Strategic Planning in Procurement: Maximizing Project Success through Effective Contract Management

Introduction

Procurement refers to the process of selecting the vendors, establishing the payment terms and condition, strategic setting, selection and the negotiation of the contracts as well as actual purchase of goods and services that are useful to complete the project successfully. Procurement involves acquiring all the necessary goods, services and work which are erective to maximise the project aims and objectives (Whitaker, 2016). The study focuses on developing the procurement strategic planning to fulfil the project aim and develop the project plan for successful establishment of the contract. In the recent years, procurements refers to acquiring the goods and services utilised for development the construction project and in this regard the resources are collected from the external sources via tendering or competitive bidding process. Through the study, it is possible to develop proper procurement strategies planning in order to complete the business successfully within appropriate cost and effective time. The study is helpful to demonstrate the procurement strategies and tendering process for completing the project and in this regard, identifying the factor of developing the procurement strategy as well as acknowledging the benefits of advanced procurement strategy are useful for the project planner to complete the project within effective time.

Project planning

The project client is the Kingston University London and the business opportunity in this regard is to develop sustained partnership with the project client ad consulting business for completing the project successfully. Kingston University London aims to plan a building with the area of Penrhyn Road campus and the new building is constructed besides the old building of Kingston University London. The building will have 2 auditoriums that comprise 200 seats each and there will be high specification of technology and multimedia theatre with air condition and comfortable tiered seating. The auditorium provides excellent visibility and it will be featured as a full sized interactive screen and computer driven presentation facilities which are perfect for lectures, conferences and presentations. The auditorium is hereby beneficial for the Kingston University London to maximise their educational activities and business purpose where the clients can arrange the meeting and lectures as well as conferences. The estimated budget of constructing the building is £10 million and it is estimated that the building will be completed within 2 years period. The project needs proper procurement strategic planning in order to maximise the aim of the project and complete the construction within 2 years and estimated cost. It is necessary to choose the advanced procurement strategic planning in order to progress in the project plan so that the consulting business can acquire proper resources, materials and human resources to progress in the construction project and fulfil it successfully within 2 years time tenure.

Strategic approach of procurement

Procurement strategy refers to the long term process of acquiring the necessary goods and services in a cost effective process form a list of vendors who will deliver quality goods on time, abiding the purchasing terms. The procurement strategic planning depends on the number of factors such as purchase in time, available budget, total cost of ownership and possible risks, where the project planner must consider the time frame and estimated budget of the project as well as analyse the risks during the contraction project so that the planner may develop suitable strategic planning in order to tackle the risks and complete the project successfully. The procurement strategic planning is hereby necessary for the construction project at Kingston University London in order to develop the auditorium and fulfil the aim of the project. There are differ types of procurement strategic planning which are cost reduction, risks management, supplier management, green purchasing technique, global sourcing and total quality management (Whitaker, 2016). In this regard, the organisation previously focused ion cost reduction and risk management procurement strategy so that the project can be completed within estimated budget. However, in the recent years, the consulting firms focus on green purchasing methods Total Quality Management (TQM) and global sourcing in order to develop the project by maintaining its quality standard and completing it efficiently within proper estimated budget. There are other procurement strategies which are stock procurement and single procurement, Vendor Management Inventory (VMI), Just in Tie procurement and Just in sequence procurement. These are the major advanced technology to manage procurement in the construction project.

The principle of procurement management in the present project at Kingston University London is to develop the construction project in order to enhance the chance of conference, lectures and meeting where the leaders and management team of the conferences can utilise the space and better technology for presentation purpose. During development of the project construction, it is also necessary to follow the principles of transparency, accountability, integrity, economy, openness, fairness and competition and these are the fundamental principles to develop the construction projects in the university campus, and here it is possible to complete the project successfully. In order to develop the construction project, it is necessary to manage openness and share all the necessary information with the stakeholders and in this project, the major stakeholders are such as consulting forms, vendor and suppliers of raw materials and necessary goods to develop the building, tender, project planner and the representative of the Kingston University London, where all the stakeholders are enhanced with each other and the contractor in this regard plays a crucial role as the stakeholders, who try to utilise the organisational resources and capabilities of the human resource for completing the project successfully. Additionally, for developing the proper procurement strategy, it is necessary to manage transparency of the business and accountability so that it is possible for the management team to develop organisational culture and manage the contractor for better performance. Fair treatment and transparency are also effective to manage the tender and other contractor to complete the building at the university.

