The Role of Procurement Departments in the Procurement Process - Report Example

Insert surname     Author’s name Instructors’ name Course Date Table of Contents Introduction 4 The Role of Procurement Departments in the Procurement Process 4 Characteristics of a Good Vendor 6 Purchasing Department 7 Main Functions of purchasing department 8 Materials Department 9 Main Functions of Material Department 10 Quality Control Department 11 Main Functions of QC Department 12 Expediting Department 13 Responsibilities of an Expediting Department 13 Recommendations for an Effective Equipment Procurement Process 14 Conclusions 16 Work Cited 17 Abstract The following report analyses the procurement process of the ADDC engineering firm. It outlines the roles of five departments in the entire process of procurement. These departments include Supplier Appraisal, Purchasing, Materials, Quality and Expediting departments. The company procured equipment, only to find out that they did not meet the specifications or expected quality standard. As a result, the ADDC Company encountered some loses in the whole process since the equipment could not work. Therefore, this paper discusses the responsibility and the roles that each of these departments played and how such problems kind be avoided in future. Introduction Engineering is a technical field for any company (Marsh, 214). As such, every department in a firm must play its role in a more accurate manner, to make sure that there is no any flaw that may happen in the company’s operations. In this scenario of buying ADDC equipment, all these departments are involved in one way or the other. It therefore means that all of them are responsible for the failure of the equipments which were bought. However, there are those departments in the procurement process that carry more weight than the others. A brief overview of the roles and responsibilities of every department in the procurement process depicts some incompetence. It is clear that from the entire process all departments failed in their jurisdictions. In this regard, there are some steps that could be taken initially to avoid what happened in the ADDC. The supplier appraisal department failed in its application of the appraisal techniques. It is also correct that in the procurement process, the first stages are very crucial. This means that if these stages are not carried out correctly, then there is a high likelihood that the rest of the stages will not be perfect. The consequent departments entirely depend on how the appraisal process is carried out. However, this is not to say that the last four departments could not have prevented the purchasing of these equipments. The Role of Procurement Departments in the Procurement Process Supplier Appraisal Department As mentioned above, this is the most important in the initial stages of procurement process. It is not clear if verification of the documents at the logged stage was done correctly. This is because the vendor must possess technical knowhow of engineering materials he wishes to sell. At the same time, the license must be valid and certified by the relevant body, these aspects are crucial before a vendor is allowed to continue to the next stage of candidate. The next step of giving out a questionnaire to the vendor to fill his details is the one that raises some eyebrows. There are two ways that this department could have carried out this process. The first one is through filling of the questionnaire while the second one is making an effort to visit the supplier’s premises. This is where the department failed. Despite the fact that the vendor in this case filled all information, they did not make an effort of visiting the manufacturer to ensure that the ordered equipment was meeting the specification. According to ‘Analysis of Engineering Design Studies for Demilitarization of Assembled Chemical Weapons at Pueblo Chemical Depot, 34,’ it is good to note that evaluation of a supplier is an involving process and it can lead to an engineering company losing a lot of money, Just like ADDC, if not well carried out. Filing this form, to some extent may not confirm that a vendor is genuine. It is therefore recommended that a team of experts could have made an effort of visiting the manufacturer’s business and scrutinizes the equipment they were planning to order. This team could be sourced from all departments in the procurement division of the company (Environmental Protection Agency et al, 43). At least a representative of every department could have been picked to ascertain that the information is correct. This way, the issues of quality and specification could have been solved without any problem. Characteristics of a Good Vendor It is important top understand some of the attributes that makes a good vendor of engineering equipment. Some of these include: Reliable The level of reliability of a vendor when an engineering company is procuring materials should be higher than dealing with other products in different companies. The reason is that there is high probability that if inefficient machines or equipment are procured, then the whole system can malfunction or even cause an accident in the process of operation. This means that a vendor should be someone who is highly reliable in all aspects. In the case of ADDC, It is clear that the process of procurement makes a vendor to be reliable and qualified to supply materials. However, it seems that the team relied only on the paper work and documentation and failed to have a personal touch on the equipment before making an order. Provides good quality materials It is evident that the process of procuring materials in the ADDC Company is vigorous enough to ensure that the products are of high quality. However, the failure seems to come from the entire team, when they were all overconfident on the vendor’s suitability. At the same time, even though the manufacturer of this engineering equipment is a renowned company, in this instance, this was not the case. Ethically sound As stated above, a vendor of engineering materials must be someone who is reliable but also he needed to be ethically good. He must be honest in his work to win the trust of the company he is supplying equipment. In the case of ADDC, the vendor could be ethically good but not competent enough to understand the level of quality of equipment that was being procured. Engineering background This is very crucial aspect on the side of a vendor. If he has an engineering background, then it will be simpler for