Final Project - Week 8 - KMGT-684 CONTRACT AND PROCUREMENT

FINAL PROJECT No. 1 – WEEK 08 / FINAL RESPONSE

KMGT-684-1 CONTRACTS AND PROCUREMENTMSC PROJECT MANAGEMENT – OIL & GAS

NAME: LEONARDO TRIGOS GUERRERO

STUDENT ID: H00024346 DATE: 10 / 12 /2014 PAGE 1 OF 13

FINAL PROJECT No. 1

WEEK 08

CONTRACTS AND PROCUREMENT

LEONARDO TRIGOS G.





TABLE OF CONTENTS1. INTRODUCTION.........................................................................................................................................3

2. PROJECT BACKGROUND........................................................................................................................3

3. OBJECTIVES...............................................................................................................................................4

4. ASSUMPTIONS...........................................................................................................................................4

5. PROJECT SCHEDULE...............................................................................................................................5

6. PROCUREMENT PROCESS....................................................................................................................8

7. PROCUREMENT ISSUES.........................................................................................................................9

8. PROCUREMENT STRATEGY.................................................................................................................11

9. CONCLUSIONS.........................................................................................................................................13

10. REFERENCE LIST................................................................................................................................13

11. APPENDIXES.........................................................................................................................................13





FINAL PROJECT – WEEK 8

1. INTRODUCTION

According to UOL (2014), the Southmead Integrated Community Hospital project with the objective to provide sustainable and quality of life to the local people. The project achieve this purpose through implementing the proper procurement strategy that enables hospital to provide the value for money benefits to the local residents, and aims to address procurement issues related to the hospital procurement and contract processes that improve its image and position.

To facilitate the achievement of project objectives, it must be designed and implemented a procurement plan based on the requirements of the Southmead Integrated Community Hospital project and the specifications for procurements of the Integrated Community Hospital Specification: Southmead Hospital Redevelopment Project (n.d).

As explain Fleming (2003, p. 117), this critical work is done best when executing according to a procurement management plan that has been designed and proper verified for the acquisition of goods and service of the project related to suppliers, third parties and also in-house providers.

An effective procurement plan provide an increased life of the purchased assets, equipment and infrastructure facilities that is a key aspect in procurement processes of goods and service that are performed permanently in hospitals.

2. PROJECT BACKGROUND

A. Organization overview:

According to UOL (2014), Southmead Hospital is a hospital that offer appropriate, high quality and responsive services in healthcare to the local residents of Bristol.

B. Problem statement:

Having in mind that the procurement plan has high importance to determine and conduct the hospital operations, the problem statement of the project is identify the main procurement issues to be handle in the Southmead Integrated Community Hospital and the proper strategies to manage them according the constraints in the schedule and budget.

C. Business value:

The business value of the project for Southmead Hospital is to achieve the project objectives and reach the patient satisfaction in its services based on the quality of service philosophy and meeting the requirements of the NHS system.





3. OBJECTIVES

The main objectives of Southmead Hospital project are:

Identify the procurement issues related to the Southmead Integrated Community Hospital Develop and foster the procurement management plan grounded to the issues identified Design effective procurement strategies that provide solution to the Southmead Integrated

Community Hospital framed inside the scope of the project

4. ASSUMPTIONS

A. Time:

Some of premises established to estimate schedules are:

No holidays Work Hours per Day: 8 Hours Work Hours per Week: 40 Workweek: Monday to Friday (Excluding Holidays) Time of Project: 6 months

Figure 1. Calendar of the Project

B. Cost:

Some of premises to estimate costs are:

Costs in dollars (USD) Extra time will be paid at same rate





C. Scope:

Some aspects considered as assumptions are:

The change request is approved by CCB. The project hasn’t have scope creep.

D. HR:

The project staff initially required according to the schedule baseline can be shown in the Figure 2.

Figure 2. Resources planned to the project

5. KEY ASPECTS PROCUREMENT PLAN

Some important aspects of the Procurement Plan to be covered according to Fleming (2003, p. 117) are:

Scope definition Project Schedule Project Budget: Cost Estimation Project organization Staffing plan for procurement Contract type selection Define company policies to apply Supplier risk assessment Closure planning

6. PROJECT SCHEDULE

Some important aspects to have in account in the procurement plan schedule are:

The project requires six months in accomplishing all the activities required to reach the project objectives.





