Procurement strategies and issues in project based procurement

Abstract

Efficient procurement is one of the most important factors in enabling an organization achieve its goals, be it private or a governmental agency. With the advent of the cutting edge information technology and widespread globalization, the environment has become more challenging. What organizations buy has increased in importance, size, and complexity, and thus the buying methodology itself has changed. Leading procurement organizations are exploiting several opportunities to leverage and optimize the supply base, minimize linked costs in the supply chain, and maximize the value of goods and services for the users. These opportunities can be described in a systematic framework of strategic sourcing that is applicable to services as well as materials. With the emphasis on enhancing shareholder value, industry leaders are turning to new business designs to capture and sustain profitable growth. Strategic sourcing can be taken to new levels and applied to the business designs that will shape corporate revenue realization and competitive cost position as well as the governmental agencies to achieve their goals in general and strategic areas such as nuclear field in particular. By building sourcing process excellence and aligning capabilities with the requirements that the organizations buy, procurement can have a key role in goal attainment and organizational growth. Efforts have been made to study some procurement frameworks researched by procurement specialists with special emphasis on project based procurement. Primary data, obtained from the procurement agency the Directorate of Purchase and Stores(DPS), of the Bhabha Atomic Research Centre (BARC) and some other constituent organisations of the Department of Atomic Energy (DAE), has been subjected to indepth study and analysis and efforts have been made to identify the areas of weakness requiring strengthening. Based on the study carried out of relevant literature conclusions have been drawn on as to what methodology could be adopted towards modifications in the existing system leading to efficient and timely procurement for critical and sensitive establishments such as BARC. It needs to be borne in mind that any delay in procurement for such organisations has a tremendous demoralizing effect on the scientists and the project managers besides entailing time and cost overruns. The role of the purchasing department attached to such organisations thus assumes special significance and they need to adopt and implement purchase strategies ensuring timely and quality supplies. However, it is equally important that the 3 Ps i.e. Policy, Process and Procedure are also set in harmony not only within themselves but with the emerging external environment. The approach adopted in this dissertation has thus been guided by a holistic principle under which the entire extant system has been subjected to a detailed scrutiny and analysis. The conclusions drawn together with the empirical evidence gathered by way of primary field data has thereafter been used to form the basis of recommendations for effecting improvement.