Procurement Plan Proposal: DMF Limited's Procurement Management Plan

This report presents a comprehensive procurement plan proposal for DMF Limited, addressing the challenges faced by the organization in its procurement processes. The proposal outlines a strategic approach to streamline the procurement system, improve inventory management, and optimize fin...Read More

Running Head: PROPOSAL
Proposal
Name of the Student
Name of the University
Author Note

1PROPOSAL
Introduction
Various organizations employ different management techniques for carrying out efficient
functioning in their departments. The procurement management is a form of management where
the services and the goods are acquired from a separate organization (Dash et al.2018). Every
organization deals with the procurement management and the planning of the process is what
ensures the success of the business (De et al. 2017). It is a management type that helps the
organizations to save money as much as possible from outside. The success of the procurement
management lies in the highly trained individuals as well as the right type of resources and
suppliers. In the DMF Limited, the main problem is that almost all the departmental heads
believe in the system of purchasing. There is lack of proper inventory management plan for the
large fleet of vehicles and there is also lack of either tyres or spare parts. It has been found that
the practice of adhoc purchase in the organization has caused strain in the financial resources.
Hence there is a need to clean up and streamline the procurement process. Charles Mwape, who
has been provided with the responsibility of everything needs assistance for making the change,
a success.
The objective of the plan
To prepare a good inventory plan and support the financial resources of the company.
The procurement management plan
The procurement management plan documents and outlines the purchase requirements
for meeting the project needs. The responsibilities of the procurement manager are to go beyond

2PROPOSAL
approving the purchases. In order to manage the project effectively, a well-planned strategy
founded on the comprehensive information is required.
The procurement team
Firstly, people will be selected to participate in the procurement planning and the
decision making process too. Everyone is expected to have the authorization.
the required items
The required materials include information about the items which need to be purchased.
Information will be gathered about all the materials which are required by the project. The
tangible and intangible assets might be required such as the software licenses and others.
Pertinent information about every item, technical requirements, size and specs will be included.
It will help to ensure the purchase of the correct material. The reasons and the justifications of
specific items purchased will be included too. A purchasing timeline will be set. It will leverage
bulk purchase across various departments having taken the advantages of seasonal discounts,
reducing the storage and processing costs with just-in-time delivery and negotiating minimal
order quantities.
The selection of the supplier
The supplier will be selected through the bidding process. The bidding will not be open;
it will be rather drawn from a preferred list of vendors.
The Bids and acceptance
A request for proposal will be issued from the procurement department having detailed
the needs of the project. The bidding process will provide certain information such as the costs,
the scheduling considerations and delivery time (Huang 2018). The vendors will be selected and

3PROPOSAL
the contracts will be awarded. The selection criteria will be based on the supplier capability for
delivering the materials on time, the cost, the quality, the delivery schedule, the cost comparison
of the outsourcing and the in-sourcing along with the vendor history and their company.
The contract type
The procurement plan will include different types of contracts. The details about the
types of contracts will be used in the whole procurement process. The different types of contracts
will be used for different categories of items. The purchase order (PO) will be used for the
purchase of goods and materials. The firm-fixed price will be used for negotiating the process for
contracted services. It will also use the Fixed-Price with Economic Price Adjustment Contracts.
The Time and Materials (T&M) will also be used for the material cost and subcontractor rates for
installation.
The identification of the risk management
The risks associated with the dealings with the suppliers are always grave. The potential
procurement risks will be listed and strategies will be outlined for managing and mitigating the
risks having maintained the relationships of the established companies with preferred suppliers.
The potential risks can cause a severe breakdown in the supply chain, delay the projects and
overrun the costs. It might include the circumstances, vendor conflict and substandard delivery
of products. The procurement plan will also outline the strategies for the risk mitigation.
The purchase order process
The purchase order process will be run by using the three-way matching authentication.
Firstly, the purchasing department will send a purchase order (PO) for authorizing a purchase.
Secondly, an invoice will be returned to the vendors having referenced the purchase order (Liu,

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Han and Yu 2017). Thirdly, the goods will arrive with a packing slip that is verified against the
purchase order along with the invoice for ensuring that everything has arrived as per the order.
The constraints in the project
The budget limit can become a major constraint in the project. order to mitigate the scope
creep, the project constraints will be defined carefully which will also include the costs, timeline,
technical specifications. It will be considered at every step of the decision-making process
having verified against the activities of procurement.
The vendor management and accountability
The purchasing department will serve as a liaison between the department heads, the
project manager and the suppliers (Nojavan et al. 2015). Regular meetings will be scheduled
having defined clearly how the meetings will be accomplished. It will also be verified whether
the deliveries are on schedule.
The vendor metrics
The deliver data will be tracked with the quality rating to assess the performance of each
vendor. The quality and quantity of services, the invoice costs and deliver time will be noted.
The metrics will be used to address the issues, recognize the problems and evaluate the suppliers
for future considerations.
Apart from this, Charles Mwape is expected to follow few other principles in the fleet
procurement process.
 Firstly, he will speak to everyone involved with the fleet in some way. The
representatives can include the risk management, the fleet, legal and service/sales

5PROPOSAL
(Patrucco, Luzzini and Ronchi 2016). The inputs will be taken from the
stakeholders for ensuring that the best practices of the company can be followed.
 An asset management inventory will be performed. The assessment of the fleet
will help to learn lessons from the past mistakes in the procurement.
 A balanced approach will be used having considered all the options before
financing the fleet that includes the purchase, lease and hire.
 A technical specification will be defined considering everything. It will include
the continuity of the fleet, the total cost of ownership. It is an essential part of the
final stages of the whole procurement process to check the vehicles against few
performance meeting criteria (Yan, Chien and Yang 2016). The company’s best
practices can be met through this.
 The evaluation and selection of the right partner will help to minimize the risk and
at the same time maximize the value during the entire procurement process.
Conclusion
On a concluding note, it can be said that, the follow up of the above mentioned proposal,
will help Charles Mwape to standardize the fleet and push some cost control on the dealers. It
will also allow the team to prepare for the vehicle acquisition in future.

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References
Dash, A., Das, R.K., Tripathy, S. and Nayak, S., 2018. Supply chain coordination voyage
towards supplier relationship management: a critical review. International Journal of
Procurement Management, 11(5), pp.586-607.
De Araújo, M.C.B., Alencar, L.H. and de Miranda Mota, C.M., 2017. Project procurement
management: A structured literature review. International Journal of Project
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Huang, J., 2018, June. Research on Cooperative Procurement and Warehouse Management of
Enterprise Supply Chain. In 2018 2nd International Conference on Education, Economics and
Management Research (ICEEMR 2018). Atlantis Press.
Liu, C., Han, Q.C. and Yu, D.Q., 2017, April. The Government Procurement Management
System Based on. Net Remoting Technology. In 2017 5th International Conference on
Machinery, Materials and Computing Technology (ICMMCT 2017). Atlantis Press.
Nojavan, S., Mehdinejad, M., Zare, K. and Mohammadi-Ivatloo, B., 2015. Energy procurement
management for electricity retailer using new hybrid approach based on combined BICA–
BPSO. International Journal of Electrical Power & Energy Systems, 73, pp.411-419.
Patrucco, A.S., Luzzini, D. and Ronchi, S., 2016. Evaluating the effectiveness of public
procurement performance management systems in local governments. Local Government
Studies, 42(5), pp.739-761.

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Yan, M.R., Chien, K.M. and Yang, T.N., 2016. Green component procurement collaboration for
improving supply chain management in the high technology industries: A case study from the
systems perspective. Sustainability, 8(2), p.105.