Learn how to plan procurement

- [Voiceover] Even with home made chicken soup, you don't make everything from scratch. Imagine how long it will take and how much it will cost, if you had to raise you own chickens and vegetables, and make chicken stock and noodles and so on. The same goes in the project world. Procurering products, services, and skills, can be a lot quicker than trying to do everything yourself. When you opt to purchase items from outside your organization, you need to plan how your gonna do that.

That's where a Procurement Plan, comes into play. The first step in developing a Procurement Plan, is identifying, what you need to purchase. For example, you need people with the right skills for your project. Or you need more people than the once available in your organization. Or the project requires products and materials. Second you Document your procurement processes. The Procurement Plan, spells out who handles procurement, whether it's the purchasing department, the project team or a combination of the two.

It also describes the selection criteria for choosing vendors. The selection process, types of contracts you use, how you manage those contracts, and so on. Third, you Describe your make or buy decision process. That is how you decide whether to use in house products or services, or procure them. To make an informed make or buy decision, it's important to understand your needs. Make sure your requirements are clear, and the prioritize them, that way it's easier to choose products that meet your requirements.

And resist bells and whilst you don't need. The next step in a make or buy decision, is to see if a product that meets your needs is available. If products are available, evaluate how they match up, with your requirements. Before you finalize your decision, consider the pros and cons of making versus buying. For instance, if completing your project quickly is crucial. Then buying is usually the preferred option.

The last part of the procurement plan, is a list of potential sellers, who offer the items you need to purchase. Describe how you researched vendors and contractors, and the criteria you used to develop the list. Procurement planning, ensures that you make smart decisions, about whether to purchase products and services. And if you do, which product and services to procure. It also helps make the procurement process run smoothly.

To learn more about project procurement, check out Bob McGannon course, Managing Project Procurement.