Procurement Management Plan as a Part of Essay

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Procurement Management Plan

As a part of its building renovation decision, the company aims to procure shrubbery, decorative bricks, and railroad ties for the building open space. The procurement activity has been assigned to the project manager who is quite unfamiliar with the purchase. After preliminary planning and market analysis, the project manager has to procure the shrubbery, bricks, and ties in the required quantity and quality at the best possible price.

The Company's Management also wants to ensure that this procurement process supports the success of the whole project. Therefore, it has asked the project manager to assess different aspects of the procurement process to build a comprehensive project procurement management plan. This plan will take into account the estimation of quantity and costs of different types of shrubbery, bricks, and ties that will be procured for this particular project; the timeline for procurement; the issues which may affect the procurement; and the way it will support the whole project process.

Items to be procured in the Project and Budgeting for each Procurement

The items required for this project can be divided into three major categories:

a. Shrubbery

b. Decorative Bricks

c. Railroad Ties

The following table shows an initial market analysis for all major types of shrubbery, decorative bricks, and railroad ties which can be considered for final selection by the project manager. The analysis includes types and estimated cost of shrubbery, decorative bricks, and railroad ties which can be used to make final procurement decision.

Sr. No.

Item Description

Required Quantity and Estimated price ($)

A

Shrubbery

1

Double Knockout Rose

200 Pieces at $40 each

2

Frost Proof Gardenia

100 Pieces at $35 each

3

Double Pink Knockout

50 Pieces at $25 each

4

Fragrant Tea Olive

100 Pieces at $30 each

5

Sunny Knockout Rose

200 Pieces at $25 each

6

White Out Rose

100 Pieces at $35 each

7

Encore Azalea

200 Pieces at $30 each

8

Endless Summer Hydrangea

100 Pieces at $20 each

9

Dwarf Radicans Gardenia

100 Pieces at $30 each

10

Heavenly Bamboo Nandina

150 Pieces at $20 each

11

Red Rhododendron

100 Pieces at $30 each

12

Black Knight Butterfly Bush

100 Pieces at $35 each

13

Gold Forsythia

100 Pieces at $35 each

14

American Boxwood

50 Pieces at $40 each

15

Fire Power Nandina

100 Pieces at $30 each

B

Decorative Bricks

1

Lapis Bricks

3,000 Pieces at $1 each

2

Obsidian Bricks

2,000 Pieces at $0.90 each

3

Glowstone Bricks

4,000 Pieces at $0.85 each

4

Paved Stone Bricks

3,000 Pieces at $1.25 each

5

Rough Surface Bricks

4,000 Pieces at $0.85 each

6

Shine Surface Bricks

2,000 Pieces at $0.90 each

7

White Stone Bricks

4,000 Pieces at $1 each

8

Imperial Bricks

2,000 Pieces at $1.2 each

C

Railroad Ties

1

Wall railroad tie (6" x 8" x 8')

50 Pieces at $12 each

2

Wall railroad tie (7" x 9" x 8')

50 Pieces at $15 each

3

Relay Grade (10' - 16')

40 Pieces at $15 each

4

Landscape railroad tie (6" x 8" x 8')

50 Pieces at $10 each

5

Creosote-Treated Railroad Tie (7" x 9" x 8')

75 Pieces at $12 each

On the basis of above market analysis, the project manager can choose the following items for the building space. The total procurement will cost around $42,350 to the company excluding the pre-feasibility study and initial market analysis costs.

Sr. No.

Item Description

Required Quantity and Estimated price ($)

Cost ($)

A

Shrubbery

1

Double Knockout Rose

200 Pieces at $40 each

8,000

2

Double Pink Knockout

50 Pieces at $25 each

1,250

3

Fragrant Tea Olive

100 Pieces at $30 each

3,000

4

White Out Rose

100 Pieces at $35 each

2,500

5

Dwarf Radicans Gardenia

100 Pieces at $30 each

3,000

6

Red Rhododendron

100 Pieces at $30 each

3,000

7

Gold Forsythia

100 Pieces at $35 each

3,500

Total

24,250

B

Decorative Bricks

1

Lapis Bricks

3,000 Pieces at $1 each

3,000

2

Glowstone Bricks

4,000 Pieces at $0.85 each

3,400

3

Paved Stone Bricks

3,000 Pieces at $1.25 each

3,750

4

Shine Surface Bricks

2,000 Pieces at $0.90 each

1,800

5

White Stone Bricks

4,000 Pieces at $1 each

4,000

Total

15,950

C

Railroad Ties

1

Wall railroad tie (7" x 9" x 8')

