How the supply chain impacts mega projects
Mega projects, construction of infrastructure projects valued at over $1 billion, represent a new benchmark for the civil construction industry. Early contractor and supply chain involvement is critical to a mega project’s success, according to Australian Constructors Association (ACA) executive director Lindsay Le Compte.
Lindsay says that initial responsibility for the smooth execution of a mega project falls on the client. In this stage, preparation and research are paramount.
“The client has an obligation to ensure that they have undertaken all of the relevant background investigations to enable them to develop an appropriate tender specification,” he says.
“They must have thought through the key commercial, operational and related risks in their project and worked out how they’re going to deal with them, and then they need to select a tenderer with demonstrated capacity and commitment to work collaboratively with them to successfully undertake the project.”
Supply chain management has always been a significant component of project management, but the complexity of mega projects necessitates involvement with suppliers at an earlier stage and in a more refined manner than clients and industry may be used to.
“The traditional approach pre-lodgement of tender has been for contractors to obtain from supply chain organisations, such as suppliers of cement, concrete, aggregates, steel, and bitumen etc, indications as to price and deliverability of their materials,” Lindsay says.
“However, the supply chain may not be engaged at a time in the project lifecycle that would optimise the opportunity for organisations to add value through innovation, or in the more effective management of project delivery programs. There may be many reasons for this occurring, including the constraints of the tender process itself, but the end result may be a lost opportunity to achieve cost and time efficiencies.
“However you look at it, early contractor and supply chain involvement in mega projects can ensure that the project is delivered on time, within budget and without disputes.”
Despite the degree of complexity in their delivery, Lindsay is optimistic about the future of mega projects, forecasting that their prevalence in civil construction will only escalate in the years to come.
“I think mega projects will be here for the foreseeable future because governments are responding to community expectations for new infrastructure and more liveable cities,” he says.
“The future for the civil construction sector and delivery of mega projects is bright. There is a great scope to reduce the cost of projects through efficient design, innovation and good management – a win/win for all parties.”
Lindsay will be discussing these issues and more in his presentation at the National Construction Equipment Convention (NCEC). This must-see industry event will run from 15-17 November in Sydney, featuring an expert speaker lineup and leading companies showcasing new equipment.
To register, visit www.ncecaustralia.com.au/ncec.