INDIVIDUAL ASSIGNMENT ON PROJECT procurement MANAGEMENT

Asreskebede……RGSR003/2012

Submitted to >Koyachew (PHD)

Table of content

General introduction……………………………………………………………. i

1. Introduction …………………………………………………………………1
2. Brief summary……………………………………………………………….1
3. Result………………………………………………………………………...2
4. Contribution………………………………………………………………….3
5. Foundation……………………………………………………………………3
6. General critique………………………………………………………………3
7. Issue………………………………………………………………………….4
General introduction

Procurement is a vital process in any sector weather it is for small scale industries, medium or big
enterprises, it will have significant effect in the success of the firm as how it is handled in different process
of procurement starting from planning phase.
When we come to project procurement which is one of the project body knowledge areas in the PMBOOK,
it has significant effect on the result of our project based on the effort exerted on how we are handling the
procurement. Project procurement starts with planning that means we need to define what we need to
procure, when to procure and from whom to procure. Also we need to be concerned on the procurement
lead time; otherwise we might be urged to take part in procurement that might not help us to achieve our
project by scope creep.
As an individual who is interested in project planning and management, it will be unlikely not to be
interested in the project procurement body knowledge area of project management.
When we are interested in project procurement, we need to ask ourselves the questions like what are the
factors which will affect our project the most. So we will love to see the researches and the literature review
like what we are doing on this paper like
 The criteria and method used in supplier selection and evaluation
This is the most interesting thing as a project planning and management student and inspires to conduct
research in future.
 1. Introduction

For any project, it is common to have project procurement and it will have direct impact on the project
success or failure weather it affects the project positively or negatively respectively. In the procurement
process the criteria and method used for supplier selection and evaluation are the key process as we tried
to see in the review.
On the literature review, the main objective of the review is therefore, to investigate procurement
processes, considering the following research questions:
1) What criteria and methods are the most widely used for selecting suppliers in projects?
2) What criteria and methods are the most widely used for evaluating the performance of suppliers in
projects?
The author focusing on the above raised questions that served to review different literature published on
different journals and core of the review.
The article is more of conceptual work because the author used most of the journals to review the
literature in its article which are conceptual by their nature as clearly mentioned on the article.

2. Brief Summary

On the literature review the author emphasized on the deterministic role of the criteria and method used
for selection and evaluation of the supplier for the success or failure of the project in the project
procurement process. And it is highly highlighted the great opportunity for the project success if we could
manage the project procurement giving special attention for the criteria and method used for selection of
the supplier for specified project procurement. It also shows the other side of the worst case that might
happen if not managed properly. We can make the best procurement for the success of our project by
emphasizing on listing out heavily weighted best criteria which might different for different procurement
that will help for the success of the project with successful procurement process. As it is clearly
mentioned on the review by the author that the project succeeded in different sectors who applied the best
criteria for selection and evaluation of supplier before and after the procurement selection respectively.
We can see below as the author tried to show on the review as follow.
Due to high competitiveness, outsourcing has become a popular business strategy (de Almeida, 2007).
The influence that suppliers have on the success or failure of projects is significant since their
performance affects the results of the entire business effort (Liu et al., 2014; Zolghadri et al.,2011a).
Moreover, selecting an appropriately qualified supplier improves stakeholders' confidence since this is
more likely to lead to project goals being achieved (Turskis, 2008). In this context, excellence in the
procurement process is essential in order to achieve good outcomes in any project. Therefore, selecting
the right supplier for an assignment, as well as evaluating this supplier's performance while the contract is
being implemented, plays an important role in ensuring a good outcome. The procurement criteria and
method used for selecting the right supplier in project and evaluating the performance of the supplier is
the most important thing in project procurement and failing to address this critical issue in project
procurement, will lead to the complete failure of the project. If the method and the criteria’s used properly
to select and evaluate the suppliers, it will lead the project in the post successful way avoiding
unnecessary cost and completing the project within the scope of the project on the right schedule.
This result reveals a greater interest from academics in the supplier selection phase and demonstrates the
need for more research on supplier evaluation. These findings confirm that, in general, projects aim to
achieve good results regarding cost, quality and time (Walravenand de Vries, 2009; Idrus et al., 2011;
Yilmaz and Ergönül, 2011). The factors listed can be used as a basis for managers setting possible criteria
as to selecting suppliers since the literature shows that criteria are very useful in the project procurement
process in a general way

