Welcome to the Everyday PM Podcast, the podcast where we discuss project management principles for your everyday life. My name is Anne Campia. I am the host and founder of The Everyday PM. I am also a lifelong project manager and a lifelong learner. And I'm so excited to have you here as well as our special guest today, Ajay Bargrove, who is coming to us from actually, I don't know where you are situated. Can you can you let us know where you are located right now?
Yes, I'm in Toronto. Wonderful. So today we are going to deep dive into the real world challenges and solutions that make project management work. In particular, we are going to explore one of the most critical, yet often overlooked as overlooked aspects of project management when it comes to procurement.
So Ajay, as our guest, I want to welcome you as well as let the audience know that you are the author of one of the my favorite books that I typically instruct with as part of my project procurement class. So you are the author of a textbook that I use quite heavily as part of my courses within my project management courses that I teach for unit, the University of California Riverside, as well as just an expert in this subject matter. So I'm so excited to welcome you
to the podcast today. And for those who have not met you or do not know of your background, can you give us a brief introduction? Yep, thanks. First of all, thanks for having me on this podcast and this is I've gone through all your previous podcast and all of them are so good. I really got to my introduction. I would like to keep it sweet short like when spend like 2 decades of working experience in procurement, supply chain.
Fortunately, I have been touched by all the sectors, service, oil and gas majority is like EPCEPCM and yeah, some experience with the public company in the beginning of my career and that made me where I am today. I'm a married guy and I have two three children and they keep teaching me more about the procurement and project management and I always treat them my client and they are always tough to deal with.
That's wonderful. Well, welcome and and thank you for sharing a little bit about yourself as well as professionally and personally. So we, we want to dive into this concept of project procurement because one of the things that makes this book special is its practical approach, which is why I like to utilize it with my students. Because when you hear the term project procurement, that can
feel a little bit daunting. You know, project managers may or not may not necessarily understand the concept of procurement and what their involvement is. So let's start with the basics. So in your book, you emphasize that procurement isn't just about buying things, it's a strategic function. So can you break down for our listeners what project procurement really means? Yeah. So when I was doing my PMP exam in two 2012 and then 2013, I passed it out.
So I happened to be working at that stage. I just want to touch a little bit of background so that people can understand. And I was already working in five years within the procurement and coming straight out of the engineering college and now managing A procurement department. It's it was a public utility and it was making into the private sector. So there you have set of regulations, right?
You have complete encyclopedia how you should be working, what you are supposed to do in certain scenarios. That's very much easy thing, right? You just go and check the regulations you have and act accordingly. Whether you like those encyclopedias or not, that's a separate question. So why why I started this book in 16 is with my experience and when I was starting my career I was struggling to get the proper knowledge on the procurement. There is a lot written on the
project management philosophy. All it was chapter I think chapter 12 on the PMBOK 4th edition when I did my BMP. So very, very fine things were written, very crisp things and it was not detailed. Over the years, I realize it's a strategic function. It's not like transactional like it's not like just you know, issuing the purchase or getting your material done. It's not like you do your groceries. It requires a lot of other things which you need to take care.
It's a risk management function. It's you're not only trying to buy the material, but you are trying to deliver to your client and you know, make him feel happy for the requirement he ask for not even giving them the gold plated things, but not giving them some inferior quality products also. And you don't want to be like delayed on the schedules, right? And when it comes to project, we all know the iron triangle we have it's like scoop time and cost. So you don't want to delay anything.
If you if you delay on or you change any lever on the iron triangle, everything is affected. Sure. Sure. And one of the things that I appreciate is it really opens up the world of project management to your point, it's mentioned, but there hasn't been real material to make it, like I said earlier, practical and or something that a concept that project managers can really grasp as part of their role.
