To retain the predictability and accuracy clients need, it’s the behind-the-scenes, up-front work and collaboration that can have a substantial impact on achieving project goals. While it’s not always front and center, leveraging procurement is a crucial piece of not only getting projects off the ground, but also in setting each one up for success.
Staying Ahead
The importance of swift decisions and sound processes—in addition to remaining adaptable—are essential in a time when trade partners cannot guarantee pricing over 90 days and lead times have swelled in some cases to 6 months. To combat the issues and avoid delays that could impact the overall project schedule, the team took a proactive approach to identify items with long lead times, allowing all parties to plan accordingly within the project schedule.
For this project, below are all the items we identified to secure preauthorization from the owner to begin procurement of these long lead items ahead of the main contract execution. Once the trades were cut loose on early procurement, we worked closely with the reps to get their submittals in.
- Structural Steel
- Steel Decking
- AHU
- Cooling Towers
- VAVs
- VFDS
- Chillers
- Switchgear
- UPS System
- Generators
- Transfer Switches
- Light Fixtures
- Structural steel
- Major Mechanical/plumbing equipment
- Major electrical equipment
In addition to identifying potential delays and prioritizing those items, trade partner buy-in and early submittals are critical to starting construction on time. By identifying long lead items that are critical to construction, we got the ball rolling on submittal development and submittal reviews and expedited the release for fabrication ASAP. We were experiencing a factory workforce shortage on our air handling units, which caused a one-month slip. If they weren’t in the fabrication que, this could’ve been a substantial delay.
Process Improvements
Recent delays and uncertainty caused by the current landscape have forced teams to get creative in their processes and adjust them to account for potential issues. Improvements in the procurement process at TMC Rincon include:
- Utilizing a submittal party
- Identify priority submittals with trade partners, followed by outreach to vendors on lead times to provide JE Dunn a list of critical items that needed to be released for production ASAP.
- Request priority / long lead submittals from Trade Partners and notify design team of its priority.
- Schedule meetings around 5-10 business days after submission that included JE Dunn, Design reviewers, Trade Partner, and vendor/manufacturer rep. Design team comes to the meeting with comments ready. Design reviewer goes through all the comments with the rep. The rep answers as many questions as possible and follows up with the factory on any comments that can’t be addressed right away.
- Distribution – JE Dunn distributes the review back to trade partner and confirms receipt and follows up after a week or so with an estimated ship date.
- Color-coded procurement log
- This JE Dunn procurement log takes the P6 schedule data and creates a color-coded priority list. You assign each item to an activity on the schedule, and it helps back track the days you need submittal approval by. With built-in formulas and color coding, any item overdue automatically populates in red to easily flag potential delays for the team.
The Results
In short-term, the goal was to avoid potential delays caused by interruptions in the supply chain—but what the team did not realize at the time is just how impactful those decisions would end up being in the long-term due to (still) increasing escalation and inflation. We were able to lock in long-lead equipment orders into the factories to avoid longer disruptions and save costs. Our AHUs slipped an entire month due to a manpower shortage at the factory; if we had not gotten a preauthorization, our AHU would have slipped significantly and jeopardized the project schedule.
Going Forward
While project teams have adjusted to the changing procurement issues, the fact remains that no one can predict how long these challenges will persist. Though it’s been difficult at times, the benefits of evolving to tackle these issues will only improve future processes and create more efficiencies going forward. “Having an efficient, proven procurement process in place is beneficial to everyone involved in each project,” said Procurement Director Jason Banks. “In addition to helping head off delays in the field and keeping work moving the pace required by the schedule, it also creates a team atmosphere from top to bottom to increase transparency and engagement across the board.”
