Category Archives: Project Assurance

SmartCube: Putting a Nice Box Around Industrial MRO for Commissioning and SPIR Procurement for Projects

There are dozens (and dozens) of Procurement Solutions out there, especially for indirect procurement, as that’s where it all started. There are also a dozen or so good solutions for BoM (Bill of Material) direct procurement for manufacturers who need to source to build the products they are selling. However, when it comes to acquiring MRO assets, and spare parts to maintain them, there are very few solutions — and even less for managing procurement and inventory from a (commissioning) project perspective.

Most Procurement Professionals assume that this is handled by the ERP/MRP or the asset management platform but the reality is that the ERP/MRP will only track product specifications for approved products and materials, the asset management will only track assets that are actually delivered, and most of the sourcing is done old school — email and Excel spreadsheets, which is not a great solution. First of all, it is very time consuming for both parties to fill out all the information manually and send documents back and forth. Secondly, it is very error prone as the technical specifications will require detailed part numbers, identifiers, standards, etc. where one miskey can totally invalidate an entire record that might have taken days to put together. Thirdly, as the sheet is not in a version control system, it’s hard to control who can access it when and ensure updates are properly maintained and not missed or overwritten. Fourth, given that an average asset will require 10 or 15 associated spare parts, and multiple assets will need to be acquired at a time, an average sourcing process will take a minimum of two weeks (if not much [much] longer).

SmartCube has developed two tools to handle 1) the pre-commissioning Procurement of components and systems for major projects (such as new plant creation or plant renovation, utility construction, ship construction, etc.), as well as the commissioning process and 2) the material/part master, and the procurement projects needed for the ongoing support (as plants will require production line maintenance and upgrades, utilities will constantly require new regulation and control systems, ships always need upgrades, etc.) along with the procurement and management of the spares required to keep the components and systems running when something breaks.

This is done through their two primary offerings of I-SPIR, which they bill as an interaction and collaboration platform to allow multiple project partners and collaborators to input, collect and share spare parts information (SPIR) between all stakeholders in real time for asset-intensive industries, and I-MAT, that they bill as autonomous warehouse management & material master cleansing & coding platform for any asset heavy industry.

SmartCube I-SPIR

First, some background. SPIR stands for Spare Parts Interchangeability Record, which is basically a list of equipment and spare parts that a manufacturer or supplier recommends that a project owner or asset manager should purchase in order to develop and maintain their industrial plant or process. Once the purchase suggestions, or modifications thereto, are accepted, the project owner then matches the purchases to the material master data in the ERP, if there are appropriate product records, or pushes the appropriate records to the material master.

SPIR is a lot more than just a slight modification to the direct procurement process, because it’s not purchasing materials and parts to build products for sale, but components and systems to keep a process running or a plant (utility, or vehicle) operating. It’s also a well-established systematic supply chain process used for tracking and recording information on various replacement parts used in industrial operations. The process involves:

  • Inventory Management: inventory must be established and properly maintained, and it must include what (parts), where (storage facility, room, and shelf), who (is responsible for), how many (quantity) and why (associated components or systems)
  • Identification: every component needs a unique identifier (and any manufacturing identifiers it’s associated with)
  • Documentation: specifications, function(al requirements), compatibility, and any standards met
  • Interchangeability Assessment: a thorough assessment that takes into account design, materials, operating requirements, and other relevant factors
  • Recording: that identifies parts that a given part can be substituted for, which includes a link to the assessment as well as information on the manufacturer, supplier(s), and lead times (for restock)
  • Maintenance: the record must continually be reviewed, updated as needed, and deactivated when the part is no longer needed or approved

When it comes to identifying components and associated spare parts, and executing SPIR projects, the process is similar to a traditional sourcing process:

  • Identify the need
  • Determine the specifications
  • Research potential substitutes
  • Evaluate compatibility
  • Select the replacement and make the award
  • Update records

It’s Procurement, but Procurement with needs not typically addressed. That’s why a specialized system is needed that takes into account all of the specialized aspects not addressed in traditional direct Procurement systems. That’s the system that SmartCube has created for Industrial MRO with its I-SPIR solution. The module has the following primary components.