In order to develop the strategic approach of procurement, it is necessary for the consulting firm to develop the major pillars for having successful procurement at the university and in this regard the major pillars of developing successful procurement are value of money, accountability and reporting, equity, open and fairness, effective competition, construction ethics, where it is possible to complete the project ethically. Tradition procurement planning is effective for the organisation to have successful project and in this context, the steps of developing procurement are general contracting, design and build, and construction method. Through these steps, it is possible for the contractor to develop the construction project successfully. General contracting procurement method involves separating the design and instruction process, where the developer is appointed to design the plan and separately contract the building contractors for successful completion of the construction work (Bautista Valhondo and Fortuny Santos, 2016). Design and build is also another traditional method where it is possible to design the building and provides all the necessary goods and services of developing proper plan of developing the project. Construction management is the third stage, where the contractors try to appoint design team and construction manager to manage quality of the project and develop the building successfully with high quality raw materials. The methods, that are traditionally utilised are hereby beneficial for developing appropriate strategic planning to develop the building successfully. General contracting method is effective to control and design the project by ensuring quality, and apart from that, it is effective for having clear vision and develop the approach to manage information or developing successful project. Design and build is also effective for the manager as it is a fast track project construction practice where the contractor is successful to manage the activities to develop the building.

The traditional approach, it is possible to manage quality of work and the client has closer control over the working activities in the project and on the other hand, the traditional method of developing the procurement strategy for the construction project is beneficial for developing effective design and engages the consultant and contractors for better management of the project. The tender management is also possible under the traditional method of procurement, where the tenders can manage the information during the project construction and the client may obtain the best price through competitive tender bidding (Yu, Yevu and Nani, 2019). Hereby, tender management and bidding process are effectively conducted under the traditional method of developing strategic planning of procurement to maximise the project aims and objectives. Traditional way of fully documented lump sum method of developing procurement strategy for the construction project at Kingston London will be evaluated further,

Engaging the consultants and prepare the project brief which is written properly for developing the project plan at the university campus.

The lump sum process offered by the tender where the tender designed the project and evaluates the price of the project for successful tender agreement.

Ensuring the design and building within the estimated budget are the responsibility of the tender where the tender ensure that the building is completed according to the budget and time with appropriate design and quality.

Lump sum amount is paid to the tender and the contractors are also paid on a regular basis.

Final cost is highly dependent on the quality of the project.

General risks during the project are developed as per the procurement strategy, where the principles are such as material and workmanship are according to the project plan, the design of the building is perfect as per the written document, the cost of project need to be managed by lump sum amount paid to the tender, design and documentation as well as project completion must be within proper time, allocated for the project.

These are the methods traditionally used for developing the procurement strategic planning, where lump sum method is beneficial to fulfil the project plan successfully. In addition to this, managing contractors is another approach, used for strategic approach of procurement, where the consulting firm try to manage their contractors in order to maximise the project aims and objectives (Liu et al., 2019). In this regard, as per the managing contractor method,

The principle is to manage the constrictors and engage them in the project design and planning for successful completion of the project in the university.

The ethical code of conduct in the project needs to be managed where the parties act ethically and manage transparency and accountability during the project plan.

Cost estimation is mandatory to develop effective planning to the obesity where the estimated budget is £10 million and it is the responsibility of the consultant to design the project and complete it within the budget.

The managing contractor progressively pays the tender and after that the Actual Construction Sum will be paid according to the project competition.

During the payment, it is necessary to manage balance between the quality of the project and cost of the procurement in order to progress in the construction of the building successfully.

The managing contractor must review the performance for the project accomplishment and reduce the claims and dispute so that it would be possible of the university to fulfil the project aim by developing the auditorium successfully.

Hereby, the traditional approach of developing procurement strategy is effective for the organisation to develop project plan, design the construction building, manage the sites, improving the pillars of the construction including ethics, health and safety at the construction sites, manage the castrators, improving transparency and accountability, openness and cooperation between the consultants and contractors to complete the project successfully.

