ strategies, identification of insurance options for potential risks and pre-qualified sellers. Naturally, contracting processes entail the assessment procedures cultivated in the application of proposal rating. Upon the assessment and selection, the corporation and project management teams require a clear understanding of the implications and risks that need utter definition, review and documentation. This is the main reason why there should be cooperation between the two parties to avoid injustice. Resultantly, some of the recommendable considerations to assert this entail; evaluation of ways that the proposals address requirements, determination of the delivery levels, technical capabilities and methodologies, financial capacity and finally, evaluation of all the preferences, comparing them. Vendors in a Proposal Vendor selection processes vary depending on the scope of the project and products, which is why management personnel for small projects have an easy time during proposal evaluation. However, for complex and major projects a lot of involvement is required from the corporation, but mostly the project managers in evaluation of proposals and for the final consensus. Typically, the main goal for vendor selection and proposal evaluation is minimization of social and political emotional instabilities that act as a hindrance for the perfect decisions relative to the corporation’s interests (Claire 2004). These aspects require systematic inquiry by first seeking input from all shareholders and investors and then application of the best available methodology in making decisions concerning vendor selection. Definitely, multiple strategies and methodologies could work for the selection of the most qualified vendor but it is work of the project management staff to come up with the best for a certain project depending on the situation and conditions set by a corporation. However, a few factors require utter consideration for every project in the purchasing and supply management. The initial step entails preliminary review of all vendor proposals for extensiveness and precision. This assists in cases where the proposals have inadvertences and obscurities that the vendors will easily clarify. Second step is recording business and vendor requirements as a form of compilation. Analysis of the perception and prerequisites from both sides assists in making just and evenhanded decisions. Assigning importance value for each requirement follows, which involves separating the extremely important and unimportant requirements hence creating an average. This creates a rational reason for eliminating some of the vendors whose requirements are dichotomous. Typically, a pass or fail gives the project management staff an idea on where a particular vendor lies depending on the overall proposal evaluation. After assigning importance value, the project management staff should now assign performance value for all the requirements for the vendors who are yet to face elimination. For the complex and large-scope projects, assigning the performance value requires some time and further evaluation such a calculating average values for all the contestants. This level has a lot of similarity to the assigning of the importance value because the score or rating results determine whether some vendors will face elimination or proceed. Consequentially, results from both levels apply the calculation of the total performance score for each vendor, which might involve both the individual importance value and the vendor’s performance value. However, this depends with the project management team that might decide to use one; however, for comprehensive and rational decisions, it is best if both values apply (Moore 2005). Finally, the only thing left is the selection of the winning/ most qualified vendor. Nonetheless, the total performance score should not be the core determinant of the effectiveness of the vendor’s proposal. The score should apply as a guide to differentiate the vendors and give insight to the project management staff that requires additional knowledge to hold eloquent discussions that will lead to rational decisions. Legal Aspects of Procurement with the Contract Essentially, most corporations are not up to per with the developments and alterations of contract law. Typically, corporate lawyers and other law professions are the only ones who take time in exploring and clearly understanding these laws (Lockhart 2005). This gives them an advantage because they can take advantage of project managers who know very little about these laws; moreover, they lack the necessary interpretation and application skills for the law of contract. Such factors put corporations and their projects at risk and without the necessary knowledge to counter the same. Decisively, anybody dealing with purchasing and supply management requires appropriate knowledge of contract law. Definitely, this helps in the identification of drawbacks and the best tactics to apply in seeking adequate professional advice from notaries when required. Evidently, it requires substantial training on legal aspects of procurements to comprehend the unstable and astonishing refinements; however, the typical doctrines are the most essential for anyone involved in purchasing and supply management. The core step is checking suppliers’ terms and conditions for every vendor before making any agreements or signing contracts. This is important because most of the vendors take advantage of the situation by strictly putting their own terms and conditions (Lockhart 2005). Additionally, in some situations, the vendors enforce the purchaser’s terms and conditions to get a competitive advantage without applying the necessary time, cost and knowledge in the processes. Definitely, this minimizes the risks that most of the vendors pass on to the purchasers through harsh terms and conditions. Most personnel in procurement management lack the necessary skill for identifying such situations when dealing with the vendors and their proposals. This facilitates the vendors passing on of the risks to the corporation, which mostly leads to the failure of the whole project. Consequently, the best way to dealing with risks that emanate from the vendor’s terms and conditions entails knowing the jeopardies to look for, have a clear idea of the acceptable and unacceptable factors and finally, have the necessary knowledge on actions that would apply in countering the necessary skills. Knowing what risks to look for is naturally hard but the procurement management staff can make work easier by assessing all the necessary areas i.e. distribution, indemnification, rebuff, excellence etc. (Lockhart 2005). Critical Elements of a Contract Project management is an effectual contrivance that almost all organizations apply today in the various projects; however, in purchasing and supply management multiple critical elements that require significant attention span. Relationships between the client, supplier and completion and payment terms are significant for the contract because the form the basis of valuable consideration, an essential element of any contract. The relationships base on the making of agreements and promises, where the promised party has to provide a benefit of value in form of payment or the agreed terms. For instance, the supplier and client agree on the payment and completion terms after they consider everyone’s propositions. The relationship element in most contracts in based on financial exchange and gains but with the incorporation of valuable consideration, other valuable entities also apply. The vendor can promise the purchasing and supply management staff that they will not take a certain action or overlook a certain right hence establishing a different kind of relationship (Moore 2005). However, this kind of relationship between the client and supplier can affect the completion and payment terms putting the whole project at risk hence it is advisable that the procurement professionals exercise integrity at all times through avoiding such agreements that are against the corporation’s ways and requisites. Conclusion There are different theories given as the reason behind the sudden development in project management, and definitely, the overpowering demand. However, as depicted in the analysis, the most significant aspect about this topic is to understand the concepts of project management and their application in facets of purchasing and supply management. Concurrently, multiple journals, articles, concepts and theories that explain and define project management depending on the understanding of the authors; however, the typical definition or chief concepts are all similar. The practice entails the execution of a strategy and technique as an expediter of success in the accomplishment of any corporate project. Additionally, project management can also be a reference for the preparation, unifying, directing and monitoring of organizational resources for the effectual and efficient attainment the set goals for purchasing and supply management (Storey 2007). REFERENCES Claire, R. (2004). Managing the Vendors: ISM Journal, 10 (1), pp. 2-13 Lockhart, D. (2005). Legal Aspects of Procurement: USAID, 6 (2), pp.19-37 Michael, E. (2009). The Role of Project Management in Business Development, 3, pp.7-25 Moore, N. (2005). Implementing Best Purchasing and Supply Management Practices: RAND Organization, 3 (10), pp. 27-160 Storey, J. (2007) Purchasing and Supply Management Theory, Practice and Future Strategies: International Journal of Purchasing Management, 26, pp.754-772 Zigiaris, S. (2000). Supply Chain Management: Dissemination of Innovation and Knowledge Management Techniques, INNOREGIO, 11 (2), pp.3-15 Read More