Introduction to Procurement Management PDF

Introduction to Procurement Management Dr. Ahmed Hammad, PhD, PEng, PMP 1  Introduction Please tell us: Your name Your degree Years of experience Languages you speak Hobbies & current loca...

Introduction to Procurement Management Dr. Ahmed Hammad, PhD, PEng, PMP 1  Introduction Please tell us: Your name Your degree Years of experience Languages you speak Hobbies & current location Now, myself: 25 years of project planning & control experience & 8 years in academia Arabic & English Reading, exercise, travelling, photography and chess… 2 Projects Stand to the Test of Time Egypt China Greece India 3 Projects Change the World 4  Course Description Three Modules: Date Sep.04 Week 1    Class Introductions & Review of Course Outline Module 1, Essentials of Project Procurement: Project Life Cycle Assignment  Procurement Sub-phases Essentials of Project  Procurement Management Systems 1. Sep. 11 2   Module 1, Essentials of Project Procurement: Project Financing Models (PFM) Submit Group Members &  Project Delivery Methods (PDM) Team Lead Procurement  Contractor Selection Procedures (CSP) Sep.18 3  Module 1, Essentials of Project Procurement:  Contract Definition & Contract Types  Management of Construction Materials Submit Project Plan  Future of Procurement 2. Contract Formation & Sep.25 4    Module 2, Contract Formation & Administration: Laws Impacting Construction Procurement Labor Relations & Agreements Achievement Test on Module 1 Submit Assignment 1  Risk Allocation & Liability Sharing Administration Oct.02 5  Module 2, Contract Formation & Administration:  Scope Definition & Other Bid Documents  Bid Clarifications & Bid Addenda (Tender Bulletins)  Bid / No Bid Decision  Technical & Commercial Bid Evaluation (TBE & CBE) 3. Conflicts, Claims & Oct.09 6    Module 2, Contract Formation & Administration: From Contract to Project Initiation Mobilization to Site & Working Permits  Responsibility for Safety on Site Alternative Dispute  Progress Measurements & Performance Evaluation Oct.16 7  Module 2, Contract Formation & Administration:  Payments & Holdbacks Submit the First 4  Contracts Management of Change (MOC) Sections of the Paper Resolution (ADR) Oct.23 8    Module 3, Conflicts, Claims & ADR: Negotiation Mediation Achievement Test on Module 2 Submit Assignment 2  Arbitration Oct.30 9  Module 3, Conflicts, Claims & ADR: Course Marking:  Guest Speaker: Owner Lessons-learned from Collaborative  Project Delivery (CPD) ADR Practice Nov.06 10  Module 3, Conflicts, Claims & ADR:  Guest Speaker: Lessons-learned from the RAM  Contract Closeout Mark Homework Assignments 15%   Site Demobilization & Contract Documentation Contractor Evaluation Distribution Achievement Tests 50%  Lessons-Learned & Knowledge Transfer Class Project 35% Nov.13 Nov.20 11 12  Reading week (No classes) Guest Speaker: Lessons-learned from Collaborative Achievement Test on ----------------------- --------- Project Delivery (CPD), a Contractor Point of View Module 3 Submit Assignment 3 Total 100% Nov.27 13  Projects Presentation and Papers Submission 5  Basic Definitions Project: is a series of Temporary related activities directed toward delivering Unique product / service Project Management: is the Art & Science of applying knowledge, skills, tools & techniques to attain project Objectives Projects are undertaken to Realize Benefits by: Organizations Individuals In order to achieve benefit realization, we need to have: Project to achieve Tactical Objective(s) Related projects are grouped into a Program to attain a Strategic Goal(s) Related programs are grouped into a Portfolio to accomplish our Vision 6  Benefit Realization Vision Portfolio Strategic Goals Program A Program B Program (n) Tactical Objectives Project A Project B Project (n) Work Package A Work Package B Work Package (n) 7  SMART Objectives https://www.hydratemarketing.com/hubfs/smart%20goals%20marketing%20hubspot%20inbound%202.png  Construction Project Types Residential & Infrastructure Industrial Commercial Housing Roads Onshore Conventional Oil Office Buildings Railroads Offshore & FPSOs Shopping Malls