Factor influencing procurement strategy

There are major factors that influence the procurement strategy and for this project of Kingston University London, the major factors are such as price of the raw materials and availability of the materials, competition in the market, project complexities, technological advancement, project size, time constraint, political stability, environmental factors and client’s financial capabilities. These are the major factors that influence the university to choose effective procurement strategies for developing effective tactics to complete the building successfully. The allocated budget for the project is £10 million and time is 2 years period and thus it is necessary for the university to hire efficient contractors who can choose advanced procurement process for successful completion of the project, as the university’s aim is to utilise advance technology for completing he auditorium with full screen picture, proper projector for presentation, sound system and other technologically advanced equipment at the auditorium for representing the auditorium efficiently. Apart from that, the factors such as technological advancement and political ability are mandatory, where it influences the contractor to choose the advanced procurement strategy for successful project completion. The government support in the UK and political stability are helpful or the university to make successful construction project and technological innovation further ensure fast pace of the project progress in which the project can be completed with the time (Mohd Nawi et al., 2016). On the other hand, the environmental factors are also influencing the project procurement plan, where it is necessary for the contractor of the project at the university to ensure green environmental footprint so that it would be possible to maximise the wellbeing of the social communities as a whole.

Tendering and cost estimating process

The tender board is an entity, which is created by proper law to develop procurement process and ensure the procurement activities as per the planning. The procurement rules and regulations are managed by the tender. The construction industry is the process to select contractor referred to tendering which is helpful to develop tender contract for successful completion of the project. In the recent project, it is also helpful to evaluate the tender process and cost estimation for the project activities, where the construction of the building at Kingston University London can be completed efficiently. For selecting the tender, it is necessary to consider pre qualification, where the information qualification, tender advertisement are mandatory to hire the best tender. Pre qualification involves seeking information, about the contractor’s experience, capacity and financial stability. The short listed suppliers may be invited in the tender for the contract where pre tender interview is the next stage to select the best suppliers in the construction business. Under the pre tender interview, the cline aim to understand the commission and acknowledge the approach of conducting the project. Assessing the current workload and enthusiasm as well as clarifying ambiguities to complete the building at the university, verifying the projected cost and timeline and tender process are mandatory during the pre tender interview to hire the best tender for the construction of the auditorium in the university campus. Tender process is necessary after the interview, to identify the best value tender as the performance of the tender is valued by the client and in this regard it is mandatory to consider the past performance, relevant experience, technical abilities, sustainability, health and safety record, resource availability, innovation, management skill process and procurement strategy (Moe, Newman and Sein, 2017). These factors further helps the client to choose the best value tender and manage the project planning process to complete the university project. The cost evaluation method is also mandatory in this regard in order to develop proper procurement plan in case of the construction project at the university. In this regard, the costs of raw materials, technology, architecture, contractors and other staff at the construction sites, salary of the engineers and other administrative working cost are considered in order to manage the cost of the project. For cost estimation, the tender needs to develop project plan and evaluate the cost o the building construction for successful completion of the project. The total budget of the project is £10 million and it is important to develop the project plan within the allocate budget. the cost of raw materials must be managed by the tender where the tender can maximise the values for the project and satisfy the client by completing the building with all the facilities, such as conference room, presentation technique, air condition auditorium and other technology for lectures.

Analysing the advanced procurement practice

Green purchasing method:

Green purchasing method is the procurement process of acquiring the products and services which have less impacts on the human health and environment and in the recent era of globalisation, environmental sustainability is one of the crucial factor that influence the contractors to develop green strategic planning for managing the construction sites and project for doing it ethically. Green procurement technique is good for the contracts at the university where the contractors try to consider the green products for building the project. Purchase of products must be considered by looking after the environmental impacts, locally produced goods, packaging style, recycled content, low energy and low pollution where the contractors at the Kingston University London aims at purchasing green products to mange waste and utilise the raw materials by reducing the harmful effects in environment. On the other hand the contractors try to choose the green supply chain, in order to develop the building in a environmental sustainable way, where the suppliers are concern to provide green environmental footprint by utilising electric cars for delivering the raw materials at the production sites as well as taking other measures of managing green supply chain such as supplying quality products, managing waste and recycled content (Eadie and Perera, 2017). This practice is also good of the construction project at the university, where the contractors can accomplish the project aim ethically.

