Category Archives: Project Assurance

Proper Project Planning is Key to Procurement Project Prosperity! Part 3

In Part 1 we noted that we wrote about the importance of Project Assurance, and how it was a methodology for keeping your Supply Management Project on track, ten years ago and that this typically ignored area of project management is becoming more important than ever given that the procurement technology failure rate, as well as the technology failure rate as a whole, hasn’t improved in the last decade, and is still as high as 80% (or more) depending on the study you select.

Then, in Part 2, we told you that even before we dove into the project steps for which both assurance, and guidance (because assurance isn’t enough if the project [plan] isn’t right), is needed, we were going to give you one critical action that you needed to undertake to ensure everything starts off, and stays right. And that particular action is to:

  • engage an independent expert to guide you through the entire process and help where needed

because the complexity of Procurement and Procurement Technology has reached a point where it just overwhelms the average Procurement professional. It’s been more than two decades since global conditions impacting Procurement have been so complex and technology has reached the point where even experts are struggling to make sense of the market madness, meaningless buzzwords, and the overwhelming onslaught of Hogwash.

We also pointed out that this expert must be truly independent and cannot be:

  • a resource of the company,
  • a resource of the vendor, or
  • a resource of the implementation provider.

This resource is critical in each of the phases we described in our original Project Assurance series (Part I, Part II, Part III, Part IV, and Part V). Here’s a high level description of why.

  • Strategy: the first step is a “health assessment” that pinpoints where the organization is in Procurement Maturity, and what it should be looking for to get to the next level (otherwise, what’s the point?), and this is where an expert can do a maturity and gap analysis
  • Acquisition: the expert can help craft the right RFP for the organization, identify which vendors have the appropriate technology (to ensure every response received would at least address some of the key pain points, and that the responses would be comparable), and help with the evaluation and review (acting as sale-speak to plain English translators)
  • Planning: once one or more solution (and implementation) vendors are selected, the expert is key in the creation of a realistic, and logical, project plan that ensures the organization doesn’t agree to a “big-bang” implementation proposal (which always results in a “big-bang” and has led to major supply chain failures), that the resource requirements won’t be too strenuous on the organization, and that the most critical capabilities are implemented first
  • Design/Plan Review: the plan is compared to the strategy, RFP, and overall business goals to make sure everything is aligned before the project progresses
  • Development/Implementation: the expert ensures each phase starts, completes, and is properly tested and verified on time; uncovers the reasons for delays and the root causes to prevent future problems; and when changes are required, helps to define and supervise change management (plans)
  • Testing & Training: the expert will not only ensure that the proper tests are designed, but that they are properly implemented and repeated until complete success is the result

In other words, the right expert is your guide to ensuring each step is designed right as well as conducted right, who can also take over any tasks you don’t have the expertise to do so in house. And, most importantly, the right expert is your key to Procurement Project Prosperity!

Proper Project Planning is Key to Procurement Project Prosperity! Part 2

In Part 1 we noted that we wrote about the importance of Project Assurance, and how it was a methodology for keeping your Supply Management Project on Track, ten years ago and that this typically ignored area of project management is becoming more important than ever. Given that the procurement technology failure rate, as well as the technology failure rate as a whole, hasn’t improved in the last decade, and is still as high as 80% (or more) depending on the study you select, that’s a problem. Especially when, for many companies, theses projects typically start in the million dollar range. (Even if the annual license is only 100K, by the time you multiply that by 3, the minimum term any vendor will give you, the annual maintenance fee by 3, and then add the implementation, integration, training, and ongoing integration maintenance costs and ongoing training costs, it’s well over 1M.)

But we also noted whereas there might have been a time when this was enough to tip the odds of success in your favour, it’s not quite enough anymore. Given the complexity of modern procurement (which hasn’t had as many complex problems to deal with simultaneously in over two decades) and modern technology (which is now AI enabled, AI backed, AI powered, AI enhanced, and or AI driven, even if it isn’t), when most organizational users are still struggling with basic technology (not enabled, backed, powered, enhanced, or driven by [fake] AI bullcr@p).

We told you we were going to dig into the project steps and help you understand what you need to do to get it as right as you can and greatly increase your odds of success. But first, there is one critical action you need to make that is common to all steps that is critical for your Procurement Project Prosperity and that is:

  • Engage an independent expert to guide you through the entire process and help where needed, including assurance.

