Procurement is the acquisition of goods or services. It is favourable that the goods/services are appropriate and that they are procured at the best possible cost to meet the needs of the purchaser in terms of quality and quantity, time, and location . Corporations and public bodies often define processes intended to promote fair and open competition for their business while minimizing exposure to fraud and collusion. As part of Shiva Consultancy Project Management delivery service we are often asked to procure various services and items of plant on behalf of the client and manage the whole process as part of a turnkey offering.
The reason why many clients choose to use Shiva Consultancy in this way is many fold but the key client benefits are as follows:
- Identification of need: This is an internal step for a company that involves understanding of the company needs by establishing a short term strategy (three to five years) followed by defining the technical direction and requirements.
- Supplier Identification: Once the company has answered important questions like: Make-buy, multiple vs. single suppliers, then it needs to identify who can provide the required product/service. There are many sources to search for supplier.
- Supplier Communication: : When one or more suitable suppliers have been identified, requests for quotation, requests for proposals, requests for information or requests for tender may be advertised, or direct contact may be made with the suppliers. References for product/service quality are consulted, and any requirements for follow-up services including installation, maintenance, and warranty are investigated. Samples of the P/S being considered may be examined, or trials undertaken.
- Negotiation: Negotiations are undertaken, and price, availability, and customization possibilities are established. Delivery schedules are negotiated, and a contract to acquire the P/S is completed.
- Supplier Liaison: During this phase, the company evaluates the performance of the P/S and any accompanying service support, as they are consumed. Supplier scorecard is a popular tool for this purpose. When the P/S has been consumed or disposed of, the contract expires, or the product or service is to be re-ordered, company experience with the P/S is reviewed. If the P/S is to be re-ordered, the company determines whether to consider other suppliers or to continue with the same supplier.
- Logistics Management: Supplier preparation, expediting, shipment, delivery, and payment for the P/S are completed, based on contract terms. Installation and training may also be included.
- Additional Step - Tender Notification: Some institutions choose to use a notification service in order to raise the competition for the chosen opportunity. These systems can either be direct from their e-tendering software, or as a re-packaged notification from an external notification company.
TYPICAL PROCUREMENT ACTIVITIES – SERVICES AND MANUFACTURED GOODS
The range of activities performed by our procurement team is equal to those covered by the client's own procurement team – except focused fully on the project being undertaken by Shiva Consultancy with the aim of ensuring the project is completed safely, on time, cost & quality. In summary the Shiva Consultancy procurement team is not distracted by on other site requirements and supports the Shiva Consultancy project team to ensure the project critical success factors are met.
Activities include, but are not limited, to the following:
- Preparation of a Procurement Plan
- Vendor sourcing and prequalification
- Preparation of procurement plans for vendor equipment and sub-contract works
- Ensure confidentiality agreements are signed as appropriate
- Enquiry preparation and issue
- Collection and tabulation of quotes
- Technical and commercial bid appraisal
- Pre-contract meeting negotiation
- Agreement of T&C's including preferential terms, guarantees and added value support
- Purchase order placement
- Expediting and progressing
- Amendments to purchase orders
- Receipt and integration of vendor design information
- Inspection, quality control and factory acceptance testing
- Co-ordination of Client Acceptance Tests
- Client/Supplier progress and status reports
- Shipping and Receipting of goods
- Administration of Customs clearance, VAT and Duty issues as appropriate
- Interface with site material control
- Valuation of works and control of stage payments
- Validation of site variations
- Ensure method statements and risk assessments are in place prior to commencement on site
- Ensure suppliers meet obligations in terms of commissioning, documentation etc
- Checking and handling of returns
- Final invoice processing and documentation
- Warranty Management
- Negotiation of claims and final settlement
EQUIPMENT SPECIFICATION / SELECTION - TYPICAL SERVICES
- Through Shiva Consultancy's vast knowledge, database of suppliers and analysis the client can readily see the benefit being promoted and have a clearer picture whether or not the premium to be paid is justifiable and the benefit outweighs any additional costs, or if the lower cost is negated in other ways like higher operating costs.
- All suppliers will boast that their product has an advantage over the competition – be it more efficient, smaller, more productive etc. Shiva Consultancy can assist clients' to filter through the facts and the sales promotion and thereby understand the base needs of the equipment required for the project. By comparing the various offers Shiva Consultancy can detail the real benefits that the suppliers are putting forward against commercial criteria.