Procurement Management

PRM 09:00

Overview

What is this chapter about?

Procurement management is the structured process of selecting the most cost-effective or otherwise economically advantageous supplier. The resulting contract is executed during the project and managed throughout the project life cycle and, where applicable, beyond completion.

To whom is this chapter primarily addressed?

This chapter is particularly relevant for members of the procurement team, including a procurement specialist, a project manager, application and solution specialists, a buyer’s representative, a documentation manager, and a critical analyst.

What is the significance of the process discussed in this chapter?

The purchaser expects deliveries that meet defined requirements. Supplier selec-tion must follow the procurement procedure, comply with applicable law, and be justified and documented.

How does the process work in practice?

The basic steps are planning, developing requirements, publishing the purchase intention, selecting a supplier, placing an order, and executing the contract. Planning is similar to the P&S process and includes defining roles, schedule, make-or-buy decisions, and the procurement procedure.

What are the main challenges?

Effective planning and a competent team are essential. Functional technical specifications facilitate evaluation and reduce complaints but require sufficient preparation time. Preparing the procurement process and involving stakeholders is time-consuming. A balance is required between evaluation effort and team workload.

What are the key success factors in this process?

Realistic planning is essential. Selecting the right supplier may take months but will deliver long-term benefits. Establishing a competent procurement team and securing stakeholder approval for the technical specifications and the procurement process are critical. The supplier should be regarded as a future partner, not an adversary.

Goal

Procurement Management aims to ensure that goods and services required by the project are obtained in a timely, compliant, and economically advantageous man-ner. This is achieved by planning and executing procurement activities, selecting suitable suppliers through structured procedures, and managing contracts so that project requirements, legal obligations, and stakeholder expectations are met.

Process

If a new order is planned or an existing order is changed, the process starts with the Procurement Planning sub-process. A supplier is then selected and a contract is concluded. New problems, change requests, or newly gained experience trigger the relevant project management processes.

Lecture notes

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