The success implementation of the procurement plan brings high benefits in the intensive care and treatment service offered by the hospital to all its patients.

The schedule of the procurement management can be summarized in the Figure 3.

Figure 3. Schedule planning of the project

The coordination of the activities must be constantly assessed to provide a continuous improvement, adjustment and feedback.

The project schedule performed as the initial base (estimation) of the project with a duration of 6 months is illustrated in the Figure 4.





Figure 4. Project Schedule

Figure 5. Resource Histograms





7. PROCUREMENT PROCESS

An important aspect to identifying issues in the procurement process is to understand the entire process properly. According to Fleming (2003), all procurements in a project must pass through distinct phases to execute the procurement processes described in the PMBOK (2013).

Figure 6. Phases of Project Procurements





Figure 7. Project Procurement management processes

As in every project, the knowledge of the usage and implementation of goods and services required improves the quality, viability and durability of products and service procured. This dimension should be included on the procurement process of the project to provide tools to the procurement team to select providers effectively.

The high importance of effective management of procurement process can be shown in the high dependence of hospitals for daily use products and service that affects its sustainability and functioning, and enable them to provide quality health service and saving costs by the adoption of effective procurement plans and strategies.

8. PROCUREMENT ISSUES

On the analysis performed of the procurement processes, some important procurement issues has emerge during purchasing of services and goods, and development of essential infrastructure to Southmead Hospital. Its proper manage with strategy and knowledge of its impact on the entire organization let to facilitate the handle of them and avoiding their negative impact on overall functioning of the hospital.




STUDENT ID: H00024346 DATE: 10 / 12 /2014 PAGE 10 OF

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The main procurement issues that emerge during procure of products and services for the Southmead Hospital project are:

Price and Costs

As a related aspect of the procurement process, price and cost has high influence on the procurement of necessary goods and services. The goods and services identified to the particular case of study refer to the purchase of:

Necessary equipment and tools for diagnosis and treatment Build infrastructure facilities for increase service hospital area

As one of the key objectives of the procurement team for the project is to make sound and economic purchasing decisions to minimize cost and maximize savings. Lower cost burden and purchase of products and services at lower prices improves sustainability of hospital, and let to acquire new health provision and facilities, and finally improve the quality of health services.

Quality and Productivity issues

The quality and productivity issues have considerable significance in the health industry, and in particular case of Hospital services like provided by Southmead. This premise is based on the high impact on health and well-being of patient that has the quality and productivity of health services. For instance, the quality of medical equipment enables health professionals to identify (diagnose) and treat health problems (diseases) accurately.

Any kind of faults in health equipment (testing) can produce severe losses and damages on patients. Many cases of faulty equipment on hospitals has produced many loses around the world. This faults will render the doctors to pursue inaccurate health treatments and decisions which can make the patients prone to severe losses and damages.

The productivity issue has a significant impact the performance of Southmead hospital. Productivity here refers to the capability of tools and equipment to diagnose and perform treatments in shortest possible time. The shortest possible time lowers the length of stay of patients in hospital and thus assists hospital in attaining the objective of offering best possible and most effective health services to the local population. In consideration with that, productivity can be affected by the quality of products, services and equipment by the delays on the effective attention of patients.

Time considerations

The effectiveness of procurement process depends highly of time factor as a key aspect on health service provided by the hospital.

Procurement function must be effective when it yields best possible goods and services at the right time and at minimum possible cost. The significance of time factor increases more in case where goods and services pose the potential of influencing one’s life and its existence as that in hospital and health care units.





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The hospital requires goods and services at the right time to save patient’s life.

Selection of suppliers

The issue in selection suppliers has a recent importance in any organization. The proper selection of suppliers must be performed according a conscientiously evaluation process where many aspects can influence, according the needs of the organization and its business objectives.

This important issue can be shown by the NHS (2011, p.1) “wastes millions by overpaying for supplies” purchasing ineffective equipment from suppliers. It has also been argued that the managers of hospital and health care units operating under NHS has also squandered and wasted money through purchasing equipment at needlessly high prices. There has been significant wastage of money on every purchase ranging from stationery to surgical instruments.

