Wk 5 Team - Procurement and Risk Management

August 10, 2020

Professor Pamela Hill

Procurement and Risk Management

The following report discusses the procurement management process in alignment with risk management, as outlined by Learning Team 4 and their collaborative impression of the lessons learned while attending this course. The intent of this outline is to discuss prior procurement management knowledge, real-world examples thereof, along with learned tools and techniques and their usage within a real-world example.

Risk and Procurement Management Tools and Techniques Experience

Collectively, most of the team members have never been in a project management role, but, see it as a career goal. Most members have been involved in the project process, serving team roles such as executive assistant. An executive assistant works directly with the project manager, remaining active within the management of procurement itself.

Typically, an executive assistant is responsible for ordering and maintaining supplies, the issue of SOW, and the processing of invoices. The executive assistant can also be involved with various risk assessment situations, working alongside members within the operational risk department.

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Real World Project Management Examples

In project management, the procurement process is regularly used and if performed well, will prove to be a contributing factor in the project success. An example of procurement can be taken from a construction project. Within the procurement process, the project requirements will be assessed, which would include expected deliverables within an expected timeline. Once this information is obtained, the availability of resources and material will be determined.

For resources needed from an outside vendor, the procurement team shall qualify the available external resources to find which may be the most suitable. Through negotiations with the vendor, all the while referring to the risk assessment, contracts will be created and executed, each carrying terms and conditions for the buyer and seller to adhere to.

Upon full performance and delivery of the project, the procurement process would then initiate a closing process. The closing process would be executed so that the assurance of all deliverables produced, and all invoices submitted and paid so that no further obligations exist within the verbiage of each contract. The overall Procurement process for the construction company would end with the project itself, with documentation delivered to the client reviewing the lifecycle of the project processes along with lessons learned.

Tools and Techniques Learned While Taking this Course

During this course, a lot was learned about procurement, especially when in alignment with risk management. The course also emphasized the importance of a procurement strategy plan which carefully analyzes risks associated with the project.

The team recognized two valuable tasks that showed evidence of being utilized within the project setting in the future:

· Procurement Evaluation – The evaluation of procurements finds the project manager performing a make or buy analysis, purchasing as compared to leasing evaluations, and whether to use internal or external resources.

A real-world example of procurement evaluation can be taken from the processing industry, and the project determination of how to produce a necessary part needed for a mission-critical process. This scenario would see the evaluation of the availability of the part produced and delivered from an exterior source, as compared to the in-house resource and material availability for the organization to produce it themselves.

· Strategic Purchasing – Strategic purchasing fins the project manager determining the acquisition of resources through the analysis of quality, capability, cost, and availability.

The processing industry offers a real-world example in terms of strategic purchasing, as well. In evaluation of the project, the project manager finds that a filter material can be purchased at a lesser cost if bought in bulk. Though the filter material is not used on a day to day basis, this evaluation finds the project requiring an excessive amount before completion. This leads to further evaluation by the project manager, who finds that although it appears as a major purchase now, the cost savings of buying bulk along with storage costs is much less than only bought when needed.

Conclusion

The value of a properly executed procurement management process has become strongly evident amongst the team, resulting in a broader knowledge as to project activities when aligned with risk management. Throughout this course, a common theme of success was projected through the repeated task of breaking the procurement process into much smaller, more manageable ones. With this project environment mindset, it is expected the members of this team should have a promising career within the project management field.