Issues regarding coordination between the head office and equipment suppliers
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Hello, teachers. As I have been working in production management, I have had little interaction with design firms and construction companies. I’m facing some minor issues with project management right now and would like to ask for everyone’s advice. The background is as follows: The company has launched a new project and hired an overall design firm to handle the overall design. This firm is highly skilled at designing buildings and factories, but it does not have much expertise in other types of production facilities. Then, as the project developer, our company inspected many suppliers of production equipment and obtained some documents to submit to the main design institute for preliminary planning. However, no matter how much data is requested, the General Institute believes that the amount available is insufficient to meet the needs of the preliminary design. However, the equipment supplier needs to go through a bidding process before it can be determined which manufacturer will be chosen; only the winning manufacturer can provide you with detailed and comprehensive design documents. However, bidding requires a detailed list of equipment and similar items in order to establish the bid control price. Result: We now feel that we are in a vicious cycle. 1. As the constructor, all we obtain from the equipment suppliers are basic documents, which are not sufficient to meet the design requirements. To meet design requirements, it is necessary to select a supplier. 2. Identifying a supplier requires detailed design documents to meet the requirements of the bidding process, as well as a detailed list of equipment to satisfy the constraints related to the budget limit for bidding; in other words, bidding is not possible without such documents as a list of equipment. 3. The head office also lacks the capability to confirm the detailed design of the production equipment. I would like to ask: 1. Is it the case that once we, as the project owners, select the main design institute, that institute is then obligated to carry out the design for the entire plant? Or should the overall institute coordinate resources on its own to complete the preliminary design? 2. For supplier bidding, is it necessary to establish a bid control price before proceeding with the bidding process?
Mark, even though I don’t understand, I still support you. Keep it up!
It seems the design firm you chose is not good enough. Since it is the head office, it assumes full responsibility; for particularly large projects, they can also be subcontracted to other design firms. All design documents should be provided by the design institute. For some special equipment, the design institute must first prepare a quotation document, after which the project owner conducts a bidding process. Only after a manufacturer is selected will that manufacturer provide the relevant equipment documents to the design institute.
A project cannot have only the design headquarters (i.e., the general contractor); the headquarters is generally responsible for the overall energy and material consumption of the project. Balancing of utilities such as water consumption, etc., also requires a detailed design firm (subcontractor) responsible for the production facilities in order to carry out the project design more effectively.
Hehe, the right to choose the equipment should lie with the project owner; otherwise, there is a risk of middlemen taking advantage of the situation. I’m not sure if it’s possible to specify what the exact items are. These days it’s a buyer’s market, and some equipment manufacturers can provide design services for free. There are many options available these days; if words hold weight, bidding processes can also be used when seeking design firms. Why be constrained by others? The key to the issue is whose interests corporate executives serve – this is a very important question. Often, it is some senior manager who holds decision-making power within a company that is responsible for carrying out this work. There are also advantages to choosing a design firm, to selecting equipment, and to picking a construction contractor, and so on. Hehe, there’s always an explanation for who you serve, and that’s why this kind of odd situation arises, as you said. A design institute is meant to fulfill as many of the owner’s requirements as possible, without violating any regulations. It’s the same as hiring a home designer. The design institute holds all your rights in its hands, and there’s definitely something fishy about that. Believe it or not, after the project is done you’ll be able to write a book: lol
It’s exactly the same as cooking at home – if your wife asks you to go buy groceries, she doesn’t tell you how many people there are or what to eat, so how are you supposed to know what to buy? It’s your wife who has to tell you what vegetables to buy and how much. Anyway, once the product and manufacturing process are determined, the conditions for use are established; in other words, parameters for selecting the equipment are defined (pressure, temperature, pH, whether a slurry is used, whether carbon steel or stainless steel should be used, or whether an epoxy-coated steel lining is appropriate). Otherwise, you won’t even know what kind of equipment to buy, let alone which manufacturer’s product to choose. Let’s determine the process parameters first.
The design institute wasn’t chosen properly; they don’t have a good understanding of production facilities. I don’t know how such an institute was selected. You are building a production facility, not just constructing buildings. Of course, if things have reached this stage, there’s nothing that can be done about it. Generally, it’s the design institute that’s responsible for contacting the manufacturers to obtain preliminary information. I’m not sure why you need to get involved, unless you’ve already chosen a manufacturer and want to take control of all procurement processes yourself. Preliminary design cannot include very detailed data; most of the details are already determined (they’re specified in the process packages). Only for certain special equipment or complete systems is it necessary for the manufacturer to provide some information, and that usually consists of basic data such as dimensions and energy consumption. There’s no such thing as a permanent lack of information – it can only be said that the manufacturer’s capabilities are insufficient
After converting the data provided by the process package supplier into procurement data, the design institute hands it over to the project owner who is responsible for equipment procurement. Once orders are placed, the design institute specifies exactly what information is needed for the preparation of the construction drawings
The question you raised is good; it’s obvious that there’s an issue with the business process, specifically with communication between the parties involved. The problem lies in the fact that the business staff and designers do not communicate properly and rely entirely on documents. For the preliminary design, not too many equipment details are needed. Once the process design is complete, the design institute can provide information on the equipment required. Detailed equipment specifications are needed during the construction phase, that is, at the stage of detailed design. Do you need any assistance? I just finished the project and can communicate via WeChat.
Thank you, expert. In other words, it should actually be the complete equipment supplier who provides a rough design plan to the main design institute; the institute should then develop a preliminary design based on this information, including a process plan and a list of equipment, and subsequently prepare an estimate for use in the bidding process. After the bidding is completed and the equipment manufacturer is selected, the equipment manufacturer and the design institute work together to carry out the construction drawing design. That’s the process, right?
For the preliminary & basic design, it’s sufficient to have a general direction; identify a shortlist of candidates, conduct commercial inquiries, and prepare tender documents or price limits. Once the winning manufacturer is determined, detailed production design will be carried out based on the manufacturer’s information. The design institute has always complained that there isn’t enough information; it’s probably because of their limited capabilities.