2020Case16Mercury

Contents Lean Construction Ireland Annual Book of Cases 2020 Case 16 Over a 48-year period, Mercury has built a reputation for delivering complex engineering projects across a range of key sectors. This case study focuses on historical initiatives undertaken for a large-scale semi-conductor client where Mercury has been at the forefront of new and retrofit project build activities since it was a green-field site in 1992. In terms of capital project timescales, clients’ needs dominate our focus on how we plan for and execute any project build in the context of safety, cost, quality, and time. Fast-track scheduling, in particular, brings enormous challenges for procurement teams in meeting client expectations due to the risks inherently associated with the unknown. Long lead- time materials procurement on a global scale requires, of course, a clear understanding of the product, but also of the relative weight and fluidity of the tiered conditions in the supply chain. These conditions ultimately determine the extent to which materials can be procured efficiently and to which relative wasteful activities can be reduced or completely eliminated. When taking into consideration that over 90% (by value) of spend on materials for this sector is bespoke, the challenges grow exponentially as the project footprint and complexities increase and the relative project timelines decrease. During the ten years from 2010 to 2020, we have experienced additional compression of up to 20% on standard project timelines. Along with this, we have encountered increased risk of time-based contractual penalties being imposed. Growing costs associated with expediting materials which have been placed on order either too late to the schedule or not placed at all, begin to impact contractors’ ability to meet their own budgets and inevitably have the potential to impact the construction schedule overall. This case examines Mercury’s eight-year Lean initiative to make its procurement systems and processes more effective and more efficient, with the focused aim to return substantially enhanced value-add to its client. During completion of a project in 2011 and commencement of a new project build in late-2012, it was recognised that there were significant process gaps in the end-to-end materials procurement function. Traditionally, construction teams lead the procurement process and this is due to legacy factors like, for example, the traditional view of procurement as an administration function and the lack of professional procurement representation at senior level. Procurement teams typically focused their attention on placing purchase orders (POs) as quickly as they could, and spent much time reacting to the lateness and or inadequate nature of requirements coming downstream. Achieving the “best price” essentially entailed the leveraging of personal Company Overview Mercury mercuryeng.com Overview & Background to Lean Initiative Antoin Earle Author Lean Initiative Undertaken – Lean Thinking, Tools, Techniques Mercury is a European contractor that builds and manages complex engineering projects that reimagine how people work and live in the built environment. Mercury believe that real innovation happens if you are willing to be brave. Its determination and sharp focus enable Mercury to deliver leading-edge construction solutions across a range of key sectors, taking our clients to new territories they never thought possible. Mercury’s purpose is to deliver its clients’ vision through leading-edge construction solutions, going beyond their duty which turns clients into partners and builds relationships that thrive across the following sectors: Enterprise Data Centres; Hyperscale Data Centres; Life Sciences & Technology; Building Services; Healthcare; Fire Protection; and TSS.