A roadmap towards a resilient internal supply chain of welding equipment & consumables

A roadmap towards a resilient internal supply chain of welding equipment & consumables

Eggink, H.N.P.

Zuidwijk, R.A. (mentor)
Behdani, B. (mentor)
Van Duin, J.H.R. (mentor)

Civil Engineering and Geosciences

Transport & Planning

MSc. Transport, Infrastructure & Logistics

2013-09-19

Allseas is one of the major offshore pipeline installation and subsea construction companies in the world. The process of pipeline installation is executed by operating specialised vessels, which are designed in-house. Allseas executes the pipeline installation with the S-lay method. The pieces of pipe (the joints) are assembled to form one pipeline in a horizontal working plane, the “firing line”, on board of the vessel. First the two joints are welded together, followed by the inspection step (Non-Destructive testing) and before leaving the vessel the pipe is coated (Field Joint Coating). The system analysed in this research is the equipment-unit of Pipeline Production Department (PPD). PPD is responsible for the preparation of all offshore welding, NDT and coating services. PPD encountered problems with timely delivery of their project equipment and consumables and seeks for measures to solve this. This thesis will focus on the internal supply chain of the welding unit within PPD. The other supply chains are out of scope due to the complexity of the whole system. Problem Definition Due to strict norms and regulations in the offshore industry almost all procedures need to be qualified onshore. Only if procedures get approval from the client, the process can continue. This imposes difficulties for the internal supply chain of the welding unit. The wish of Allseas is to control and optimise the logistics of project equipment and consumables for the welding unit. This means reducing the vulnerability of the internal supply chain for a disruption. The ability of a system to withstand and accommodate a disruption is called resilience. In this thesis the following definition of resilience is used: resilience is the ability of a system to return to its original form after unforeseen changes. This ability of the system can be defined in a twofold matter, the time to recover to the original form and the impact this unforeseen change temporarily has on the system. A system can develop resilience in a threefold manner by increasing redundancy, building flexibility into the system, and the right corporate culture. The work of Sheffi will be the theoretical framework for this thesis. By improving the flexibility of a chain the time_to_respond to a disruption will become shorter. A more resilient culture and a higher level of redundancy will reduce the impact of a disruption. Research Objective Based on the problem definition the following research objective can be stated: Increase the resilience of the internal equipment and consumables supply chain of Allseas' welding department to cope with the disruptions stemming from the seasonal planning. Based on the research objective the main research question for this thesis is the following: How to increase the resilience of the internal equipment and consumables supply chain of Allseas' welding department to cope with the disruptions stemming from the seasonal planning? This research question is assessed and the results of this research are shown in three parts: part I: qualitative analysis, part II: quantitative analysis, and part III: roadmap. Part I: Qualitative Analysis The goal of part I was to determine the root cause of the problem with handling disruptions. This in order to gain insights in the system and to search for the drivers behind the problems in the chain. This qualitative analysis starts with a disruption analysis followed by the bottlenecks and finished with a search for lessons learned from other industries. The disruption analysis is conducted based on a framework of disruption assessment by Jüttner, Peck, & Christopher. This framework makes a distinction between on the one hand risk sources and on the other hand risk drivers and their mitigating strategies. This framework is applied on Allseas for example when dealing with a vessel swap. The risk sources are not the main cause of problems in the disruption handling of PPD. The reason why the previous vessel swap was executed in such a chaotic way was due to a lack in general preparation at the equipment side and not communicating in a proper way. The supply chain risk drivers were the basis of the bottleneck analysis. By assessing the drivers as the bottlenecks. Clear problems were pinpointed and the effect of these bottlenecks on resilience is shown as well. • Communication is a big problem within PPD. There is not a structured way to communicate and this influences the execution of projects. The lack of communication influences the flexibility of the chain because the current way of communicating consumes the much needed preparation time. • The innovative culture of Allseas helped them to be one of the major companies in their industry; however it is now a threat to their supply chain. Innovations cannot be planned or scheduled and this implements high uncertainty to the chain. • The current way of equipment handling does not have an explicit strategy, therefore it is not clear why some equipment is purchased and other equipment is rented (the make or buy decision). These uncertainties in the equipment pool influence the redundancy of the chain. In the chaotic ad-hoc way of working everyone choses the quick fix instead of working on a more fundamental solution. The measures that are going to be tested only have influence on the flexibility of the system and not on the redundancy or the culture of this system. This is due to the fact that improvements on redundancy cannot be tested in this system. The lack of transparency in the equipment pool makes it impossible to see whether or not improvements are made. Culture is as well not tested due to the ambiguous nature of this topic and is therefore difficult to quantify. Culture will, however, be part of the roadmap towards a resilient chain. Flexibility will be the core of the measures that will be tested in part II. Especially the time between different tasks is important. The influence of these tasks on each other and on the time to make the deadline of mobilisation of a project is important. ? