Hydrocarbon Processing - October 2021 - 63

Engineering and
Construction
S. WYSS, Bechtel Corp., Houston, Texas
Materials management: Data-centric execution
to enhance organizational productivity-Part 1
As a veteran of many capital projects once observed, " All
projects execute materials management-those that do so without
a plan and the appropriate resources just do it very poorly. "
What is materials management? Ask a dozen materials managers
and you will probably get a dozen different definitions. While
we generally think of capital projects in terms of design and
construction, the materials required to execute projects heavily
impact both design and construction-not only in terms of executional
information, but also in terms of execution planning.
Materials management efforts have generally been related
to improving materials-related information flows to design and
construction. In recent decades, these efforts have fallen short
for two primary reasons: the lack of recognition that materials
management is an integral part of project management, and
the failure to support change in entrenched siloed materialsrelated
work processes as data connectivity has improved. As a
result, the potential of optimal materials management has not
been fulfilled.
With the current trend of transitioning from document-centric
execution to data-centric execution, it is important that engineering,
procurement and construction (EPC) organizations
recognize that the cross-functional executional perspective of
materials management offers opportunities for data-centricbased
transformational work-process change-and for significant
productivity enhancement. Those organizations that attempt
to manage this change from EPC siloes will suffer.
Part 1 of this series will briefly address the broad concept of
materials management and will discuss materials management
as an investment and as an attitude. It will also provide examples
that illustrate the hidden costs of poor materials management
execution. Part 2-to be published in the November issue of
Hydrocarbon Processing-will show how data-centric execution,
with an object-oriented focus and exposure to a common data
environment (CDE), fosters elevation out of detrimental siloed
document-centric execution. Additionally, Part 2 will detail how
collaboration among all transactional parties via a CDE-not
just EPC and project controls, but also suppliers, service providers
and the owner/client-can facilitate efficient project execution.
Finally, Part 2 will highlight several areas where a forwardthinking
materials management team can identify and drive
transformational work process opportunities via an object-oriented
approach to offer significant productivity enhancement.
What is-and is not-materials management? The Construction
Industry Institute (CII) is the unparalleled authority
on materials management, with numerous and thorough publications
spanning decades, documenting benefits of rigorous
and robust materials management project execution. As CII
documents show, materials management is not just procurement
or warehousing, although both are elements. Materials
management is the cross-functional work process coordination
of materials-related work processes across engineering, procurement
and construction to optimize those processes for the
unique project-specific needs to deliver the lowest total installed
cost (TIC) to the project. FIG. 1 provides an overview of the four
phases of materials management and the steps that comprise
each phase. FIG. 2 shows the parties that play roles in projects.
In the past, many EPC contractors have embraced the idea
of materials management without recognizing that they were
already executing it-just in a fractured, siloed and often inefficient
manner. Concerns that adding a materials management
team to project execution would add undesired bureaucracy have
led many to create a narrow materials management team to mop
up and close work process gaps, instead of positioning the team
to prevent these gaps from ever materializing in the first place. In
addition, positioning the materials management team to report
to a manager besides the project manager, and specifically not
providing this team the latitude to participate in all aspects of the
project where materials-related decision making is taking place,
has led to many lost opportunities in identifying subtle upstream
FIG. 1. Phases/steps of materials management.
Hydrocarbon Processing | OCTOBER 2021 63
Hydrocarbon Processing - October 2021

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