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Project Procurement Management: planning, executing and controlling

25 March 2022

Project procurement management (procurement); if you google it, you are actually presented with a string of training courses. That indicates that it is a specialist area within project management. Perhaps it is one of the most crucial parts. Because you are already 1-0 behind when the supplies are not in time to execute the project.

Within Perfact there are several colleagues who focus on procurement management of materials for complex projects in the industry, especially for the so-called Turnarounds or maintenance stops. The run-up to and preparation for a Turnaround is often long, but once it starts the materials must also be on site so that the ‘stop’ of the factory in question does not last unnecessarily long. Herein lies the challenge and especially at this time, where materials are becoming less readily available.

Monitoring processes

Within procurement management, it is broadly about these key processes, which the buyer needs to follow within the project.
1. Plan
2. Execute
3. Control

Planning comes in different forms. An inventory must be made of the materials needed, but this part of the Project Management Plan also establishes the procedures for requesting quotes and sets the decision-making criteria. Potential and preferred suppliers are also defined.

“At the client we work for, two types of roles have been created within Procurement, a Material Coordinator and an Operational Buyer. We work closely together and the input I provide is the basis of what my colleagues are procuring on,” indicates Richard Waterval, Material Coordinator at Perfact. “Together with the Work Planners and Mechanical Engineers, we take stock of what materials are needed to carry out the project. Then I look at and assess these needs and check how they should be delivered. This includes checking the stock in the warehouse, ongoing revision, third party deliveries or new purchase. We always try to bundle the new purchase as well as possible,” Richard continues.

Once the inventory has been made of what needs to be purchased, the requirements are read into the system. Each item is given a specific number so that it can be easily traced at another time. From this moment on, the Operational Purchasing Officer can get to work.

Control is key

“As an Operational Purchaser, before I have made the order, I get to work on converting that need. I check whether these are contracted items, request quotations, check delivery times, compare prices and delivery conditions. All this together ultimately yields the right supplier,” indicates Petra Wehrens, Operational Purchasing Manager at Perfact. For a Turnaround it is very important that materials arrive on time. Regarding Long Delivery Items, materials with a long delivery time, ordering these items on time is very important. We are extra alert to this,” continues Petra.

Delivery time is the common thread within procurement management. That’s why it’s important to keep following up on orders. Are the orders confirmed? Are they arriving at the warehouse on time? “As soon as the articles arrive at the warehouse they are also inspected, as they have to comply with certain regulations. If an article is rejected, it goes back to the Material Coordinator, in this case Richard. He then assesses together with the Mechanical Engineer or Planner whether the material can still be used or whether a new one must be purchased,” Petra continues.

It is important to keep track of which materials are available by means of a certain report, so that there is a good overview of the progress and what is already present. “The more a Turnaround approaches, the fewer items may still come in, everything must be present at the time of the start of the project, otherwise the project is unnecessarily delayed,” Petra says. “That control remains hugely important and with it also the timely escalation when it threatens to fail, so that we can look at possible alternatives.”

Like top sport

It’s a long run-up to a Turnaround, compare it to training for the Olympics. “The first week of a Turnaround is often exciting. During this week the parts of a factory are dismantled, which often reveals which parts no longer meet the requirements and therefore need to be replaced. Through experience you can take this into account to a certain extent, but partly due to budget not everything. So, it can happen that the right materials are not available,” says Richard. “Fortunately, this often works out well, partly because the entire team that is important in the procurement process is present at the time of the Turnaround, and this allows quick switching,” says Petra.

A Turnaround is only completed when it receives the status ‘Mechanical Complete’ and is transferred back to the operational department. For a Material Coordinator and Operational Purchaser, it doesn’t stop there. Remaining materials must be cleared and sorted, some can go to the warehouse, some items must be returned. The Operational Purchasing Officer checks that there are no outstanding deliveries and inspections and that all invoices are paid and dealt with. Only when these activities are completed is the project for the Procurement department also closed and the next project is already waiting.

“The great thing about working in projects and especially in Turnarounds is that you have a long preparation process but once the project takes place, you really have to be there, and everything has to be right. Only then can you go for gold together,” indicates Richard. “It’s hectic for a couple of works, but if everything goes as you planned, that really gives you a kick”, concludes Petra.

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