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Topics: Governance, Manufacturing, Procurement Management
Project procurement
On a large manufacturing project. Where all items are bought from outside. So there is a big list of items to buy.
There is a separate procurement department in a company but they don’t have enough people for project procurement so project manager says I will do the complete procurement of project.
Here this is functional organization and no one reports to project manager in a company. And project manager is neither user nor service provider in a company.
Most decisions made are by functional heads.
Note: project is already behind and forecasted to be above budget.

My question is project manager is doing right thing or wrong? What should be procurement strategy?
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There is no project procurement. There is procurement and the project will add the activities related to procurement. No more than that. Is the procurement department is saying that they will not perform the activities which are the reason of their existence inside a company then you have to put it clear with all the stakeholders, raise a risk/issue and to scale it to project steering committee.
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1 reply by KEYULKUMAR DAVE
Mar 05, 2019 2:47 PM
KEYULKUMAR DAVE
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This will surely helps
The PM means well, but I would consider that an unacceptable solution. It is unsustainable from a division of labor perspective, may introduce other issues such as labor contracts and cost accounting, and the effort consumed by managing procurement is time that cannot be spent managing projects. On a large manufacturing project, it usually requires many procurement agents, not just one.

The PM should elevate the problem as a resource constraint issue. Either additional resources are required, or more efficient processes and tools are required, but a PM can’t just do the jobs of every functional organization that lacks resources.
I have been in nearly the exact same situation as the one you’re describing. When an organization permits a critical department like Procurement to tell departments that depend on it that it can’t do its job, the organization’s leadership isn’t likely to respond to a PM’s complaints about that department. I’m guessing that even if your PM were to elevate the procurement issue to the Sponsor he or she would just be told to get the job done anyway, particularly because your PM appears to have no power within the organization.
You should do the procurement for the project - consider this as a chance to boost your skills by getting some hands-on procurement experience.
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1 reply by Keith Novak
Mar 05, 2019 1:12 PM
Keith Novak
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While that might be feasible in some cases, in a large scale manufacturing project, that could be one person trying to do the work of dozens of procurement specialists.
Seems like a very dysfunctional organization. The company needs to determine project priority and establish a project governance which should detail the roles and responsibilities. Without that, the project is doomed to fail.
Mar 05, 2019 12:18 PM
Replying to Eric Simms
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I have been in nearly the exact same situation as the one you’re describing. When an organization permits a critical department like Procurement to tell departments that depend on it that it can’t do its job, the organization’s leadership isn’t likely to respond to a PM’s complaints about that department. I’m guessing that even if your PM were to elevate the procurement issue to the Sponsor he or she would just be told to get the job done anyway, particularly because your PM appears to have no power within the organization.
You should do the procurement for the project - consider this as a chance to boost your skills by getting some hands-on procurement experience.
While that might be feasible in some cases, in a large scale manufacturing project, that could be one person trying to do the work of dozens of procurement specialists.
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1 reply by Eric Simms
Mar 05, 2019 5:22 PM
Eric Simms
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True. However, this project is already experiencing problems that in addition to the procurement issue pretty much guarantee its failure, so the best Keyulkumar can do is to salvage some useful procurement experience from this fiasco.
Mar 05, 2019 10:30 AM
Replying to Sergio Luis Conte
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There is no project procurement. There is procurement and the project will add the activities related to procurement. No more than that. Is the procurement department is saying that they will not perform the activities which are the reason of their existence inside a company then you have to put it clear with all the stakeholders, raise a risk/issue and to scale it to project steering committee.
This will surely helps
I am not the project manager for the project but I have been give responsibility to help PM if required. As I am looking for small projects within organization. I agree that PM might want some boost in career so he trying everything. But it doesn’t help project then it has very high risk.
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1 reply by Sergio Luis Conte
Mar 06, 2019 4:34 AM
Sergio Luis Conte
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It could be important to show that person the risk he is creating on the project. It could be the situation where after you and the PM meet the procurement area everybody agree on the procurement area will not perform procurement activities into the project but they will guide on all related to procurement. If that is the situation (I was in this type of situations) then my recommendation is put this on the table, inform to all the stakeholders, raise a risk/issue, and be sure that the procurement area will say "GO" to deliverable and activities.
Mar 05, 2019 1:12 PM
Replying to Keith Novak
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While that might be feasible in some cases, in a large scale manufacturing project, that could be one person trying to do the work of dozens of procurement specialists.
True. However, this project is already experiencing problems that in addition to the procurement issue pretty much guarantee its failure, so the best Keyulkumar can do is to salvage some useful procurement experience from this fiasco.
In your case, I think the man who manages project does not have enough authority to be called as project manager; he is a Project Expediter or may be a Project Coordinator. The project is organized and carried out in a weak matrix structure. Because of that and for it has a separate procurement department so you should not do procurement by yourself; you do not have authority to do that. As Sergio mentioned above, you should raise risk/issue to Board of Steering Committee to get help and actively plan to accept risk of having procured items late in your plan by adding more buffer time for items to be procured. But as you described, I think the organization culture should be changed, it does not support doing projects.
Get onto the sponsor and fast.
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