How The PMO Director Aids Selecting Right Suppliers

Let’s now visit the seventh important task in our series for the Program Management Office (pmo) Director – selecting the right suppliers and partners. In selections, the pmo director needs to consider the following purpose:

business-coaching-houston-pmo-director-aids-suppliers
  1. reduce risks by contracting special skills
  2. shorten timeline by buying product parts
  3. buy consumables for project
  4. add contract staff when internal staff isn’t sufficient

For example, here are best practices for managing purchases.

Planning to buy – Based on project scope, constraints, assumptions, risks and product specs, the buyer decides to buy or build. The pmo director needs to work with the buying department to select the contract, which fits the work.

Plan contracting – Based on the contract, the pmo director needs to aid in preparing the SOW and other documents to evaluate suppliers

Seeking Supplier Replies – The pmo director works with the buying department to ask the suppliers to reply to buying questions

Selecting Suppliers – Based on price, finance stability and performance history, pmo director works with the buying department to score and select suppliers for their quotes. 

For example, one could use a weighted average method to select the supplier who fits the company’s needs. 

Here, the Price Point and SOW Match are important. However, another company could focus on Finance Stability or Performance History. For this example, the buyer would select Supplier A based on the higher score.

We need to remember the contract terms are part of the Statement of Work (SOW). Therefore, we need clear scope. Importantly, sellers need to highlight the checklist of what’s excluded from the SOW. This will make it easier to compare apples to apples. In a back-to-back contract, the seller pays suppliers once buyer pays seller. The pmo director has direct accountability for the SOW. If the SOW identifies success for the project, then suppliers have a higher chance to match their abilities in delivering accurately for the project. 

We need to remember the contract terms are part of the Statement of Work (SOW). Therefore, we need clear scope. Importantly, sellers need to highlight the checklist of what’s excluded from the SOW. This will make it easier to compare apples to apples.

Nevertheless, it falls on the buyer to take more steps to make the buying steps successful. The project is now ready for quick success.

Written by Suresh Iyengar, P.E., President, Business Unit Execution LLC––“Explosive Business Coaching Houston Results For Small Business”. Want even faster results? Are you ready to learn? Call 281.410.5375 and speak to your Profitability Coach Houston today!

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