Project managementб purchasing and supply management

Name: University: Course: Tutor: Date: Research Paper Introduction There is a direct link between project management and purchasing and supply management as the later dictates the success of the former. Usually organizations are trying all they can to ensure that their supply chain is lean, effective and efficient. This can only be attained when project management concepts are successfully integrated to procurement, purchasing and supply management. It I worth noting that supply chain management is thought of as an active management of supply chain activities to take full advantage of customer value and realize a sustainable competitive advantage. Ideally the entire concept calls for firms to come up with better ways to effectively and efficiently manage supply chains. The major activities in supply covers issues relating to creation or development of a product, sourcing, production as well as logistics together with communication that facilitates coordination of the mentioned activities. On the other hand project management a project is a collection of tasks that is carried out by a team to meet an objective as defined by a sponsor (Luo, et al., 2009). It has a beginning and end date, a budget and risk. Every project is unique though all projects share one common characteristic which is the projection of ideas and activities into new endeavors. The unique characteristics include; clear objectives, task identification, sponsor(s), team, defined budget, risks identification and work schedule. For that matter project management is the application of knowledge, skills, items and techniques to project activities in order to meet or exceed stakeholder`s expectations. It has evolved to plan, coordinate and control the complex and diverse activities of modem industrial, commercial and management change and IT projects. All projects share one common characteristic - the projection of ideas and activities into new endeavors. The ever-present element of risk and uncertainty means that the events and tasks leading to completion can never be foretold with absolute accuracy (Meredith, Mantel & Samuel, 2008). The purpose of project management is to foresee or predict as many of the dangers and problems as possible and to plan, organize and control activities so that projects are completed successfully in spite of all the risks. This process should start well before any resource is committed, and must continue until all work is finished. A closely related to the two terms is procurement and it refers to obtaining goods and services outside the company. Successful and effective procurement, supply and chain management depends on fully understanding of the concept of project management. The research paper will critically look into procurement and contract management and the importance to the business world, RFP selection tools and how to improve the assessment of proposals, procurement planning and various strategies necessary for project success, how to select the most qualified vendor in a proposal, evaluation of the contract and the legal aspects of procurement in a project as well as comparisons of the critical elements of a contract. Procurement and contract management and the importance to the business world For businesses to succeed the concept of procurement and contract comes in handy. It is indeed a fact that there is no single firm that will have all the goods, services and resources within its jurisdiction. Thus it is important to source for the materials as well as services that will help such an organization to operate in an effective and successful manner. As noted previously procurement has been thought of as the process of acquiring goods and services at an affordable or best possible cost, in the right quality and quantity, at the opportune time as well as from the right source for the sole purpose of organization`s or individuals use through contracts. It is worth noting that procurement can be a repetitive activity or a one-time activity, or a long term relationship between the firm and its suppliers. Usually procurement entails purchasing goods either directly or indirectly. Procurement which entails direct purchases include those goods and services that are ordered regularly in huge quantities and are specific to a given business entity. These goods are responsible for the day-to-day running of the firm with the aim of producing their end products and services to be consumed by customers (Luo, et al., 2009). On the other hand, the indirect purchases include services and goods that are procured regularly but the quantity are relatively lower. It is worth noting that indirect purchases are used to support the production of the primary goods and services in a given firm. For instance during a construction of a road, an engineering firm will procure services to maintain as well as repair its equipment and other capital assets. Ideally procurement ensures that the business operations are not hitched hence the firm will meet its objectives of producing goods and services to their end users. Scholars have also shown that procurement when it is developed in a strategic manner helps an organization to cut down on costs. For instance instead of buying very expensive equipment, have a repair and maintained department among other which are very expensive to support, procuring gives such firms a lease of life since these goods and services can be obtained outside the firm at a relatively cheap price. It is from this advantage that organizations can utilize financial resources saved from such an activity to be used elsewhere. For instance such funds can be used to open up new subsidiaries or branches, improve on customer satisfaction, train and educate its staffs among other things. This ultimately leads to a successful organization in terms of revenue generation and profit realization (Benton, 2010). Additionally it has been argued that procurement process has the potential of helping a firm to uphold the principles of transparency and accountability for all its contracts. This will ultimately contribute to the firm to be seen by the public to be ethical hence gain more trust and loyalty from consumers of its goods and services (Meredith, Mantel & Samuel, 2008). On the same note it is important to state that the process of procurement helps in elevating the economy status of other firms as well as regions. For instance if a firm outsource raw materials from a given firm, the local community who produces such products gain economic wise by selling their raw materials. This can be exemplified by a road construction company buying red soils from the locals. Such money when invested properly can create job opportunities among other benefits. As suggested by Meredith, Mantel & Samuel, 2008 another important concepts to organization related to procurement is contract management. The term refers implementation as well as examining of an agreement entered between two or more firms with the ultimate aim of maximizing financial as well as operational performance while reducing the risks. This process entails tracking purchases based on the contract in order to ensure that the suppliers used are the desired ones; the rates are strictly followed while discounts and rebates are gathered. As such the concept is indeed important to businesses organizations. First it helps in standardizing processes as well as procedures. Through contract management it is possible that a firm will realize less cost, more value for their purchase as well as increase percentage agreed savings (Benton, 2010). This is attributed to the fact that there will be decline in maverick purchases, supply risks as well as increased spend leverage. It is also shown that contract management leads to a firm to realize better performance management as well as risk mitigation. For instance it ensures that a firm easily identifies and ensures delivery of contract benefits. Similarly it allows a firm to automatically examine as well as manage compliance as well as performance by coming up with supplier metrics which makes it possible for a proactive management of issues. On the same line of thinking, it is important to state that contract management to business organizations helps in automatically alerting them of contracts that need renewal and the same can be done automatically. Usually firms have several contracts and when it comes to renewal, there are cases where some of these contracts might be unnoticed which eventually locks the firm prom procuring goods and services that are essential in day-to-day running of the firm (Scheid, 2010). RFP selection tools and how to improve the assessment of proposals As stated previously businesses are a times compelled to seek services as well as products outside their jurisdiction. For this reason the concept of procurement comes in. however before going into procurement, there are a number of things that should be done and this include issues such as placing request for proposal, selection tools for the request for proposal, assessment of the proposal among others. It is worth noting that there are a number of RFP selection criteria or tools. Two major ones are price based and qualification based selection (Luo, et al., 2009). Qualification based selection is a fair as well as objective process where professional services are sought after. Ideally firms or communities are allowed to procure professional services purely on the grounds of a firm`s qualifications in relation to the project in question. This tool does not use money as or price as criteria instead it uses th...