Projects & Packages

In the I-SPIR platform, projects correspond to systems and packages to related sets of one or more modules (and each module will require one or more spares to maintain it).

SPIR Processes

Once a project has been defined, the system makes it super quick and easy to request spare parts for one or more components or systems. Setting up a SPIR project is simply a matter of:

  • selecting the master project
  • selecting the responsible individuals (for QA, Evaluation, Assessment, DCC, PRE, Coordination)
  • selecting the supplier
  • providing the basic SPIR info (Doc ReF, PO, Due Date, System & Area of intended use)
  • uploading any necessary documentation
  • sending it to the supplier

Once the supplier receives the SPIR, they can select the part they are willing to provide simply by specifying their ID, the original manufacturer name and OEM part number (if they are acting as a distributor) if they already have the SPIR in their system or it’s in EQHub, a third party SPIR database that contains pre-vetted products with validated information which, when imported, is tagged as already validated information (which can allow an organization to accept the part without having to go through a full evaluation). If the part does not already exist in the system or EQHub, a popup will allow the supplier to enter all of the required information, which will then have to go through a full evaluation process on the buyer’s end.

When the SPIR is returned, the system walks the individuals on the buying team through the process, which consists of:

  • Quality Assurance: is the data valid and are the specifications appropriate
  • Evaluation: classify the Spare against key asset tracking attributes of redundancy, repair/discard, consequence, and criticality and define/override the auto-suggested quantities
  • Assessment: asses the overall purchase against the inventory and finance requirements
  • DCC: verify the DCC data
  • Final Approval and Order: final approval and place the order

Tag Management

The platform makes it easy to manage asset tags and provides downloadable templates for quick upload. This simplifies integration with ERP/MRP/Asset Management systems and material masters.


The main entry point summarizes the projects the user has ongoing and their current states for easy project location, access, and management:

  • To Do: tracks the SPIR requests that need to be opened, re-submitted, evaluated for quality, concluded, etc.
  • New: new Projects & SPIRs recently opened and awaiting supplier submission
  • Open: Projects that are open where team members need to assess submitted SPIRs
  • Overdue: Projects that are overdue
  • Rejected: SPIRS that have been rejected (and need to be returned or recast to new suppliers)
  • Submitted: tracks the supplier submissions (that need to go through the SPIR process)
  • Concluded: SPIRS that have been concluded

SmartCube I-MAT

SmartCube‘s other major offering is their materials “master” management and inventory platform that was specifically designed for supporting material and inventory requirements during (new) plant/site/rig construction and commissioning, plant/site/rig retrofit/upgrade and commissioning, cross-platform / site based material and inventory management (where the organization doesn’t have an ERP/MRP integrations that support that), and other temporary or permanent material and inventory management scenarios not adequately handled by the ERP.

The platform is designed to serve as a part and material master as well as an inventory master for the locations and projects not managed by the ERP/MRP (which, for organizations running on the BIG ERPs like SAP or Oracle, or older ERPs, are any temporary/construction/retrofit/commissioning project where inventory needs to be managed separately and off-site in a yard, on a rig, etc. until the project is done). It’s very easy to load products and materials into the SmartCube I-MAT platform as it allows for easy CSV upload (in addition to direct ERP integration if you so desire, both for initial load and final push when you are done with the project).

In addition, as part of their latest release, they have automatic (potential) duplicate detection and simplify the process of merging duplicates and cleansing the material / product master. They also make it one click to deactivate products (and make it clear when a certain product should not be ordered).

Upon implementation, it’s really easy to define (and upload):

  • Vendors: that are providing the products and materials
  • Tag Numbers: standard (asset) tag numbers (for system integration)
  • Projects: the projects currently being managed through the system
  • Product States: Evaluating / Accepted / Offsite / InTransit / Not Found / Destroy / etc.
  • Locations: Onshore / Offshore / Yard / Europe Warehouse / USA Warehouse / etc.
  • Imports: upload a file and track the imports
  • Deactivated Products: for easy identification and management
  • Users: and their associated permissions

Once the data is loaded, it’s really easy to search for any product using a free-text search on all key fields, or an in-depth filter-driven search on each supported product field. In other words, filters aren’t just limited to material/part name, number, tag, project, vendor, etc. It’s also easy, once a search and drill down is performed, to select all or a subset for batch editing where all products are missing the same data or need the same field updated.