Total Quality Management:

Total Quality Management (TQM) is the process of managing and eliminating the errors of manufacturing, streamlining the supply chain and improving customer management in order to make the project successful. TQM is a useful tool us dint he construction industry for successful improvement of the productivity and maximise the project aim and it focuses on business policies and practice to develop the building, where the constructors try to acquire the resources and raw materials for developing the building and fulfil the client’s expectations. The construction industry mainly suffers from workmanship defences, time and cost of the operations and in this regard, TQM is effective to implement in the construction project for developing the building successfully (Brankley et al., 2017). The stages of inspection of the building, developing architectural drawing and design of the building at the university, analysing the requirement of the client and quality control management are effective for managing total quality of the building. The inspection is necessary for checking the quality of raw materials, conducting soil examination, measuring the building size, testing the environment and it is mandatory for the production of the workers. Quality control involves the product requirement specification, raw materials required for the building, human resources, as well as testing of the technology to develop the building efficiently. Quality assurance is also necessary for the contractors to develop the process of the building the auditorium in the university and monitor the standard of the building. Audits, online performance evaluation and implementing CCTV are effective for evaluating the performance of the staff and ensure the quality of the building construction. Total quality management is mainly a customer focused system, where the contractors try to fulfil the expectation of the clients in order to complete the building and develop the auditorium with all the necessary facilities such as presentation, audio visual system, full screen system at the auditorium, free Wi-Fi and air conditioned system for the benefit of the clients. Effective communication and involvement of the orders are mandatory; where the employees need to be integrated and manage discipline at the construction sites.

TQM in the construction site is mandatory of the contractors of the university building, in order to manage the quality standard of the building and complete it efficiently. Leadership is effective for managing TQM, and in his regard the leader needs to support the staff and contractors and develop proper culture with managing transparency and accountability, managing integrity and respect and maintain health and safety at the construction sites. The leader of the construction company is efficient to support and direct the contracts and other staff at the construction sites with health and safety measures, where there are emergency exits, fire extinguisher and other safety measures to build the project successfully (Zhang, Liang and Gao, 2017). The leader is also efficient to manage the insurance coverage of the staff and encourage them to show their creativity and utilise technological innovation for developing the construction project efficiently. Relationship management is also mandatory in TQM, where the contractors try to manage relationship and build trust and loyalty among the stakeholders, engaged with the construction project.

In this regard, for managing TQM, the leader aims at developing check list with proper roles and responsibilities and develop time table so that the project can be completed within the time. Checklist documentation and the task audit as well as performance review site at the construction site are effective for the leader top mange the construction activities and utilise the latest technology or developing the building. For TQM, the contractors try to develop fish bone analysis in order to develop effective procurement strategic planning to complete the project successfully.

In the construction sites, it is necessary to improve the design of the building with proper architecture, where the engineers and staff members try to collaborate to develop the design and develop project planning people is mandatory to be managed at the construction site of the university, where the contractor will monitor the performance of the employees and their productivity as well as review the performance on the day basis through the performance checklist and coordination and communication among the staff at the building site will be helpful to complete the auditorium within effective time and within the estimated budget (Ellison, 2017). As per the fish bone analysis, material delivery and environment are necessary factors, where the contractor tries to manage the technical equipment for fast pace of the construction, supply the quality raw materials and manage the tender for managing the project successfully. Internal management system and the policy framework at the university construction sites at London are also necessary as per the fish bone analysis for managing the quality of the construction project.

Vendor Management Inventory (VMI):

Vendor management inventory is another advanced method of procurement management, where the constructors need to manage their supply chain and manage their vendors or proper supply of raw materials. The distribution and warehouse are managed well, where the distributors play crucial role in supplying the raw materials. The construction sites need to be managed well, so that contractors are able to supply the quality raw materials and managing the stock through the computerised database. In the recent era of digitalisation, the computerised data base management system and could computing stock are effectively used by the contractors to manage their raw arterials in order to supply it for successful construction projects.

Through the VMI system, it is possible to mage inventory and reduces the stock out risk, where the contractors at the university try to develop effective strategic planning to manage the vendors and develop strong corporate relationship for successful supply of the raw materials at the construction sites, so that the auditorium can be built properly.

Just in Time procurement:

Just-in-Time procurement approach (JIT) is another procurement method or managing the construction activities at the Kingston University at London. The construction industry is considered as project based approach with inefficient wand low productivity and in this context, JIT is one of the effective strategies to manage the raw materials of the construction project, managing logistics and workforce at the building sits (Dai and Paracha, 2016). JIT is effective in this regard to manage the waste, supply the material, storing inventory and moving materials. It is the method of forwarding the material and workmanship towards completing the project successfully. Kaizen is one of the JIT systems, where it helps to improve the strategy of procurement and utilise the materials and workmanship for continuous improvement. It further increases the productivity of the operations of the building and helps the contractor to complete the project efficiently.

