Modernizing the Supply Chain and Increasing the Value of AWP

RT-363 Topic Summary
RT 363

Overview

Previous research has verified that supply chain integration that includes contractor, engineer, owner, and supplier can improve project performance. AWP successfully integrates contractors’ expertise into design and, as a result, it can increase predictability, improve productivity, and reduce the total installation cost. However, any consideration of suppliers is missing from AWP despite the fact that materials make up 50% of the project cost. A modernized supply chain that integrates suppliers into AWP maximizes AWP’s potential to enhance project performance.

To address this opportunity, CII created Research Team 363 (RT-363), Modernizing the Supply Chain and Increasing the Value of AWP. By conducting a survey and a series of interviews with suppliers, RT-363 found that the early involvement of suppliers and the clearer communication of customer requirements can address common but serious issues around materials. Specifically, early involvement allows suppliers to create value by participating in the design and provides time to refine customer requirements.

To ensure the early involvement of suppliers and promote clear information transfer, RT-363 recommends a series of improvements to work processes and the digital supply chain:

  1. The recommended work processes consist of a rigorous supplier qualification program based on multiple criteria, a material responsibility matrix, and engineering deliverables that reflect vendor data.
  2. The team’s recommendations on the digital supply chain include strengthening capabilities that support AWP execution, identifying the ideal functionalities to strengthen communication among stakeholders, and creating the new role of a digital coordinator who assures the smooth operation of the digital supply chain.

Key Findings and Implementation Tools

1 : The Possible Benefits of Earlier Supplier Involvement

Suppliers can be better involved in the project, especially if they are engaged earlier than has been usual practice. RT-363’s interviews with suppliers identified a number of opportunities for them to add to the project through earlier involvement. The team’s survey expanded on the results from the interviews and found that many challenges stemmed from late involvement of suppliers and that many benefits could be realized by involving suppliers earlier (FR-363, in press).

Reference: (FR-363)

2 : Definitions for the Procurement Work Package and the Supply Chain Process

The Procurement Work Package (PWP) is defined as aligned to the Construction Work Package boundaries. (RT-363 considers the PWP to be an optional construct.) The Supply Chain Process (SCPr) is composed of a set of capabilities to track both information and materials deliverables in support of the execution sequence, including the ability to support constraint management. The SCPr supports mapping procurements across multiple work packages (FR-363, in press).

Reference: (FR-363)

3 : Enhancements to AWP Work Processes

The research team described 20 changes to the work processes in the AWP Process Integration Flowcharts (a.k.a. swimlane diagrams) published in Volume II of IR272-2. These changes included updates to early planning, such as enhancements to supplier prequalification and supplier technology screening; developing a materials responsibility matrix and managing it through engineering and construction; and additional steps in materials tracking and materials readiness to support field activities (FR-363, in press).

Reference: (FR-363)

4 : Recommended Capabilities of Materials Management Systems

RT-363 considers current materials management systems to be less than ideal, whether developed in house or commercially acquired. By drawing upon research findings from its interviews and survey, the research team identified nine areas of key capabilities for a materials management system. Practitioners can use these areas to audit existing tools and plan for logical expansions (FR-363, in press).

Reference: (FR-363)

5 : The Role of the Digital Coordinator and Digital Information

In addition to identifying processes and tools that could be key enhancements for supply chain performance, the team also acknowledged the importance of people to make the process and technology work. RT-363 defined roles that would be required to enact the process improvements it had identified to enhance the AWP swimlanes (see Key Finding 3), and it wrote abbreviated job descriptions for them. Key among these roles, the digital coordinator would be involved early in the project to help design and to coordinate the transfer of information among stakeholders on the project. This role could expand beyond the supply chain function, but the team considered it to be critical to the successful communication of information across the supply chain (FR-363, in press).

Reference: (FR-363)
RT-363

Key Performance Indicators


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