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World Class Procurement Definitions A forum for defining key terms / definitions as it applies to World Class Procurement and Supply Chain Management

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  #1  
Old 06-06-2007, 08:22 AM
Procurementtips Member
 
Join Date: May 2007
Oman
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Lamia is on a distinguished road
Default Improving Procurement to ensure Project Delivery

Hi,

I'm looking for info/tips/ideas on how companies can improve their Strategic Procurement to ensure project delivery. I'm particularly looking into the energy sector, where long-lead procurement items delays cause projects to slip, which then hits the company profit due to unavailibility of (in my case) wells on time to produce oil.

How do you manage this, in todays construction boom and unavailibility of these items, even if you're willing to pay more?

And are any other industries facing this same issue?

Thanks in advance, once I'm done with my research i'm happy to share it here too.
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  #2  
Old 06-07-2007, 02:50 AM
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Join Date: Oct 2005
Australia
Posts: 42
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Default Re: Improving Procurement to ensure Project Delivery

Hi Lamia

To address this issue you will need to look at project management skills accross the supply chain, from your supplier's supplier through to your customer.

Procurement can not 'solve" this problem alone, but need to create and manage cross functional teams to both specify contract terms and manage the delivery of the project.

You will need to have visibility accross the supply chain and be able to manage changes before it become an issue. How this will be done need to be planned and agreed as part of the supplier selection process and be specified in the contract.

You should also develop and include a formal communication plan for the project. This should go beyond sales talking to procurement, and include engineers, construction, logistcs etc. as needed.

You should also include finance to look at Supply Chain Finance options. ( there can be another saving that procurement can claim).

Lastly, share the risk. Incorrect delivery create cost for your company, so specify how the supplier will cary all or some of this. However, your company can also be reponsible for creating unplanned cost for your suppliers, so include how you will address that as well.

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