Best Practices for Material Management in EPC Projects
In a mega-sized EPC project, how you handle material management has high stakes for your schedule and budget. Construction materials alone make up about 50-60% of a capital project's total cost, and snags in material flow cause 80% of project delays. If you’re winging it, you’re losing millions.
The goals are simple.
- Know what you’ll need before you need it
- Get material on-site early
- Avoid stock outs & downtime
- Don’t lose anything in the shuffle
- Save money wherever possible
Achieving those aims will take some work, though. EPC projects have a ton of moving parts. Your first go at a plan might come out of a few days or a week of hashing out the broad strokes, but true efficiency in EPC project management and material management demands continuous attention and updates throughout the job.
Here are a few best practices you’ve really got to establish up front — or pay for, later on.
Best Practices for EPC Material Management
Start Early When Pre-Planning For Scope
Intricate, large-scale EPC projects are hamstrung when there is not a heavily detailed scope established early in the process. Missed equipment or material at this stage leads to orders being placed during the build, which leads to downtime during the build, which leads to cost and time overruns.
Make sure to identify all deliverables and necessary materials, including the placement of components on-site so that they are not misplaced and re-ordered.
Optimize Inventory Placement
Speaking of lost material, the worst case scenario is to have inventory scattered everywhere around the job-site, unsecured against the elements and unaccounted for in a detailed, shared system. This will lead to a series of unproductive trips around the site by the crew, and the lack of clarity about what you actually have creates a fear of running out. That fear is a main cause of over-ordering of EPC construction material.
Lost material or other resources is a huge waste of time and money, and it can also lead to one of the major issues faced by EPC projects — material cannibalism. When stuff is lost, resources that were meant for one activity may get used for another one earlier in the process instead. That’s a delay for a re-order waiting to happen.
Get Construction & Engineering on the Same Page
The earlier you can involve the construction team, the better. When engineering operates in a silo, things get missed that won’t be noticed until the construction team is trying to execute the design. The last thing you want is for a design error to cause expensive rework (potentially with new material orders) and fabrication delays.
Construction and engineering alignment during the design process is the difference between detecting errors early and expanding your schedule at high cost. When practical problems are flagged in design, there’s more time to adjust orders and plan for the proper amount of labor.
Double-Check Contractor, Supplier & Distributor Experience
Inexperienced teams are a major cause of delays for more than 80% of oil and gas projects worldwide. Take a hard look at your material partners’ performance on past and present projects, including late or partial deliveries. Many of your contractors are also used to ordering materials every day — that’s just how they’ve always done it. It’s critical that you assemble a team that knows what they’re doing and works together on a clear material management strategy and schedule of manageable releases of project material.
You’re in an even better spot if your distributor has the tools, the personnel, and the expertise to guide your entire EPC project management process. If you need a place to start, call in the Troops. Troop Industrial has more than 20 years of experience keeping EPC projects on schedule, predicting material needs early, and getting everything on-site before you need it.