Application About Construction Supply Chain Management Orojects In The EPC Contract

Procurement, as one of the core links of Engineering-Procurement-Construction (EPC) project, has a direct influence on the cost of projectand economic benefits of prime contractor. However, problems andcriticisms are proposed at present, such as low productivity, uncertain timeof delivery and cost overrun, etc. Supply chain management as aninnovative management mode provides a completely new solution forresolving these problems. After analyzing the characteristics of EPCproject with special interest in project procurement management, thenecessity of the adoption of supply chain management in EPC projects isput forward. Furthermore, this thesis is focused on the idea of how toimprove procurement management by means of supply chain management.First, this thesis proposes the premise of the adoption of the newprocurement mode, i.e. EPC prime contractors and suppliers should buildpartnership on the basis of trust. Then, special attention is given to asystem approach of JIT procurement management between partners withthe aim of using supply chain management effectively. Therefore, theadoption of supply chain management in EPC project can significantlycontribute to the procurement efficiency as well as performance ofconstruction supply chain. Finally, with a practical case of an EPC projectexecuted by Sinopec Engineering Company, this paper shows how toestablish the general model of engineering project logistics and thecorresponding platform of supply chain management, as well as how to strengthen the practice of supply chain management in EPC projects, howto construct a supply chain management mode in steel procurement whichcan be easily extended into the general management mode of supply chainfor the whole project. Also, its application to the procurement of shapedsteel confirms it obviously improves the procurement efficiency of theEPC project.