VIP - Supply Chain Optimization

Q. Supply Chain Optimization:

	There are considerable savings to be made by the Integration of the Supply Chain into a Collaborative Working or Partnering Environment, perhaps greater than 30% of the cost of employing supply chains on projects through traditional methods such as by direct appointment by the contractors, or through nomination by client organizations.
	Ready made supply chains can be developed where suppliers already have chains set up, for instance, with their material suppliers and with their installation contractors. These supply chains which may have quality guarantees for up to 10 years, can then become integrated with their contractor clients, bidding together for new work or better still, becoming involved in Early Contractor Involvement (ECI) schemes with the client organizations. This leads to better choice, less risk and as a result less cost and time.
	Early Contractor Involvement permits better opportunities to manage Value and Risk in an effective manner, with value enhancement and avoidance of unnecessary costs.

Example Applications:

Project: Relationship between Main Contractor and his "Premier" Supplier (click for details)

Traditional contract competitive bid between Client and Main Contractor

The Premier Supplier works with the Main Contractor to offer the most appropriate plant and equipment for the project at his best price, using his preferred installers for best results

The Contractor and Supplier together check the market to determine that their joint bid to the Client is fair and competitive.

Project: Fully Integrated Project Team including an Integrated Supply Chain (click for details)

Fully integrated project team consisting of the Client, Designers, Contractor, Suppliers, Installers and Specialist Contractors

Early Contractor and Major Supplier Involvement established on almost 100% Quality Proposal

Compatible Contract based on a Target Cost and Incentives, reimbursed on a "Cost Plus Basis"

Benchmarking to determine that the project costs and timing are compatible with and better than the rest of the market

The TEAM FOCUS Group Value and Risk Management approach is an excellent framework for conducting the Supply Chain Optimization VIP for best results.

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