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Supply chain management (SCM) is often focused on continuous production
environments where the emphasis is placed on strategies such as leveraging
purchases through bulk buys, forming alliances, outsourcing catalog items and
minimizing nonstandard purchases. However, SCM also plays a critical role in a
project-based environment where it’s often not possible, or desirable, to eliminate
purchases that are customized or low-volume quantities. Whether it’s purchasing
specialized capital equipment, constructing new plants or developing new
products, they’re all good candidates for the application of project management
principles.

These principles have applications in a broad range of industries, such as power
generation, oil and gas production, shipbuilding, and research and development.
Many organizations operating in these industries have adopted project
management methods as the means of developing and integrating the solutions
required by their customers.

Procurement Roles in the Project Team

Most projects rely heavily on bought-out elements, whether they’re specialized
services, tests, raw materials or completely engineered systems. Supply
managers, often referred to as project procurement professionals, are
assigned procurement roles and should be fully integrated into the project team
in order to maximize the efficiency of the supply chain and to ensure all elements
are aligned to support the project (see the chart below). Specifically, procurement
professionals integrated into project teams add value by performing the following
key roles:

1. Developing the project procurement management plan.
2. Providing inputs regarding existing supplier capabilities to new product
design teams.
3. Providing inputs into scope statements and specifications.
4. Planning and leading supplier solicitation, bid evaluation and supplier
selection.
5. Planning and facilitating early supplier involvement (ESI) initiatives to assist
in new product development, feasibility studies or manufacturing.
6. Identifying potential suppliers and establishing key supplier relationships to
support project requirements.
7. Managing supplier communications throughout all phases of the project.
8. Maintaining financial management of the supply chain, including cash flow,
cost control, currency exchanges, insurance, etc., as well as providing
supply chain financial inputs into the project cost management plan.
9. Preparing and negotiating supplier contracts.
10. Managing supply chain contracts throughout all phases of the project.

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