Assignment Sample on Factors for Selecting a Suitable Procurement
Section A – Question 1
It is vital to note that procurement routes should be selected on the basis of internal and external factors present within the project for ensuring its success. The way which is shortlisted by undertaking these factors will be the most appropriate. This decision is usually made by considering the elements of goals, requirements, and resources available (Molwus et. al. 2020). The external as well as internal factors which need to be considered by the client for selecting the best procurement route for the project DT are mentioned below:
External Factors for Selecting a Suitable Procurement Route
Economic Factors
While deciding upon the best professional route for the construction project, economic factors have to be considered so that the client can gain a clear picture about whether or not the way is feasible for the project as far as money is concerned. The cost incurred for setting up a professional and route is one of the most crucial factors capable of influencing the decision making (Ajayi and Oyedele, 2018). The key reason behind this is that if the client does not have adequate monetary resources, it will be clarified within the neutral decision process.
Political Factors
The significant political complication present within the UK currently is that of Brexit. Brexit has limited the development of the UK and has also made it very complicated to undertake construction activities. One of the significant implications of the same is that it has become tough to predict your serials from the noble countries. The project involves building a new railway line for connecting all the major cities within the UK. The project manager would have to break all the raw materials and the supplies from within the country because they can’t obtain goods internationally because of disrupted trade relations.
Social Factors
Major cities of the UK include London, Manchester, Birmingham, Glasgow, Leeds, Liverpool, New Castle, Sheffield. People who regularly travel from their hometown to the major cities for business and trade will be highly benefited from this project. In addition to this, people who wish to commute from these cities will be able to do that in a faster manner without having to wait to catch a train (Ajayi et. al. 2017). It will also strengthen the connectivity of all the major cities, which further has positive social, economic, and cultural impact. While defining the procurement route, the flow of these cities could be undertaken for the same, which will decrease the cost of transportation and undertake the activities rapidly.
Internal Factors for Selecting a Suitable Procurement Route
Client Characteristics
Experience of the organization along with knowledge of the client should be considered while deciding the best procurement route for construction projects. The key reason behind this is that the client’s objectives and aim to the project manager can influence the nature and culture of the project (Brisse, 2017). The degree of client involvement also determines the success of the construction project and is one of the primary considerations that should be assessed appropriately before finalizing the best procurement route.
Project Characteristics
It is essential to monitor the variables within the project to select the best procurement route for ensuring project success. The significant characteristics of the project which can influence this decision include location, size, uniqueness, and complexity. They can impose implications on cost, risk, and time for the project. The procurement route will be finalized on the basis of the characteristics of the project, and it will be made sure that the variables are aligning themselves with the former so that success can be achieved in the long run.
Issues within Cost
To assess the certainty of price, the project manager has to consider the situations that can lead to delay. The confidence is provided by the client, and the time delay expected is usually compared with the initial estimated time when the tenders were received and finalized. The level of design completion can determine the impact of cost issues at the time of selecting the tender (Osman and Salah, 2020). It is vital to note that the project manager wishes for price certainty. The project design should be completed before the beginning of the construction so that the changes requested within the structure can be disregarded. The situation of caused issues can be avoided.
The ability for Accommodating Changes
The needs and wants of the clients should be clearly identified and agreed upon in the early stages of the project. This is so because if they are not fully known to the project manager, then there is a scope that the client would demand changes in the later stage of the project. The most common changes requested that of changes within the technology. If differences are addressed in the latter stages of the project, it can lead to time and cost implications.
Section B – Question 2
The purpose of integrating supply chain management with the construction is based upon a lot of factors such as client relationships and handling multiple suppliers. The circumstances which necessity that the adoption of supply chain management in the construction industry are as follows:
Rising Costs and Poor Financial Practices
Failure to plan the finances within the construction project can be a costly mistake. This is because it’s more cash flow is a critical aspect of construction, and supplies in management are capable of providing efficient accounting factors, which can enable the project manager to streamline the finances (Mojumder and Singh, 2021). Once all the tasks have been automated, money can be saved on the floor as well as the accounts. Supply chain management also enables the project management entity to find those areas which are unnecessarily spent on.
