Procurement strategies are used in order to support the overall business agenda of an organization. These strategies outline a plan for optimizing external expenses and procurement procedures. You cannot determine whether or not your procurement organization is aligned with the company’s strategy and making any progress without a thorough procurement plan in place.
There are a few things that should be taken into consideration when developing a procurement strategy such as the priorities of the project, your management skills, and the level of risk that you are willing to take. Make sure to consider the following factors when creating an effective procurement strategy for your construction project.
Consider the External Elements
It is important to account for the potential effects that the economic, commercial, political and legal elements will have on the client and the project team. For instance, changes in interest rates or currency rates are going to have an effect on the business and the project team. It is possible that these factors will end up impacting the price and timeline of the project.
Recently, we have seen the impact that the increase in fuel and fluctuating exchange rates have had on the material supply. With such unstable economic conditions it is more important than ever before to consider how external elements might impact your procurement plans. Even if you have access to equipment dealers and material suppliers if there is a shortage in the industry, there is not much you will be able to do.
Characteristics of the Project
Other factors that should be taken into consideration when creating a procurement strategy are; the size of the project, it’s location, complexity and uniqueness. All of these things will have an impact on the costs, risk and timeline of the project. Considering all of these project characteristics will help make the decision a little easier as you will know the risks involved with each procurement system and how they might impact the client.
Possibility of Changes
It is important to determine the client’s needs as early in the project as possible. However, that does not always happen. Modern technology has made it possible to make adjustments in construction projects. Although, changes in the scope always result in more time and money being spent. Before starting work on the project, it is important to take into account the scope of the design and determine whether or not there is potential for adjustments in the project during construction.