Document Detail

Title: FR-363 - Modernizing the Supply Chain and Increasing the Value of AWP
Publication Date: 4/1/2021
Product Type: Final Report
Status: Tool
Pages: 78
This publication examines the ways capital projects could be improved by involving suppliers earlier than typically has been done, increasing the quality of orders placed with suppliers, and leveraging information systems to support both better supplier engagement and more accurate reporting. The report also introduces enhancements to Advanced Work Packaging (AWP) processes, including the Procurement Work Package (PWP) and the role of Digital Supply Chain Coordinator.
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Abstract

CII chartered Research Team 363 (RT-363), Integrating the Supply Chain with AWP Practices, to conduct this research with the specific objective of enhancing Advanced Work Packaging (AWP) processes with respect to procurement and supply chain. The following chapters offer many specific recommendations with respect to AWP processes. RT-363 also defined a supply chain process and a Procurement Work Package (PWP) for use within AWP execution. A project team could benefit from following these recommendations even if it did not use AWP. Also, while the research team conducted this research primarily in the industrial sector, it expects these findings will be relevant to other sectors with substantial production in the supply chain.

The members of RT-363 consider improving supply chain performance to be an important pathway to increasing project productivity and predictability, and the findings of this research support the all-too-common stories of supply chain problems, such as late and out-of-sequence deliveries with consequent impacts on performance. However, the findings also suggest that these problems have actionable remedies.

The principal recommendations of this project fall under three areas:

  1. Improving the quality of orders to suppliers could be a major industry opportunity and low-hanging fruit. Areas for attention include clarity of scope, timeliness of orders, clear priorities for delivery, and delineation of needed information.
  2. Involving suppliers earlier in the project better leverages their capabilities and ensures timely delivery. All stakeholders broadly agree that there are opportunities for improvement with a range of benefits. An ancillary recommendation is to keep abreast of supplier capabilities at the corporate level, to make this information available to the project at inception.
  3. Improving information systems would assure the smooth exchange of information across the supply chain, supporting better and more timely decisions. The recommendations made in this report promote actualizing ideal materials management system capabilities that complement contemporaneous CII research on digital threads for AWP. As a related recommendation, the team proposes establishing the role of a Digital Supply Chain Coordinator to help set up and assure communication across disparate information systems.

RT-363 finds great opportunity in these recommendations. It is difficult for any project to be successful if the flow of materials is disrupted. These research findings show broad agreement among owners, engineers, contractors, and suppliers. Common issues in customer orders cause problems with supplying materials in a timely and cost-effective manner, and all stakeholder groups studied agreed that there would be significant benefits if suppliers were more involved on projects.

Suppliers can enhance projects in a number of ways, including the use of alternate technologies, value added delivery via kitting, and decreased production costs. One anecdote that stuck with the research team told of an instance where, if pipe-bending technology had been used, a project could have saved 10% of the cost of the order. Unfortunately, the project team placed its order too late to allow that option. Every supplier interviewed during this research, from high-value engineering to distributors, shared similar examples of missed opportunities for cost-saving efficiencies due to late contact with projects