2020Case16Mercury

Contents Lean Construction Ireland Annual Book of Cases 2020 Case 16 part to play in this phase. Some risked overcommitting with aggressive lead times that they could never meet just to look favourable at tender stage. Others did the opposite and quoted extended lead times which put them at risk of losing potential business. Order too late and the schedule is bust – Order too early and you impact cash flow at the very least. The main tasks carried out during this phase included: • Analysing all historical data pertaining to actual delivery times. • Extending data library to include all size ranges, specifically out of gauge outside diameters. • Categorising materials as “critical” and “non-critical”. • Engaging with key vendors to establish best and worst case scenarios for material lead times. • Validating vendor data against historical data where possible. • Validating data for new materials through open discussions with vendors and manufacturers. • Comparing lead time data between competitors. • Agreeing and inputting lead times specific to each material and each vendor. Element IV – December 2018 The focus here was on aligning planning with execution vis-à-vis materials management. In preparation for the next major project with this client, new challenges were presented in terms of materials management. The scale of this project (in construction phase at time of writing) is much greater than anything we had undertaken before. Added to that, the project would be built using the “advanced work packaging” (AWP) methodology which is a structured approach to improving construction projects from design to commissioning, and is accomplished by aligning planning and execution activities throughout the project life cycle. It is such rigourous front-end planning along with the detailed engineering activities that support enhanced execution at the workface, and, in construction, the workface is where trades turn materials into functioning plant. Project set-up and planning establishes the basis for coordinated “construction work packages” (CWPs) which are strategic subdivisions of the “construction work area” (CWA). A CWA is a section of the construction site that has been defined as a logical area of work. CWPs then enable progression of work by the planning, execution and monitoring of more granulated “installation work packages” (IWPs). The need arose to carry out a full review of our materials management processes to identify areas of risk in terms of how to plan for and execute the end-to-end materials management function. In December 2018, we engaged an external Lean service provider to carry out a full Lean review of our systems and processes, and to make recommendations for improvement. The brief was to evaluate the materials management process (which does not add specific value but supports value creation); conduct a current and future state analysis; and make recommendations on how we could achieve the future state. The primary recommendations made were to improve the functionality of the then Excel- based EMR process, and to give consideration to long-term ERP materials planning and migration from Excel-based planning to fully integrated MRP. The following were undertaken as part of this element: • Interviews with all key stakeholders. • Value stream mapping (VSM) on our Order & Receipt process for stocked materials. • A Kaizen event to highlight wastes. • A workshop to identify and prioritise Kaizen tasks. We faced many challenges on this Lean initiative. Operation- ally, we had to get people to help and keep up the effort as well as to create time to work on enormous volumes of data. With the Supply Chain, we had to get suppliers on-boarded, and we had to keep them interested when there was no immediate benefit to them. Culturally, within both the Pro- curement function as well as across the wider group, we had to enable the changing of long-held practices and attitudes by introducing the Lean mindset and tools to Procurement. The overriding challenge was encapsulated in the statement that “This isn’t for us, this is all about manufacturing. What has it got to do with Procurement ? ” There have been a number of high-level functional impacts, including: • During our last major project with this client we had 2,500 partially useful MM in our ERP system. At the time of writing, we have 53,000 PIR agreements (Item, Lead time, and various Pricing T&Cs) across 112 vendors. Improvements to these numbers is now seen as “how we do things around here”. • When we commenced these initiatives, we did not have a long-form RFQ process in place. We currently issue all major packages to market via long-form RFQ. This process ensures we request and capture all pertinent information regarding pricing and T&Cs. • Increases in efficiency on admin buying has created value-add in terms of enhanced strategic skillsets to the procurement function. Compliance and governance play Figure 2. Value Stream Mapping Lean Initiative Improvements & Impact