In accordance with the Royal Institute of Chartered Surveyors (RICS), Vendor Management or the ‘upfront’ management of the supply chain, is the overarching management of all contacts, service offerings, and performance and trading history records of any organization that provides products and services to the business.
RICS professional guidance for Commercial Management of Construction (1st edition, March 2016) details why Vendor Management is a time-consuming exercise that requires concerted efforts to keep the data from the relevant processes up to date: trades, locations, key staff, certifications, insurances, classifications and accreditations can be out of date as quickly as they are recorded.
Using a Project Management Information System (PMIS) like PMWeb, commercial managers can improve the monitoring, tracking and reporting the different vendor management processes. The first of those processes is the vendor database which will be used to capture and maintain details of all entities that could be considered for delivering the different scope of work and services required for executing capital construction projects. For each vendor, the database will identify the type of services and scope of work that a vendor can provide, status of the vendor qualification, location of the vendor including their different business addresses, authorized contacts details, list of resources that the vendor has, trade registrations details, insurances and indemnities polices details, among others. PMWeb also allows importing the list of vendors using MS Excel file format.
All supportive documents for trade accreditations and certificates, insurances and indemnities policies, audited financial statements, resumes of project management and other key resources, company brochures among others will be attached to their relevant vendor. Although documents can be directly uploaded and attached to the vendor form, nevertheless, as a best practice this requires uploading and storing those documents into PMWeb document management repository. PMWeb allows creating file folders and subfolders to upload those documents in an organized and controlled manner. Access permission rights can be set to each folder or subfolder to restrict viewing or editing those documents. In addition, PMWeb allows linking relevant transactions to each record whether those transactions were other PMWeb records or imported emails.
PMWeb also allows formalizing the process for registering as well as maintaining the qualification of vendors using the prequalification module. PMWeb allows designing the prequalification form that will be used by vendors to submit their information in the form and format required by the commercial team and other entity team members.
In addition, PMWeb allows applying a formal process for reviewing and approving the vendors submission. PMWeb allows creating unlimited number of scoring templates to comply with the different prequalification analysis and assessment requirements needed by the project owner. PMWeb scoring template allows defining all possible types of assessment that need to be performed. Those include for example currency, date and number values, text response documents provided among many others.
The attachment tab will include all documents submitted by the contractor or consultant that were required in the online prequalification submission. In addition, the project owner team can upload and attach other documents as well as add links to PMWeb records and imported MS Outlook emails. This will ensure the analysis and assessment process is comprehensive and all used documents are captured and available for review.
Similar to all other PMWeb modules, the prequalification assessment module will be assigned a workflow to formalize the review and approval of the prequalification scoring provided by the project team. The workflow will identify the workflow steps, duration, responsibility, available action types and sequence. The workflow could include conditions to ensure that the correct approvals are secured depending on the approval authority levels set for the project.
In addition, it is important to implement a process for Performance Management of the consultants, contractors, subcontractors and suppliers within the vendors database, to understand if they should be used in future, or engaged in preference to others. Appraisal of vendors’ performance could be designed using PMWeb form builder to cover different aspects of their performance. For example, it could include appraisal of their HSE, quality, response to NCR and remedial work, adherence to the project schedule, managing and responding to communications, correctness of their interim payment certificates and final account, actions to mitigate issues, among others.
The information captured for the vendors will become the basis to enable the commercial management to monitor, track and report the vendor management processes. The more data is captured, the more information will become available for the commercial management to better manage this requirement. What is important is that all available data to report on is trust-worthy and can be used to have the insight to make faster and better informed decisions.
About the Author
Bassam Samman, PMP, PSP, EVP, GPM is a Senior Project Management Consultant with 40-year service record providing project management, project controls services and project management information system to over than 400 projects with a total value in excess of US$ 400 Billion. Those projects included Commercial, Residential, Education and Healthcare Buildings and Infrastructure, Entertainment, Hospitality and Shopping Malls, Oil and Gas Plants and Refineries, Telecommunication and Information Technology projects. He is thoroughly experienced in complete project management including project management control systems, computerized project control software, claims analysis/prevention, risk analysis/management (contingency planning), design, supervision, training and business development.
Bassam is a frequent speaker in topics relating to Project Management, Strategic Project Management and Project Management Personal Skills. Over the past 40 years he has lectured at more than 400 events and courses at different locations in the Middle East, North Africa, Europe and South America. He has written more than 400 articles on project management and project management information systems that were featured in international and regional magazines and newspapers. He was a co-founder of the Project Management Institute- Arabian Gulf Chapter (PMI-AGC) and has served on its board of directors for more than 6 years. He is a certified Project Management Professional (PMP) from the Project Management Institute (PMI), a certified Planning and Scheduling Professional (PSP) and Earned Value Professional (EVP) from the American Association of Cost Engineers (AACE) and Green Project Management (GPM).
Bassam holds a Masters in Engineering Administration (Construction Management) with Faculty Commendation, George Washington University, Washington, D.C., USA, Bachelor in Civil Engineering – Kuwait University, Kuwait and has attended many executive management programs at Harvard Business School, Boston, USA and London Business School, London, UK.