As per the JIT practice, the suppliers aim at supplying the quality raw material for the building and the system engineers and architects try to develop strategy for constructing the building. The distribution of the raw material, utilising the Information Technology (IT) for managing information at the construction sites, personnel management are the major tactic to handle the activities and progress in the project. It is herby useful for the contractors to reduce the cost of eliminating the waste to material usage, and also labour cost and transportation. Introduction of JIT is justified for eliminating the waste and improve the productivity of the construction and it would beneficial for the contractor to introduce JIT in the university to manage the building and complete it efficiently. JIT is mandatory to eliminate physical buffers which are material inventories and time (Moraru, 2017). Hereby, JIT is beneficial for the construction project and it is helpful for procurement strategy, where the contractors can reduce the cost of inventories and manage the supply of quality raw materials. It also provides a scope to eliminate the site congestion and reduce inconvenience, where the supply chain management for supply of the raw materials as well as the working process are fruitful for the contractors at the university to complete the building efficiently by utilising quality raw materials and productive workmanship.

Just in sequence procurement:

Just in Sequence (JIS) is another effective process under JIT, which s appropriate for managing the construction project in a sequential manner, and proper process innovation and synchronised maintenance at the construction sites are effective for the university to maximise the return on asset, without loss in overall efficiency, quality and control. It is a specialised production strategy to reduce the production buffers at the construction sites, where the inventory control system, management of quality raw materials workmanship, productivity of the staff are managed well with cooperation and communication. Order automotive system further enhance the efficiency of the contractors to manage the vendors and maintain JIS system at the construction sites for better management of procurement and inventory control. JIS is effective to pick of the sequence, ship to the sequence then receive to sequence and make assemble build to sequence (de Araújo et al., 2017). In this regard pick to the sequence so that where the items are picked from on site buffer, sequences and delivered to the production sites through automotive process of inventory control and management system. Ship to sequence and the receive the sequence are important to collect the terms that are sequenced at the supplier which are delivered to the production site directly and it is effective for reducing the amount of components and semi finished goods. In the recent years, it is one of the effective ways to construct the building in an easiest way, where the parts are sequenced well and delivered at the production location directly.

Benefits of advanced procurement strategy

The advanced procurement strategy is effective for the construction project in order to complete the project efficiently and maximise the aim and objective of the project. The advanced procurement management is effective for fast pace of operations, where the procurement system is managed through latest technology and operations, which are helpful to complete the project efficiently. Within appropriate time and budget. Optimising the working capital is another benefit of utilising advanced procurement strategy and apart from that the constructing tender can evaluate the cost and estimate the budget required for the building obstruction at the university. The above mentioned advanced method of procurement management is also effective for the university building construction, where it is possible to improve delivery performance and minimise the cost of purchased materials. In this regard, the green purchase technique and managing the green environmental footprint are also beneficial for the university to manage the wellbeing of the special communities and develop the building successfully with the help of the contractor and the tender.

In addition to this, the advanced technology procurement management is also beneficial to improve the quality of the building and manage risk of time constraint, budget constraint, inability of the staff, lack of viability of the resources and others at the construction sites, where the tender and the constructors are efficient to handle the project and fulfil the project aim and objectives according to the project plan. Pricing strategy and cost evaluation are also effective under the advanced proves as well as the just in time approach and TQM are also beneficial for the tender and contractors to manage their operations in cost effective way (Ajulo, Akinyede and Boyinbode, 2017). Hereby, the advanced technology and method of procurement are advantageous for the university and the contractors to complete the building by managing its quality and technology so that it is possible for the Kingston University London to fulfil the project plan and organise the conference, annual meeting and lectures successfully.

Conclusion

Procurement management is mandatory for the contractors to fulfil the project plan of the Kingston University London, where the client focuses on developing a building with two auditoriums where the facilities are technologically advanced. The strategy of procurement management and tender management are effective for evaluating the cost and reducing the cost of the building, where the estimated cost is £10 million and the time frame in 2 years period. However, in the recent era of digitalisation and technological advisement, there are different automotive process and system to manage the supply of raw material, managing procurement and boosting the workmanship at the construction sites. It would be beneficial for the contractors at the diversity to choose the advanced technology of TQM, JIT and JIS to develop a sequential way to complete the project as well as manage the green procurement technique to complete the building in an environmental sustainable manner.

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