How you can achieve visibility, control, and cost savings, by combining advanced technology with key industry best practices.
Proper project planning doesn’t always avoid the unforeseen circumstances that can cause your routine maintenance, turnaround, outage, or shutdown project to become completely behind schedule and over budget.
Adding to that challenge is the complex owner/contractor relationship which involves hundreds or thousands of craftsmen, each with very specific contract permutations. Because of unforeseen problems, combined with the complexity of contracts, it’s no wonder that projects are often millions of dollars over budget and notoriously late.
In addition, the demand for plant contractors is growing due to a shortage of skilled workers, aging equipment, and growing business requirements. The processes for managing these contractors have traditionally been based on manual time methods that result in errors, disputes, lack of visibility, and control.
World-class companies, however, are realizing that they can address these challenges, achieving visibility, control, and cost savings, by combining advanced technology with key industry best practices. Using Contractor Spend Management technology exclusive to MCi’s TRACK® Platform, manufacturers can automate all processes — from contractor time-sheets that are validated through proof of presence, accurate skill assignment, and adherence to contractual terms and conditions through invoicing to payment, giving them real-time visibility to avoid cost overruns, as well as an automated payment process that ensures that contractors are paid accurately, on time.
Supported by today’s innovative technology, the following are best practices that best-in-class companies are implementing:
REAL-TIME METRICS
Provide visibility into such critical information as planned and real-time headcount by contractor, skill, and shift; equipment and materials required by contractor and shift; notification of absent labor and missing equipment; cumulative hours and costs at the work order and activity level; planned vs. actual variance reporting of final costs; and any purchase orders (PO’s) and work orders (WO’s) that exceed planned hours and cost. Metrics should also offer electronic contractor time-sheets and invoices that are in compliance with contracts.
ACCESS CONTROL SYSTEMS
Are critical for security and can also support other business processes. They make excellent employee and contractor on-site validation records; help eliminate billing errors and can play a major role in a company’s insurance and risk management practices.
SMART CONTRACTS
Should be guided by the company’s approach to contractor staff levels and the nature of contractor/owner relationships. Smart contracts match work risk to contract type, with Lump Sum contracts, ensuring good scope; Unit Rate contracts, to improve productivity and control costs; Time & Materials work, to address labor, equipment, and materials.
WORK PLANNING AND SCHEDULING
Are critical to evaluating effectiveness, costs, and performance. Progress, cost, and status measurement are only meaningful in the context of an up-to-date plan. Whenever possible, standardize on one CMMS(computerized maintenance management software). It also is important to use real-time progress/status feedback provided by a Contractor Management solution, like the TRACK Platform, so you can pro-actively adjust the plan and the schedule.
ERP INTEGRATION
Is important for efficiency and communication. It enables, for example, a work order to be downloaded to the TRACK Platform, where it automatically updates the ERP with operation, work order, and project status and costs throughout the day. After the software approves the invoice for payment, it generates electronic charges that are updated in the ERP system for settlement.
By combining advanced technology with world-class best practices, manufacturers can avoid many of the headaches associated with time overruns and save millions of dollars a year, while gaining critical visibility into real-time project status.