Managers has multiple prices and choices available for procure services and products from different suppliers.

It’s highly important to evaluate and appraise all the options available for acquire products, services and equipment from suppliers through an optimal process of supplier selection.

9. PROCUREMENT STRATEGY

The procurement plan of the Southmead Integrated Community Hospital identified can be described as an interrelated process based on five main activities: developing a procurement strategy, prescribing commercial framework, implementing the procurement strategy as a pilot, assess the impact on organization, and develop a project finalization.

The procurement strategy of the Southmead Hospital will implement the follow steps:

Developing procurement strategy

As a key finding, the Southmead Hospital require the implementation of strategies to executing and controlling procurement decisions cautiously. The hospital products, goods and services will be purchased from recognized suppliers with high quality standards after appraising and evaluating them on various grounds. The procurement strategy includes the application of a standardized process:

o Inviting procurement bidso Evaluating bidso Selecting most feasible bids

The organization must pay attention on some key aspects on selection. The follow aspect has high importance according to the case of study:

Flexibility Long term interest Product robustness Quality oriented





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Cooperative Economic viability Financial considerations Time factor

Prescribing commercial framework

One of the main purpose of the procurement strategy is to provide a documented approach of the Hospital process and its requirements focused in a commercial sense to evaluate the practical viability of deliverables to achieve organization goals through feasible solutions.

Implementing procurement strategy as a pilot project

With the objective to make a transition without affect the current functioning of the organization, the procurement strategy can be implemented on a small scale. It helps to identify areas of improvement and performance gaps and help to overcome it with a better knowledge of the needs of the organization.

An important finding of the strategy of implementation on pilot basis will also prove helpful in preventing significant cost burden incurred on strategy.

Other aspect to have in account is to enable negotiation with suppliers about terms and conditions of procurements. It provide a high risk reduction to the organization.

Impact Assessment

The impact of procured product, goods and services acquired will be determined in terms of patient’s health status, their length of stay in the hospital, overall satisfaction level, and other aspects related. Here is when the assessment of the implemented strategies become useful to bring positive results in procurement evaluating. Some aspects to be considered are:

Patient health Patients length of stay Satisfaction level

The results founded provide feedback on approach improvements. It can be considered as a sample of the success progress in the improvement process.

Project finalization

The final recommendation is to selects the better suppliers that offers product and services on a regular basis. It enables Hospital to have access to reliable suppliers.





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10. CONCLUSIONS

A remarkable finding in the Southmead project is that the procurement of product, services and equipment influence the functioning of Hospital. Some issues like identified can affect and render the procurement process and become ineffective. It’s required the implementation of the procurement plan and strategies shown to overcome the issues and offer quality that improves the medical services to the local population.

11. REFERENCE LIST

1. Verma, V. K. (1995) Organizing projects for success. Upper Darby, PA, Project Management Institute.

2. UOL / University of Liverpool (2014), CONTRACTS AND PROCUREMENT (KMGT-684-1) - Week 8 Lecture notes and Assignments [Online]. Available from: University of Liverpool / Laureate Online Education (Accessed: 12 November 2014).

3. Integrated Community Hospital Specification: Southmead Hospital Redevelopment Project. (n.d). Invitation to Participate in Competitive Dialogue: Volume 2.

4. Project Management Institute. (2013) A Guide to the Project Management Body of Knowledge (PMBOK® Guide). 5th ed. Newtown Square, PA: Project Management Institute Inc.

5. Fleming, Q. (2003). Project procurement management: contracting, subcontracting and teaming. Tustin, Calif, FMC Press.

6. Procurement challenge case study (2009) [online]. Available at: http://www.ukhca.co.uk/pdfs/challengingtenderscasestudies.pdf [accessed on: 12 November 2014].

7. NHS (2009) Addressing the challenges facing NHS providers [online]. Available at: http://www.eoecph.nhs.uk/Addressing-Challenges.pdf [accessed on: 1 April 2013].

12. APPENDIXES

Final Project - Week 8 - KMGT-684 CONTRACT AND PROCUREMENT

Documents

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