Procurement Performance Review: 

Here you focus on bench marking the vendors/suppliers against metrics such as on time delivery, cost, quality etc to help yourself-buyer- to consider/eliminate them for future projects based on the expereince you have on your recent projects with them.  This will serve as input for Select Sellers List process for future projects

Inspection:  Here you validate whether all the deliverables meet all the specifications in the Purchase Order

Audit: Here you inspect few random/critical metrics/processes are adhered to by the supplier.  It can be within your organization or within the external organization such as your supplier's.

Chandra

 Hi,

You are right that there is a “subtle” difference between the “Procurement Performance Review”, “Inspection and Audit” and the “Procurement Audit”. Let me share with you my version.

First let’s discuss the difference between the “performance review” and the “inspection/audit” tools and techniques. The performance review, is an independent review of the supplier’s performance. You are not required be on the site and you are not required to be interacting with the supplier to perform this activity. You can do this in your office, with your team members and can use documentation provided by the supplier, your team’s observations and the project’s progress as the inputs to this activity. However please note that I have used the words that “you are not required to”, I have not said that “you must not”. You CAN be on site and you CAN interact with the supplier if you deem fit, but it is at your discretion. However you MUST involve your project team for this review. Usually this is an in-office and a team-event, and is carried out on a frequent basis. I do a weekly review with my team for every contractual arrangement and I do it during every team status meeting.

However! An inspection or an audit needs to be done on site and with the active involvement of the supplier. You might have questions or queries for the supplier, you might ask the reasons if the performance is not up to the agreed standards etc. Audit or inspection is always related to physically reviewing the deliverables or products, it’s a very active technique. On the other hand, a review is a passive technique and CAN be done without the involvement of the supplier and without the physical inspection of the actual deliverable or products. Its always based on facts and figures, documentation and YES internal project team feedback.

Having differentiated “procurement performance review” with “inspection and audit”, lets differentiate them with the “procurements audit”. The first two are the tools and techniques to “administer” and “on-going” contractual arrangement, while the later is the tool and technique to “close” the contractual arrangement. You can say that a “Procurements audit” is a combination of the performance review and the inspection/audit and same in nature. The only difference is the approach to it, here you want to close the procurements, you will validate each and every deliverable or the “final deliverable”. If there are no defects, you will release all the due payments. Secondly the procurements audit is a very comprehensive activity, it does not only reviews the performance of the supplier, it also reviews our own procurement management, from start to end and captures lessons learned.

Please don’t confuse these terms on the basis of their true meanings in English. I hope the examples and reasoning I have given, would help you clear the confusion.

Exam Support Team

The PM PrepCast - http://www.premiumcast.com/vp/50398/16780/10399/

I never ever knew so much difference exists...

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