Optimize Your Project Procurement Management in Just 5 Steps
Many elements need to align perfectly to bring projects to a fruitful closure — each piece has its unique role and importance in building the whole picture.
Some of those pieces may come from external sources, and obtaining them requires special focus and attention to detail.?
This is known as project procurement management — purchasing or renting products and services necessary for a project from outside your organization.
From vendor selection to ensuring timely delivery, project procurement can cause some stress — but we’ll show you how to transform it into a smooth and cost-effective process in just 5 steps.
*This article is the abridged, adapted version of the blog post originally published on the Plaky blog: https://plaky.com/blog/project-procurement-management/
5 steps for optimized project procurement management
The procurement process must be approached strategically to ensure favorable results and transparency. Here’s how to do it in 5 simple steps.
1. Define needs, budget, and timeline
First, you need a list of goods and services necessary for the project, such as:
You should involve relevant stakeholders in the planning of procurement activities since their needs and expectations are closely linked with the vision of project success. Moreover, look at your project timeline to set reasonable deadlines within the project procurement management plan.
Finally, determine the procurement budget, considering both direct costs (e.g., purchase price, shipping) and indirect costs (e.g., storage, maintenance).
2. Establish supplier selection criteria and launch a call
Once you have the procurement list, define the supplier selection criteria — matters such as:
Then, launch an Invitation to Bid (ITB) — a document prompting suppliers to submit their best price for delivering exactly what’s requested. The goal is to find the lowest-cost supplier without compromising the quality of resources.
Alternatively, companies can issue a Request for Proposal (RFP), a broader document asking for proposed solutions, methodologies, and pricing structures. This is more suitable when the requirements are not fully defined or when you’re in need of innovative solutions.
Whichever you choose, use precise selection criteria and ITB/RFP documents. This way, the project procurement management process will be efficient and transparent.
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3. Review bids and select a supplier
After closing the bid call, it’s time to assess the vendors and their offers by:
If needed, narrow down the selection first and ask the top vendors for additional information. By removing less qualified options, you prevent decision overwhelm and reduce the risk of selecting an inadequate supplier.
4. Monitor the provider’s performance
Controlling procurement implementation primarily involves getting regular progress/status updates from vendors and performing quality checks of goods and services delivered.
It can be useful to visualize some of this data, improving information visibility and pattern identification.?
For instance, specialized Gantt chart software can offer a visual representation of task duration and order, deadlines, overlaps, and more. This kind of bird’s eye view provides a simplified yet comprehensive perspective that makes even the more complex projects digestible.
Another important aspect of procurement monitoring is fostering open communication with the vendor. This will encourage them to report potential issues so that you can collaborate on solutions.
5. Close the procurement process
Closing procurement activities is the final step — it’s when you confirm that contract requirements have been met in line with the deal.
Make sure that all the invoices and other procurement-related documents are complete and archived according to your organizational policies and legal standards.
You also have to inform all relevant stakeholders, in addition to the core project team, that the procurement is officially closed. We suggest sharing a final procurement report to summarize everything.
Enjoy easy project procurement management with Plaky
Managing project procurement activities requires quite a lot of effort. However, when you break the process down as we showed you, you’ll see how easy it is? — especially if you let a powerful PM tool like Plaky help you.
Our centralized software solution is a lifesaver when managing procurements and other project activities since:
Eliminate stress and gain full control of your procurement process. Sign up for Plaky today!