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    Procurement and Supply in Projects: Misunderstood and Under Researched
    Procurement and Supply in Projects: Misunderstood and Under Researched
    Procurement and Supply in Projects: Misunderstood and Under Researched
    Ebook145 pages1 hour

    Procurement and Supply in Projects: Misunderstood and Under Researched

    By Douglas Macbeth, Terry Williams, Stuart Humby and Ken James

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    Procurement Management is one of the nine Knowledge Areas of the PMBOK Guide, but it is a relatively recent focus of academic study and in many business sectors the contribution of procurement is not fully realized or integrated into the strategic considerations of the business. Procurement and Supply in Projects: Misunderstood and Under-Researched examines this inconsistency.
    LanguageEnglish
    PublisherProject Management Institute
    Release dateJun 1, 2012
    ISBN9781628250114
    Procurement and Supply in Projects: Misunderstood and Under Researched

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      Book preview

      Procurement and Supply in Projects - Douglas Macbeth

      Project Management Institute

      Procurement and Supply in Projects: Misunderstood and Under-Researched

      Research Team:

      Douglas Macbeth, BSc, MSc, C.Eng

      Professor of Purchasing and Supply Chain Management, Southampton Management School, University of Southampton, UK, (corresponding author)

      Terry Williams, MA(Oxon), MSc, PhD

      Director, Southampton Management School, University of Southampton, UK

      Stuart Humby, BSc, MSc.

      Visiting Professor, Southampton Management School, University of Southampton, UK

      Ken James, MA, OBE

      Visiting Senior Fellow, Southampton Management School, University of Southampton, UK

      Library of Congress Cataloging-in-Publication Data

      Procurement and supply in projects: misunderstood and under-researched/research team,

      Douglas Macbeth…[et al.].

             p. cm.

        Includes bibliographical references.

        ISBN 978-1-935589-54-9 (alk. paper)

      1. Project management. 2. Industrial procurement—Management. I. Macbeth, D. K. (Douglas K.)

        HD69.P75P685 2012

        658.4’04—dc23

      2012014178

      ISBN: 978-1-935589-54-9

      ©2012 Project Management Institute, Inc. All rights reserved.

      PMI, the PMI logo, PMP, the PMP logo, PMBOK, PgMP, Project Management Journal, PM Network, and the PMI Today logo are registered marks of Project Management Institute, Inc. The Quarter Globe Design is a trademark of the Project Management Institute, Inc. For a comprehensive list of PMI marks, contact the PMI Legal Department.

      PMI Publications welcomes corrections and comments on its books. Please feel free to send comments on typographical, formatting, or other errors. Simply make a copy of the relevant page of the book, mark the error, and send it to: Book Editor, PMI Publications, 14 Campus Boulevard, Newtown Square, PA 19073-3299 USA.

      To inquire about discounts for resale or educational purposes, please contact the PMI Book Service Center.

      Printed in the United States of America. No part of this work may be reproduced or transmitted in any form or by any means, electronic, manual, photocopying, recording, or by any information storage and retrieval system, without prior written permission of the publisher.

      The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48—1984).

      10 9 8 7 6 5 4 3 2 1

      Table of Contents

      Acknowledgments

      1.Introduction and Research Questions

      1.1Research Questions

      1.2Specific Aims

      2.Literature Review

      2.1Introduction

      2.2Economic Foundations

      2.3The Project Management Literature

      2.3.1PMBOK® Guide and Other Standard Guidance

      2.3.2Recognition of Procurement's Role

      2.3.3Perceived Causes of Failure

      2.3.4Collaboration in Complex Projects: Managing the Ongoing Relationships and Planned Actions

      2.4Supply (or Procurement) Management

      2.4.1Evolution of Supply

      2.4.2Information Flows

      2.4.3Early Supplier Involvement

      2.4.4Nature of Cooperation as a Newer Way of Working (Where Appropriate)

