Procurement Management

Materials Management

Describes the processes required to acquire goods and services from outside the performing organization. Discussed from the perspective of the buyer in the buyer-seller relationship

Materials Management

Planning
12.1.Plan Purchases & Acquisitions

Process
12.2. Plan Contracting

Group

First Process Is P.P

Procurement Steps
12.6. Contract Closure

12.3. Request Seller Responses

Closing
Process Group
12.5. Contract Administration 12.4. Select Sellers

Executing Process Group

Monitoring & Controlling Process Group

Materials Management

12.1. Plan Purchases & Acquisitions

12.2. Plan Contracting

Determining what to procure and when Documenting product requirements and identifying potential sources Obtaining quotations, bids, offers, or proposals

12.3. Request Seller Responses

Materials Management

12.4. Select Seller

Choosing from among potential buyers

12.5. Contract Administration

Managing the relationship with the seller

12.6. Contract Closeout

Completion and settlement of the contract, including resolution of any open issues

Materials Management

Input:

enterprise environmental factors organizational process assets project scope statement WBS risk register WBS dictionary risk-related contractual agreements PM plan
resource requirements project schedule activity cost estimate cost baseline
Materials Management 6

Tools/Techniques:
Make or Buy Analysis To determine if production is cost-effective for performing organization Expert Judgment Contract Type Selection

Materials Management

Output:
Procurement Management Plan Contract Statement of Work

Clear, complete, concise description of procurement item for prospective sellers to determine if they are capable of providing item
Make-or-buy decisions Requested changes

Materials Management

Input: - Procurement management plan

- Make or buy decisions - Contract Statement Of Work - Project management plan

risk register risk-related contractual agreements resource requirements project schedule activity cost estimate cost baseline
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Materials Management 9

Protocol Probing

Get to know each other

Each party identifies issues of concern Bargaining occurs, concessions are made Two positions summed up and final concessions made Both parties have identical understanding of agreements
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Scratch bargaining Closure

Agreement

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Input: Payment Request Tools/Techniques: Completing and settlement of contract, including resolutions of open items (audits) Output: Contract File

12.6. Contract Closure

Person/organization responsible for contract admin should provide seller with formal written notice that contract is complete

Materials Management

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It Is Not Always Economical For The Companies To Make All The Materials Used In Manufacturing. Some Items Are Procured From Others, And Some Are Produced In The Company.

Materials Management

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Some Reasons For Making: - Lower Production Cost - Unreliable Or Unsuitable Suppliers - Assure Adequate Supply (Quantity) - Utilize Surplus Labor Capacity - Obtain Desired Quality - Protect Special Design Or Quality

Materials Management

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