This post was republished to Mentor & Author at 10:17:55 AM 9/24/2015

The algebra of successful project procurement

This post throws light on one of the factors of successful procurement.

To begin, we know that procurement buys what engineering asks it to buy.

Let

X1, X2 and X3 be the quantity present in the material take off, requisitions and specifications
respectively. Refer this post for more clarity.

X be the procurement scope of work = ΣX = X1 + X2 + X3

Sample procurement scope of work

• piping
mto
• electrical

• ups
requisition • valves
• vessels

• hvac package
scope specification
• mechanical handling package

The value of X should not change in ideal situations. But it is not so.

The value of X changes due to the deviations taken by the vendor.

 drawing
TQ stage review stage site

TBE stage inspection

stage

Deviations taken by vendor during TQ, TBE, review, inspection stage are denoted by y1, y2, y3
and y4.

As the vendor item reaches site, there could be further problems with material like theft,
damage, defects, improper storage etc. Let this value be Y5

Hence ΣY = Y1 + Y2 + Y3 + Y4 + Y5

The contractor needs to track and control the value of ΣY. This is the algebra of successful
procurement.