Being late in materials delivery, will create significant impact to the project objective. Case study in a mining company has been selected to be explored to answer the problem: what are the feasible solutions that the project team in the company can use, in order to ensure the materials will be available for the project when needed?
The five alternatives to consider in order to answer above problem have been explained in blog W9
Analysis and Criteria
Force Field Analysis technique will be used to analyze the alternatives. The selection criteria of the five alternatives will be the highest score on positive forces and the lower effort to reduce the impact of negative forces. The decision will not be made until all alternatives have been completely evaluated.
This blog will discuss alternative no. 3 if this alternative is applied in the company. Based on the author’s observation and discussion with the others project team, the following are the proposed simplification and improvements that can be offered to the SCM Department:
- Review and improve procurement business process. Improve process of Purchase Requisition to Purchase Order. Currently this process are not controlled by project team as client or user
- Dismiss silo organization/mindset. Increase communication chain between Procurement and Project team, the purpose of procurement department is to support project needs by following the set up regulation, not just to follow the regulation
- KPI (Key Performance Indicator) of Procurement Department must be integrated with the KPI of user, so they can support each others
- Recruit more staff depend on load, but with engineering background. It is better to have Procurement Analyst not just a Buyer
- Punishment and reward system to suppliers must be strongly and consistently implemented
- Improve tracking of materials supply. It is currently not fully supported by system – or limited access given to the project team
- Update vendor list regularly and engage more manufacturer or at least official agent in the list, not a second hand or third hand who does not have enough technical knowledge of materials/equipment
- Improve automatic order when warehouse minimum stocks have been achieved.
Logistics and Warehousing:
- Prioritize shipping schedule, it should be mainly applied FIFO
- Centralized Warehousing and Lay Down material for project
- Improve material record status system. In and out materials from Warehouse record must be updated and actual
- Improve materials delivery status and quantity. Data in the system and actual MUST be the same
- Punishment and reward system to transporters must be strongly and consistently implemented
- Improve tracking of materials delivery and record. It is currently not fully supported by system – or limited access given to the project team
- Improve material check process when arriving to site (quality and quantity)
The force field analysis of the third alternative if the above recommendations are followed, is shown on the following tables:
Figure – 1 Procurement Field Force Analysis – Alt 3
Figure – 2 Logistic and Warehousing Field Force Analysis – Alt 3
Conclusion and selection of preferred alternative
The positive forces score from the three area of concerns (Procurement, Logistics and Warehousing) above are higher than the negatives forces. The details action plan to strengthen the positive forces and to reduce the impact of the negative forces will be explored in the last blog of the preferred alternative selection.
Post evaluation and monitoring for the preferred alternative will be described in the last blog of the preferred alternative selection.
- Brassad, M., Ritter, D. (2010), The Memory Jogger 2, Second Edition, GOAL/QPC
- Richardson, G., T., W., Supply Chain Management. Retrieved from: http://www.witiger.com/internationalbusiness/SupplyChainManagement.htm
- Mindtools, Force Field Analysis. Retrieved from http://www.mindtools.com/pages/article/newTED_06.htm
- Meringer, J., James (2003), Procurement Management Plan for the EMD Project. Retrieved from: http://edhs1.gsfc.nasa.gov/waisdata/emd/pdf/117emd001.pdf