And so as you started to incorporate more of the procurement acumen into your own practice as a project manager, can you tell us a little bit about what gap you were trying to fill when you wrote this particular book? So my intention when I was writing this book was to fill up the gap, right? How if I am acting as a buyer or the project procurement manager, So what should be going into my
mind? I should be concentrating on the schedule, I should be focusing on cost or I should try to bring the best value to the client or to the project. So those were the things which were going on mine. And apart from that, you have set of compliances with you which you need to take care when it comes to procurement. It's, it's a trading of coal, right? You get your hands dirty, somebody can always point finger
on you. It's, it's, it's the easiest thing in the world to point a finger on the procurement. If anything goes delayed and you know, something goes wrong, oh, it's your supplier, it's procurement. So how would you deliver within the iron triangle controlling all the parameters? Not exactly. You know, it's, it's not like a corporate purchasing where you you can delay, right. It's coming for the for some
utilization. It's not a very complex item whenever you're doing a project, it's unique all the time. Yeah. Yeah. So it's not like a defined requirement all over again, right. So maybe you are buying the same sub, same, same transformer, but it's with maybe the different specifications maybe getting manufactured for the very first time. But I mean, that is why, you know, it's, it's very, very niche area where we need to
spend more time. It's not just buying, it's not just buying, it's not just about the cost. It's about all of the factors, schedule a relationship with the vendor, keeping your stakeholders informed, keeping them aligned, keeping them on all the same page, right? So, and it's, it's like it's teared, right? It's there are many layers on it. So which I was trying to, you know, uncover when I was writing
this book. And the the biggest task or the difficulty I had is like, how should I process this information in the easiest, simplest form so that if somebody is reading for the first time, he should, you know, make some idea. OK, this is the first step. OK, let's OK, supply selection. What comes before, oh, purchase equation. But why purchase equation? Because there was some demand. So I tried to, you know, it's all that goes in circle, supply management in circle, right?
But then that was the thing when I was writing those book, that part of the book. And that is the most difficult thing also to, to make readers aware how they should understand the book and the flow with the with the chapter it flows. Still, I know some of the readers might not might not have found it, you know, some might say why not? Income terms come before financial evaluation because that is dependent on your company, dependent on the Bay you are doing project procurement.
Right, right. And you wanna tailor it to your needs, right. And I I will commend you because you question whether the book is effective in doing so. And I can attest to it is because the yes. And I'm, I'm just gonna share a quick anecdote before I get into our next question for you, which is as part of our course, I couple that with the concept of quality and how procurement and
quality kind of go hand in hand. And one of the things that I'm proud to say that comes out of discussions about the material you provide for my course is that within your book, because it's practical, I hear the students and their anecdotes about how they've been utilizing the text to then influence what they do in their day-to-day jobs. And so one of the examples that I'll give is we had a really nice active conversation with my students about acquiring certain
materials. And in this case, it was somebody that was working to build a automotive and one of the pieces of materials they talked about was, you know, we had a choice in the procurement process to go with a vendor that would supply us with a piece of that material that would come a little bit faster. It was a little less expensive. However, you know, for our company's objectives, one of the things we promote is we we provide high quality products.
And so it was a very active conversation with a group about what are some of the choices you have to make as part of procurement in your vendor selection process to ensure that the materials you're procuring are also to the standards of what the company is expecting. And so they were able to apply a lot of what you said within your textbook and then put that against a real world example, which I was very, very proud of
them for being able to do that. And it did spur this active conversation around how procurement can directly affect something like the quality of what it is that you're trying to procure and how you have as a project manager have influence and decisions to make or help influence the group to make a decision around what is most important for you, right? Is it the quality of the material? Is it the cost? Is it the time?
So to your point, procurement is intertwined in all of that in which a project manager is looking at. So that gets me to my question for you, which is from what you've seen in your experience, what are some of the most common procurement mistakes that you might see a project managers making? And I know I provided one example of how my students have discussed it, but do you have a example that you are willing to share with us?
So I think the biggest pitfall I saw when it comes to project procurement is like in the beginning of the project, you got your order from the client and now project manager is all excited. I'll get things done quickly. I'll get my specification done by the engineering, you know, make run to do place all the orders quickly, right? And then, you know, present it to client O all that is a place. Now everything is coming in 16 weeks, 20 weeks or 4 weeks.