50 Pieces at $15 each

2

Landscape railroad tie (6" x 8" x 8')

50 Pieces at $10 each

3

Creosote-Treated Tie (7" x 9" x 8')

75 Pieces at $12 each

Total

2,150

Grand Total

42,350

Timeline for Procurements

Days

Day 1

Day 2

Day 3

Day 4

Day 5

Day 6

Day 7

Day 8

Day 9

Day 10

Day 11

Day 12

Day 13

Day 14

Week 1

Week 2

Activities

Pre-feasibility study

Initial Market Research

Suppliers' evaluation for Shrubbery

Purchase of Shrubbery

Suppliers' evaluation for Decorative Bricks

Purchase of Decorative Bricks

Suppliers' evaluation for Railroad Ties

Purchase of Railroad Ties

Start of the Project

The procurement process will start with the pre-feasibility study and initial market analysis. This analysis will help the company in procuring the required quality and quantity of shrubbery, decorative bricks, and railroad ties for the building open space at the best possible rates. After this analysis, the company will actually purchase these items. The evaluation of suppliers will be the next step in procurement process. The company will have to conduct market analysis to find the most reliable suppliers from the industry that are offering the required quality of these items at the most competitive rates. All these procurements will spread over a period of 2 weeks (including the purchase of shrubbery, decorative bricks, and railroad ties).

Issues that may affect procurements

The procurement process is one of the most critical phases in the whole project due to the dependence of all prior and post purchase activities on the quality, quantity, and budgeting of the required material (Carter, Carter, Monczka, Slaight, & Swan, 2000). Thus, the success or failure of a project is largely dependent on the effective procurement process. This section discusses a number of issues which may affect these procurements in one way or another.

i. Identification of the Project Needs:

The project management team is primarily responsible to identify the exact quantity and quality of shrubbery, decorative bricks, and railroad ties for the company. Therefore, understatement or overstatement of required items can cause in wastage of money while keeping the project needs unfulfilled. These issues will happen if the project management team will not effectively coordinate with the Company's Management or fail to estimate the specifications accurately. Wrong identification of project needs can also result in a delay in decision making, initiation of the project and its subsequent activities, and high additional expenses for tendering for the second time (Lambert & Cooper, 2000).

If the project needs are not effectively identified, it can take part from the financial resources for future projects. As a result, the company has to postpone its future projects or cut off the least preferred project activities. Moreover, it disturbs the whole timeline for current and future project activities (Monczka, 2009).

ii. Selection of the Shrubbery, Decorative Bricks, and Railroad Ties:

The project management team also has to ensure that the shrubbery, decorative bricks, and railroad ties that are being purchased are of required quality and specifications. Otherwise, it results in wastage of time and money. For instance, if the products are purchased which are poor in quality or do not meet the exact project requirements, the company will not be able to undertake the different project phases in an effective way.

iii. Supplier Evaluation:

Another important issue in the project procurement process is the selection of reliable suppliers from the industry. In order to ensure the success of procurement process and ultimately the whole project, the company will have to ensure that the shrubbery, decorative bricks, and railroad ties are purchased from the suppliers that have a sound track record and strong public image (Lambert & Cooper, 2000). These suppliers will provide the highest quality of these products to the company which is vital for an effective completion of the project (Pooler, Pooler, & Farney, 2004). In contrast, if the company purchases its material and products from unknown suppliers, there are more chances of financial fraud, misrepresentation, or purchase of non-genuine products (Carter, Carter, Monczka, Slaight, & Swan, 2000).

How Procurement Management will support the Project Process?

The procurement management constitutes all the activities from the initial market analysis to the supplier evaluation, and finally, the purchase of shrubbery, decorative bricks, and railroad ties. An effective procurement management will help the company in ensuring that its project is being carried out according to the set objectives and purposes (Wisner & Tan, 2000). For example, by conducting a full-fledged market analysis and pre-feasibility study, the company will be able to access the most potential markets where these items are available at the most reasonable prices (Baily, 2010).

The procurement of shrubbery, decorative bricks,…[continue]

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