By: Arshad Khan, Façade Omkar Realtors & Developers Pvt Ltd.
Material procurement planning plays a key role in the successful implementation of the project. Normally the decisions are delayed and once the procurement starts there is a mad rush to complete the project, which results in overlooking many key aspects which eventually further delays the project.
While finalizing the commercial ensure that hidden costs are identified and sorted out earlier as in a later stage it will badly affect the budget. Consider the following:
Ensure all documentation required for overseas consignment is agreed upon and no delays are noted while getting materials cleared. Select a supplier which can give the benefit of taxes, transport & time. Product code should be clearly defined to be identified by the end user. (See table ‘Panel Coding’).
Inform clearly to a supplier not to proceed with the next lot until the earlier one is completed. Optimization priorities differ at both ends. When each lot has big quantities, communicate to the supplier to ensure he supplies all the items in the lot proportionately as in most cases 99 per cent is considered as ZERO.
Negotiate and finalise the rates in the early part of the project as you have the options and time to look for alternatives. Once we are in the middle of the project and ordering a new item with a fixed supplier then he tends to bargain for the higher price. Communicate all specs and requirements of the project clearly to the supplier to ensure arguments are avoided. Fix the rates by avoiding escalation in due course of the project by setting out project completion dates.
All materials should have the same warranties as required by the project. If any one of the suppliers is giving a lesser period warranty then the entire warranty will fall off. Ensure that the warranties are project-specific and not generic in nature.
Define standard packing procedures at the time of order. A little more investment might be helpful at a later stage than damaged quality of products.
All needed tests as per the specification should be taken seriously and carried out in accordance with it. Considering all the above-mentioned points before finalizing any contract will be beneficial for all the stakeholders. Hence a thorough study of the project requirement at the start of the project is very much needed.
By following correct procedures putting materials on hold, rejection of materials, transit breakages, arbitrations, rate escalation, billing variations etc., can be avoided which normally consumes a lot of energy and time of the project management team.
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