Procurement System For Aircraft Spare Parts Construction Essay

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This paper is a proposal on how to conduct a procurement system for aircraft spare parts using a design that would ensure cost efficiency and value for money while ensuring that the company purchases quality products suitable for the company's needs and circumstances. In order to ensure this the procurement system that this paper proposes answers needs and situations in every step of the process, the procurement system that I am proposing shall be carried out with the intent of answering the following questions:

What are the product needs of the production department and what are the specifications, technical requirements, and issues that they have based on their experience from past products and procurement process?

Is the procurement system sustainable in that does it takes into account the issue of cost and affordability? Is the procurement system in line with ethical standards of transparency, openness and fairness?

What is the situation of the current market that we are targeting? Are there issues concerning pricing, availability of suppliers, competition among suppliers and the current state of the playing field?

For purposes of efficiency and clarity of the whole procurement process, the proposed procurement system addresses different stages which are; (1) preparation of a procurement plan; (2) preparation of procurement; (3) actual bidding; (4) evaluation, examination and approval; and (5) contract management. Each stage in the procurement plan shall indicate the time frame, main activity, person or office responsible for the activity, and supporting activity if necessary.

Each stage shall be evaluated by the Manager of the Airframe Material Demand Department in consultation with the Manager of the Production Department, and every development regarding the procurement process shall be communicated regularly to the Director of Aircraft and Production Engineering. To illustrate the whole process, there is a flow chart attached as an annex to this paper for your reference.

As I have stated the whole procurement process is divided into five specific stages. Let us discuss each stage separately so as to further clarify its aspects, and what are the specific activities or doables at each stage.

PREPARATION OF PROCUREMENT PLAN

The first stage of the procurement process will be the drafting of a procurement plan based on the identified needs of the production department. This procurement plan shall determine the procurement needs and objectives based on the project needs determined by the production department. The procurement plan also indicates a clear and unambiguous procurement requirement that would ensure that the right product is delivered and that we are getting the best value for the company's money. Again his requirement must take into consideration the needs of production and should be consistent to the overall objectives of the company. The procurement plan will be then presented to the Director of Aircraft Production for final approval and evaluation before it is finalized and implemented. Throughout the procurement process this plan shall be subjected to periodic evaluation and appropriate adjustments shall be made based on the arising circumstance.

PREPARATION OF PROCUREMENT

Based on the procurement plan the next step in the process is the identification of the specifications of the object to be procured and the preparation of an official cost estimate document that will then be submitted to the Director for final approval. This document will be a confidential internal document that will only be use as a basis for evaluating contracts with possible suppliers. During this stage the material demand department will advertise a pre-qualification invitation to possible suppliers, and issue a document that would set standards for procurement that potential suppliers must comply with. This would help in the evaluation of possible suppliers and ensure that the procurement process would be open and transparent, and that there is a level playing field wherein a democratic process of bidding can take place. After issuing the pre-qualification invitation, possible suppliers will then submit their pre-qualification papers and documents for evaluation. Suppliers who comply with this process will be the only ones who will be evaluated and given the chance to participate in the actual bidding.

ACTUAL BIDDING

Potential suppliers who have passed pre-qualification eligibility will be part of the bidding process. At this stage an invitation to bid is issued to potential suppliers who have already complied and passed the pre-qualification process. Potential suppliers are then asked to submit a proposal that is evaluated by the material demand department. Evaluation will be based on cost efficiency and product quality, and if their proposal is within the budget.

EVALUATION, EXAMINATION, AND APPROVAL

After submission of the proposals of potential suppliers the next step will be the evaluation both of the product that they will sell to the company and their actual bid proposal. The proposals will be evaluated based on the standards set forth by the pre-qualification document. During this stage a contract will also be prepared that would clearly state the rights and obligations of the supplier and the company. The specifics of the contract will depend upon the value and volume of the procurement. The contract should also consider the procurement requirements and how does this take into account the needs of the company and of the supplier. Do the potential suppliers have the means to implement concrete and realistic measures that would meet the procurement requirements? Do they have the necessary human and material resource to meet with their contractual obligations?

It is at this stage also that a thorough evaluation of the bid proposal shall be undertaken. The evaluation will take into consideration the financial and qualitative elements separately before evaluating it together. This is important because it is necessary to determine the things that the potential supplier is committing to on the two aspects of finance and product quality. In evaluating the financial aspect of the proposal the company must bear in mind if the pricing is fair and if it is equal to the value of the product. While an evaluation of the actual product should be based on quality, dependability, and is it up to the technical standards set by the company. All in all proposal evaluation should be seen from the context of value for your money.

CONTRACT MANAGEMENT

After evaluation the successful bidder will be informed by the company and a contract will be signed. Any failure of the supplier to abide by the obligations stated in the contract will be basis for the awarding of the contract to the next eligible suppliers who also participated in the bid process. After which the product needed will be procured and shall be used by the production department. A record of procurement will be instituted to monitor the flow of the product between the supplier and the company and if it is being used according to the stipulation of the contract. The record will also monitor product delivery from the supplier to ensure that they are living up to the expected output that they have committed to supply.

OPERATIONS AND PERSONNEL

To carry out with this procurement operation there is a need to hire five persons that will assist the manager of the material demand department. There will be an assistant manager who will assist the manager in carrying out the duties in the department. In particular the assistant manager will be primarily responsible in scouting for possible suppliers and providing the manager with a market profile. We should also hire three procurement staff that will take care of documentation and paper work; a liaison staff that would coordinate with the suppliers and the production department in behalf of the material demand department.

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