Friday 11 February 2022

Overview of project procurement management

Because of the complexity of the project, the project organization can not rely on its own strength to complete the entire work of the project, so it is necessary to outsource part of the project to other organizations, the so-called outsourcing is usually carried out in the form of a contract, a project may have many executive organizations.


1. Project procurement management is that the project team

Obtains products, services or results from outside the project to optimally meet the needs of the project. procurement management is a more special process, in other project management processes, the project team is a party b role, but in the procurement management, the project team becomes the role of party a.


2. enterprises are unable to cope with fierce competition by themselves.


Nut should use the power of the supply chain to integrate the superior resources of each member enterprise to form an overall competitiveness. therefore, it is necessary to abandon the traditional management model of "enterprise-centered" and replace it with the management mode of modern strategic cooperation. the essence of strategic cooperation management is supply chain management. strategic partnerships should be established between supply chain member enterprises, that is, informal long-term agreements between independent upstream and downstream enterprises in the supply chain based on trust and common goals, sharing resources, sharing risks, and common vitality.


3. the significance of establishing strategic partnerships with suppliers:

(1) shorten the supply cycle of suppliers and improve the flexibility of supply

(2) reduce equipment inventory, reduce management costs, and accelerate capital turnover

(3) improve the quality of purchased equipment

(4) strengthen communication with suppliers and improve the order processing process

(5) share supplier technology and innovation results, accelerate development speed, shorten the development cycle

(6) share management experience and promote the improvement of enterprise management level


4. supplier strategic partnership construction process:

(1) analyze the market competition environment

(2) analysis of the main factors of the partner

(3) criteria for establishing partnerships: cost minimization, agility, risk minimization principles

(4) evaluation and selection of partners: basic qualifications, credit status, market technical capabilities, etc

(5) establish and implement partnerships


5. key points for the approval and signing of strategic cooperation agreements:

(1) draft strategic cooperation agreements. for bidding projects, the cooperation agreement shall not be later than the time of bidding, and for non-bidding projects, the cooperation agreement shall not be later than the time of contract negotiation or signing.

(2) the approval of the enterprise leader is signed.

(3) all cooperation agreements regulate the activities of the partners before the signing of the contract for the projects they are involved in.

(4) after the enterprise signs a contract with the end customer, the partner signs the corresponding outsourcing contract according to the cooperation agreement.


6. two aspects of supply chain partnership management:

(1) establish a trust supervision mechanism:

1) examine the supplier's past performance and goodwill

2) the supplier passes third-party certification

3) establish long-term strategic cooperative relationship

4) the change of business philosophy

5) the government actively participates in and creates a good economic environment

(2) incentive mechanism of partners


7. key points to avoid partnership failure:

(1) commitment of senior management

(2) strict supplier selection process

(3) continuous efforts to improve

(4) the goal is the same

(5) partnership support systems and documents

(6) win-win opportunities

(7) extensive communication and sharing of information

(8) build trust

(9) resource concessions

(10) internal education

(11) the ability to maintain alliances and partnerships


8. the project procurement management process includes 4 processes:

(1) planning procurement management (planning group). prepare a procurement management plan and stipulate how to do a good job in procurement management.

(2) implementation procurement (execution group). publish procurement parties, obtain corresponding quotations, bids or proposals, select suppliers, and sign procurement contracts.

(3) control procurement (monitoring group). monitor the execution of contracts and implement changes and take corrective actions as needed.

(4) end of purchase (end group). complete a single purchase process.


9. detailed steps of project procurement management process:

(1) demand determination and procurement plan formulation

(2) supplier search and analysis

(3) pricing: competitive quotations and negotiations

(4) draw up and issue orders

(5) order tracking and follow-up

(6) inspection and receipt

(7) invoicing and payment of goods

(8) record management


10. competitive quotation of purchase pricing is applicable to:

(1) the purchase volume is large enough to be worthy of competitive quotation

(2) the supplier is well aware of the details and requirements and has the ability to accurately estimate the cost required for production

(3) competitive market environment, i.e. there are enough qualified competitors

(4) the buyer only issues bids to suppliers who are technically qualified, and suppliers who are willing to cooperate make quotations

(5) the buyer does not have a priority supplier


11. purchase pricing negotiation applies to:

(1) when none of the criteria for the foregoing competitive offer exist

(2) when morality requires that many performance factors must be consistent

(3) when the buyer asks for the early involvement of the supplier

(4) when it takes a long time for the supplier to develop and produce items purchased by the purchaser


The selection and management of supply chain partners is a dynamic process, in today's rapidly changing form of the market, internet-based management is efficient, the selection and management of partners can only be combined with reality, and the long-term win-win interest model of both sides can be played.

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