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Table 52 Steps in Developing a Project Supply Chain 1 Vendor Analysis What processes do we currently perform that could be framed out Who do we get supplies from Who are reasonable alternative to these vendors What criteria do we use to make vendor decisions How often do we review the status of vendors in terms of their prices Reliability Quality Responsiveness
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2 Goals in Creating a Project Supply Chain What goals are driving our decision Cost containment Long-term relationships Market penetration How will we measure our progress
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3 Modeling the Supply Chain How often do we reevaluate our suppliers Have we modeled or run simulations to determine optimal supply chains in terms of time (speed of response), money (cost efficiency), or quality Is the supply chain understood by all relevant project organization members
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4 Distribution Channel Analysis How do we handle product transfer currently How do we want to handle product transfer Do we have an idealized vision of product transfer How often do we contact or communicate with the project clients
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5 System Control How do we know when problems are occuring Do we have any proactive methods for staying ahead of problems or do we react to them as they occur Have we identified primary problem solvers in our organizations in case of trouble Do we have clear lines of communication into our vendor and client organizations when problems threaten How often do we audit the supply chain to find ways to improve its efficiency or quality
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Page 119 What do we hope to achieve through PSCM Is our primary goal one of cost containment or increased flexibility and productivity through benefits following from creating long-term vendor/client relationships What trade-offs are we willing to make between these goals For example, we might find that in our desire to contain costs, we are making too many decisions based solely on the bottom-line, eventually alienating both our vendors and our client base who are weary of observing how every project decision becomes a battle over money Finally, Table 52 suggests some of the important questions we must continually ask as we first create and then hone our project supply chain We start with a realistic statement of project organization goals The process then evolves through an internal analysis, a series of external analyses aimed at our supply chain partners and customers, and concludes with a comprehensive control system set in place to monitor the activities and offer methods to remain proactive Proactive means two things: (1) constantly looking for ways to improve the supply chain process, evaluating new potential partners, and solidifying working relationships with long-term vendors and customers, and (2) identifying potential problem areas before they become serious
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CHALLENGES IN EFFECTIVE PROJECT SUPPLY CHAIN MANAGEMENT
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Creating an effective project supply chain is not an easy process It requires first an intimate understanding of our current operations, our strengths and weaknesses, as well as a clear view of competition and customer needs To maintain such a supply chain in a project organization, a number of challenges continually confront top management8 Let us consider some of these challenges and the effects they have on project management
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Approved Vendors
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The basis for supply chain management lies in identifying a group of approved vendors that meet the criteria we have set to our partners Among the criteria of concern here are the quality of their processes and products as well as their attitudes and operating procedures In establishing and maintaining the supplier network, quality standards, such as ISO 9001, offer a great tool by setting the basic requirements and involving regular third-party audits to keep up the initially achieved level
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Effectively Tracking Work in Process
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One of the long-time challenges associated with project management is having a clear view of the project s status at any point in time With PSCM, this problem is even more confusing because effective organizations are tracking not only their own processes, but also the workflow of their vendors Our company s planning must take into consideration the work of the vendors whose supplies are critical to our subsequent success As Figure 53 shows, project tracking and control begin much earlier in the project development, prior even to procurement, during the initial stages of supplier production In this simple diagram, we have labeled only three external vendors whose supplies we need to develop our project Note, however, that it may be appropriate to sequence and schedule the delivery of their materials at different points throughout the work-in-process at our site Rather than stockpile potentially huge quantities of supplies prior to initiating our own project, it is often more efficient to phase delivery of required materials when needed As research on just-in-time inventory (JIT) shows, companies can save money through more efficient workflow control Furthermore, sequenced delivery of materials makes it easier to adopt the changes that may
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Page 121 follow the concurrent engineering and fabrication often necessary in fast-track project deliveries The tradeoff is the necessary investment of resources in scheduling and tracking vendor deliveries to minimize disruptions to our planned work sequence and project development schedule
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