Procurement Management
Procurement Management
Marketing 432
What is Procurement Management?
Today, different organizations employ various management techniques to carry out the efficient functioning of their departments. According to the Project Management Institute’s A Guide to the Project Management Body of Knowledge, “procurement management is the process required to acquire goods and services, to attain project scope, from outside the performing organization” (Ruskin, 1995). Procurement management is known to help an organization negotiate prices, save money when purchasing goods and services from outside and to attain the best quality resources for production processes.
All organizations deal with this form of management at some point during the life span of their businesses. Typically, smaller businesses do not usually have a department dedicated to procurement since they have much smaller business operations. Larger companies are able to purchase resources and inputs in large volume quantities which usually require a procurement management process.
Procurement Management Processes
The project procurement cycle reflects the procurement activities from the decision to purchase the material or service through to the payment of bills and closing of procurement contracts. The Project Management Institute’s PMBOK Guide breaks the procurement area into six distinct processes:
Plan Purchases and Acquisitions, in this process the technical teams typically develop a description of the work that will be outsourced.
Plan Contracting (also called Solicitation Planning) is the process of requesting a price and supporting information from bidders. The solicitation usually takes the form of an RFP (Request for Proposal).
Request Seller Responses, the bidder takes the RFP (Request for Proposal) and request formal proposals from sellers.
Select Sellers, the evaluation of bids in response to RFP includes the price and also an evaluation of the technical approach. The
Marketing 432
What is Procurement Management?
Today, different organizations employ various management techniques to carry out the efficient functioning of their departments. According to the Project Management Institute’s A Guide to the Project Management Body of Knowledge, “procurement management is the process required to acquire goods and services, to attain project scope, from outside the performing organization” (Ruskin, 1995). Procurement management is known to help an organization negotiate prices, save money when purchasing goods and services from outside and to attain the best quality resources for production processes.
All organizations deal with this form of management at some point during the life span of their businesses. Typically, smaller businesses do not usually have a department dedicated to procurement since they have much smaller business operations. Larger companies are able to purchase resources and inputs in large volume quantities which usually require a procurement management process.
Procurement Management Processes
The project procurement cycle reflects the procurement activities from the decision to purchase the material or service through to the payment of bills and closing of procurement contracts. The Project Management Institute’s PMBOK Guide breaks the procurement area into six distinct processes:
Plan Purchases and Acquisitions, in this process the technical teams typically develop a description of the work that will be outsourced.
Plan Contracting (also called Solicitation Planning) is the process of requesting a price and supporting information from bidders. The solicitation usually takes the form of an RFP (Request for Proposal).
Request Seller Responses, the bidder takes the RFP (Request for Proposal) and request formal proposals from sellers.
Select Sellers, the evaluation of bids in response to RFP includes the price and also an evaluation of the technical approach. The