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Engineering and construction digital supply chains


The digital effect on engineering and construction supply chains

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Today’s engineering and construction supply chains are still largely analog, with processes that are manual and with only limited automation. Without real-time supply-chain coordination and execution, these companies have limited ability to forecast schedules when work will be done and when materials and equipment will be needed. A digital supply chain can provide connections across the value chain and ecosystem, leveraging multiple sources of data to create transparency, provide advanced planning, and predict and avoid future problems. To take full advantage, engineering and construction organizations need to enable these capabilities through a set of levers. With input from 250 executives worldwide, we explore how leading organizations have prepared for a digital supply chain, as well as what others can learn from them.

The need for a digital supply chain

Engineering and construction supply chains are a complex network with numerous relationships and materials, products /services, logistics and information, and money flows. These complex projects involve thousands of participants from hundreds of organizations and require volumes of documents and drawings. Increasing fragmentation in the industry adds to this challenge by adding more suppliers and contractors. Difficulty in controlling and managing construction arises from a project-based orientation (each project is unique) and from the many suppliers involved. Each player has its own schedule. Integration and synchronization of a master schedule is needed to manage the entire project lifecycle. Risks and disruptions in the supply chain can lead to lost materials, waste, increased downtime, and inefficiencies.

Compounding the industry’s flat productivity, engineering and construction supply chains continue to be challenged by “pre-digital” processes that are manual, on paper, by phone, by people, and with little automation. Without real-time supply-chain coordination and execution, these companies have limited ability to forecast schedules when work will be done and when the next materials/equipment will be needed. As such, it is vital these companies take action and invest in digital to increase visibility and optimize their supply chains.


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Meet the authors

Vishal Bhargava

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, Executive Partner, IBM Global Industrial Products Engineering, Construction, and Operations


José R Favilla

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, Worldwide Director for Industrial Products


Raman Chander

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, IBM Global Leader, Chemicals & Petroleum and Industrial Products Center of Competency


Wilco Kaijim

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, Executive Partner, Global Industrial Products Engineering, Construction, and Operations


Spencer Lin

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, Global Research Leader, Chemicals, Petroleum, and Industrial Products, IBM Institute for Business Value



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