A decision support system for rapid evaluation and selection of engineered equipment suppliers
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Procurement’s role in engineering and construction is changing. Procurement is evolving into a far more strategic discipline. Major equipment procurement in particular ties up a large proportion of construction cost, has long lead time, and is usually associated with the acquisition of complex or specialized technology. Selection of suppliers is a complex process which requires the evaluation of several suppliers and project targets. This analysis is usually performed manually, it is time consuming, and certain tradeoffs may be overlooked. This research advances state of the art to aid the commercial evaluation and selection of engineered equipment suppliers in the early stages of capital projects. A decision support system was developed in cooperation with several leading engineering-procurement-construction (EPC) and owner firms within industrial construction. The system integrates firms’ market and supplier performance data with a decision aid method to support rapid tradeoff analysis and evaluation of sourcing alternatives in the early stages of capital projects. The tool has been developed in Visual C#, in the form of simple and intuitive forms, with Microsoft Access as the back-end database. A supplier selection module uses the Aspiration Interactive Method (AIM) for providing rapid tradeoff analysis and points how each supplier is ranked in relation to the expected procurement targets. The system also includes a module for schedule analysis of the preferred supplier. Managers first need to assess unique project and supplier’s characteristics to estimate most likely durations. These durations are used to run a PERT analysis and provide initial feedback on probability of equipment delivery success. Therefore, managers are able to check whether their procurement master schedule milestones are feasible or not. Two actual selection cases were used to validate system’s usefulness, completeness, and deployability. According to experienced managers, this tool brings intelligence to the traditional selection process. The ability to quickly generate what-if scenarios and rapidly perform tradeoff analysis based on real data improves the quality of decision making, and supports commercial assessment and recommendation of suppliers in the early phases of capital projects.