In this APM Project Management Qualification (BoK7) podcast, Paul and John discuss procurement. This podcast is ideal for anyone doing one of the APM PMQ project management courses and aims to address the following assessment criteria: Explain the purpose, typical content and importance of a procurement strategy Differentiate between different methods of supplier reimbursement (including fixed price, cost plus fee, per unit quantity, and target cost) Differentiate between different contractual relationships Explain a supplier selection process A procurement process is used by companies in the acquisition of goods and services. This will usually have a defined procurement strategy document and include details on selecting suppliers, setting up contracts and management of those contracts. Because the procurement strategy document is a standard project document it needs to be in place at the start of a project as it is an important factor at the same time as considering the business case of a project. Typical parts of the procurement strategy documentation are:   Make or buy decision: Would it be better to produce the required goods within the organisation or would it be more efficient or cost-effective to use an external producer/suppler. This decision can only be made when the specification of the product is fully understood.   Contractual relationship: There is a wide choice of contractual agreement types fro the single contract between the client and supplier to more complex agreements between the client and a main contractor and between main contractor and sub-contractors.   Reimbursement methods: These are the payment terms and the way in which the goods or services will be paid for. This could be as simple as a fixed-price method for a clearly specified product through to much more flexible arrangements where an innovative new product is being developed by the supplier for the client.   Supplier selection: Large organisations will usually have an established process to help in the selection of the right suppliers, most usually through a competitive tender process where several suppliers provide costs for the required product/service. The aim being for the organisation to acquire the product or service at the most competitive price.   Contract administration: This should be a regular, ongoing process throughout the term of the contract to confirm that both supplier(s) and client are complying with the terms of the contract which they have agreed.   Feedback and review: This is important in any type of strategy in order to learn lessons about what went well and what did not; in order to improve the process for future projects.   This podcast is just part of the Parallel Learning System for the APM Project Management Qualification. This approach includes a wide range of learning resources including a printed study guide, on-line e-learning, a tutor lead study group and a wide range of project management courses.   SEE THE TRANSCRIPT BELOW: Introduction: Welcome to a Parallel Project Training APM Project Management Qualification podcast based on the APM body of knowledge seventh edition. You should be using this in conjunction with our e-learning, podcasts and potentially a tutor-led course. For more information please visit www.parallelprojecttraining.com   Paul Naybour: Hello welcome to another parallel project training podcast we're on to procurement for the APM PMQ with Paul Naybour and John Bolton.     Hello, John   John Bolton: Hello everybody.   Paul: Last chapter. By now the guys are hurray. Guys and girls.   John: If this takes two minutes it’s because we've had a long day. Yeah, well. It's quite a big topic, though so let’s crack on   Paul: By completing this subsection you will be able to understand the learning objectives: Explain the purpose of a procurement strategy. We need to get that clear, because it causes confusion Differentiate between the different types of reimbursement method. Differentiate between