Evaluate specifications of procurement

Assessing the scope and function of goods and/or services to be procured is essential because it helps to identify the desired outcomes, objectives, and logistics of the procurement process. By assessing the scope and function, stakeholders can determine the best approach to procure goods and/or services that meet the required standards and specifications.

When assessing the scope and function of goods and/or services to be procured, several factors should be taken into consideration. These include the organisation's overall strategy, budget constraints, legal and regulatory requirements, quality and performance standards, and any environmental or social sustainability considerations.

Example

For example, let's consider a scenario where a company needs to procure a new fleet of vehicles for their delivery service. In assessing the scope and function of the vehicles, the company needs to consider their delivery needs, the terrain and weather conditions in the delivery areas, and any environmental regulations or standards for emissions.

The company would also need to consider their budget and financial constraints, as well as any legal and regulatory requirements related to vehicle safety and performance. Additionally, they may want to consider sustainability factors such as fuel efficiency or the use of electric vehicles.

Identifying the outcomes and objectives of the procurement is also crucial in ensuring that the procurement aligns with the organisation's overall strategy and goals. This could include objectives such as reducing delivery times, improving customer satisfaction, or reducing operational costs.

By taking all of these factors into consideration, the company can ensure that they are procuring goods or services that meet its specific needs and requirements, while also aligning with its broader organisational goals and values.

It is important to establish a procurement timeframe and develop a schedule for tender of goods and/or services for several reasons. First, having a well-planned procurement schedule ensures that the procurement process is conducted in a timely and efficient manner, reducing the risk of delays and cost overruns. Additionally, a well-planned schedule ensures that all necessary activities are completed within the specified time frame and that all stakeholders are aware of the timelines and deadlines.

To establish a procurement timeframe and develop a schedule for tender of goods and/or services, the following steps can be taken:

1. Determine the deadline for the procurement: Start by determining the deadline for the procurement and work backward to establish the timeline for each step of the process.
2. Identify the key activities: Identify the key activities that need to be completed during the procurement process, such as market research, drafting of procurement documents, and evaluation of proposals.
3. Assign timelines for each activity: Assign a specific timeline for each activity to ensure that all activities are completed on time.
4. Determine the procurement method: Determine the appropriate procurement method, such as open tender, selective tender, or direct procurement, and factor this into the procurement timeline.
5. Review and adjust the schedule: Review the schedule regularly to ensure that all activities are on track and adjust as necessary to ensure the procurement process stays on schedule.

By following these steps, a well-planned procurement schedule can be developed, which helps ensure that the procurement process is conducted in a timely and efficient manner.

A measurable output for procurement is a specific, quantifiable result that can be used to evaluate the success of the procurement process and its impact on the organisation. Examples of measurable outputs for procurement may include:

1. Cost savings: This can be measured by comparing the actual cost of procured goods or services with the estimated cost or the cost of previous procurement processes.
2. Vendor performance: This can be measured by evaluating the quality of the products or services provided by the vendor, their adherence to delivery schedules, and their ability to meet contractual obligations.
3. Contract compliance: This can be measured by assessing the extent to which vendors adhere to the terms and conditions of the procurement contract.
4. Timeliness: This can be measured by assessing the length of time it takes to complete the procurement process, from the initial planning stages to the final delivery of the goods or services.
5. Customer satisfaction: This can be measured by conducting surveys or feedback sessions with stakeholders to determine their level of satisfaction with the procurement process and the goods or services procured.

Measurable outputs should be clearly defined and measurable so that they can be evaluated objectively and used to improve future procurement processes.

How to create measurable outputs

Once the procurement scope and objectives have been defined, the next step is to create measurable outputs for desired contractual outcomes. Measurable outputs are specific and quantifiable targets that can be used to assess the success of the procurement process. They allow for clear communication between stakeholders and suppliers and provide a way to evaluate the effectiveness of the procurement process.

To create measurable outputs, follow these steps:

1. Define specific metrics for each objective. For example, if the objective is to reduce costs, the metric could be the percentage reduction in costs compared to the previous year.
2. Set targets for each metric. Targets should be realistic and achievable, but also challenging.
3. Establish a baseline for each metric. This will serve as a starting point for measuring progress and evaluating the effectiveness of the procurement process.

A bad example of not creating measurable outputs would be a procurement process that focuses solely on obtaining the lowest price without any consideration of quality or other factors. In this case, there are no specific metrics or targets for evaluating the success of the procurement process, and it may not lead to the desired outcomes. This can result in a situation where the procured goods or services are not fit for purpose, leading to additional costs to correct the situation or a lack of value for money.

Specifying resource requirements for procurement and identifying the stakeholders responsible for key procurement activities is important for several reasons.

Firstly, it helps to ensure that the procurement process runs smoothly and efficiently. By identifying the resources required, such as personnel, equipment, and budget, it becomes easier to plan and execute procurement activities. This helps to avoid delays or disruptions in the procurement process, which can have a negative impact on the overall project or organisation.

Secondly, specifying resource requirements and stakeholders responsible for key procurement activities can help to improve accountability and transparency. By clearly defining the roles and responsibilities of each stakeholder involved in the procurement process, it becomes easier to identify and address any issues or problems that may arise. This can help to prevent conflicts of interest, ensure compliance with regulations, and promote good governance.

Lastly, specifying resource requirements and stakeholders responsible for key procurement activities can help to promote effective communication and collaboration. By involving all stakeholders in the procurement process and clearly defining their roles and responsibilities, it becomes easier to coordinate procurement activities and ensure that everyone is working towards the same goals.

An example of a situation where failure to specify resource requirements and stakeholders responsible for key procurement activities can be seen in the case of the US government's healthcare.gov website launch in 2013. Due to poor planning and unclear communication among stakeholders, the website experienced numerous technical issues and delays, resulting in a negative impact on the overall procurement project. This highlights the importance of specifying resource requirements and stakeholder responsibilities in procurement to avoid similar issues in the future.

Think

ABC Company is planning to procure a new IT system for its operations. The project manager has been tasked with the procurement process and has identified the IT department as the main stakeholder for the project. However, the project manager did not specify the resource requirements and stakeholders responsible for the procurement activities. As a result, the procurement process has been delayed, and the project is over budget. The IT department is frustrated because they were not involved in the process, and the new system does not meet their needs.

Question: Why was it crucial for the project manager to specify the resource requirements and stakeholders responsible for the procurement activities in this scenario? What could the project manager have done differently to ensure a successful procurement process?