3. Result

It is clearly seen in the review that the criteria and method used for selection and evaluation of the
supplier after selection is a vital process in the project procurement for the good of our project success.
But it is not clearly mentioned which criteria are the most important and need to be considered in the
selection process and the method can be used is not mentioned or nothing is explained in the review how
to evaluate or how the evaluation should go or which method is best for the evaluation process of the
supplier for project procurement.
Since suppliers' performance is critical for the success of projects, their performance also critically
influences the procurement process. Moreover, in order to select and evaluate suppliers adequately, it is
essential to use criteria and methods that support the client's needs. Thus, this paper presents the criteria
and methods used to select and evaluate suppliers in different project environments. In this context,
asystematic review of the literature was undertaken, covering publications issued between 1973 and 2015.
The search for papers used five databases: Web of Science, Web of Knowledge, Scopus, SpringerLink
and Wiley Online Library. A growth in the number of studies in this area was noted. The papers were
classified by the type of project in which the project occurs and the phase of the procurement process. In
the literature review, it was observed that most papers consider the phase of supplier selection while
supplier evaluation was considered by only 15% of the studies and only 1 of 119 articles proposes an
integrated model for supplier selection and evaluation. Due to the high number of criteria found in the
review, they were classified into categories and subcategories and took the phase of the process into
consideration. There were 28 categories for supplier selection and 20 for supplier evaluation. The criteria
that each phase of the procurement process most used were examined and after ordering them by the type
of project. It was observed that the main criteria considered are different for each of these classifications,
so this fact must be taken into account when choosing the most suitable criteria for each project.
Moreover, the methods for the project procurement process cited in the literature review were presented.
The selection of a method depends on, for example, the type of criteria used, the existing information and
the desired results. It was also noted that there is no best method, but rather methods that are suitable for
different decision problems. This paper has contributed to the literature by integrating knowledge from
studies on criteria and methods with a view to selecting and evaluating suppliers for projects. Therefore,
as these themes are highly related and commonly used together for practical applications and to propose
models, this paper helps researchers and managers to find research material more quickly, and condenses
high-quality articles available on relevant databases that can be drawn on for their research. Therefore,
this study offers a basis of reference for managers and researchers, so they can inform themselves about
criteria and methods that they have not considered hitherto and decide whether or not they should be used
in their organization. Recommending a robust set of criteria or methods for all companies, even to those
in the same sector, is dangerous because each organization has different characteristics and preferences.
 4. Contribution

This article review found to be important by taking through different types of literature in different sector
with a variety of view point to carefully look at the criteria and method for selection and evaluation of the
supplier for procuring project or outsourcing the project. We can mention the main contribution of the
article.

 It will inspire researchers to focus on the empirical research method to see how the criteria and
method for procurement selection and evaluation affects the success of the project as a whole.
 It will have a great impact for project managers and institutions working on project to have a look
while or before conducting a project procurement even to include in their project procurement
management plan.
 It might be a good opportunity to invite researchers to research in detail the other issues like the
points not covered in the review by the researchers in future and to be used as an input for many
more projects in future.

5. Foundation

The literature review mainly focused on different articles written by different researchers in different
sector and used as main input for his review based on the number of repentance of their citation neither
used theories and models in the article review. As we have clearly seen in the review by the author, the
need for the review also arouse because it has been shown that most of the time, outsourcing became very
common in the project area for the failure and success of the project and it is related with the criteria and
method used by the project manager (project procurement management team) for selection and evaluation
after selection carried out. Therefore the review also conducted on the research conducted in different
sectors which tried to explore the effect of the criteria and the method used in their respective project
procurement on their success or failure of the project. So no model or theoretical foundation is seen in the
article.

