Table of Contents
Foreword xi
Preface xv
Acknowledgments xvii
About the Author xix
Web Added Value™ xxi
Chapter 1 First Things First 1
Case Example 1 Shopping for a Car 1
What Is a Procurement? 5
What Is a Project? 6
What Is a Business Process? 7
How Is Procurement a Project? 9
What Is Project Management? 10
Project Management Processes 11
Process Groups 12
Initiating 13
Planning 14
Executing 14
Controlling 15
Closing 15
Customizing Process Interactions 16
What Leads to Being a Successful Procurement Manager? 16
Professional Management Skills 17
Personal Traits 18
Other Management Skills 18
Specific Procurement Management Skills 20
Terminology 21
Summary 24
Chapter 2 Starting 25
Prioritizing 25
Priority Matrix 26
Do Now - Priority A 27
Reject and Explain - Priority C 28
Resist and Cease - Priority D 29
Plan to Do - Priority B 30
Prioritizing Methods 31
What Kind of Procurement Do You Have? 33
What Is It For? 33
New or Existing Contract? 34
Competitive or Sole-Source Contract? 36
A Traditional Request for Proposal or Internet Reverse Auction? 37
Cost Versus Value Decisions 38
Request for Procurement Services 39
Procurement Team 42
Statement of Work 44
Summary 45
Chapter 3 Planning 47
Case Example 2 Janitorial Services 47
Your Assignment 47
Procurement Process 48
Procurement Plan 48
Priority 49
Statement of Work (Procurement Charter) 50
Task List and Work Breakdown Structure 57
Schedule (Timeline) 58
Budget 59
Communications Plan 60
Risk Plan 62
Summary 67
Chapter 4 Scheduling 69
Major Considerations for Schedules 70
Interrelationships 70
Float Time 70
Contingency 71
Level of Detail Provided 72
Stakeholder Agreement 74
Meeting the Dates 75
Network Diagrams 76
The Program Evaluation and Review Technique (PERT) 78
Inputs 80
Developing a Schedule 86
Step 1 List Tasks 86
Step 2 Create the WBS 87
Step 3 Identify Milestones 87
Step 4 Assign Responsible People 87
Step 5 Develop Network Diagrams 87
Step 6 Estimate Task Effort 88
Step 7 Estimate Task Duration and Assign Dates 88
Step 8 Review the Schedule 89
Step 9 Control the Schedule 89
Step-by-Step Schedule Development 90
Step 1 List Tasks 90
Step 2 Create the WBS 93
Step 3 Identify Milestones 99
Step 4 Assign Responsible People 100
Step 5 Develop Network Diagrams 101
Step 6 Estimate Task Effort 102
Step 7 Estimate Task Duration and Assign Dates 107
Step 8 Review the Schedule 110
Step 9 Control the Schedule 110
Summary 112
Chapter 5 Budget 113
Do You Need a Budget? 113
Words of Caution About Attitudes Toward Procurement 114
Budgeting Methods 115
How to Create a Budget 115
Step 1 Get Estimates 116
Step 2 Combine Estimates 116
Step 3 Add All Task Estimates 117
Step 4 Determine Contingency 118
Step 5 Present Budget 118
Step-by-Step Budget Creation 119
Cautions 123
Summary 124
Chapter 6 Communications 125
Communication as the Failure Point 125
Expectations 126
Stakeholders 126
Leadership 127
Tracking and Reporting 127
Conflict-Resolution Skills 129
Communication Plan 130
Team Communications 130
Status Reports 131
Potential Suppliers (Vendors) 133
Frequency of Communication 136
Best Forms of Communication 136
Change Control 138
Summary 141
Chapter 7 Risk 143
Procurement Risk 144
Types of Risk 146
Procurement Risk Management Processes 147
Risk Identification 148
How to Identify Risks 148
Risk Analysis 153
Risk Probability and Impact 153
Step 1 Determine Each Risk's Probability 154
Step 2 Determine Each Risk's Overall Impact 156
Response Planning 158
Monitoring and Control 162
Summary 164
Chapter 8 Negotiations 165
Goals 166
Information 166
Strategies 168
Techniques 171
Case Example 1 Dissection 173
Case Example 1 Price Negotiation Dialogue 179
Summary 182
Chapter 9 Signing the Contract and Closing the Procurement 185
Draft Contract 185
Parts of a Contract 186
Reviews 188
Signatures 188
Executed Contract 191
Debrief Unsuccessful Suppliers 192
Lessons Learned 194
Summary 195
Chapter 10 Contract Administration 197
Is Contract Administration Your fob? 197
Contract Administration Requirements 199
Document Supplier Performance 200
Document Cost Savings 206
Prepare Necessary Contract Amendments/Addendums 206
Monitor Contract Expiration Dates 207
Terminate the Contract When Necessary 207
Summary 208
Chapter 11 Final Words 211
Communication 211
Know Your Commodity 212
Know Your Business and Industry 212
Project Management Software 213
Reference Books 215
Appendix A List of Tables and Figures 217
Appendix B Examples of a Completed RFPS, Schedule, and Budget 221
Appendix C RFP for Case Example 2: Janitorial Services 241
Index 283
