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Procurement and Materials Management: A Decade of Improvement. Percent Improvements. Reduced bulk surplus (40%) Improved supplier performance (24%) Cash flow savings (23%) Reduced site storage, handling (21%) Improved craft productivity (16%) Improved project schedule (16%). Background.

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Procurement and materials management a decade of improvement

Procurement and Materials Management: A Decade of Improvement


Percent improvements
Percent Improvements

  • Reduced bulk surplus (40%)

  • Improved supplier performance (24%)

  • Cash flow savings (23%)

  • Reduced site storage, handling (21%)

  • Improved craft productivity (16%)

  • Improved project schedule (16%)


Background
Background

  • Project Materials Management Handbook originally issued by CII in 1988

  • Updated to include value-added concepts

  • Procurement & Materials Management: A Guide to Effective Project Execution


Team membership

Al Franks, Jerry Whetstone Amoco Corporation

David Timberlake Bechtel Group. Inc.

Steve Daniels, Jim Scotti Brown & Root, Inc.

Doug Moore Chevron Corporation

Mark Coleman CITGO Petroleum Corporation

Lance Bell Clemson University

Glen Meadows Commonwealth Edison Co.

Bob Ferguson Fluor Daniel, Inc.

Greg Pisklo Hilti Corporation

Ed Ruane J. A. Jones Inc.

James Steenbergen Union Carbide Corporation

Jim Goodwin H. B. Zachry Company

Team Membership


Approach
Approach

  • Surveyed membership to identify awareness and use of effective procurement and materials concepts

  • Executed structured interviews

  • Utilized survey input, site reports, and team member experience in the update process


Immediate usefulness
Immediate Usefulness

  • Update includes:

    • Checklists

    • Sample reports

    • List of concepts and technologies

    • Sample templates

    • Guidelines to assess contractor’s systems

    • References


New developing concepts

Internet, intranet

Supplier alliances

On-site supplier stocks

Bar code controls

Common commodity codes

Global logistics planning

Supply chain management

Evaluated receipts settlement

MRP and trial allocation

Document imaging

Procurement cards

Simulation packages

New/Developing Concepts


Gaps

  • Survey of CII members

  • Sizeable gaps between awareness and implementation of procurement and materials management concepts


Evaluated receipts settlement

Owner

Contractor

Evaluated Receipts Settlement

Minimal Awareness

Moderate Awareness

Intent to Implement

Current Utilization

0

20

40

60

80

100


Bar coding tool control

Owner

Contractor

Bar Coding (Tool Control)

Minimal Awareness

Moderate Awareness

Intent to Implement

Current Utilization

0

20

40

60

80

100


Management role
Management Role

  • Champion procurement and materials management as a value-added process.

  • Provide resources for implementation and training.

  • Implement effectiveness measures to track improvements over time.

  • Promote supplier alliances.


Welcome to the …

Procurement and Materials Management

“Skins Game”


1. What is a purchasing technique for several companies to combine their material requirements into a single plan to attain greater leverage with suppliers?

A. Consortium buying

B. Leasing arrangement

C. Subcontracting


1. What is a purchasing technique for several companies to combine their material requirements into a single plan to attain greater leverage with suppliers?

A. Consortium buying

B. Leasing arrangement

C. Subcontracting


2 what are examples of procurement and materials management system metrics
2. What are examples of procurement and materials management system metrics?

A. Stock outs

B. PO cycle time

C. Both A and B


2 what are examples of procurement and materials management system metrics1
2. What are examples of procurement and materials management system metrics?

A. Stock outs

B. PO cycle time

C. Both A and B


3 what is evaluated receipts settlement
3. What is system metrics?“Evaluated Receipts Settlement”?

A. Analysis of warehouse operations

B. Payment w/o hard copy of invoice

C. Process similar to Alternate Dispute Resolution


3 what is evaluated receipts settlement1
3. What is system metrics?“Evaluated Receipts Settlement”?

A. Analysis of warehouse operations

B. Payment w/o hard copy of invoice

C. Process similar to Alternate Dispute Resolution


4 what are examples of services expected of strategic integrated suppliers
4. What are examples of services expected of strategic, integrated suppliers?

A. Take-off assistance

B. Accurate inventory control

C. Both A and B


4 what are examples of services expected of strategic integrated suppliers1
4. What are examples of services expected of strategic, integrated suppliers?

A. Take-off assistance

B. Accurate inventory control

C. Both A and B


5. What is the average percent improvement CII members have achieved in “craft labor productivity” when effective procurement and materials concepts were used?

A. 2%

B. 4%

C. 16%


5. What is the average percent improvement CII members have achieved in “craft labor productivity” when effective procurement and materials concepts were used?

A. 2%

B. 4%

C. 16%


True or False achieved in 6. The following are examples of areas that should be included in a contract for transportation services:

  • Carrier liability

  • Origin and destination services

  • Rate structure


True achieved in or False6. The following are examples of areas that should be included in a contract for transportation services:

  • Carrier liability

  • Origin and destination services

  • Rate structure


7 which of the following are characteristics of a contractor s comprehensive computer system
7. Which of the following are characteristics of a contractor’s comprehensive computer system?

