Advanced Project Logistics and

Procurement Management
Course Outline

Chapter one: Introduction to logistics and contract management

1) What is and why logistics?

2) Logistics systems and supply chain

3) Understanding contract and contract management

Course Outline

• Chapter two: Project procurement management

1.Plan procurements

2.Conduct procurements

3.Administer procurements

4.Close procurements
Course Outline

•Chapter three: Identifying and evaluating suppliers

1) Sourcing strategies for goods and services

2) Key project sourcing structures
3) Evaluating & selecting potential suppliers
Course Outline

Chapter four: Bid management

1) Subcontracting procurement
2) Types of bid
3) Bid management process
4) Negotiation, its types, and approaches
Course Outline

Chapter four: Bid management

1) Subcontracting procurement
2) Types of bid
3) Bid management process
4) Negotiation, its types, and approaches
Course Outline

Chapter four: Management of materials

1) Transportation of goods
2) Warehouse and inventory management
Course Objectives
 Understand the concept of logistics and contract in line with their activities,

 Demonstrate the process and elements embedded in project procurement

management,

 Identify and evaluate suppliers,

 Design appropriate strategy to manage materials, and

 Contrast the project logistics and contract management with overall

organizational policy and procedures.
Mode Of Delivery
• Lectures,

• seminars,

• case studies,

• debates and discussions,

• case analysis, and presentation.

Assessment Scheme

• Quiz and/or class activities 10%

• Individual Assignment 20%

• Group Assignment 20%

• Final examination 50%

• TOTAL 100%
Required References

• Burrows, R. P. (2012). The Market-Driven Supply Chain: A Revolutionary Model for Sales and
Operations Planning in the New On-Demand Economy. New York: AMACOM.

• CIPS. (2019). Contract Management Guide.

• Gattorna, J. (2016). Gower Handbook of Supply Chain Management. New York: Gower Publishing.

• Kildow, B.A. (2011). A Supply Chain Management Guide to Business Continuity. New York:
AMACOM.

• Mitchell, J.S. (2014). Operational Excellence: Journey to Creating Sustainable Value. New Jersey:
Wiley & Sons, Inc.
Required References
• Musiolik, T. (2012). The Global Player: How to Become the Logistics Company for the World.
Hamburg: Diplomica Verlag GmbH.

• O’Brien, J. (2015). Supplier Relationship Management: Unlocking the Hidden Value in Your
Supply Base. Great Britain and United Sates of America: Kogan Page Limited.

• Presutti, W.D., & Mawhinney, J. (2013). Understanding the Dynamics of the Value Chain. New
York: Business Expert Press, LLC.

• Temesgen, B., & Dargie, A. (2016). Project Logistics and Contract Administration. Addis Ababa:
Addis Ababa University School of Commerce.

• USAID. (2011). The Logistics Handbook: A Practical Guide for the Supply Chain Management
of Health Commodities. Arlington: USAID.
Chapter One: Introduction to Project Logistics

• Logistic is the function that enables the flow of materials from suppliers
into an organization through different operations

• It is derived from the Greek word “logistikos’ which means ‘to reason
logically’ .

• It is basically consists of all operations required for goods(both tangible

and intangible) to be made available in markets or at specific destinations.
Logistics …
• According to Council of Logistic Management (USA) “Logistics is the
process of planning, implementing and controlling the efficient, effective
flow and storage of goods, services and related information from the
point of origin to the point of consumption for the purpose of
conforming the customer requirements”.

• Therefore, the essence of logistics is the flow of material goods and

services from their place of origin to the final customer (consumer).
Logistics …

• Definition of logistics is not unified, although it might be indeed, in current

environment, a commonly acknowledged one.

The American Council of Logistics Management;

• Logistics management is the process of planning, implementing, and

controlling the efficient, & effective flow and storage of goods,
services, and related information from point of origin to point of
consumption for the purpose of conforming to customer requirements.
Logistics …
The European Logistics Association has adopted the definition that Logistics is a concept

involving the organization, planning, control and execution of the flow of goods

form their places of manufacturing (purchase), through the sphere of production and

distribution, to the final consumer, which aims to satisfy the demands of the market with

minimal commitment and capital.

 H. Ch. Pohl define that logistics management comprises all the steps leading to

planning, supervision, execution and control of the time-and-space transformation of goods

and the related transformation in quantity and range of assortment, the manipulation

properties and the degree of logistics determination of goods.

