The main objective of the procurement phase is to select suitable turnkey suppliers for your production lines – within a given budget. Ideally they come with their own project management team and your role for the next few phases could be reduced to monitoring, coordination plus escalation and change management. Assigning all operations to a supplier requires a high level of trust on both sides, so this selection has to be done carefully.

While the operational part usually is done according to corporate guidelines and business best practice there are several risks to pay attention to:

Decisions taken during this phase are setting the external risks of your project. Your suppliers are the interface to market resources like mechanical parts, engineers, specialists, robots etc. They manage availability and constraints. Their skills will define production quality and availability, so cheap might not be best value. Usually there is little chance to change a supplier once manufacturing deadlines are passed. Delays due to such a change are very likely to delay your start of production, which in turn reduces profitability and may pose higher risks on your company’s reputation – opening opportunities of getting blackmailed by a low performing supplier during a later phase.