him to understand the basic requirement of the equipment being procurement. This could include testing the materials to ensure they meet the stipulated specs. There are other qualities of a vendor when it comes to procuring engineering equipment, but these are some of the main ones. In relation to ADDC’s procuring process, the above factors could be emphasized to ensure that both the vendor and manufacturer are rightfully qualified. Purchasing Department Main Functions of purchasing department As stated in the ADDC case, the work of purchasing department is well outlined. In any engineering company, there must be purchasing department that ensures that there is continued supply off equipment at any time of company operation. They provide services which form the core function of a manufacturing or any other organization. There are many functions of purchasing departments but the main ones include: Actual procurement This department does the actual purchase of equipment for a company. This does not mean that the problem that occurred in the ADDC Company can be blamed on only purchasing department. However, part of the problem could be solved at this stage. This is because every department has professional whose main work is to ensure that the materials being procurement match with the proposed specifications. Therefore, before making any order, the department could have ensured that these standards are met or ask for samples of the same if that deemed necessary. Paperwork and documentation The validity of the vendor in ADDC procurement case, could, partly, depend on the documentation process. Even if part of this process is done by the appraisal department, but when it comes to accounting and validity of transactional documents, then this department was responsible. It cannot be argued much on this aspect since it seems the equipment was delivered on time after all payments have been done on real time. Evaluation of price The price of the equipment being procured should go in line with the durability and the quality level of the same product. However, the purchasing department cannot be blamed on this since the quality of the equipment to be supplied had already been assured. Policy compliance In this respect, before any order of equipment is made, the department needs to ensure that all policy requirements are met by different departments. This can be ensured by continued liaising with the others in the company. The department ensures that the outlined procedure in procurement is followed to the letter. Supply sourcing This could be the part where this department failed. The department is accounted to ensure that the source of equipment is from a reliable manufacturer (Ward, 143). At the same time, if the supplier was new, then a visit to the location could be very vital. This did not happen, which made the whole process to fail. Materials Department In the material department, this problem could be noted. One of the main work of material engineer is to ensure that equipment are properly evaluated and meets the prescribed specifications before giving clearance to the purchasing team (Nicholas, 213). Main Functions of Material Department It should be noted that material engineers have a great role to play in a company and in the procurement process. Analyzing equipment This is the main work of material engineers. The failure of the ADDC material department is that they did not carry out their analyses correctly. One of the main fundamentals in engineering is that equipment should have been trusted to ensure that it meets the standards. It is not however clear if there was such attempt by the material department of the ADDC company. Therefore, they failed in their work! Supervision of material tests If the department is not carrying out its own test of equipment, then it ought to supervise this exercise. The main responsibility in this case is to ensure that all design, functionality and other variables are met before purchasing is done. It is not clear if this department at the ADDC Company carried out this process diligently. Training other personnel This is one of the responsibilities of the department to ensure that other officials in the company who deal with quality issues are well trained on how to meet the standards stipulated in the company policies. The failure seem to lie on this department since according to the ADDC and other such companies, is that the main role is to ensure that the materials are good in their physical and technical aspects and that they function to the standards. This seems to have been ignored by the department. Quality Control Department At this department, there seem to a big problem. This is because the problem with the equipment is that it did not meet the quality levels that were expected by the ADDC Company. This could entirely be attributed to the quality department. This premise is based on the fact that other experts in other departments could not be in position to determine the quality of the equipment. Therefore, they relied solely on the report from the quality people. At the same time, it should be noted that the main differences between quality control and assurance engineers is that an assurance engineer is tasked on overall prevention of any quality issue, while a quality control engineer detects such flaws (Plummer, 342) . The main functions of this department have been discussed below. Main Functions of QC Department Testing The process of quality control in engineering does not mean only approval of equipment through documents; it requires actual testing (Erridge et al, 123). This means that a quality controller needs to have quality knowhow of the equipment before assuring the purchasing team. If this is not done, then there is a high likelihood that the equipment may not meet the company’s standards. Monitoring equipment and process The work of the quality team in engineering does not stop in testing (Leeser et al, 57).They need accompany the purchasing team, when equipment is being delivered to ensure that the quality is still the same and that there are no adjustments made. If this could have been done appropriately in the process of procuring the ADDC equipment, then the flaws witnessed could not have occurred. Reporting The report given by a quality assurance manager determines if the purchasing of equipment could be done. This means that the report issued assures the purchasing team to go ahead and buy the equipment. If proper analysis of the whole process was not done, then, officials at the