Procurement Management Study In Preparation Period Of NPG Expansion Project

Modern Project Management is a focused field in nowadays. Especially, theProject Procurement Management is an important part of Nine Knowledge Bodies ofProject Management. Generally, the cost of Project Procurement accounts for fifty tosixty percent of total project investment. Project Procurement Management not onlyrelates to total project expenditure, schedule and quality, but also directly influenceswhether the project will be implemented and accomplished smoothly. Thus, inProject Management, it is very necessary to intensify the Project ProcurementManagement, improving the management level to ensure the project finishsuccessfully.Except the necessary human power in the implementation of the project, it alsoneeds the devices, facilities, raw materials, spare parts, service and other resources.The whole work process combining planning, organizing, directing, controlling andcoordinating is the Project Procurement Management.Project Procurement Management includes the goods procurement, civilengineering procurement and consulting service procurement. So it is very importantto choose the suitable procurement mode according to the different nature of thepurchasing goods. At the same time, it is required to conform to the procurementprinciples. The scope management of the Project Procurement Management definesthe detail starting and ending point and work responsibilities distribution betweenthe departments in actual procurement workProject Procurement Management contains its specific features, logic system andthe basic workflow. It is the whole process management. There are six steps in theworkflow of Project Procurement Management. Compiling procurement plan pointsout what to be purchased and when carrying out the purchasing work. Compiling theRequest for Quotation aims to work out the products demand document and choosethe suppliers. Request for Quotation means getting the quotation, bidding in duetime. Vendor selection refers to make choices among the suppliers. Contract endingindicates the implementation of the contact.This thesis makes the procurement management study in the preparation periodof NPG expansion project as object, using the theories and methods of projectprocurement management as basis, discusses the effective measures to intensifyprocurement management, improve the purchasing quality and decrease theprocurement cost in the project from the detail project procurement process. The first chapter introduces the general profile of BCN Co., reviewed itsdeveloping history and presents its production and sales situation in recent years. Italso introduces the NPG market development status, disclosing the product becomesshort supply in the market due to the market demand increase; this is the exactreason that the project will be expanded. At the same time, it introduces the projectschedule, target and cost, pointing out that because the entire project fund isself-gathering, how to well control procurement management becomes a severequestion to influence whether the project could be fully accomplished. So it is veryimportant to intensify the project procurement management for the NPG expansionproject. The second chapter introduces the general theories and the workflow of projectprocurement management. First is the project procurement concept, includingdefinition, mode, principles and scope. Second is the introduction of wholeworkflow of project procurement management, including every step and its contents.By introducing the theories and workflow, it is providing the solid theories basis forthe project procurement work in practice. The third chapter discusses how to make use of the knowledge of procurementmanagement to manage the actual procurement work in the project according to thepractical situation of NPG expansion project. In the start-up phase of theprocurement management, it should first establish project-purchasing organizationand distribute duties and responsibilities. Then the company also clearly stipulatedthe ethics regulation to intensify the education to purchasing staff and improve theircareer ethics. In the detail project procurement work, the first step is to make out the projectprocurement plan and documents. Hence, the project purchasing team worked outthe detail Procurement Cost Schedule of NPG Expansion Project and it becomes theguideline of the project procurement expenditure and scheduling. The project procurement teams also optimize the management system to strictlycontrol the purchasing behavior. In order to find out the effective measure to reduce the total cost of project in thewhole course of project procurement, the company started with paying attention tothe cost in whole project workflow, then making innovation and working out thepurchasing principle-the best cost value principle. In order to ensure smooth implementation of this purchasing principle, thecompany emphasized the purchasing staff should pay close attention to somepurchasing aspects, such as product quality, delivery time, new product &technology, price analysis, price, warranty and service. In the implementation phase of project procurement management, it should firstmake assessment on the suppliers according to the four factors, supplier operationresult, technology, cost and engineering management. Then classify the supplierswith the final assessment score and list out the qualified suppliers as database. Next, make assessment on the market supply/demand power, analyze the supplymarket structure and judge the position in the market. Then the company providedfour procurement strategies: Emancipating Strategy, Judgment/Selection Strategy,and Chance Realization Strategy. Based on these strategies, the company alsoworked out the detail implementation methods. At last, procurement workflow standardization. It is one of the most effectivechannels to reduce project cost and increase economic efficiency. Thus, to strictlycontrol and manage each of the steps of procurement work must proceed accordingto fixed procedure. By making reference of advanced project procurementmanagement experience and combining the actual situation of this project, thecompany fixed the detail procurement workflow. The stipulation of the workflowmake the procurement procedure more detail and clear, avoiding the neglects,realizing the target of whole course management in procurement management. At last establishing the contract management system, manage and control thecontacts, at the same time well doing the contact analysis and contract diagnose. The fourth chapter pointed out the risks in this project are the risk of teamestablishment, risk of procurement quality, risk of purchasing cost and risk ofcontract type. The countermeasures are improving the team qualifications to keepaway the risk of team establishment, tracing and controlling to keep away the risk ofprocurement quality, effectively controlling to keep away the risk of procurementcost and intensifying management to keep away the risk of contract types. So it...