      2.4.5Networks of Relationships

      2.4.6Summary and Impact on Projects

      2.5Summary and Conclusions

      3.Methodology

      3.1Introduction

      3.2Research Design/General Methodological Approach

      4.Fieldwork

      4.1Interviews

      4.1.1The Context of the Interviewee

      4.1.2Project Context

      4.1.3Project Setup

      4.1.4Perceptions of the Supply Function

      4.1.5Bodies of Knowledge

      4.1.6Project Performance

      4.1.7Interdisciplinary Relationships

      4.1.8Project Processes

      4.1.9Barriers to Progress

      4.1.10Leadership

      4.1.11Team Processes

      4.1.12Capability (Individuals or Groups)

      4.1.13Keys to Success and Failure of Projects

      4.2Survey (See Appendix 2 – Questionnaire)

      4.3Results

      5.Discussion

      6.Limitations

      7.Conclusions and Recommendations

      References

      Appendix 1 – Interview Guide

      Annex 1. Project disciplines/specialisms

      Annex 2. Project processes

      Appendix 2 – Questionnaire

      Acknowledgments

      Our thanks go to Project Management Institute and the Chartered Institute of Purchasing and Supply for their support to this project and in supporting our approach to their members and to all who participated in the survey.

      Chapter 1

      Introduction and Research Questions

      The Project Management Institute's A Guide to the Project Management Body of Knowledge ( PMBOK® Guide ) recognizes Procurement Management as one of its nine Knowledge Areas, and it features in a number of the Process Groups, either directly or by association.

      The issues are captured in a quote from the cover of Kwak and Anbari (2008): Project management is greatly affected by allied disciplines and in return, it influences them. Therefore, innovative theories, trends and challenges discovered through investigating allied disciplines of project management could have important implications and allocations in the future of project management.

      This project looks to the broad reach of procurement and supply management to investigate the processes involved in interacting with the variety of disciplines and experience brought to bear from the suppliers to projects, in order to better understand the impact of and opportunities from the management of the supply side to the project.

      However, given that procurement is itself a relatively recent focus for academic development and that in many business sectors the contribution of procurement is not fully realized or integrated into the strategic considerations of the business, it is the starting hypotheses of this project that (1) project managers are unlikely to have fully accounted for the problems produced by an incompletely considered procurement process, and (2) that the opportunities of operating with participative and cooperative procurement strategies will not have been recognized. The implication of these hypotheses is that when projects go wrong it is likely that at least some of the blame can be attributed to the failure to plan and manage the procurement agendas appropriately.

      This project investigated the current levels of understanding of the procurement (later standardized to a generic term of supply) management dimension in major projects and the impact that supply performance has on successful project completion. The approach was a mixture of methodologies, initially using a qualitative approach involving interviewing senior persons involved in projects, followed by a quantitative phase to survey a wider group to test out the indicators from the qualitative phase, supported by SPSS analysis.

      1.1 Research Questions

      To what extent are the issues of procurement management understood by project managers?

      What are the relative importance and activity levels of the different disciplines involved in the supply-side activities?

      Is there a relationship between project managers who are active in the procurement process and project success (including completion on time, within cost, and with quality, but also success in its broader perspectives)?

      Is there evidence to suggest that Procurement Management in the PMBOK® Guide needs to have a more strategic role, in particular coming earlier in project planning?

      There is at least anecdotal evidence (some of it gained through pilot study work undertaken by two members of the team) that the provision in the PMBOK® Guide is not well understood or put into action in major projects. If this is true, the projects are liable to additional risks of failure to meet overall targets through failures in supply areas distant from observation at the project site. If this is the case, there are major opportunities to improve project success rates by managing the supply side in the same way as successful manufacturing and service companies are already doing and these lessons may apply to the project area as well. In these other sectors, best practice suggests different modes of interaction and relationship building and earlier involvement in decision making, among other issues. The project aimed to explore these issues in practice.

      1.2 Specific Aims

      Understand the role of procurement thinking and processes in project success or failure

      Examine the nature of interdisciplinary

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