Engineering and Procurement !!!!

[slick086]

These two departments generally have problems working with each other.... so guys my question is how can "How can engineering risk management complement those of procurement and supply chain to mitigate risks in oil and gas production ?"

Your views will be very much appreciated

[goatdrag]

Procurement person shall have engineering background. Do not simply wait Engineering to compile every single thing. Subsequeently Engineering shall be dare to take decision for market availability material or specs.

[mohnos]

All procurement shall be initiated and approved by engineer. Engineer is the ultimate technical power and could not be overlooked by any entity. This principal is a paramount. Period.
Your question is so general. I will explain to you from my 40+ years career as engineer.
1- If procurement is for construction project , any dispute with a third party should be communicated with the owner. But, usually the procurement dept. is sub to main engineering dept. and in this case your instructions must be followed by the procurement personnel.
2- If you are talking about a project already is in operation, still the responsibility of the engineer to make sure the procurement is sufficient to accommodate the operation in such away to keep the production running 24/7/365 without compromising any of the quality, safety, environmental, and economics factors.
thus could be achieved through a comprehensive study to your plant with all equipment and machinery in such away to keep plant running without freezing capital for a long time of period on the shelf ( investment and forgone opportunity. I advice you to have a course in Engineering economics analysis).
What to consider in your study? you consider all spare parts against their life cycle, all capital equipment, all consumables. Consider the time lead that needed by the procurement department to procure including all time frame from initiating the purchase order, bids / offers study time, funds transfer time, receiving and inspection and any discrepancies and on shelf., consider all interchangeable items between equipment, consider mean time between failures, consider procurement is from local or from outsourcing, consider your company policies and politics, consider your country politics and relationship with the manufacturer country politics, consider your company financial situation, consider maintenance Engineering central Workshops abilities of manufacturing some spare parts by providing raw materials for fabrication ( you should have metal and non metal welding and fabrication, lathe or CNC machining, mechanical cleaning and jet cleaning shop, etc...).
After studying all above, you must define three levels of procurement for purchasing / procurement department as permanent instruction to follow and to comply with.
the three levels are: 1- Maximum Level.
2-Minimum Level.
3-Order Level.

Usually, the Japanese Engineering have developed it in a good mathematical way. But, I found it a time spending. I have developed a simple formula for the procurement staff to follow which is:

Order Level ( quantity) = Maximum Level + Minimum Level divided by 2.

Maximum level: is the quantity or number of spare parts which must be in the where house and is needed to keep the equipment running all times.
Minimum Level is the quantity of spare part which should not go below in the where house all times.
Order Level: is the quantity which the stock room or procurement guy shall immediately initiate a purchase order when he observes the level of any spare part in where house at the Minimum Level.

Levels could be controlled through a Computerized Maintenance System (CMMS ) , or through cards as the old years before computer is intered in maintenance.

Capital Equipment should not be procured more than one equipment due to high cost which exceeds 5-10 millions dollars and must be coordinated and by your superior and be justified with top management before procurement.

No, authority for procurement people to interfere in technical things except the engineer. they are working for you. if your business is a mess, then have your boss deals with this issue.

[f81aa]

mohnos, thank you

Regards