Bridges Oil Sands Educational Tunnels Liquid Natural Gas (LNG) Governmental Water & Wastewater Pipelines Towers Airports Conventional Power Plants Hospitals Ports Alternative Energy Plants Hotels Dams Chemical Process Plants Cultural Coastal Breakwaters Factories 9  Project Stakeholders Key Players in Construction (AEC): Owner (Public / Private / Joint-Venture) Owner Designer (Architects / Engineers) Constructor (Prime Contractor(s)) Designer (AE) Other Internal Stakeholders (have Contractual Relationships within the Project): Project Leadership Team (PLT) / Project Sponsors Constructor Project Management Teams (PMTs) Functional Managers (Department Heads) Working Trades / Labour Unions Vendors (Consultants, Subcontractors & Suppliers) Facility Operation & Maintenance (O&M) Financial Institutions (Banks / Insurance Comp.) External Stakeholders: End-user Government Agencies Non-governmental Organizations (NGOs) Traditional Media, Social Media & General Public 10  Matrix Organization Functional Managers Managers Project 11  Project Management Team Scope & Change Management Information & Communications 12  Project Management Institute PMI Project Management Institute (PMI), Project Management Body Of Knowledge (PMBOK), 2017 13  Project Management as a Process https://www.bestessayservices.com/blog/wp-content/uploads/2016/09/Utilization-of-Open-Systems-Theory-in-skilled-nursing-facility.jpg 14 15  Project Life Cycle As per PMI - PMBOK, 2017, each Project is temporary and unique, hence each project must have a definitive: Start date & Finish date and a project S-Curve Ability to influence projects is reduced with time, hence Procurement plays major role in each project 100% Complete 0% Complete 16  Project Life Cycle PMI - PMBOK, 2017 also states; project Resource levels go through slow Ramp-up, steady state and sharp Ramp-down Ahuja et al., 1994 has a similar diagram for Construction Construction Projects Contractor Point of View 17  Project Life Cycle Project Success is accomplished through the appropriate application and integration of these 5 Stages: 1. Initiation 2. Planning 3. Execution 4. Controlling 5. Closeout Construction Projects 3 Construction Projects 3 major Phases: major Resource Types: 1. Engineering 1. Labour 2. Procurement 2. Materials 3. Construction 3. Equipment 18  Construction Project Phases Conceptual Engineering Preliminary Engineering (FEED) Detailed Engineering & Design Production Planning Contract Formation (CF) 19 Ready For Construction (RFC) 20  Procurement Management Procurement is the process of obtaining: Goods via Purchase Orders (POs) Services via Contracts (sometimes called POs) Another name: Supply Chain Management (SCM) Procurement planning requirements: Agree on Procurement Strategy Develop Procurement Management Plan Build Procurement Team: Transfer from head office, other projects or new hires Contracts Language and Unit of Measure (UOM) Selection of Project Currencies Management of Escalation in long term projects Coordinate with Engineering, Planning & Construction 21  Major Procurement Decisions Selection of: Project Financing Model (PFM) Project Delivery Method (PDM) Contractor Selection Procedures (CSP) Contract Types Procurement Software Define Project Stakeholders Prequalification of Vendors Single vs. Multiple Contracts Buy vs. Rent: Equipment & Facilities Local vs. Global Risk Management Plan https://docucollab.com/wp- content/uploads/2020/03/What-are- Bidding vs. Long Term Agreements the-Top-5-Challenges-Facing-the- Procurement-Department-Today.png 22  Procurement Software Enterprise Resource Planning (ERP): Oracle SAP Maximo by IBM Dynamics by Microsoft Sage Infor M3 Specialty Software: 4castplus ProcureWare by Bentley Promena https://www.oracle.com/assets/c82-e-procurement-image-4004670.png Online Cloud-based procurement software is also called E-Procurement or E-Commerce 23 24  Building your House Location Budget Schedule Specifications PFM PDM Contractor Selection: Engineering Construction Permits Execution https://i2.wp.com/boingboing.net/wp- content/uploads/2018/02/sale_14471_primary_image.jpg?fit=630%2C473&ssl=1&w=640 25