3 Strategies for Managing Suppliers and Supplier Documents in EPC Projects
Integrating suppliers and vendors effectively is key for engineering, procurement, construction companies. With supplier involvement at key processes, companies can improve quality, schedule, and get the most out of the supplier.
On the flip side, if suppliers and vendors aren’t tightly integrated, horrible things can happen like building from the wrong revision, delays, receiving equipment that doesn’t operate correctly, or a rocky handover to operations which can lead to very costly delays and shutdowns.
Obviously, having the right strategies to integrate suppliers can make a huge difference for EPC contractors, owners, and operators. Below are 3 strategies to improve supplier document management that will impact project outcomes.
Online Access
Suppliers need the right data to be productive. Plain and simple.
More specifically, it is in the project’s best interest that suppliers have the latest revision of engineering and technical documents. This produces more accurate bids during the requisition stage, reduces change orders in the fabrication stage, and speeds up commissioning, and improves operability.
Simply put, if suppliers are looking at the wrong drawings and specs – they are going to bid on the wrong design. To prevent this, there are many document management systems out there that send notifications to any stakeholder notifying them that a document has a new revision.
The bare minimum here is having a system like that and providing the right supplier contacts with access and the appropriate notifications.
It seems simple, but a (frighteningly) common thing to hear is that equipment was built from the wrong revision and it cost $100,000, $5,000,000, or more.
However you manage it – giving suppliers the latest data is going to improve quality, cost, and schedule.
Smart Submittals
Collecting vendor data can be a painful process if managed poorly. Without proper infrastructure, it can be a pain to physically or digitally collect files from suppliers. Without the proper control of the files, it may be hard to track which files any given supplier still owes. Without proper document management practices and workflows, reviewing and approving supplier data can drag on forever.
The end result of the problems I listed above are long nights at the office at the end of a project, or delivering an incomplete handover package because of poor document management practices.
The first big task to make sure you don’t fall into this pit of despair is allowing suppliers to submit documents against a supplier data requirements list electronically. This system should allow document controllers to track supplier progress while remaining hands off during the submittal process. To be clear, there should be no exchange of files via email or ftp. Rather, the supplier should submit their own files against the required documentation in an online portal.
Online submittals demonstrate to suppliers that there is a codified document submittal process. This means that suppliers become more engaged in the EPC contractor’s process and be more likely to respect the EPC contractor’s process.
The second big task is tracking submittals. Most smart systems track submittals against required documents automatically, allowing document controllers to generate an automated report of submitted and outstanding documents at the supplier and purchase order (PO) level.
The simple answer here is: get a system that manages tracking automatically. Manually tracking supplier submittals in spreadsheets or on a white board is a waste of time, energy, brain power, and labor dollars.
The third task is to effectively manage the review/approval/reject/resubmittal process for vendor documents. When the review and approval workflows are managed manually, the process inevitably breaks down due to human error. These breakdowns start a cycle of delays which serve to normalize delays and inefficiency. Don’t be that company.
The simple answer here is let the document management system do it’s job. Note that any good document management system that is built for true document control can manage these processes. If your’s doesn’t, get a new one.
Regimented Participation
If a tree falls in the woods and nobody hears it, does it happen? Similarly, if a supplier asks a question and there is no record of it, does it happen?
Supplier engagement is a very important component of the procurement process for EPC projects. Too important to be left up to emails and the goodwill of the supplier.
As mentioned previously, simply having the ability to report on supplier activity and submittal progress will help ensure suppliers participate as desired. Further, the ability to produce late action reports helps hold their feet to the fire.
The next part is to integrate suppliers into your procurement process via controlled communication. As any EPC professional knows, technical and commercial queries among buyers, suppliers, engineers, and clients are key to purchasing quality equipment within budget and having it arrive at the right time.
Too often these technical and commercial queries are executed via email, which is problematic. Emails are completely uncontrolled and unsecured means of communication. Rather than using emails, effective queries should be managed through a system that aggregates the queries, routes them to the correct project players, and ensures the query is resolved.
In short, suppliers can be slippery. Sometimes it is in the supplier’s best interest to drag their feet or withhold. That’s fine as long as EPC contractors, owners, and operators understand the supplier’s position and motivations.
Perhaps the most important takeaway from this white paper is that EPC projects should have processes and infrastructure to manage suppliers. With easy-to-navigate infrastructure and clear expectations, equipment quality, cost, and schedule improves in addition to making your buyer’s quality of life much better.