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Long lead time equipments-schedule

15 replies [Last post]
Carmen Arape
User offline. Last seen 4 years 22 weeks ago. Offline
Joined: 26 Jun 2004
Posts: 292
HI PLANNERS,

I am working on a schedule where 40% of activities are “Long lead Items procurement”. I do not believe the source of information regarding durations of:
· Bid time
· Vendor drawing& other data
· Fabrication or production time
For each type of major equipment (grouped by discipline).

HELP, does anyone can tell me where to search for more updated and reliable information. The estimates that I am working with are from 1989. Apparently the worldwide suppliers are very busy.

Thanks & Cheers
Carmen

Replies

Carmen Arape
User offline. Last seen 4 years 22 weeks ago. Offline
Joined: 26 Jun 2004
Posts: 292
Peter,

you are right. Three activities involving different responsibles is very risky. Working at level 4 schedule, I study the information flow chart for procurement and add all the activities needed to control where the papers are.

I have used the three activities for a Level 1 schedule, where the most important was the time frame for procurement in order to make decisions.

Cheers,
Carmen
Nigel Winkley
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James - You are ranting. Remember, everything can filed under Miscellaneaous.
See your point about the bar progressing though. Not thought of that one.
Nige
Peter Holroyd
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Carmen,
you seem to be combining several offices by using only 3 activities - don’t they each need their own programme?
Carmen Arape
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Joined: 26 Jun 2004
Posts: 292
Gentlemen,

Good comments with regard to LLI items but all of you have forgotten the very important “START point” for manufacture which is VENDOR Drawings. Therefore, back to Kumar´s question, my suggested breakdown is as follow:
- Bidding process/Issue P. Order (starting with issue of Requisition by Eng.)
- Vendor drawings/review and approved
- Fab., tests/Ocean freight&custom clearance/delivery to site

I recommend to track separately the vendor drawings,. My experience tells me that without approved drawings the manufacturer will not start fabrication.

Normally, I use the above 3 activities as a typical international procurement which I apply for each LLI . Updating the activity Fab,.,test follows all the comments that you have made.

Cheers,
carmen
Peter Holroyd
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We all agree that the front end processes of order placement and delivery is easy to monitor and progress as there are numerous deliverables at these points which are visible to the whole team. The vendor manufacturing period is the black hole -
T & C’s rely on LD’s to meet delivery commitment - Anybody ever recovered these ?
Vendor programmes are usually non existent or useless
Expediting has variable success but generally nobody will pay for it so surprises are inevitable
Long term supply agreements give you more clout if needed
Try milestone payments for long lead bespoke items, design approved, main sub orders placed, delivery to workshop, FAT etc - nothing like an payment to encourage progress
The world seems to be very busy at the moment!!

James Griffiths
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A valid suggestion, Nigel.

Part of the reason I tend not to use that format, is because of the visual aspects of seeing a progress line get closer and closer to the end-date. It acts as a prompt to begin investigating the physical levels of progress. I agree that it is essential to ensure that your duration progress is updated, but that can be done via a filter. It’s just like any routine process, however: it doesn’t matter how good it is; if it isn’t implemented then it’s a waste of time. I keep telling that to the wife - with regard to our household filing (we have all the files with the various sections) but she just doesn’t bother actually filing anything for months-on-end(OK, I’m not perfect either). The children are the same with their books and toys. We must have more than 32 shelves in our house - but the biggest shelf is the floor!

Am I ranting?

James.
Nigel Winkley
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A suggestion for manufacturing and/or procurement.

I now always use a start and finish milestone, with lags, rather than a long duration bar. Reason being that it is less to update and all yoou have to do is confirm the end dates every time, rather than update a bar with progress - you may forget, your leave replacement may forget...

So you get Start Manufacturing, FS 120 days, End Manufacturing, etc.

Cheers

Nige
James Griffiths
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Kumar,

I would tend to agree with your breakdown of Place Order, Manufacture, Ship, Customs, Delivery-to-site. At summary-level, these are the major elements. Moreover, I would also tend to agree that attempting to break-down the process into further detail is really a complete waste of time unless the suppliers are prepared to report their progress at the same level of detail, on a regular basis – and that report is based on a verifiable and quantifiable programme/methodology that they themselves use to monitor their own progress and forecasts. Moreover, it is still a classic case that 99% of the stuff can be completed on time, but is of no use until you get that last nut & bolt. We have a proverb: “For The Want Of A Nail, A Kingdom Is Lost”.

All you can really do is trust them and hope that they are not feeding you a pile of cow-poo. If you don’t really trust them, you can spend extraordinary amounts of time bugging them for data or making physical checks on their progress. At the moment, I’m having a crap time attempting to get the relevant data from our Works. They just don’t have the resources to compile and maintain the required information. As a result, the only way that we can see anything having been done is by physically looking at it. They have no definitive plans or progress monitoring abilities to compare baselines against actuals. It really is a case of crossing-your-fingers and hoping (which really isn’t a very good idea)

James.
Kumar I
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What is the best way to breakdown the activities of materials/equipments which have long lead time.
Place order
Procurement
or
Place order
Manufacuture
Ship
custums clearance and delivery to site

More the breakdown difficult to update as getting information on actual dates/percent completion of manufacturing may be difficult
Carmen Arape
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Joined: 26 Jun 2004
Posts: 292
Peter,

Thanks, that´s the number I am using for the Fire Heater: 14months PLUS 2 months Ocean freight+custom learance+delivery to site.

Cheers
Carmen
Peter Holroyd
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Lead Times for fire(d) heaters - furnaces
Recent quote (Mar 06) was 9 to 15 months for medium to large + 6 months build time - Refinery Upgrade Project

ps wait till your quoted 48 months delivery and then fit that into your schedule !!
Jihad Daniel
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Hi,
May this website be useful to you.
http://www.planningengineers.org/knowledge/leadtimes.aspx

Regards,
Charleston-Joseph...
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Hi Carmen,

If you ask for "where to search?"

go to google or use google search engine.

This may surprise you, however, you can give a try.

Cheers,

charlie
Carmen Arape
User offline. Last seen 4 years 22 weeks ago. Offline
Joined: 26 Jun 2004
Posts: 292
Hi Peter,

Fully agree with you regarding that 40% is unusual, BUT I am supporting a CLIENT with assessment of scenarios where LLI (Long lead items) procurement is the KEY. Why , because it is a matter of taking a decision whether the client buys or the IPC.

I have a ITEM very important. Fire heater (12 months) starting with bid process until delivery to SITE. I will work with your estimate of 25%-50% on top of my durations, and see how things go.

Do really appreciate your quick and fruitful answer.

Cheers,
carmen
Peter Holroyd
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Depends as always on industry & circumstances - 40% of TIC for major items in Oil & GAs / Petrochemicals is not unusual

Can you elaborate. If not

Take for major pkges
13 weeks minimum for Bid Pkge assembly/Vendor Response/Assessments/Neg/Pur Order

Major Project Specific Design Details (rather than catalogue details) should be 6 to 8 weeks after PO Placement (or as specified on VDR list)

Vendor Delivery periods are now whatever you negotiate within T&C’s - but add 10% to be sure. Recent market rates have generally been +25% to +50% on normal delivery durations from 5 years ago which gives you an idea of how busy it is out there in certain industry sectors

This all means we have to put much more thought into how the procurement plan supports (or not!!) the project objectives