Now we can plan the construction side of it. The the important thing the project manager is missing is it's not about, you know, pushing some papers to the vendor and placing order. Sure. And and that is the biggest pitfall and they pay the price. All the years I've seen, it's not just one project I've seen I've done multiple projects with multiple companies in different sectors and that is the biggest pitfall I saw that and it's a
knowledge gap. All the project manager might be intelligent, he knew it already, but then they are running behind the skill in the beginning and the moment you know what, it'll start coming. They realize, Oh, I, I should have waited for a little bit long and then you know from my specification and requirements and they start paying the price
later. And towards the end of the cycle, when your project is about to be completed, they have to pay through the news and they're they're really going mad about the cost controlling. They are not so aware they, they, they are, although they have the knowledge, but they were not aware that this is, this is going to happen just to
make your client feel good. In the beginning, you are creating a lot of mess once the things start coming in And that is why I said it in the beginning that it's a very strategic function, very niche. You need to think about those things. So you don't want to do root cause analysis and lesson learnt in every material you bought but you should be, you know we are buying commodities like something related to copper, steel or something and those are the prices which are fluctuating.
They have their own lead times. So you need to understand when to buy, how much to buy and if you don't have to buy, why you do not have to buy right now. You can wait some time, right. But I have not seen a single project manager who has said to me, Hey, AJ, I want you to buy 1234 and then leave in between
line item. You don't have to buy right now because I see this will, you know, this will kill us on the costing if you buy the field prices or something structural steel or say anything related to copper and that will shoot up your overall, you know, screw up the budgets.
Yeah. So that is something where I would say that the biggest pitfall I saw, yeah, even though project managers are aware that they might be screwed up on the cost, but I've not seen a single one who has, you know, came and negotiated all. You don't buy everything right now. So that's the biggest footfall.
And another one I would say is the misunderstanding of the misconceptions, especially the new buyers or new government engineers who are starting their career just after the college is like they think, oh, I did not see the purchase requisition. I need not to act. Yeah. So that is the biggest pitfall for the buyers. I mentioned project manager but got to just start with the
project manager. So, but the procurement has to act much before that the moment project is being bugged or you are bidding for some client, OK, some project you have not received it. But if your companies allows you guys have man hours and you have such a process where you can integrate yourself when you are bidding actually not during the execution that makes life easier for everyone. Project manager, client procurement.
So that's the second thing. I mean the misconception about purchasing stats with the purchase. Yeah. So those are the biggest one I saw and there there are many things which you can discuss, but these are the biggest one I would say.
Because, yeah, yeah, absolutely. And then I think intertwined in there, as you're talking about procurement being strategic over transactional, is this concept of introducing, at least the way I teach it to my PMS, the soft skills that are involved in procurement too, right, Because there is this aspect of vendor relationship management. That comes along with. Yeah. So you touched on that a little bit. So I wanna go a little bit
deeper into that. So one of the things that really stood out to me in your book is this emphasis on relationship management with your vendors and your suppliers. A lot of my junior project managers within my classes still question how they're involved and even that process.
But I like to emphasize to them, this seems, while it seems to go beyond traditional contract, you know, management or project management, there's still that aspect when you trace it back to those critical relationships that you have to build and maintain as part of your project. So can you talk a little bit about why you thought it was important to emphasize that as part of procurement? Yes. And and you test very important perspective or very pertinent point, right.
If we are buying the procurement is also not just about managing your risk, but it's about managing people, right. It's a people management function. And I used to challenge my human resources guys. Sometime, you know, we are also doing, you know, people management, not just out to my manager sometime I'm also managing people. And you used to say, oh, you are managing becoming. No, I'm managing people.
