ConstructionDriven Procurement Presented at the 2019 AWP Conference

Construction-Driven Procurement Presented at the 2019 AWP Conference – October 9, 2019 Ash Alashqar, Materials Management Lead, The Dow Chemical Company Geoff Ryan, AWP Specialist, Insight-AWP Darren Wellington, Technical Services Director, Hexagon Akira Kondo, Sr. VP, JGC 1

Agenda • Safety Moment • What is a Procurement Work Package (PWP)? • Data Requirements • Materials Management Enterprise Solutions – Available options and bolt-on tools – Overview of Auto-ID • Reporting – Material Visibility • Summary • Q&A 2

Safety Moment: Avoid the Dash to the Dashboard! • Dashboard touchscreens create DANGEROUS DISTRACTIONS FOR DRIVERS • Fail to see 50% of surroundings • More than 30 studies show hands-free devices don’t make drivers any safer! • While driving, DO NOT: – Talk on the phone – Check email – Post a social status – Order takeout • Source: nsc. org/justdrive 3

What is a PWP? A PWP: • Is a virtual package that resides within the material management software/tool. • Lists all required materials by CWP. • Must be ready in order to complete a CWP. • Requires constant communication with fabricators and suppliers to ensure priorities are met for each CWP (by Required On-Site Date). • Includes Materials and Data 4

Data Requirements • Data for engineering • Data for AWP: – Templates and submission schedule to be agreed – Adhere to Data Thread Best Practices • Tagged Equipment: Key dates required (PO issued, shipped, delivered, on-hold, etc. ) in addition to tag numbers/barcodes • For Steel/Pipe fabrication: Spool ID, piece mark number required. • For steel/pipe detailing: ISO/IFC/model files required. – To be negotiated prior to PO issue or Contract Award 5

Materials Management Solutions “A basic materials management system can be expected to produce a 6% savings on projects…” – Construction Industry Institute Research Report Advantages: ü Significant decrease in error rates less re-work ü Significant reductions in material overages less cost ü Significant reductions in material shortages more productivity ü Increased ability to plan and adjust at the work face more efficiency ü Improved time on tools more productivity ü Increased ability to solve project issues before they happen proactivity 6

Options Available • Barcoding/RFID Material Tracking gives greater visibility – Receive via hand scanner or gate reader – Transfer/issue using mobile technology – Locate materials via GPS or Bluetooth technology • Barcoding/RFID to track Fabrication • Mobile extensions of MM software to execute Expediting and Inspection functions

Auto ID: An Owner’s Perspective • Goal of implementing an AUTOID System: – 100% PMLI of your assets – PMLI = Positive Material Location and Identification – Can be a passive or active device • Potential Benefits: – Automated Receiving and Marshalling – Improved Time on Tools – Lower inventory *A project with $1 billion TIC devotes 40% of its costs to labor – $400 million. With 15% of an average workday lost to wait times, the project will lose $60 million. If wait times could be reduced to 10 -12%, this could lead to savings of $12 -$20 million, or a 3 -5% overall cost reduction.

Reporting • Report by PWP • GET OUT OF THE WEEDS!!! • Don't lose sight of the big picture!!! • Owner-Furnished vs. Contractor-Furnished Material visibility • Accurate & Frequent Progress Reporting • Stakeholder Management

Material Visibility & Reporting for AWP AUTO-ID Implementation Supplier Data Quality / Inspections Site Receiving / Marshalling Equipment Project Team / Field Personnel / Construction Contractor Pipe Detail / Fabricator Materials Management Software Steel Detail / Fabricator Material Feasibility Report Work Packaging Database AWP Data Loading Workface Planner Project Controls Procurement ERP System Data DOW RESTRICTED Design Engineering 10 Construction Manager

Summary • Planning with the end in mind MUST include procurement • When we buy a package, we are buying BOTH equipment AND Data • Leverage technology and available tools for your organization • One take-away? Communication! 11

Discussion and Questions 12