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Rubber Lined Piping & Engineering Manufacturing Procurement Process Challenges

EPC

Doing a large project for engineering firms can be rewarding and challenging depending on the contract at the same time. Here are some of the process challenges with rubber lined piping and piping projects in general.

The most common way to price many short lead, large scope projects is to bid a Bill of Material. These BOM’s are generally generated form a snapshot of their CAD system model. The CAD bill of materials unfortunate provides the first challenge such as how to price 10,000 feet of pipe when you don’t know the individual lengths? How many termination are there, how many branches are there, supports etc…? The descriptions of the piping will say rubber lined grooved. So to determine the quantities of grooves you must sometimes estimate based on the coupling count.

Some of these challenges have been overcome by providing welding rates, cutting rates, branch rates etc… This method of pricing does not provide the purchasing groups a clear cost on the project. As many of the welds and cuts do not get rolled up or counted into the price. The preferred alternative is to price a- la cart. This style of pricing would mean that any flange price listed for example in the BOM would include all the shop processes required to fasten a flange for example to any piece in the system. This provides a transparent all in fabrication price.

Assuming your prices are competitive and you won the contract, the next challenge is that generally the fabrication drawings are not complete. Hopefully the purchasing people will allow you to purchase the BOM as it stands, as waiting for drawings can delay projects, while the drawings are being completed you can purchase and stage your materials for fabrication. Next arrives the drawings and they pose their own problems as discussed in my blog on cad challenges.

Now you fabricate your rubber lined piping. When you ship your project to site you are not shipping flanges pipe and a branch separately. You are shipping a spool that contains all the materials listed in the BOM. Reconciling the original PO is extremely difficult as the original PO is based on a BOM. Depending on the purchasing team a backup document containing the price breakout of the spool may becomes a useful tool to reconcile the billing on the spool i n order to eventually consolidate the project purchase order at the ends

Keeping these interesting challenges in mind and discussing the challenges with an agreement ahead of time, before the issue of a purchase order will ensures a smooth trouble free contract.

 

Dan Chamberland

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