Procurement Management | Project Management

Running Head: PROJECT MANAGEMENT
PROJECT MANAGEMENT
Name of the Student
Name of the University
Author Note:

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PART A
Introduction
The study defines and demonstrate Procurement management along with its
application in project management. The entire study demonstrates the definition of
procurement management and its importance. Kerzner (2017) mentioned that the term
procurement refers to acquiring something positive or good from an external source. It is a
mutual business between two parties to perform an interaction for market segmentation
(Fleming, 2019). Both the parties included in this interaction procedure obtain different
objectives. In this section a reflect on the entire knowledge of procurement management and
its implication on project management.
Discussion
Definition
The definition states that procurement is the process of interaction between two
parties for increasing profit of a particular organization. an effective procurement practice can
provide the organization an interesting amount of discounts, it can reduce the cash flow, and
address any problems associated with the suppliers. The alternative terms used for
procurement are – acquisition, purchasing, and contracting. In simpler terms procurement
demonstrate the relationship with the buyers or the consumers with the seller or the contractor
(Kisomi, Solimanpur & Doniavi, 2016). For the contractor the contract is the entire project
whereas for the consumers it is the subproject.
Project procurement management
In the management of project, the procedure of procurement includes some specific
stages that include – Planning of the procurement management, conducting the procurements,
and controlling the procurements.

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Procurement strategy
According to the study there are two basic strategies for procurement. Firstly, the
strategy for corporate use where the profitability is linked with the strategy (Ferri et al.,
2016). Secondly, the project procurement strategy defines its relationship with the operating
environment.
Procurement environment
There are two types of environment of procurement that includes macro and micro
environment. Macro environment refers to the external variables and micro environment
includes the internal factor including – planning, conduction, administer, and closure.
Procurement process
There are two types dedicated for buyers and sellers. The seller’s procurement process
includes the following steps – presales activity, Bid or No Bid decision making, Negotiation
of the contract and formulation, administration of the contract, and contract closeout. The
buyers process includes the following steps – planning, solicitation, selection source,
administration of the contract, and contract closeout.
Project contract
The contract refers to the agreement between the two parties of the procurement
management. There are three types of project contract namely – fixed price contract, cost plus
contract, and time and material contract (Ferri et al., 2016). In the fixed price contract, the
contractor carefully estimates the target cost. In the cost-plus contract the contractor
demonstrates the situational pricing of the contracts.

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Conclusion
In conclusion, it can be said that, procurement management is a group of activities
that helps the business to run smoothly. It ensures all the elements of the services and ensures
efficiency and success of every project at the end of the project. It clearly demonstrates the
relationship between the buyers and sellers. These are the two basic pillars of the project. It
can optimize the purchasing procedure and helps to gather efficient leads for further projects.
PART B
Introduction
This chapter demonstrates the procurement management and its relationship with the
concept of sustainability. On the other hand, the chapter will describe the concept from the
Australian perspective of project management. The term sustainability refers to the ability to
maintain a certain level that helps to secure the ecological balance.
Discussion
Definition
To define the term sustainability Sengupta & Shukla (2019), mentioned the ability to
encompass the social, economic, and environmental factor by any activity. Sustainable
procurement refers to the process that helps to create a positive social, economic, and
environmental impacts on the business condition. It has been appeared as an integral part of
procurement management that ensures a positive purchasing decision depending on the triple
bottom line. The elements of this triple bottom line are environment, social, and economic.
Tomossy & Alam (2018) on the other hand, mentioned that sustainable procurement
management refers to adoption of all the elements of Corporate Social Responsibility as the
principle of procurement.

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Key consideration
As mentioned in the triple bottom line the key elements of the sustainable
procurement are divided intro three categories namely – environmental element, social
element, and economic element. The aspects of environmental element are – inputs of the
natural resources, amount of pollution, and loss of flora and fauna. The social element
includes – condition of the workforce, impact upon the human health, elimination of child
labor. The aspects of economic element include – acquisition of the product, training others,
and disposition of the product.
Sustainable procurement practice demonstration
It includes the strategy of demand reduction, consideration of the future sustainability,
and improving the sustainability. There are certain aspects associated with sustainable
procurement management that includes – accountability, ethical behavior, full and fair
opportunity, focus on the needs, integration, ethical behavior, respect for all the stakeholders,
unique solutions, and continuation of the improvement. There is certain risk associated with
the term sustainability (Sukardi & Abduh, 2019). Procurement management procedure helps
to reduce the organizational risk with proper management plan. The objectives of
procurement risk management include identification, prioritization, and proper management
of both the external and internal risks.
Model of sustainable procurement management
The model of procurement management includes some steps for effective result. The
first step of this include high level commitment and implementation of the framework to
ensure the concept of sustainability. Second step of the procurement management model
includes working with the group members of the team (Ghadimi et al., 2016). Third step

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includes, assessing the procurement procedure and prioritizing the areas to be spent. And the
final step includes development of the policy and its implementation.
Conclusion
Both the studies provide some important information about procurement and
procurement management. It exhibits that the procedure is an integral part of the entire
process of organizational management. It helps the organization to mitigate any deal between
two parties with different objectives and one particular goal. The goal is to provide effective
profits to the organization with due respect to the concept of corporate social responsibilities
and the notion of sustainability. Hence, procurement management and is very much important
for the organizational growth and management.

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References
PART A
Kerzner, H. (2017). Project management: a systems approach to planning, scheduling, and
controlling. John Wiley & Sons.
Kisomi, M. S., Solimanpur, M., & Doniavi, A. (2016). An integrated supply chain
configuration model and procurement management under uncertainty: a set-based
robust optimization methodology. Applied Mathematical Modelling, 40(17-18), 7928-
7947.
Ferri, L. M., Oelze, N., Habisch, A., & Molteni, M. (2016). Implementation of responsible
procurement management: An institutional perspective. Business Strategy and the
Environment, 25(4), 261-276
Fleming, Q. W. (2019, January). Project procurement management: contracting,
subcontracting, teaming. Project Management Institute.
PART B
Ghadimi, P., Azadnia, A. H., Heavey, C., Dolgui, A., & Can, B. (2016). A review on the
buyer–supplier dyad relationships in sustainable procurement context: past, present
and future. International Journal of Production Research, 54(5), 1443-1462.
Sengupta, T., & Shukla, S. (2019). 1 Conceptual Framework in Sustainable
Procurement. Sustainable Procurement in Supply Chain Operations.
Sukardi, S. N., & Abduh, M. (2019). Indonesian contractors’ practices towards sustainable
procurement principles for green building projects. In MATEC Web of
Conferences (Vol. 270, p. 05009). EDP Sciences.

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Tomossy, G., & Alam, S. (2018). Shifting public procurement towards sustainability: a
comparative case study of Indonesia and Australia. Australian journal of Asian
law, 18(2).