It's a relationship, right? Yeah, and and if you vomit out or others other words, which other priority is not going to like you need to think 10 times before opening up your mouth. Yeah, because some people say, OK, I'm very open, straightforward kind of person. I will go ahead and tell the vendor this is not the great thing you did. You need to decide what is the right time to communicate. You don't want to relay all the messages today.
So and that is why your relationship with the vendor is very important. You don't want to kill the relationship just trying pointing a finger. Oh, because you delayed and now my project is screwed up. I have to pay the penalties to the client and I'm going to blacklist you from the next time. Obviously, you're trying to kill the whole relationship. You need to be empathetic. And these are capital projects. These are the project which evolve all the time, right?
So we have to be empathetic and then flexible during the execution of the project specifically. Yeah. Yeah, absolutely. Yeah. So that's the biggest thing and that is why I if if you have seen that I've written long term contracts right over the years. If you are executing the same kind of projects, right, you get to meet the same kind of same set of suppliers. Most of the time.
If it is, if you newly, if you got new project and you are not executing completely new thing, you going to see the same set of people. It's not just for today, it's for tomorrow and it's for future. So he should not be spoiling the relationship, not with the vendor, not with client. Also there are ways to communicate. Get your things done easily with being polite, being empathetic and being considering yourself some time in the shoes of supplier. OK, this might have happened to me.
The cultural boundaries or the tariff boundaries like we have been hearing a lot, much on the tariff from the states recently that has clogged deliveries on the ports. But that is something beyond the control of supplier. So we need to be a little empathetic, understand the situation, OK, It's not him, it's some trade conflicts ongoing. And you need to communicate same way to your client. Try to bring everyone on the same page, try to find a solution instead of pointing a
finger. So it's the key of whole procurement. If you have the best contract, you have best compliances, but you have the bitter relationship with the vendor, your project gonna fail 200%. Absolutely. Absolutely. Really beautifully said. Yeah. And that alone, that component alone of the way that you describe it in your book always resonates with every cohort that I teach. Is they something?
It's not that they forget that there's this aspect of utilizing soft skills and the empathy that you're saying and building those relationships. But maybe it's you do such a good job of connecting the dots between again, why procurement is so a strategic management over transactional, but also in what you just described the longevity of the relationships. These are stakeholders like anybody else, even people that you would be working with internally.
And so the best that you can do that as a project manager, and I think that's very effective in the way that you paint the picture for my students is that's right. Even though they're external, maybe suppliers or vendors, they still very much are a part of the project just like anybody else. That is, that would be a part of your internal project team. And then that starts to click, and then it starts to become a really, really fun concept for them to grasp. Yeah, they, they're a part of
your project the very first day. So you have a kick off meeting. So even before that they you should have a relationship.
If I'm talking to five different bidders and the order is not finalized, I should not be biased about one or other bidder and thinking, OK, this is going to get the order, let's forget about others, consider them there on the project until you decide, OK. Or even if I have had situations where in some of the projects we have awarded A vendor a bit big based on price, based on best judgments, but something happened not to our set with them.
Some things happens, right? And then they said, oh, we are very sorry, we cannot execute. Yeah, we have gone into financial classes or something, right? So then you should be able to go back to option #2 the best options you had, right? You don't want to go start from the scratch and you know, create all the documents now are issued to the market, start working again. No, you don't want to do that, right?
So keeping your relationship clean, I suite is the best thing if you are in procurement, right. And everywhere I'm not in procurement in general, project manager is also keeping, they understand this right, that you don't want to spoil that relation with the client because he's important. Yeah. So it's just the meter of the project manager maintains with the client, maintains with the supplier.
It's a great way to put it. I want to pick your brain about something outside of relationships and just because it's so relevant in the in the environment that we're currently in. So I don't know even know if you've thought about this, Ajay, in terms of how do you see AI impacting procurement processes, Have you thought about that yet in terms it's a little bit of a curveball here? Yeah, yeah. No, no, it's talk of the town
and it's not that we can. It's just like, you know, when people were talking 1980s of supercomputer computers are coming to the market and man, humans will be jobless. They don't have anything to work because it, it has, you know, very great processing powers and this and that they can calculate and snip. It's, it's something like that, right. So the only challenge is for people like us who are already spending two decades in the market is to gear up themselves, right?