Logistics Activities
• Logistics is responsible for the movement and storage of material as they
move through the supply chain.

• When the material moving through an organization one can see the following
activities are normally included in logistics.

Activities
• Transportation
• Inventory Management
• Information flows and order processing
• Warehousing
• Material Handling 17
Project Logistics

• A project logistics can be defined as a complex, special and unique sets

of activities which can be described by technical and economic
parameters and is determined by cost, time, and scope .

• Project logistics is a very complex field and covers a great many

aspects. 

• It involves making sure that the hundreds of thousands of different items

are available when required.
Project Logistics …

• Controlling of the project logistics is process of measuring progress

toward an objective, evaluating what remains to be done, and taking the
necessary corrective tasks to achieve or exceed the objectives of the
project logistics.
Logistic Management

• Is a process of physical flow of goods/services and accompanying

information;

• Is a concept of integrated management of goods/services and

information flow;

• Manage resources include physical items, such as materials, equipment,

and liquids, as well as abstract items, such as time, information, particles,
and energy
Project Logistics …

• An efficient and effective implementation of logistics are focusing on the

following activities :

• Transport; (air, road, sea, rail , pipeline)

• Warehousing : (where materials received, stored, and shipping)

• Packaging;

• Material handling ;

• Inventory ;
Elements of logistics

22
Logistics Strategic Decisions

• Depending on the type of business, logistics decision groupings are

diverse.

• However, all of these decision categorizations comprise the following

three basic types of strategic decisions:

1. Customer service

2. Logistics network design

3. Outsourcing versus vertical integration

1.Customer service
• Customer service is the first and foremost class of logistics strategic decisions.

• As defined earlier, logistics involves delivering the right product to the right
customer at the right place, at the right time, and with the right cost and quality.

• Identifying the customer’s need is the primary step in establishing a logistics

system.

• The purpose of customer service decision is to provide service need on time, in

full, and error free.
2.Logistics network design
• To achieve corporate strategies, a company must ensure that its structure and
flow of materials and information are appropriate.

• Therefore, logistics network (or, in some references, logistics channel) design is

divided into two groups:

• The physical facility network and the communication and information network 

• These decisions are critical because the largest part of invested capital belongs
to them
3.Outsourcing versus vertical integration

• Decisions related to outsourcing bring greater flexibility, lower

investment risk, improved cash flow, and lower potential labor costs.

• Outsourcing decisions determine which functions should be outsourced,

as well as the nature and extent of outsourcing agreements.

• Decisions on vertical integration (also known as insourcing) have

higher control over inputs, higher visibility over the process, and so on.
Supply Chain Management

Fundamental Concepts
A supply chain is a dynamic concept that involves the constant flow of
resources (products, information, funds) amongst all the participants
along the chain

It is essentially a system of interconnecting chains i.e. a supply network

or a supply web
Supply Chain …

The supply chain is a network of manufacturers and service providers

who cooperate with one another in order to process and relocate goods ‒
from the raw material stage to the end-user level.

All these entities are linked by the flow of goods, information and cash
Supply chain ‒ a process ‒ a sequence of events in the relocation of
goods that increases their value.
Supply Chain …

Supply chain is a network of connected and interdependent organizations

that cooperate and mutually control, manage and improve the flow of goods
and information from suppliers to the end users.
Supply chain is a physical network, which starts with the supplier and ends
with the final customer.
It involves aspects associated with product development, purchasing,
production, real distribution and after-sales services, as well as, deliveries
carried out by external bidders.
Supply Chain …

SC - Two or more parties linked by a flow of resources – typically material,

information, and money – that ultimately fulfill a customer request.
The Four Interrelated Flows in SCM

1. Product & Service Flows:

• The value-adding flow, as products & services progress along the supply
chain from point of origin to point of final use or consumption.
2. Information Flows:
• The bi-directional flows of information throughout the chain –
particularly on customer demand which “pulls” the supply chain, but also
on supply conditions & eventual disruptions
Interrelated Flows in SCM …

3. Funds Flows:
• The flows of funds, mainly upstream (payments for goods & services
received) but also in some cases downstream.

