Internal Preparations for outsourcing 3.5PL or in-sourcing 4PL

1. Preparing for New Project Inbound Material
Logistics Operation Management Service Models
Ready, Set, Go!
© Project Logistics Management, Inc./Wei Li

2. Defining Vision/Anticipations for Inbound Material
Logistics Management Contributions to Project SCM
• Project Total Ownership Cost Control & Project
Material Logistics Operation Management
Contributions
• Development/redevelopment/turnaround
and expansion onshore projects & operation
revenue loss preventions/minimizations
• Direct & indirect project material logistics
service and project material logistics
operation management cost control

3. Consensus On the Project Material Logistics
Management Objectives
• Project management, project procurement
management, project construction site management,
project engineering management are all to support and
to benefit from the next level project material logistics
management model in daily practice
• Logistics service category management is to support
and benefit to add more significant and tangible values
subjectively measurable
• Project gate pass review boards must specify their
expectations and set new criteria in alignment with the
defined vision

4. Reviews of Current EPC Contract Award Related
Project SCM/Material Logistics Management Practice
• Onshore project delays and logistics operation
mismanagement attributions in historical data analysis
• Identifying the flaws from outstanding project SCM
practices, including ECP1PL competence & capacity
screening procedures, if any; AVL mandatory
requirements on project subcontracts with 2PLs and
3PLs, if any; check & balance mechanism on results of
project material logistics operation management
oversight planning & implementations
• Identifying pragmatic alteration to current EPC contract
award practice, at least the Ts & Cs related to project
material logistics operation management

5. Best Practice for Project SCM at Owners/Operators
• New project SCM practice: project material logistics operation
management oversight planning and implementation requirements,
project material logistics operation excellence implementation
program requirements, mandatory AVLs on project subcontracts for
2PLs & 3PLs and Scorecard Admin procedures & protocols
• Project management, construction site management and project
procurement management supports for Project Material Logistics
Operation Management
• Logistics service category management for project material logistics
operation management
• Establish best practice based project material logistics operation
management with SOPs and protocols, in replacement of current
project short term SME contracts with in-sourced 4PL in “carving
out” EPC contract model, or out-sourced 3.5PL in status quo EPC
contract award model

6. Project Material Logistics Operation Excellence
& Metric Setting
• To make inbound material logistics management counts for
project total ownership cost control, subjective
measurement system is to be set in place, specifically
gauging the delivery delay cut downs, hence the reductions
in operation revenue losses and project material logistics
costs.
• Where and how which nodes of process flows should be
monitored at what scale and frequency, so that project
material logistics operation processes can be steered,
measured and completed on the marks. It is analytical,
while it does call for well rounded material logistics service
operation expertise for operationally practical
considerations in metric settings.
• Project material logistics operation excellence initiative
program & implementations for internal staffs/contractors
and EPCs alike

7. Project Logistics Operation Management Service
Introduction & Implementation Planning
• Change Management Initiative Program
• Project total ownership cost control & inbound
material logistics management contribution initiative
program, project management gate pass criteria
• Project SCM best practice initiative program
• Project material logistics operation excellence metric
implementation initiative program
• Project material logistics management service
performance benchmarks
• Project material logistics & SCM procedure integration
and communication protocol orientation program

8. Organization Structure, Process Map, SOPs and
Protocols to Pave the Inroads
• Logistics service category management, 3.5PL or 4PL
work scopes, procedures and protocols
• Project management team and 3.5PL or 4PL project
placement procedures and protocols
• Project construction site management and 3.5PL or 4PL
under project placement work scope, procedures and
protocols
• Project procurement and 3.5PL or 4PL project
placement work scope, procedures & protocols
• Awarded EPC1PL and 3.5PL or 4PL under project
placement work scope, procedures and protocols
• Other relevant work scopes, procedures and protocols

9. Road Map for Project SCM Best Practice
Development and Implementations
• Optional models between without external enhancement
resources, the best practice development and
implementations for in-house project material logistics
management functionalities
• 3.5PL model introduction and implementation procedure
with requirements both for project procurement at
owners/operators and for awarded EPC1PLs
• 4PL model introduction and implementation procedures
with all internal interfaces stipulated in clear procedures
and protocols
• Objectives, measuring metrics and benchmarks set for all
three above models