6. General critique

To mention the positive critique, the author tried to show us the influence of criteria and method on the
procurement selection and evaluation of the supplier and tried to consider the procurement process in
different sector with a review of a number of literatures which is written with different scholars.
Choosing the title for literature review by itself is considered us an inspiration and input for further
review and research for different scholar who is working on project area.
The review tried to analyze which will have the most influence either criteria or method for selection or
supplier evaluation on the success of the project. Even it helped to recognize that different criteria for
supplier selection and evaluation are not same for different sector, the one criterion which comes first in
the selection process may come to in different rank (e.g. cost ranked 11th in evaluation phase but ranked
but 2nd in selection phase as shown in the literature review).
The drawback of the literature review is, the literature is based on the literature which is most cited in the
different journals not based on the models and theories.
The review also based on more number of conceptual works not focused in empirical work that might be
different from the reality.
Since the selection and evaluation processes might be affected by the government rules and regulation for
governmental institutions and the author doesn’t tried to look at how the project procurement selection
and evaluation in governmental institutions. Most of the literatures focused on the construction sector and
that generalization from one sector may not represent for others sector to consider in the project selection
and evaluation phase. Time, quality, cost and health and safety are treated as required performance in
current environment rather than as indicator of excellence.
Finally I need to highlight that especially in the evaluation process there is not clear points discussed what
to focus on that phase. Not only in the evaluation phase, but also in the selection process, nothing is
mentioned or tried to show in which are to focus as common area.

7. Issues
Although this paper has contributed to knowledge about the supplier selection and evaluation process in a
project environment, it has some limitations:
- The taxonomy used in the paper was proposed based on reviewing the literature, and no primary
research was performed to test this taxonomy.
- This research does not discuss the aspiration levels for clients and suppliers during the procurement
process.
Finally, the results have revealed that the procurement process may have to consider new perspectives,
such as client/ supplier relations, due to the importance of having partnerships with suppliers that meet
organizational needs. Finally, it would be useful to conduct exploratory studies on the perception of
different stakeholders in contractual partnerships in the supplier selection phase. Also, models of
negotiation that explain in depth the multiple and conflicting factors in this phase may be proposed.
First, quantitative and qualitative studies are needed on the use of several measures to define the
importance rating of criteria for selecting and evaluating suppliers. Additionally, these criteria must be
used in practical applications in different sectors. Moreover, due to the strategic importance of
sustainability, environmental, ecological, and social and risk factors, it is important to consider these
criteria and conduct an analysis of their expected performance in future studies. The methods cited in the
review can be used as a basis for real world applications. It is critical to choose the adequate methodology
for the problem, and to take into consideration the type of criteria used, the information available, the type
of recommendation and the complexity level.
Finally, the results have revealed that the procurement process may have to consider new perspectives,
such as client/ supplier relations, due to the importance of having partnerships with suppliers that meet
organizational needs. Finally, it would be useful to conduct exploratory studies on the perception of
different stakeholders in contractual partnerships in the supplier selection phase. Also, models of
negotiation that explain in depth the multiple and conflicting factors in this phase may be proposed.
Also, this research highlights the need to discuss the aspiration levels for agents, contractors and
contracting during project supplier selection and evaluation. Finally, the outcomes of this paper provide a
good source of information for researchers seeking to conduct future studies on this theme, as well as a
list of publications from academic journals which could be useful. To finalize we can raise the below
questions:

 Why not the author tried to conduct primary research?

  Why this research does not discuss the aspiration levels for clients and suppliers during
the procurement process.
I hope the researcher focused to show only the deterministic effect of the issue (the method and criteria on
the selection and evaluation of the supplier) on project success or failure.
But I recommend conducting a detail research on the above highlighted questions to address and lay a
foundation for future research and projects.