Once a product is selected, it’s easy to bring up, and if necessary, edit all of the associated data, which includes all of the standard part/material fields, as well as perform standard inventory operations. The system understands the standard actions of:

  • Add Stock: increase the stock at the selected location
  • Move/Transfer Stock: move the stock from its current location to the selected location
  • Withdraw Stock: mark the stock as withdrawn and used

In addition, you can (re-)set the status of any product at any time for any reason (which you can capture) if you have the appropriate authority. Plus, when you move or transfer stock, you can indicate the type of transfer and withdrawal (if you define multiple types of transfer and withdrawals, such as consumption, returned, trashed, queued for destruction, etc.).

Plus, coming soon, if you are doing a transfer from one location to another that requires shipping (such as from a rig to onshore or one country for another), the platform will automatically export data for manifest creation in third party shipping systems (either through an API integration or through a flat file CSV export for loading in the third party system).

The entire system has been designed to be incredibly easy to use and support the primary requirements of a temporary project not supported by a traditional ERP/MRP material master or inventory management system:

  • easy off-site management
  • collaboration
  • high quality data

… and eliminate the need for error-prone spreadsheets and shadow processes that were created to get around the limitations of systems that were setup for managing acquisitions and inventory for traditional production line utilization, which is not the case in facility/plant construction and/or upgrade.

Both solutions are delivered as SaaS and no integration with ERP’s are required. Last but not least, the amount training needed is very limited as the design focuses on ease of use. Once a decision is made to use one or the other solution (or both) you can be up and running in matter of days if integrations are not required. Integration with ERPs and other systems is typically only a matter of a few weeks.

As explained in detail, if you need to do a lot of sourcing for pre-commissioning, commissioning, and asset-maintenance, SmartCube is a system you should add to your (very) short list as traditional indirect (and even direct) Sourcing/Procurement systems just weren’t setup for the type of sourcing and (temporary) inventory management you need to do (while SmartCube checks all the necessary boxes and then some).

Societal Damnation 52: Project Management

I’m sure you’re asking — what’s damning about project management? Isn’t good project management the key to success? After all, without good management, the chances of a project over-running its resource allocation (of time, people, and money), if not failing, increase significantly. Well, yes, it is. Provided you can manage the project.

One has to remember that project management has evolved over the last six decades or so to manage traditional types of projects that produce structures and goods against well-understood designs and project plans, starting with the need to effectively manage complex engineering projects in areas that include construction, defence, aviation, and shipbuilding.

When project management was being defined, the ENIAC was still in operation, Procurement was placing an order against a printed catalogue, and a company imported a small number of commodities in which they had contacts and expertise. There were no complex software projects, no complex Just-in-Time supply chain projects, and no automated factory mega-projects (which resulted in some of the biggest supply chain failures in history).

And, more importantly, projects were focussed on the production, or acquisition, of a single structure, product, or report. They had a defined beginning, a defined end, used well understood resources, required people with well-understood skill-sets, could be scheduled with reasonable certainty, and required a comprehensible amount of money.

Where software development is concerned, there is a rough definition of what is desired, but the beginning and end is a best estimate that is no more accurate than a wild guess in some cases, the resources required (while defined as software architect, developer, network specialist, etc.) are not well understood (as a non-skilled software architect cannot define what makes, or identifies, a good software architect), and the amount of money required is relatively unknown (due to uncertain work effort requirements, unknown support requirements, etc.).

And that’s just software. When it comes to supply chain, the difficulty is intensified. There’s the management of the sourcing, the management of the negotiation and contracting cycle, and the management of the procurement. But before that, there’s identifying the right supplier, which requires detailed understanding of the product technical requirements and the supplier production capabilities. There’s identifying the expected costs, based upon understanding material costs, labour costs, energy costs, tariffs, and overhead. There’s managing the supplier relationship. There’s dealing with disruptions and disasters. And taking corrective actions.