A. Electronic links to ERP

B. Multi project procurement database

C. Electronic distribution of catalogs


7 which of the following are characteristics of a contractor s comprehensive computer system1
7. Which of the following are characteristics of a contractor’s comprehensive computer system?

A. Electronic links to ERP

B. Multi project procurement database

C. Electronic distribution of catalogs


8. What are the trade terms published by the International Chamber of Commerce (Paris) that divide obligations between a buyer and supplier in 10 areas?

A. Uniform Commercial Code

B. Napoleon’s Code of Warfare

C. INCOTERMS


8. What are the trade terms published by the International Chamber of Commerce (Paris) that divide obligations between a buyer and supplier in 10 areas?

A. Uniform Commercial Code

B. Napoleon’s Code of Warfare

C. INCOTERMS


9 what are very common applications of bar code technology
9. What are very common applications of bar code technology? Chamber of Commerce (Paris) that divide obligations between a buyer and supplier in 10 areas?

A. Receipt of fabricated items

B. Tool control

C. Both A and B


9 what are very common applications of bar code technology1
9. What are very common applications of bar code technology? Chamber of Commerce (Paris) that divide obligations between a buyer and supplier in 10 areas?

A. Receipt of fabricated items

B. Tool control

C. Both A and B


10. What multi-industry initiative has developed more than a million standard material identifiers and descriptions?

A. CIMIS

B. APICS

C. NAPM


10. What multi-industry initiative has developed more than a million standard material identifiers and descriptions?

A. CIMIS

B. APICS

C. NAPM


11. What is an effective software platform with which to develop a materials management computer system that interfaces with design systems?

A. Trial and error

B. MRR

C. Object-oriented programming


11. What is an effective software platform with which to develop a materials management computer system that interfaces with design systems?

A. Trial and error

B. MRR

C. Object-oriented programming


12. What important function of a materials control system compares material requirements to requisitions, purchases, and inventory to ensure material availability for construction?

A. Packaging

B. Trial allocation

C. Proration


12. What important function of a materials control system compares material requirements to requisitions, purchases, and inventory to ensure material availability for construction?

A. Packaging

B. Trial allocation

C. Proration


13. What communications link will exert fundamental change on procurement and materials management in the next several years?

A. Fax machines

B. Electronic commerce

C. Morse code


13. What communications link will exert fundamental change on procurement and materials management in the next several years?

A. Fax machines

B. Electronic commerce

C. Morse code


True or false 14 the following are benefits of a supplier alliance
True or False fundamental change on procurement and materials management in the next several years?14. The following are benefits of a “Supplier Alliance”:

  • Shared vision and goals

  • Lower total costs

  • Integrated vs. duplicate teams


True or false 14 the following are benefits of a supplier alliance1
True fundamental change on procurement and materials management in the next several years? or False14. The following are benefits of a “Supplier Alliance”:

  • Shared vision and goals

  • Lower total costs

  • Integrated vs. duplicate teams


Final question 15 how can you learn more about procurement and materials management
Final Question fundamental change on procurement and materials management in the next several years?15.How can you learn more about Procurement and Materials Management?

A. More supplier lunches

B. Fewer supplier lunches

C. Attend the Implementation Session


Final question 15 how can you learn more about procurement and materials management1
Final Question fundamental change on procurement and materials management in the next several years?15.How can you learn more about Procurement and Materials Management?

A. More supplier lunches

B. Fewer supplier lunches

C. Attend the Implementation Session


Summary
Summary fundamental change on procurement and materials management in the next several years?

  • Innovative concepts have emerged in past decade.

  • Utilization of these concepts has resulted in significant improvements.

  • Not all CII are aware of or utilizing these concepts.

  • New CII publication provides details of these concepts.


Implementation session
Implementation Session fundamental change on procurement and materials management in the next several years?

  • Pros, cons, benefits, & advantages:

    • Lance Bell (Clemson): Moderator

    • Bob Ferguson (Fluor Daniel): Electronic Tools/Systems

    • David Timberlake (Bechtel): Logistics

    • Jim Scotti (Brown & Root): Supplier Alliances

    • Ed Ruane (J. A. Jones): Collective Group of Concepts

  • Share experiences

  • Take-home tool


Percent improvements1
Percent Improvements fundamental change on procurement and materials management in the next several years?

  • Reduced bulk surplus (40%)

  • Improved supplier performance (24%)

  • Cash flow savings (23%)

  • Reduced site storage, handling (21%)

  • Improved craft productivity (16%)

  • Improved project schedule (16%)


Our thanks to varese sarabande records inc and robert a israel for the use of the theme song

Our thanks to Varese Sarabande Records Inc. and Robert A. Israel for the use of the theme song...

The Price

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