Project Procurement Management
As I drank the cappuccino we had just bought from Starbucks, I could not help but feel excited about the buzz this coffee gave me. It takes nanoseconds to say the words “seed to cup,” but rarely do coffee lovers think of the procurement journey of their daily pick me beverage. Project procurement management entails the processes required to get goods and services to attain a project’s scope from outside the performing corporation. The average American takes a cup of coffee per day, but this is nothing compared to Finland natives who drink up to three cups daily. Coffee is reportedly the second most traded commodity after oil. This paper will discuss the procurement process of Starbucks coffee from planning to closing. The paper will examine further the difference of the Starbucks procurement process with the ones reiterated under the PMBOK® Guide.
Chapter 12 of the PMBOK® Guide highlights the processes under procurement management. They include procurement planning, solicitation planning, solicitation, source selection, contract administration, and contract closeout. Starbucks management reorganized its supply chain in 2008 to be more efficient, and now they use a vertically integrated supply chain. Hence, they are involved in all steps. When Starbucks decides it will make coffee; consequently, they plan on procuring coffee beans. They then solicit which farmers grow the best coffee. Afterward, Starbucks offers tenders, and farmers put out their offers for Starbucks to select. They then choose the best farms to get their coffee, and the farmers here will quote their prices.
The farmers are given contracts to produce coffee for Starbucks, after which the agreement is finalized and settled for any open items. Starbucks spends the US $600 million yearly on coffee. The supply chain is divided into four parameters of planning, sourcing, making, and delivering. The Guide gives more details of the procurement process, and it is more fine-tuned. The methods are similar in that there is procurement planning, solicitation planning, solicitation, contract administration, and closeout. The difference between the PMBOK Guide’s processes and those of Starbucks is mainly in the definition of project procurement management. The Guide states that the processes are usually outside the performing organization, but Starbucks is involved in the process from the planning to the closeout because of their vertically integrated supply chain.
References
Guide, P. M. B. O. K. (2017). A Guide to the Project Management Body of Knowledge. Sixth Edit. Project Management Institute, Inc.