AI is going to be the next revolution. And I know the companies has already started. Obviously if one company is investing efforts in say bringing AI system to their company just to reduce the cost because they want to be competitive compared to their competitors, obviously the competition has to gear up themselves. It's not about snatching jobs from the mankind and giving it to the computer to process. No, it's not like that. We need to learn.
We need to grow ourself into AI, and it's not difficult. People have been talking about ChatGPT perplexity cloud. There's so many chat bots, is it? But these are very, very nascent, or I would say at a very young stage. And this is going to change in say, another two to three years. I see that people are still using those things are like Google, right? Just correcting things on grammar, writing emails, but that is nothing. That's just the beginning.
AI is if I see procurement is gonna give you scorecard for the supplies, you don't have to because that is the area where any company wants to evaluate their supplies, how they performed in say last project, how they have been on the
relationship. Yeah. How many claims they sent to us or how many claims we have to send to them or how much market they are controlling those things right now buyers are doing themselves, they get information collected and say, OK, I think A is better than B because they have a better market share. They have been doing same. If I talk about my company or my area, they are like 60% controlling the market share. They are getting 60% of the projects we are awarding to the
market. Those kind of things you can get like this yeah. Tell me which supplier for which component say for I keep saying transformer, give me power transformer 50 MW and in considering my last three projects and tell me which one is the best suppliers we had and you'll get information like this. You don't have to spend time right that will make you more efficient to save your own time. Obviously we don't need like 4050 sixty people to manage the procurement of a capital
project. You might need 5 or 10. But then if you don't give up or the buyers or the young supply chain folks don't want to learn yet, I'm sorry to say that they have to be thinking about doing something with the hand and something, some skilled building or something else they can do. But if you want to do something in procurement, you need to learn all those tools. AI is going to be beautiful. I'm telling you, you don't have to do the financial evaluation
of the supplier. You check the financial health, right? If just like banks, right? They check, OK, what is your credit score and how much you are earning, how long you have been into this job. They asked all those core kind of questions. Similarly, you evaluate your suppliers on the financials, you check their OK, give me your financial statements for the last three years or give me DNB ratings and then you make decision, right? Those details are gonna be easy.
Yeah, very, very quick. Yes. And you just have to apply, OK? Now I have everything. I don't have to waste like 2 weeks in collecting, gathering this information, processing, analyzing and making final decision. I have this information right away, Yeah. Yeah. You save a lot of time so we need to get up our self as a procurement or supply chain guys. That is what I feel about AI. Yeah. And I believe you because I see you as the expert here.
And I think I think in everything that you said, AI is only going to further emphasize what you've been trying to promote this whole conversation, which is seeing procurement as a strategic function of a project manager. So thank you for appeasing me and looking into the future.
So my final question to you, in terms of folks that want to get a little bit more practical with procurement and for someone listening to the podcast who wants to improve their procurement processes tomorrow, what are some of the top actionable steps that they should take in order to do so? So just be covered AI Start learning about AI. Yeah, so that's the first thing. There are a lot of lot many things. There are hell lot of courses coming up from all the Rapido universities.
Even I think University of California Riverside must have one and it I believe I saw one is available. Yes, that's the first thing you should be getting accustomed with the technology, right, So you don't feel lagged behind. The second important thing is like since the data availability or analysis would be so easier. So if you want to improve your supply chain or your procurement cycle, you should be looking OK,
what are the long lead items? That's first thing you should see any procurement is, is everything is not critical on the project, right? It's like Pareto like 8020 rules. So only 20% of the item which going to hamper your project schedule. You don't want to buy at the end, you don't buy it want to buy at the beginning so that items are lost or materials are
lost in the site. But you need to think about and I, I, I can say there is very good textable label classic metrics is available where you can, you know, divide your supply chain, what is important, what is critical, what is miscellaneous and then you make your decisions accordingly. Focus on the very important items, see their schedule, what are the supplies available for those particular items in the market and how they have performed.
