Managing Procurement and Suppliers for Project Managers
- Category: PDU Ideas
Properly managing the procurement process and your supply chain is extremely important for Project Managers. A lot of factors can go wrong with time delays, poor quality products, mishandled or lost shipments. Delays and inferior products can be costly and potentially hamper your project and negatively impact your contract, as well as your reputation with your clients. Below are 10 key points to implement with all your projects to minimize procurement problems.
1. When sourcing suppliers and materials, carefully include all the technical requirements outlined in the main contract with your client. This will ensure that you are procuring the correct materials and the project will satisfy your client’s needs.
2. Transfer the risks for delays and for missing performance to suppliers, especially if they are part of your main contract with your client. It is important that they are held responsible for their part in the process and will work to guarantee you the service and performance you require.
3. Define an escalation process with the supplier’s management (and stipulated within the Purchase Order) in case the supplier’s staff does not follow the original plan. This will help to mitigate any problems quickly and get the results you demand.
4. Request a time schedule from the suppliers and do a sanity check on how they will be achieving your project goals and objectives. Proactively keeping everything on schedule and on task will guarantee minimal problems and alert you to any potential setbacks.
5. Define precise delivery dates for components as well as document submittals, and identify them on the supplier Gantt chart. Clearly establishing defined dates will help to keep everyone working on a schedule and reduce the chance of conflicts or mix-ups.
6. Define a detailed closure process within the Statement of Work (SOW) including the document submittals, user manuals, as-built drawings, etc. Clear instructions and documentation will increase the overall communication process minimizing potential errors or omissions.
7. Use Project Management applications and set up weekly or bi-weekly calls with the suppliers to monitor the progress. Today, there are numerous computer software and mobile apps connecting project stakeholders. Keeping close and consistent communication channels open help to establish excellent working relationships and allows to be easily aware of the ongoing status of the orders and quickly remedy any issues before they become a problem or impact the project.
8. Request monthly progress reports from suppliers and compare with the time schedule that they provided at the beginning. This will guarantee that the suppliers continue to meet your requirements and are being held accountable.
9. Do not hesitate to escalate the issues if you start to see any delays. It is best to be proactive and nip it in the bud, so to speak. A project becomes one year late one day at a time!
10. Make sure your suppliers keep track of their “Lessons Learned” in order to take advantage of the learning curve savings on multi-unit projects or on your future contracts. Continuous improvement is important to everyone within the process. If the suppliers want to be included for future projects, it is to their benefit and yours to be cognizant of all the components learned within the project and incorporating them again for you.
Following these guidelines will assist you as the Project Manager in achieving the most out of your supplier relationships. Often, the performance of your supplier will reflect on the performance of your project. Therefore, it is critical that you manage your supplier’s performance carefully, to ensure that they produce deliverables which meet your expectations, and that you get the maximum value from them.