A niche consultancy serving a global market established 1977

Procurement

All too often procurement is the area of major expenditure that receives the least amount of real attention. Experience shows that too many companies regard good procurement as simply obtaining the cheapest product that meets the specification.

 

Good procurement practice is an integrated approach that should cover all aspects of expenditure, this must include subcontractors, specialist consultants and plant suppliers, as well as the more obvious, material supplies.  Cheapest is rarely best and hardly ever best value, other considerations can have a greater bearing on the final cost than initial price, these are generally considered to be incorporated into the RAMS principle,

 

Currently much attention is given to the need to meet each of these principles. In particular, environmental legislation has driven the requirement to provide sustainability. The drive to achieve greater sustainability covers all elements of a project from initial design to ongoing operation, which in turn leads to consideration of reliability and maintainability. McMillan Associates history of working on numerous PPP/PFI contracts places us at the forefront of initiating Whole Life Cost Analysis. On projects where the installation phase occupies a relatively small percentage of the overall  franchise period, it is reliability and maintainability which attain great importance.

 

Availability is a factor that achieves most significance at design and planning stages, its effect can be controlled by setting in place a regime of Supply Chain Management. Materials are supplied by manufacturers that need buyers and which are generally willing to develop constructive relationships with clients. The management of this relationship can produce benefits for both parties and should form an essential element of ongoing procurement management. For any company with long term ambitions, developing good relationships with suppliers is essential and need not be a costly or time consuming activity. Above all it is something that will pay dividends in the long term

 

There are however, other factors that must form the decision making from an early stage. Matters such as compatibility: how does it fit with other components; requirements for installation, will additional plant be required, is there a need for specialist labour? These are all matters that must form part of the procurement process.