So you can gather that information even if you're not doing any procurement right now. And if you're starting, say fresh procurement department within the company, start building your data and then try to analyse later. So, so you need to divide a supply chain which items to
focus. We don't have the time of whole world and you know go and do a six Sigma thing and you know do all the run charts and this and that we don't have that bandwidth of the time on our side yeah that too when AI is picking up so consider looking into your supply chain how you can make process lean right. You should not. OK, I need to collect 20 signatures before I issue the purchase order. No, and I had been having very difficulty with my procurement heads in the past when I started
my career. Why I have to collect 10 signature before I issue the purchase order? Yeah. And then they're laughing, oh, I need to collect project engineer signature because he certifies what we are buying is correct. OK, got it. Fair enough. OK, so why procurement leader signing? Because he's checking the work of package engineer and then OK, understood. So why project manager is signing? Because project manager knows when the requirement is required, right? Right.
They have like radical kind of things. So I think we need to make our processes leaner, right? So think about opportunity to make your government agile, how you can make your decisions. We don't have time, although we have all the digital tools available. You can send for signatures in in like this.
Imagine a project manager sitting with the construction manager and fighting for some material outside some incident and you are waiting for his signature to get the purchase order release for a critical item which is already on the critical path. And then and people start blaming coming. Oh why you have not called me? Because there was no signal you were busy.
Things happen, you know we all are human and then you delayed whole week and then supply came back, oh, my price is expired, I cannot access or address your requirement right now. Early quarterly time is now bigger because my production got busy, they got another order from the client, some other client. So you need to think about those things how you can improve, right. And those are we should be looking and I know people spent
very less time on those things. Yeah, nobody talks about these things. So they say, OK, if this project happened, client is OK now, OK, let's talk about new project. We need to go back, look into the lessons learned and where we did good things. We should record that as well. We should not only be talking about negative things happened on the project, but obviously we need to see how we could have done better. Yeah, yeah, absolutely, absolutely. Well, our time is up already.
I mean, this was absolutely fascinating. The time has gone by so fast. I think our audience as well as my students, I can't wait for them to listen to this episode. It's gonna add tremendous value in terms of just understanding procurement alongside the strategic advantage it will be for a project manager to really understand the concept. So AJ, for those that want to continue the conversation with you, where can they find you online?
Also, we've mentioned your book multiple times, so if you want to go ahead and plug that, we can do that too. Yeah, So they can connect me over to LinkedIn and my LinkedIn is his name is very specific. You do not find another guy. I don't know why, but in the whole world, my surname is little unique and it's you can say just find my profile there, send me a message request and I would be happy to connect. Otherwise my e-mail ID is also mentioned on the LinkedIn
banner. They can send me an e-mail if they have specific question. I try to help them the best way possible and it's it's a mutual learning always. That is my, my, my kind of things. I feel we learn from each other, right? It's not like there are students and I know, OK, I've been 20 years in the I might some I might something hear something new, different, right. And then I really will be happy to hear such kind of questions, which are tough and be in a
challenge mode. OK, now solve this. Tell me how would you operate? I might say right or wrong way, but at least that will help me as well as I'm a I'm a student for my life. So that is that's my feeling. Well, thank you for being open to continuing the conversation with our audience. I encourage everyone to reach out to you. Also pick up the book if you're able to, project procurement and if folks want to continue the
conversation. I will leave the relevant links to everything that AJ described as ways to contact him. And you guys can follow me on LinkedIn as well. I'll leave that link as well as subscribe to the podcast. Give us your comments and feedback on this episode and listen to some of the other episodes as well. So that will do it for AJ and I on this installment of the Everyday PM Podcast. We hope you enjoyed our conversation and until next time, take care.