| The risk management of a project at the top level is | | | | there will be a minimum of three companies thought |
| complex enough, but when the infeed from outside | | | | to be capable of fulfilling the technical requirement for |
| companies has to be considered as well, it becomes | | | | each item, preferably more in the first instance. This |
| even more so. | | | | list is then reduced to a manageable number (the |
| Starting with the receipt of an invitation to tender | | | | ideal three) by reviewing the possible sub-contractors |
| from a potential customer, the steps to be taken to | | | | in terms of the following. |
| manage the risk associated with selecting suppliers | | | | Companies who have supplied goods in the past: |
| are as follows. | | | | - Quality and reliability of items supplied |
| The project technical lead must review all the | | | | - Timeliness of delivery |
| technical documentation received from the customer. | | | | - Adequacy of documentation |
| Following the project team's decision that certain | | | | - Attitude, flexibility and co-operation of personnel |
| items need to be sub-contracted, the technical lead | | | | - Ease of contract negotiation |
| will write, or have a representative write, a technical | | | | - Pricing policy |
| requirements specification for each item to be | | | | - After sales service, including warranty |
| sub-contracted, which will form part of the | | | | Companies who have not supplied goods in the past |
| sub-contractor invitation to tender. | | | | - Reputation in the market place |
| In addition, all other members of the project team | | | | - Quality assurance certification |
| will review the areas of their own particular discipline | | | | - Financial stability |
| (quality assurance, configuration management, etc.) | | | | This list is not exhaustive but contains the most |
| and write their own specifications for flowing down | | | | important areas to be considered. The most |
| to the sub-contractor invitation to tender. | | | | objective way of reviewing the above, is to weight |
| For each item to be sub-contracted, a procurement | | | | each one in order of importance, devise a scoring |
| package will be compiled. This will contain whatever | | | | mechanism, create a grid to be completed by each |
| documents are deemed necessary depending on the | | | | member of the review team and calculate the |
| complexity of the item in question, but as a minimum | | | | numbers. This method isn't foolproof but is as close |
| the aforementioned technical specification. | | | | as it possibly can be. |
| To start the risk management process, all documents | | | | At this stage, the project risk has already been |
| to be included in the procurement package will be | | | | reduced because the best few of the potential |
| peer reviewed. This involves at least one person of | | | | sub-contractors have been chosen to compete for |
| the same discipline comparing the customer | | | | the sub-contract. |
| requirements with those included in the | | | | Alternatively, the selection process has shown that |
| sub-contractor specification to ensure that nothing | | | | there is only one supplier capable of fulfilling the |
| has been omitted. | | | | requirements. This requires quite different handling |
| A list of potential suppliers for each item of supply is | | | | and will be the subject of a future article. |
| then drawn up. Ideally, in terms of risk mitigation, | | | | |