• 4. Expertise & Technology Flows:

• Sharing in areas such as IT systems, SCM expertise, product design,
marketing, developing joint SC performance indicators, etc
Decision areas in supply chain management

• Effective SC management requires good decision making in a wide

variety of areas.
• In supply chain management there are four decision areas:
1. Location decision
• The location of production facilities, stocking points, and sourcing points
is the first step in creating a supply chain
• A facility location ( location to raw material, location to customers….)
Decision areas in SCM …

2. production decision:
The strategic decision in choosing what products to produce and which
plants to produce
It also decision on how product flow among plants, operation of all
production, like quality, cost, time and etc.
Decision areas in SCM …

3. Inventory decision :
• Decision on how inventories are managed: raw material, semi finished
good, and finished goods .

4. Distribution decision

• Decision regards how produced materials are distributed to the users -

Mode of transportation, (safety, fastest….)
Decision areas in SCM …

 Effective supply chain management strategic decision have many

potential benefits:

 Improved customer service

 Lower inventory & higher inventory turnover

 Higher productivity

 Improved ROI and Increased market share

Green Logistics and Supply Chain

Green logistics refers to a logistics form which plans and implements

green transport, green storage, green packaging, green circulation
processing, green recovery, and other activities via advanced logistics
technology.
It aims to reduce environmental pollution and resource consumption
arising from logistics activity so as to realize a “win-win” consequence
in logistics development and eco-environmental conservation.
Green Logistics
• A typical field in green logistics and supply chain management is reverse logistics,
sometimes called closed-loop supply chains, in which there are reverse flows of used
products (postconsumer) back to manufacturers.

The Reprocessing Flow

• The Reprocessing Flow is a critical part of “Greening the Supply Chain”

• The US Environmental Protection Agency (EPA) originally came up with the concept
of the “4Rs of waste management”: Reduce, Reuse, Reallocate & Recycle. However,
recently remanufacturing is added.
 Greening the Supply Chain:
The 5 R’s of Reprocessing
REDUCE: The Reduction in use of materials,
e.g. reduce solid waste, reduce packaging, etc.

REUSE: The Re-use of materials,

e.g. returnable boxes, reusable packaging

RE-ALLOCATE: Extending the use of waste,

e.g. by - products used for another purpose

RECYCLE: Collection and separation of material,

e.g. waste paper, plastics, aluminum beverage cans

REMANUFACTURE: Resource regeneration, reusing

e.g. reconditioning single-use cameras, printer cartridges
Supply chain challenges

Potential lack of transparency. Having transparency enables

stakeholders to understand the status of the supply chain.

Waste due to inadequate production cycle. Businesses that,

inaccurately gauge their supply demand or capabilities may end up with
an overstocked inventory.

Lost or delayed goods. Goods that go missing at any point in the chain
ultimately delay the whole process and can impact customers negatively.
Supply chain challenges …

Increasing customer expectations. New technology and businesses

raise customer expectations, which can be difficult to manage, and
impossible to meet if not properly managed.

Sudden changes in the supply chain. External factors can cause

unforeseen changes in a supply chain, so best practice is to prepare for
the unexpected and be able to pivot if need be.
Contract Management

• A contract is a mutually binding legal relationship obligating the seller to

furnish the supplies or services and the buyer to pay for them.

The contract is the mechanism by which:

The project organization is created;

Project managers are employed;

Goods and services are procured;

The commercial nature of the project process is defined.

Contract Management

• Contract Management: refers to actions taken to ensure that both the client and the

Contractor comply with the requirements of the Contract.

Contract Management includes :

 Contract development and close‐out,

 Contract Monitoring, evaluation of deliverables, invoice review, payment approval,

progress tracking, regular status meetings, dispute resolution and “day to day” management.
Contents of a contract

• Name and address of both the parties,

• Subject of the agreement,

• Deadlines for the different stages of fulfillment of the agreement,

• Financial aspects and other necessary conditions such as violation of

contract etc.
Approaches to contracting

• Contracting total responsibility for one contractor

• Dividing the project and contracting it to suitable suppliers and

contractors.

• Accomplish a portion of the work yourself and contract out the

balance to one or more agencies.
Group Assignment (40%)
General Instruction
• Assignment due date: August, 30/2023
• Writing style: 12 font size font style: Times Roman,1.5 spacing
• Assignment submission format: Soft copy
Visit two organization working on different projects and write an assessment report not less than 10 and
more than 20 pages on :
Type of project contact
Type of contract price
Their Procurement management
Their Inventory management
How to mange dispute resolution
Main challenges encountered and your advice on how to cope up with the challenges .
The End of Chapter One
Thank You