Planning Procurement Activities in ETO Projects

The complexity of ETO projects reflects also in the challenges of planning and controlling them. Most ETO companies apply planning procedures based on elements from the traditional project management literature with a linear approach that cannot deal with the challenges of such an environment. Moreover, most of these procedures focus on planning the production activities with little focus on planning the design-, engineering-, and procurement activities. This research looks into how ETO characteristics affect the planning of procurement activities since their outcome have a significant effect on the total cost of the project. The studied literature reveals a need for more knowledge on how to actually plan procurement activities since delayed materials and components contribute to major costs overruns and delays in ETO projects.