Designing a vendor management procedure for engineering, procurement and construction management projects
Kuznetsova, Anna (2018)
2018
Industrial Engineering and Management
Talouden ja rakentamisen tiedekunta - Faculty of Business and Built Environment
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Hyväksymispäivämäärä
2018-08-15
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:tty-201808142124
https://urn.fi/URN:NBN:fi:tty-201808142124
Tiivistelmä
Nowadays, project organisation and communications in engineering projects are evidently complicated due to the participation of many specialists and contractors. The work and materials provided by these vendors in turn account for the majority of project costs. Furthermore, vendors have a significant influence on the success or failure of a project, as their performance directly affects the entire result of the business effort. Thus, to guarantee successful completion of engineering projects, it is of high importance to manage numerous vendors efficiently and effectively, which often becomes a challenge for many organisations.
This research investigates vendor management in engineering projects and, using this as a basis, seeks to design a vendor management procedure that would serve as a guideline to handling vendors efficiently. The subject is analysed based on an extensive literature review of renowned authors in the field, as well as from the viewpoint of one of the leading engineering and consulting companies located in Finland. The literature review explores this relatively scarce topic by presenting available ideas sourced from diverse authors, while the empirical part of the research reinforces the findings by qualitative interviews conducted among 11 experienced employees of the case company, who shared the practices applied in their offices based in Finland, Sweden, Germany and Canada.
The outcome of the research is a demonstration of theoretical and practical vendor management procedures. The theoretical is built on literature review and is suitable for engineering projects in general, while the practical is more comprehensive and represents practices of the case company to handle vendors in EPCM projects. Both encompass the three main phases: pre-contract, contract execution and post-contract, specifying the key activities, responsible roles and documents required when selecting a vendor, administering the contract execution, as well as closing off the contract and evaluating the results achieved.
The scientific importance of this subject is the expansion of the knowledge boundaries in the field by filling the void in existing literature with the results of empirical findings, while the practical importance of the research is the thoroughly developed framework to manage vendors in EPCM projects, which will be formally documented in the case company, evaluated internally and its practical guidelines implemented in due course. Future research ought to be undertaken to investigate vendor management in other project types like EPC and to analyse the key differences between the approaches. In addition, it is suggested to explore KPIs that can be applied to evaluate the success of implemented vendor management.
This research investigates vendor management in engineering projects and, using this as a basis, seeks to design a vendor management procedure that would serve as a guideline to handling vendors efficiently. The subject is analysed based on an extensive literature review of renowned authors in the field, as well as from the viewpoint of one of the leading engineering and consulting companies located in Finland. The literature review explores this relatively scarce topic by presenting available ideas sourced from diverse authors, while the empirical part of the research reinforces the findings by qualitative interviews conducted among 11 experienced employees of the case company, who shared the practices applied in their offices based in Finland, Sweden, Germany and Canada.
The outcome of the research is a demonstration of theoretical and practical vendor management procedures. The theoretical is built on literature review and is suitable for engineering projects in general, while the practical is more comprehensive and represents practices of the case company to handle vendors in EPCM projects. Both encompass the three main phases: pre-contract, contract execution and post-contract, specifying the key activities, responsible roles and documents required when selecting a vendor, administering the contract execution, as well as closing off the contract and evaluating the results achieved.
The scientific importance of this subject is the expansion of the knowledge boundaries in the field by filling the void in existing literature with the results of empirical findings, while the practical importance of the research is the thoroughly developed framework to manage vendors in EPCM projects, which will be formally documented in the case company, evaluated internally and its practical guidelines implemented in due course. Future research ought to be undertaken to investigate vendor management in other project types like EPC and to analyse the key differences between the approaches. In addition, it is suggested to explore KPIs that can be applied to evaluate the success of implemented vendor management.