In other words, supply chain projects don’t have well-defined beginnings. Don’t have well-defined endings. Don’t have well-defined workflows. Aren’t limited to a fix set of resources. Don’t always have a well-defined team. And don’t always have a well-known cost (even if there is a target one).

Project Management hasn’t kept up. Sourcerors are often making it up as they go. And they’re damned every step of the way.

Procurement Trend #14. Shorter and More Complex Product Life-Cycles

Eleven anti-trends from the pre-internet pundits still remain, and as much as we’d like to not give yet another reason for LOLCat to hate futurists, we must continue to make sure that no good deed goes unpunished and since the futurists’ advice is still as good as it gets, we must break it all down until you can look past the shiny new paint job and realize that it’s still a twenty year old Skoda you are being sold.

So why do so many historians keep pegging shorter and more complex product life-cycles as a future trend? I honestly can’t fathom this as the video console, cellphone, and apparel industries have been in this mindset for over two decades, but maybe it is because the futurists, who finally realized that the internet has given everyone a need for speed, are finally catching on or because:

  • consumers in some verticals, like electronics, expect major new releases each year
    because they’ve been conditioned by the manufacturers and the marketers to, and
  • they expect every release to contain more new and exciting features than the last one
    even though they don’t even use half of the current features, and
  • they also expect each new product to be smaller, lighter, faster, and more powerful than the one before …
    even though they’ll then complain about lack of battery life, screen resolution, or something else when you have are faced with an impossible choice between two incompatible feature requests.

So what does this mean?

Annual Release Cycles

No matter how good Procurement is doing, it has to do it better, faster, cheaper and keep doing it better, faster, and cheaper (relatively speaking) every year. To do this, it’s going to have to institutionalize its knowledge and process in a workflow driven sourcing suite with integrated analysis and optimization that will tell it if its method is still appropriate, the market is ripe for the preferred event structure, and the costs are optimized.

Constant Innovation

The product has to keep improving, which means the organization and its suppliers have to keep innovating and Procurement needs to manage that innovation. Knowledge management, team management, and project management is just the beginning. When the team hits a dead end, Procurement is going to have to bring an innovation methodology like TRIZ, FORTH, or Design Thinking to the table to help it get past the finish line.

New Market Identification

At some point the incremental improvement in the new product is going to be so minimal that it’s going to lose value to the market and if the organization doesn’t phase the product out, the market will. So the organization not only has to constantly identify potential new versions of its products, but new markets for which it can design new products for. Preferably blue oceans, but open seas are a good start.

Procurement Trend #27: Inter-Departmental Collaboration

Twenty-four trends remain
Together they bring disdain
We’re trapped in the mundane
They are Lucifer’s bane
… and we cannot rest until they are slain!

We cannot give up. We cannot give in. We must shed light on the darkness that each and every false prophecy brings. Only then can we move forward.

The journey is long and hard, but at the end of this thirty part series, you should not only understand why so many historians are still talking about the false trends we debunked in our Future of Procurement series, what you need to do to prevent staying in the past with your organizational “peers”, but what you need to do to not only stay in the present but start marching towards the future, which is coming faster than you think.

So why do so many historians keep pegging this as a future trend? There are a number of reasons, but among the top three today are:

  • Stakeholders are multiplying
    as Supply Management spreads
  • Stakeholder review and participation is increasing in importance
    as more knowledge work is being outsourced
  • Fiefdoms still exist in large(r) corporations
    as many organizations still measure your worth by the number of people under you or the budget you control and not the value you bring to the organization.

Multiplication of Stakeholders

Team management skills are now at a premium. A Supply Management leader not only has to manage a cross-functional team to be successful, but a team where each department being represented is typically at odds with each other and itching for a full-contact rugby match. (It wouldn’t be unrealistic to suggest that your organization might want to start by bringing in a career kindergarten teacher.)

Project Management skills are also becoming more important by the day, as the Supply Management team will need to maintain appropriate focus in each of the cross-functional team members to insure that things get done when they need to get done to keep each sourcing event and procurement project on schedule.

