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Research Team 344

(RTS 12) Improved Integration of the Supply Chain in Materials Planning and Work Packaging

Essential Question to be Addressed

What are the new tools, practices, and documentable benefits improving supply chain visibility, advanced work packaging, and risk mitigation? Further, as part of an enhanced supply chain visibility, can project material and equipment inventories (and associated inventory costs) be optimized? Specifically, can an analytical process be devised to select the optimal balance between just-in-time and just-in-case delivery strategies for various types of project materials and equipment without jeopardizing project schedules?

Background

Some examples of new tools available in the industry include improved IT communications, RFID and automated risk monitoring. One such application is to have manufacturers place RFID chips on their products with links back to all required documentation and certifications

Because this research addresses a relatively unexplored component of materials management and requires an understanding of terms more commonly used outside the industry, the following definitions will be helpful. (These definitions are open to research team refinement.)

Materials Planning, also known as material requirements planning-is the oversight of the entire project material and equipment life cycle, from conceptual design through project close-out. Material Planning ensures that the right material is in the right place at the right time, with a minimal level of surplus. Material planning is an essential component of a comprehensive materials management program and applies to all materials, equipment, and fabricated components required for a specific project. (Note: materials planning is not to be confused with a project's material management execution plan.)

Just-in-time (JIT) is classically defined as an inventory strategy that strives to receive goods only as they are needed in the production process and thereby improves a business's return on investment by reducing in-process inventory and associated carrying and handling costs.

Just-in-case (JIC) is classically defined as an inventory strategy that aims to maintain large inventories of in-process supplies, parts, warehousing resources in order to minimize the possibility that adequate inventories will be unavailable in the face of varying or unpredictable production and supply chain contingencies. [In practice, JIT and JIC can be viewed as two extremes that can be applied in varying degrees to various types of supplies.]

Inventory is classically defined in two ways:

1. From the lean perspective, inventory is waste. In-process inventory has no real value until it is used and incorporated into finished goods (or projects).

2. From another perspective, inventory is an accepted buffer-along with capacity and time-against process variability, including supply chain variability.

Notes to team

For an example of one such assessment tool, see the following study: Polat, G., Arditi, D., Mungen, U. (2007). "Simulation-Based Decision Support System for Economical Supply Chain Management of Rebar." ASCE Journal of Construction Engineering and Management, 133 (1), 29-39.

While the term inventory is not commonly used in the engineering and construction industry, in reality all materials and equipment that are delivered to and then stored on a project site awaiting installation are indeed in-process inventory; they are thus subject to the same characterizations of inventory found in manufacturing and other industries. Although there are instances of JIT materials delivery in our industry-ready-mix concrete, some locally-supplied commodities, and certain heavy-lift components are examples-most large industrial projects tend to follow more of a JIC strategy. Materials, equipment, and fabricated components often arrive months before they are actually needed or used. Depending on project size, the JIC approach can result in inventories valued in the millions of dollars (or even in the hundreds of millions of dollars) essentially sitting idle for extended periods and with an associated financial cost.


Research Team Roster

Chair
Laurinda Tseng, Houston Supply Chain Division Manager, SBM Offshore
Vice Chair
Derek Wedel, Operating Principal, Global Infrastructure Partners
Principal Investigator
Douglas J. Morrice, Professor, The University of Texas at Austin
Principal Investigator
William J. O'Brien, Phil M. Ferguson Centennial Teaching Fellow, Professor, The University of Texas at Austin
 
 Members

Cody Austin, Technical Account Manager, Autodesk, Inc.

Robert Ball, Senior Vice President, Operations, Atlas RFID Solutions

Stephen Booker, Project Associate, ExxonMobil Corporation

Patrick Byrne, Procurement Leader, Hargrove Engineers + Constructors

Robert Keith Churchill, Corporate Construction, Operations Manager, Bechtel Corporation

Matt Dean, Operational Procurement Manager, EnLink Midstream

Gregory Fox, Senior Purchasing Manager, The Procter & Gamble Company

Jamie E. Gerbrecht, Construction Advisor, ExxonMobil Corporation

Lori Goetz, Director, Supply Chain, Matrix Service Company

Anand Kandaswamy, Research Economist, Applied Economics Office, U.S. Department of Commerce/NIST/EL

David Levin, Power Specialist, Victaulic

Anabella B. Martin, Global Inspection Engineer, Hilti Corporation

Chris McConnell, Manager - Projects, Ontario Power Generation

Philip Ovanessians, Jacobs

Phil Radin, MC Industrial, Inc.

Paola Richter, Manager of Global Sourcing, Jacobs Engineering

Michael Serniak, Sr. Project Manager, Haskell

Jeffrey C. Weetch, Global Director, Procurement Execution, AECOM

Bobby Youngblood, PCL Constructors, Inc.
 
Student
Vineeth Dharmapalan, Graduate Research Assistant, The University of Texas at Austin
 

Roster updated 4-30-17 · The CII Webmaster

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