A procurement execution plan creates a process that procurement professionals follow to determine what to buy, when it should be bought, and who they should purchase from.
Businesses excel when proper plans are in place. This is especially true in the procurement department. The first step in creating a procurement execution plan is to understand what data is relevant to procurement decision-making and where it is stored.
A procurement execution plan outlines the requirements for a project or program as well as the processes that must be taken before entering into final contracts. The procedure necessary to acquire the goods or services that the company deals in is referred to in this context as the specific project.
What Does a Procurement Execution Plan Include?
Procurement execution plans will vary depending on characteristics of a project. However, there are some common elements that are part of a procurement execution plan in almost every construction project:
- Metrics that will be used to evaluate the suppliers’ performance.
- A list of all suppliers involved and an explanation of their roles in relation to the project.
- A list of the organizational standards that must be followed.
- Types of contracts used in each purchase.
- Estimated delivery dates for all provided supplies (products and services).
- Graphics or text that demonstrates an alignment between lead times and the project schedule.
- An explanation of how the listed supplies will impact the project plan’s constraints and limitations.
Benefits of Procurement Execution Plans
Companies who are looking forward to acquiring new goods and services from external suppliers are highly benefited by the development and implementation of Procurement Execution Plans. Among said benefits, it’s possible to list the following:
- To maximize cost savings, procurement execution plans enable firms to group related requirements into a single contract as well as break up complex requirements into different contract packages.
- All stakeholders have the chance to meet during the procurement planning process and talk about the requirements they believe are necessary.
- Procurement Execution Plans enable businesses to anticipate any additional workforce requirements, such as any outside help that may be required to set up or install the goods or services.
- Organizations can use procurement plans to compare actual performance to the scheduled project activities and timeframe and to notify departments when procedures are running late.
- The purchasing process is more transparent and predictable