quality department could be culpable since they gave a wrong report. Other functions include auditing the whole exercise, which means it was not done in the case of the ADDC Company. Expediting Department In the procurement process of engineering equipment, this department could be partly excused! The quality assurance of the product could only be doe perfectly by the quality people. This is as per the following main responsibilities of an expediting department. Responsibilities of an Expediting Department Timely delivery of equipment The main work of expediting department is to ‘expedite’ the process by making sure that equipment has been delivered on time. However, in the case of ADDC, the team may have failed to ensure that the relevant qualifying experts accompany it. This may have caused the problem, which was witnessed. At the same time, it also depends on the type of equipment and the training the expediting officials have in engineering. Liaising with the suppliers For the equipment to be delivered in real time there must be some collaboration with suppliers. This ensures that the company does not experience late delivery of the equipment. It seems that on that area, the expediting team at the ADDC did their job well since there have not been reports of late delivery in the entire procurement process. Quality assurance At a lighter note, the expediting team is also expected to ensure that equipment being procured has met the quality levels. However, as mentioned above, it depends with the kind of equipment. If the equipment requires thorough scrutiny, then the quality assurance team must accompany their counterparts in the expediting department. Recommendations for an Effective Equipment Procurement Process Procurement process requires concerted efforts of the concerned departments in the ADDC Company. The following points could point worked better if considered. Intensive research As stated earlier on, it is prudent to do a lot of research on the manufacturing firm that will supplier the equipment to an engineering company. This is particularly essential when dealing with any new suppliers that are not well known to the company (Booth, 354). In this case, a research should involve visiting the market premises and seeing if the equipments meet the company’s standards. This process seemed to have been ignored by the whole procurement team. Type of tender to be used There are generally three types of tenders namely: open, prequalified and limited tenders (Handfield et al, 119). An Open tender is simply advertised and open to any applicant who meets the company’s threshold. Prequalified is only awarded to suppliers who are already existing while limited tender is given depending on the quotes from a suppler. In the case of ADDC Company, it seems that they used the limited type of tender. Both the open and limited tendering processes of engineering equipment are best applied if there are no existing and qualified suppliers. The ADDC procurement department could have used prequalified vendors for the equipment. If not, proper research of the manufacturer equipment was a must. Limited procurement of equipment This is where a company only procures part of what it needs for testing purposes. This is very essential based on if there is any suspicion or if the equipment is sensitive. It helps to minimize risks to the buying party. Cooperation in evaluation of the process If the procurement process is so involving, there could be need to ensure that representative of all departments concerned meet and discuss on the requirement of the entire process. At such discussions, issues to do with quality assurance arise and solution is brought forward. In this case, a visit to the manufacturing company was eminent but maybe there was no opportunity to raise an alarm. Training of procurement team ADDC could be having well trained procurement team members, but there is need to emphasis on the basic and technical issues depending on specific tenders. The training should be emphasized on the vendor qualification process and certainty of manufacturing firms. This will curb any such outcomes in future procurement processes. Insurance cover It is prudent that ADDC Company relooks on the possibility of taking insurance cover related to such issue. The loss, to some extent, could be enormous to an extent of affecting the normal engineering operations. Conclusions A quick analysis of the entire procurement process at ADDC points to some negligence of procurement departments. In this scenario, proper audit of the entire process is essential to uncover and determine what exactly went wrong in the entire procurement process. At the same time, the above recommendations, plus any other, should be considered to avoid such occurrences in future. Work Cited Booth, Caroline. Strategic Procurement: Organizing Suppliers and Supply Chains for Competitive Advantage. London: Kogan Page, 2010. Print. Environmental Protection Agency 40 Cfr Part 247, Et Al: Comprehensive Guideline for Procurement of Products Containing Recovered Materials and Issuance of a Draft Recovered Materials Advisory Notice, Proposed Rule and Notice. Washington, D.C: Office of the Federal Register, National Archives and Records Administration, 1994. Print. Erridge, Andrew, Ruth Fee, and John McIlroy. Best Practice Procurement: Public and Private Sector Perspectives. Aldershot, Hampshire, England: Gower, 2001. Print. Handfield, Robert B. Re-engineering for Time-Based Competition: Benchmarks and Best Practices for Production, R & D, and Purchasing. Westport, Conn: Quorum Books, 1995. Print. Leeser, Robert C. Engineer's Procurement Manual for Major Plant Equipment: A Guide to Principles and Procedures [for] Planning, Specifications, Bidding, Evaluation, Contract Award. Upper Saddle River, N.J: Prentice Hall PTR, 1996. Print. Marsh, P D. V. Contracting for Engineering and Construction Projects. Burlington, VT: Gower, 2000. Print. Nicholas, John M, and Herman Steyn. Project Management for Business, Engineering, and Technology: Principles and Practice. Amsterdam: Elsevier Butterworth Heinemann, 2008. Print. Plummer, Frederick. Project Engineering: The Essential Toolbox for Young Engineers. Burlington: Elsevier, 2007. Internet resource. Ward, Sol A. Cost Engineering for Effective Project Control. New York: J. Wiley, 1992. Print. Analysis of Engineering Design Studies for Demilitarization of Assembled Chemical Weapons at Pueblo Chemical Depot. Washington, D.C: National Academy Press, 2001. Internet resource Read More