Procurement Management and Performance - Essay Example

Procurement Management Name Date Course Table of Contents Table of Contents 2 Part 1: Procurement plan 4 Step 1: Business needs 4 Step 2: Business case 5 Step 3: Procurement strategy 5 Step 4: Competitive procurement 6 Step 5: Budget Allowance 6 Step 5: Award and implement contract 7 Step 6: Manage contract 7 Step 7: closure and review 7 Part 2: Scope of Work (SOW) 8 Mandatory elements 8 Purpose 8 Glossary 9 Responsibility Matrix 9 Contractor deliverables 10 Performance requirements 10 Additional elements 11 Services required 11 Security 11 Part 3: Performance 11 Contract scorecard 11 Quality quadrant 12 Financial quadrant 13 Relationship quadrant 13 Strategic quadrant 14 Key performance indicators (KPI) 14 Conclusion 15 References 15 Part 1: Procurement plan Introduction The process will involve the use of external agents to perform the organizational activities. This may be in terms of both products and services. The processes that will be involved include Planning Specification writing Financing Selection of suppliers Performance management It will ensure that the right products at the right prices are delivered (Project Management Institute, 2013). The plan will enhance decision making process regarding the selection of the external supplier and implementing the project. The procurement requirements will be identified through the use of the procurement plan. The processes that will be involved in the selection of the supplier are also identified in through the procurement plan. Step 1: Business needs The project will involve regular cleaning of the personal living space. This will therefore require the services of a cleaning contractor. Step 2: Business case A contractor that has all the tools and equipment to carry out the process will be identified through tendering procedure. The personal living space is not a large area but it requires a thorough job by the contractor. A high number of companies that offers the services will be required submit their tender. However, of importance is the quality of the services that is offered by the contractor. The personal living space involves cleaning the floor, carpet, sinks and the rooms within the building. The contractor must be flexible with the ability to deliver high quality cleaning services. Step 3: Procurement strategy The contractor must have the technical capacity to carry out the cleaning services on a regular basis. This includes equipment and staff members. The contractor has to be well established with a track record of good performance. The past performance of the contractor will be looked at to determine their ability to deliver the required services (Merrow, 2011). The contractor should also have the ability to carry out the activities on a regular basis. The contractor will be selected will be from the locality. This is because their services may be required within a short notice in some cases. Step 4: Competitive procurement The contractor that will be selected must accept the minimum pricing that is used by stakeholders in the industry. To attract the contractors, an advertisement will be posted through the social media and prints. All interested contractors will be required to send their proposals. An evaluation of the proposal will then be carried out and the contractor that meets the criteria will be selected. Step 5: Budget Allowance The expenditure will be based on the available funds. The contractors will therefore be provided with quotation limits to ensure that the work is based on the available finances. The selected contractor will then be required to come up with a clear budget that stipulates how the finances will be utilized. A workable and a detailed budget will be adopted and put down through writing. Actual budget Project cost summary Equipment $5,000 Cleaning supplies $3,200 Office Supplies $725 One-time-up-front Fees deposit $750 Working capital $12,000 Total $21,675 Step 5: Award and implement contract A contract will be entered with the selected contractor for the purposes of ensuring that the relationship developed is legal. A contract may be written or verbal in relation to the exchange of benefits. An express contract will be entered with the contractor. An express contract requires the parties to state their terms either orally or in writing at the time of its formation (Kloppenborg, 2012). The terms of the contract will however be expressed in writing. The terms will also include the actions that should be taken in case of breach of contract. The contract will be implemented after the contract has been signed. This is considering that a contract becomes valid when both parties have signed it. The contractor will be required to start working immediately. Step 6: Manage contract A schedule as well as a timetable will be in place for the purposes of ensuring that the activities are carried out effectively. The contractor will be required to be punctual at all times since the cleaning will be on a living space with occupants. A mechanism for solving problems that may result in the implementation of the contract will be developed. Step 7: closure and review The contract will be analyzed and evaluated to determine the performance of the contractor. A review of the contract after every three months will determine whether it will be terminated or not based on the performance. Part 2: Scope of Work (SOW) This will outline the specific services that a supplier is expected to perform. Type of Service Level of Service Quality of Service Time schedule The time schedule that the tasks are supposed to be performed will be indicated clearly in the statement of work. The Scope of Work plays an essential role in ensuring that the project is effectively implemented. The scope of work that will be utilized in the contract will be the level of effort statement of Work. Mandatory elements Purpose The Scope of Work will describe the activities that will be carried out by the contractor and the required standards. The contractor will be required to clean the living space located in Melbourne on a regular basis. High standards have to be attained by the contractor when carrying out the required activities. Glossary SOW: Scope of Work Responsibility Matrix On a regular basis, the contractor will be responsible for cleaning the living space. This will involve cleaning the floor carpet and the windows. The contractor will also be required to arrange everything in place after completing the cleaning process. It will be the responsibility of the contractor to ensure that all the trash and other forms of wastes are well disposed. The trash bins which will be provided by the owner have to be emptied by the contractor after carrying out the cleaning Process. The contractor has to ensure that none of the items in the building is damaged during the cleaning process. The owner will be responsible for providing the security code to enable the contractor to access all the rooms in the living space. The owner will develop a timetable that will be provided to the supplier. The selected contractor will provide cleaning services in teams. The cleaning process will be sped up to increase the levels of efficiency. Each team member will be assigned specific tasks and will be monitored on quality by the company employee. The selected contractor will provide cleaning service with an initial six-month cleaning contract. Cleaning service