Document Detail

Title: FR-344 - Improved Integration of the Supply Chain in Materials Planning and Work Packaging, Version 2.0
Publication Date: 4/1/2020
Product Type: Final Report
Status: Tool
Pages: 232
Provides concrete starting points from which firms and projects can take action to improve materials management. Part I focuses on visibility across common decisions during execution, defining enablers that enhance the benefits of increased visibility and offering a method for scoring visibility and enabler performance. Part II considers the costs of carrying stocks of materials on the project and how to achieve the right balance of materials as a buffer against shortages.
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Materials are the life blood of projects. If materials don’t flow smoothly from specification to fabrication to site installation, project performance will be poor. All too often, even well planned and executed projects face disruptions to materials flow. Indeed, late or missing materials are a common occurrence on almost every project.

Part I of this report explored the visibility of materials in the project supply chain and made recommendations to improve materials tracking and support effective decision-making. The volume was based on an initial stage of research that reported on the current state of materials visibility – generally poor – and identified a large number of visibility items and enablers that are associated with common decisions. It concluded that project supply chain performance will improve if projects and firms pay closer attention to visibility.

Version 2.0 introduces Part II, a companion to Part I that explores the opportunities for improvement that may stem from improved visibility. A particular focus of this second phase was to focus on the costs of carrying stocks of materials on the project and, hence, to help teams make better decisions about achieving the right balance of materials as a buffer against the risk of shortages. The researchers see a better understanding of costs as a prerequisite to improving policies or optimizing behavior.

This study presents metrics for excess inventory and a framework for decision-making to augment project planning processes. Collectively, these findings make the case that there are significant opportunities for reducing inventory holding costs while making the material on hand more effective.