Inefficient Inventory Management
Supply chain management within the construction industry can also improve the inventory system as the manager won’t have to keep up with what products are missing rather than using automation. The system will automatically note the items which need to be ordered, and we’ll provide information about those which are available for use. In addition to this, while working with reliable suppliers’ disruptions are reduced within the construction projects, and it also improves the cash flow by eliminating the situation of wasteful spending. Effective supply chain management within the construction operation supports the flow of information and provides services related to procurement for fast delivery to the project. Implementing the construction supply chain management allows the business to evaluate the current process, determine weak areas, and develop solutions for fixing problems that may be encountered.
Low Rate of Efficiency
When the efficiency rate of the project is slow, it clearly depicts that an effective supply chain management process is required for managing the construction project and delivering the desired outcomes. By incorporating supply chains and integrated logistics and project innovation strategies within the construction project, possible shortcomings can be identified, which will give project managers the opportunity to act to save the project. This is so because its construction projects come up with a lot of uncertainties (Nguyen et. al. 2018). These include increased product cost and shortage of labour along with other emergencies. By applying supply chain management within the construction project, it will allow the project manager to deal with unexpected costs, which will bring an enhancement within the efficiency rate and ensure that neither cost nor time constraints are encountered.
Distorted Quality Control
Replacing an item or repairing it within the construction project is believed to lead to high cost as the project owner. By implementing supply chain management and having personnel for ensuring that the chosen contractors and suppliers agree to meet the defined requirements of quality can ensure success (Peter et. al. 2020). Supply chain management also involves processing those guidelines, which can help the suppliers as well as the contractors to comply with the quality requirements of the project. If the standards are laid out, in future, they can be compared with the actual product for ensuring that suppliers and contractors are maintaining quality control.
Poor Vendor Relationships
When the project does not have effective relationships, it might fail due to poor management of procurement and inventory. Supply chain management is capable of promoting excellent vendor relationships. Once the project manager has undertaken efforts for enhancing vendor relationships, the project won’t have to worry about facing a shortage of construction materials. It can focus on the consistency of undertaking quality control while construction products will be delivered within the budget and time.
High Generation of Waste
Within the construction projects, a lot of waste is generated while undertaking the operations in the form of concrete or sand. This waste is not economically because the client has to pay for all the materials. If some of it gets wasted instead of being used within the construction, it is a setback for the finances (Wibowo et. al. 2018). Supply chain management enables the project manager to reduce waste and undertake effective waste management procedures. This happens because sometimes engineers and contractors fail to implement redundant processes or read double efforts from each other. If all of them are under one umbrella, it will curb the situations of waste generation or unnecessary redundancy.
References
Books and Journals
Ajayi, S.O., Oyedele, L.O., Akinade, O.O., Bilal, M., Alaka, H.A. and Owolabi, H.A. (2017). Optimizing material procurement for construction waste minimization: An exploration of success factors. Sustainable materials and technologies, 11, pp.38-46.
Mojumder, A. and Singh, A. (2021). An exploratory study of the adaptation of green supply chain management in construction industry: The case of Indian Construction Companies. Journal of Cleaner Production, 295, p.126400.
Molwus, J.J., Erdogan, B. and Ogunlana, S.O. (2020). EFFECTS OF PROCUREMENT ROUTES’CHARACTERISTICS ON STAKEHOLDER MANAGEMENT IN CONSTRUCTION. International Journal of Construction Project Management, 12(2), pp.101-123.
Nguyen, P. T., Nguyen, V. N., Pham, L. H., Nguyen, T. A., Nguyen, Q. L. H. T. T., and Huynh, V. D. B. (2018). Application of supply chain management in construction industry. Advances in Science and Technology Research Journal, 12.
Osman, H., and Salah, A. (2020, November). Optimal Selection of Integrated Project Procurement Strategies. In Construction Research Congress 2020: Project Management and Controls, Materials, and Contracts (pp. 1064-1072). Reston, VA: American Society of Civil Engineers.
Peter, N.J., Okagbue, H.I., Iroham, C.O., Opoko, A.P. and Akinola, A.O. (2020). Literature Review of Areas of Application of Supply Chain Management in Construction Industry. Int. J Sup. Chain. Mgt Vol, 9(3), p.273.
Wibowo, M.A., Handayani, N.U. and Mustikasari, A. (2018). Factors for implementing green supply chain management in the construction industry. Journal of Industrial Engineering and Management, 11(4), pp.651-679.
Online
Brisse, R. (2017). Supply Chain in Construction – Why Implement Supply Chain Management. [Online] Available Through <https://www.assignar.com/au/construction/supply-chain-construction-implement-supply-chain-management/> [Accessed on 5th May 2021]
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