will be carried out on a daily basis on week days and be billed on the last day of the week (Friday). Punctuality will therefore be an important aspect for the contractor in order to ensure that the work is completed on time. The table below will indicate the activities and responsibilities of both the company and the contractor. Activity Section ref. Company Contractor 1 Provide security 2 Carry out cleaning 3 Proper care of items 4 Develop a timeline Contractor deliverables The contractor will be required to be punctual and complete the work within the required time. This is for the purposes of ensuring that the owner is not inconvenienced in any way. The contractor has to ensure that the cleaning services are of high quality and standards. The contractor has to exercise high standards of ethics when carrying out the cleaning services. The wastes have to be properly disposed by the contractor. Performance requirements The performance will mainly be managed based on the quality of the services. The services provided by the company will be considered of high quality if all the dirt as well as the stains is removed. However, the failure to do so will be considered a poor performance. Measuring performance of a service in some instances is dependants on the consumers (Lysons & Brian, 2012). The ability of the contractor to complete the tasks on time as well being punctual and ethical will form an important aspect of performance. Additional elements Services required Meetings with the contactor will be held every week in order to discuss the issues that are related to the contract. The meeting will offer both parties an opportunity to raise any issues or dissatisfaction in relation to the implementation of the contract. Reports will also be analyzed during the meetings in order to determine the progress of the contract. Security The contractor will have full access to the living space during the process of cleaning. It is thus important for the contractor to ensure that all the properties are safe. The aspects of security are important in terms of terms of avoiding loss of any property. Part 3: Performance A better communication can be established and promoted between the parties to the contract through performance management (Wisner, et al, 2015). Feedback can be obtained through the analysis of the performance. The analysis of the performance is important as it cam led to the development of measures that can lead to motivation. Contract scorecard A contract scorecard will be used to evaluate the performance of the contract. The scorecards will be used for the purposes of expressing the goals and objectives of the contract in a measurable form. A scorecard ensures that the goals can be evaluated against the performance of the contract (Kloppenborg, 2012). The desired goals and objectives of the contract which involves quality can be evaluated through the use of a scorecard. The active management of the desired goals can be achieved through the use of a scorecard. There will be incremental adoption of the contract scorecard Quality quadrant The precession of the work will be carried out will be an important determinant of quality. The reliability of the contractor will be measures based on the consistency and dependability. The contractor should be in a position to carry out high quality work at a high speed. The degree of user satisfaction with regards to the performance of the contractor is an aspect that determines quality. The effectiveness of the work of the contractor will also be measures as part of determining the quality. Relationship types Financial quadrant The financial quadrant will help in the measurement of the performance in relation to the amount paid to the contractor. The amount paid to the contractor will be measured against the performance. This is for the purposes of ensuring that the quality of the service is in line with amount being paid to the contractor. The contract may be terminated if the services offered cannot be compared with the amount paid (Project Management Institute, 2013). Relationship quadrant The relationship between the parties plays an important role in affecting the performance of the contract (Merrow, 2011). A good relationship with the contractor will be established in order to ensure that the performance is enhanced. This will be achieved by promoting and enhancing the communication process. The contractor will be treated fairly and all the conflicts will be resolved amicably. A positive interaction will be encouraged in order to ensure that the working relationship is good. Strategic quadrant The strategic quadrant will mainly focus on the strategies that the contractor will utilize during the implementation of the contract. The degree of innovativeness by the contractor will be utilized in determining the performance of the contractor. This quadrant is also an important key performance indicator. The key performance indicator is useful in determining the quality of the work carried out by the contractor (Merrow, 2011). Key performance indicators (KPI) The key performance indicators will be used in evaluating the performance of the contractor. It is can also be part of the service agreement with the contractor (Handfield, et al, 2011). The ability to deliver the services accurately is part of the key performance indicator that will be used in measuring the performance. The contractor must carry out the duty without errors. The results from the scorecard will also be used as part of the key performance indicator. KPI Attribute KPI Attribute Description KPI Id: Represents the KPI Identifier Indicator Name of the KPI Definition The context and requirements of the KPI Calculation Value of the KPI Threshold Value of the KPI calculation to be matched Damage points Number of KPI damage points applied for deviations from the threshold Conclusion In conclusion, it is evident that the procurement management will involve several processes. The procurement plan will require some processes and procedures that will be adhered to. The presence of a procurement plan will ensure that the contract can be delivered effectively. It is evident that the scope of work plays an essential role in providing guidance to the implementation of the contract. The activities that the contractor must carry out are also outlined in the scope of work. The performance of the contractor will have to be evaluated. This is to ensure that the intended goals and objectives are attained. References Handfield, R. B., et al. (2011). Sourcing and Supply Chain Management. 5th ed. Canada: Cengage Learning. Lysons, K., & Brian, F. (2012). Purchasing and Supply Chain Management. 8th ed. Harlow, Essex: Pearson Education Ltd. Project Management Institute. (2013). A Guide to the Project Management Body of Knowledge. 5th ed. Merrow, E. D. (2011). Industrial Megaprojects: Concepts, Strategies, and Practices for Success. Hoboken, NJ: John Wiley & Sons. Kloppenborg, T. J. (2012). Contemporary Project Management. Mason, OH: Cengage Learning. Linton, T. (2014). Project Management Essentials. 1st ed. Melbourne: Cengage Learning Australia. Lysons, K., & Brian F. (2012). Purchasing and Supply Chain Management. 8th ed. Harlow, Essex: Pearson Education Ltd. Monczka, R., et al. (2015). Purchasing and supply chain management, Cengage Learning. Wisner, J., et al. (2015). Principles of supply chain management: a balanced approach, Cengage Learning. Read More