The Knowledge Economy

While often overlooked, knowledge management and collaboration portals will soon become a key part of your organization’s technology infrastructure. Your organization needs to capture all input and organizational knowledge (before it walks out the door), track all relevant issues, and make sure all of the relevant information not only gets in the hands of who needs it, but when external parties are involved, capture their knowledge, decisions, and processes (and not just output) as well in case it needs to be reconstructed or redeployed later on.


Off with their heads! Well, figuratively at least. If your organization has one or more fiefdoms, then your organization has someone unwilling to relinquish control, even if that is what is required for the greater good. In this case, your organization has to fight the urge to try and fix the problem with more training or yet another reorganization (which is typically very, very disruptive) and simply do what the kings of old did when they had problems with the dukes — and take off their heads!

If, and only if, the leader can be reformed, give her another management position within the company (and possibly initiate some inter-departmental collaboration at the same time as she will more than likely be more than willing to work with her old department). But if he’s stuck in his ways and can’t be reformed, bite the bullet, give him a fair severance package, and push him out into the outside world. Just like a ship that’s dropped anchor can’t sail, a company with a lead filled sandbag can’t rise above the clouds, no matter how much hot air that individual puts out on a daily basis!

Project Assurance Specialist: What Do You Look For?

In our series on Project Assurance: A Methodology for Keeping Your Supply Management Project that we just wrapped, we discussed Project Assurance — a specialized discipline and practice involving independent and objective oversight, specialized experience, and audit skill to assess risk, finance, accounting, compliance, safety, and performance for any major capital expenditure. It is designed to minimize the risk of projet overruns and failure.

In today’s post we will discuss what makes a good Project Assurance Specialist. Not just anyone can perform such a task. What are the skills that such an individual must posses to be successful? What must define the core of her, or his, EQ?

We’ll start by referencing the intervention process pyramid defined by Prinzo in No Wishing Required. According to Prinzo, collaborative intervention requires you to:

Implement the Solution
Communicate the Findings
Negotiate the Solutions


Navigate the Organization
Identify the Decision Making Process
Conduct Mini-Briefings


Build the Foundation
Trust & Credibility


Each step of the process requires a base set of skills, some of which Prinzo did a great job explaining in his book. In this post, we will discuss those core skills along with the secondary skills that are needed for assurance success.

The core skills required to build the foundation, as defined by Prinzo, are:

  • receptivity
    the assurance specialist needs to listen carefully to understand the situation
  • comprehension
    the assurance specialist needs to take the time to properly understand the situation
  • compromise
    the assurance specialist needs to find the middle ground that all parties will (reluctantly) accept
  • humility
    sometimes the assurance specialist needs to make the solution appear to be the idea of one or more stakeholders even if all of the credit is due to the specialist — sometimes harmony is key
  • objectivity
    the assurance specialist cannot take sides and cannot be blind to the truth
  • diplomacy
    even when some stakeholders should be slapped upside the head or strangled for pig-headed viewpoints that could put the entire project in jeopardy, the assurance specialist needs to be diplomatic
  • strategy
    not only does the assurance specialist need to navigate the explosive stakeholder minefield, but come up with solutions that will be acceptable and successful
  • analysis
    the assurance specialist needs to dig deep and sometimes read between the lines to determine where the issues are and what the solutions need to look like

But that’s just the foundation. In addition to these skills, the assurance specialist will also need the following skills to navigate the organization:

  • organizational knowledge
    without a good knowledge of the workings of the organization, it will be very hard for the assurance specialist to navigate it
  • team building
    even though it is the job of the assurance specialist to find the issues all others miss, it will often take a cross-functional team to implement their mitigations
  • communication
    the mini-briefings will have to be very effective in order for the resolution sessions to go well

Finally, the assurance specialist will also need the following skills to implement the solution:

  • negotiation
    diplomacy and compromise are a good start, but sometimes the assurance specialist will require the use of persuasion to get all parties in sync
  • leadership
    while it will often require a cross functional team to implement the mitigation, that team will still need the guidance of a leader and that role falls to the assurance specialist

In other words, it takes someone with a skill set that goes beyond basic project management skills to be a project assurance specialist.