How and why business procurement contributes to the success of a project or project-based organization
Project procurement helps to establish and maintain a relationship between the project and the potential suppliers throughout its lifecycle. It is part of the supply chain management and ensures that the project can source resources from outside. Procurement occurs in four major processes: in the planning process, the project procurement team identifies the resources to be sourced from outside the business, considering the project’s budget.
The project procurement team advertises for the commodities required for the projects’ fruition and invites other businesses to present offers, with details of quality, quantity, and efficiency of the supply chain of each commodity required. The team then ranks the bidders and selects the most affordable, efficient, and reliable supplier.
The project procurement team administers to ensure that the vendors’ relationships are well managed to ensure the project’s smooth running. Finally, the closing process involves ending the procurement contracts and performing audits on the review project (Moretto et al. 2020).
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Some procurement-related factors that support project success
To ensure the success of a project, the project procurement team can address the foundational technology required in the fruition of the project. Advancement in technology makes a project more cost-effective and increases its speed of delivery. This ensures that all departments responsible for the project have the resources they require on time while increasing their efficiency. Also, the adoption of strategic sourcing contributes to a project’s success that involves the reliance of the project on technology and ensuring efficiency in the procurement process (Moretto et al. 2020).
Procurement-related factors that lead to project failure
Low procurement that involves occurs due to the snowballing of several factors contributing to the project’s harmful running. This could be in the form of delayed payments to suppliers or late delivery of commodities, aspects that might affect the company’s image.
This calls for the adoption of strategic sourcing. The organization management’s failure to select the right leadership for project management leads to the procurement project’s poor performance. In addition to this, the lack of a firm foundation for the procurement process, for example, the early adaption of the transformational process, leads to confusion among the parties involved in the procurement process (Moretto et al. 2020).
Project Procurement Essay References
Moretto, A., Patrucco, A. S., Walker, H., & Ronchi, S. (2020). Procurement organisation in project-based setting: a multiple case study of engineer-to-order companies. Production Planning & Control, 1-16.