Project risk and procurement management - procurement

Authors Details :
Mohamed Sorogy

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Purchasing is one of the key managerial activities in every organisation, its significance having been identified during the 19th century. According to Kasilingham (2012, p.57), the period shortly before the Second World War marked the discovery of the fact that a firm’s success was not so much dependent upon what it was capable of selling but rather on how able organisations were to acquire necessary services together with materials from vendors. This discovery was triggered by a global shortage of virtually all fundamental materials for supporting operations, coupled with an abnormal rise in prices following the First World War. Since that time, purchasing has gained significance for the critical role it plays towards ensuring continuity of production (Hacioglu, 2019 p.265). Worth noting is that purchasing acts as “an interface between suppliers and functional areas within the buying organisation” (Crandall, Crandall & Chen, 2009 p.265). Among some of the functional areas that are influenced by purchasing are finance, marketing, production, and quality assurance (Magad & Amos, 2013 p.225). A vital deduction that can be made from this latter statement is that for the purchasing function to proceed smoothly and make the other functions- and the entire organisation- active, organisations must cultivate and maintain good relationships with suppliers and all other players in the supply chain. In addition, organisations operate in environments that are highly unpredictable; the techniques needed to perform the purchasing function become more refined almost every day due to constant changes in the market (Kasilingam, 2012 p.57). Subsequently, there is a need for managers in organisations to understand and embrace the idea of sustainable procurement.