Resource assessment is used to determine whether sufficient resources,
including funding, have been assessed and budgeted for a project. A
resource assessment should be performed at the beginning of the supply
chain management (SCM) process to determine whether sufficient resources
or funding have been assessed and budgeted for the project.
There are five categories of resources that need to be assessed:
• Funding - assess the current funding availability and compare it
with the funding required to accomplish the project
• People - ensure that there is sufficient human capital to develop,
manage, and operate the project
• Facilities - ensure that existing facilities can accommodate the
• Technology - analyze the organization's current state of
technology, and determine what will be required to enable
effective operation of the proposed project
• Other resources - analyze other resources that the organization
has, and determine which additional resources may be needed to
carry out the project
During this stage, the Purchase/SCM Team will evaluate the need and
determine the relative impact on available resources. The following should be
reviewed at this stage in the process:
• Ensure that total cost of ownership (TCO) is documented and that
the likelihood of significant cost changes over the life of the
project is explored.
• Ensure that resources are available to carry out the project.
• Ascertain whether the effort will/can be fully or incrementally
funded (i.e., the budget for a given fiscal year is exhausted; must
allocate funds from the following year's budget).
The resources available are organized to deliver objectives in the most
economical, efficient, and effective way possible.
In the early stages of a project, costs are generally estimated. The three most
common methods of cost estimation are:
• Expert opinion - an estimate based on the personal experience
of a subject matter expert (SME)
• Analogy - a more formal approach to expert opinion, using direct
comparison with one or more past projects
• Rough order of magnitude (ROM) - an approximation of the
project cost when high-level requirements are available, but not
The nearest calculation of real costs will be determined when calculating the
TCO; the total cost incurred over the life cycle of a product or service.
Requirements for funding must be revisited at this stage, to ensure that
adequate funds will be available and realistically estimated. The
organization's ability to fund a purchase is derived from the annual budget.
Develop Total Cost of Ownership (TCO) Estimate topic, Conceptualize Need
task, Process Step 1: Identify Needs