As noted, this individual

  • cannot be an internal resource, even from a different department, as they are still subject to the internal pressures from the C-Suite (fast, cheap, etc.) that might be counter-productive to project success (that is critical for eventually obtaining the ROI you purchased the platform for in the first place)
  • cannot be a vendor representative as their only goal is to get you to buy more, or at least keep your subscription at the initial purchase level (which likely contained seats you never used, SKUs you don’t use enough to justify, and third party feeds/integrations you aren’t taking advantage of)
  • cannot be an implementation team representative, even if they are a third party consultancy, as the odds are that consultancy has a preferred partnership with the vendor and will be biased towards keeping the vendor and doing whatever is easiest (and thus most profitable for) the vendor to keep getting their implementation referrals

Now, what’s the difference between helping and pure assurance? In addition to making sure each step is accomplished effectively, this person is also guiding you through the creation of the necessary artifacts of each step to ensure success. This person is helping you define the goals, not just ensuring the goals are met. The person is simultaneously a project guide and a project evaluator, bringing the Procurement Best Practices and Technology Knowledge that your organization doesn’t have, and helping you identify the right intersection to take you forward on your journey.

And this goes well beyond just helping you write an RFP (although this is a key step, which is why the doctor has been telling you to get expert RFP help for your Procurement technology RFP for close to two decades, because a bad RFP is one of the leading causes of project failure).

This is because, as we noted ten years ago in our original Project Assurance Series (Part I, Part II, Part III, Part IV, and Part V), project success depends on more than just getting the technical specifications right. Project success also depends on getting the talent right — as it is the people who will have to use the new system. And project success also depends on getting the transition right —- if the changeover is not smooth, significant disruptions to daily operations can occur. And, equally important, they also depend on an often overlooked 4th “T” —- tracery. Organizational success depends on selecting a superior strategy and seeing it through until the desired results are achieved (or the organization changes the strategy). (And since you don’t know what you don’t know, the small cost of engaging an expert, relative to the overall project cost, will generate a return far, far greater than the technology ever will.)

Tracery, which stems from late Middle English, can be defined as a “delicate, interlacing, work of lines as in an embroidery” or, more modernly, as a “network”. Implementing a strategy requires effectively implementing all of the intersecting “threads” that are required to execute the strategy to success. If any one aspect is overlooked, the project can fail. And if you can’t even see all the threads, it should be easy to understand how most projects essentially fail as soon as they begin and why you need a master weaver if you want to beat the odds and actually succeed.

Come back for our next installment where we will dig into the six traditional project steps outlined in our original series and dive into what your independent, third party, Procurement technology project guide (who will be independent from you, your vendor, and the vendor’s third party implementation team) needs to do.

Proper Project Planning is Key to Procurement Project Prosperity! Part 1

Ten years ago we wrote about the importance of Project Assurance, and how it was a methodology for keeping your Supply Management Project on Track (Part I, Part II, Part III, Part IV, and Part V).

We told you that Project Assurance, which takes a proactive approach and tries to identify issues, and implement mitigations, before they arise, involves the organization periodically stopping to objectively assess project failure points as they arise, typically with the help of an outside third party who can be completely objective, to identify what is and is not being done well and what could cause failure later if not adequately addressed now.

In traditional Project Assurance, there are six health assessments at six critical points in every project (for each of the six initial project phases defined by the classic waterfall project methodology). In particular, there is an assessment at each of the following steps:

  • Strategy (Pre-Presentation)
  • Acquisition (Pre-Vendor Selection)
  • Planning (Pre-Design)
  • Design (Pre-Acceptance)
  • Development (Pre-Testing)
  • Testing & Training (Pre-Acceptance)

And that the right assurance expert can help you with

  • expectation management during the strategy development
  • narrowing the procurement gap during the acquisition phase
  • aligning the troops during the planning phase
  • delineate the disconnect during the design phase
  • evaluate for acceptance during the development phase
  • tame the transition during the testing and training phase

And we stand by these posts and the importance of a third party expert helping you with the assurance ten years later, because we feel that if more companies adopted the methodology, we might not be in the situation a decade late where we still have a ridiculously high failure rate in procurement technology projects (as well as technology projects as a whole), that, depending on the study quoted, still exceeds 80% in some cases.

But we also recognize that, given the complexity of both modern Procurement (which hasn’t had so many issues to deal with simultaneously in over two decades), and modern technology, project assurance isn’t enough to save a project that isn’t planned right from the get go. (You just don’t have time to identify and fix all the problems once things get underway and you have the army of grunts simultaneously doing the implementation, all the integrations, and training as they try to rush an enterprise project that used to take two years and get it done in 9 months so they can promise payback within a year (which never happens when they do this — but that would be a different rant).

So, in this short series, we are going to dive into the project steps and help you understand what you need to do to get it as right as you can and greatly increase your odds of success.

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.

Dashboard

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.