Internal - External Supply Chain Customers for Kmart

AMEC Paragon’s Supply Chain

Jerry Gragg

OSC 300

Strategic Supply Chain Management

Steve Knabe

November 8, 2005

AMEC Paragon’s Supply Chain

Effective supply chain management can be described as the efficient utilization of methods and processes that integrate manufacturers, suppliers, and distribution channels in a way that delivers product and/or services at the right time, in the right quantities, and at the needed location to minimize costs and maximize profit and customer satisfaction (Simchi-Levi, Kaminsky, & Simchi-Levi, 2005).

AMEC Paragon believes this is essential to the well being of the solutions provider and makes it part of our mission statement (http://www.amec.com/sustainability/2ndlevel.asp?pageid=9006). AMEC Paragon is an engineering manager, designer, constructor, and installer of offshore oil and gas platforms, worldwide. This is accomplished by using the client’s ideas and expectations and gathering manufacturers, suppliers, and fabricators to create an oil or gas production platform and the product distribution system to its final destination.

The beginning of each new project requires that AMEC Paragon prepare a service and product distribution network that will deliver what the customer has specified, to the correct location, and in a timely manner.

Client specifications enable AMEC Paragon personnel to begin the first of many steps involved in project completion. These specifications help develop the process necessary to identify vendors that will be able to manufacture or supply the many components necessary to construct a multi-million dollar platform. Pumps and piping will be required to bring the oil or gas up from the ocean floor. Steel structures of many types must be assembled together to support the many vessels and tanks required to process the product. Electrical machinery of all types will be used to move the product around from one tank to another. Final assembly of these components are done by more than a thousand craftsman and professionals from a wide range of engineering and construction disciplines. Once assembled and tested, the platform will begin the final check-out phase to determine if oil or gas can start flowing and enter process steps that will deliver product to the customer.

Many strategies and methodologies are used to accomplish this task in a timely manner. The general parts of this supply chain are discussed.

AMEC Paragon requires people with specific expertise, who can travel to exotic locations around the world. The specifics of a supply chain will change from one project to another but the general process will be the same. Creative solutions must be obtained from a constantly changing labor pool, from different areas of the world. The Human Resource Department must stay connected with a network of professional personnel who have the expertise to complete these projects.

AMEC Paragon requires vendors who can manufacture, fabricate, or supply very specific equipment and services that will pass ISO 9000 and ISO 9001 certification. Each of these must have the ability to supply their products and services under the restraints of a very strict construction schedule.

The Contracts Department must maintain specific and up-to-date agreements with this network of personnel and vendors. Geographical location and political considerations are a key driver for these legal agreements. Contacts with lawyers and negotiators in each region must be maintained and enhanced as a part of doing business.

The Procurement Department, with support from Contracts, insures that the specific product and services required by customer specifications match the engineering design of the platform. Procurement then follows the product and service to contract delivery and completion.

The Scheduling Department maintains data about product and service requirements in specific time periods. The Logistics Department will use scheduling data to insure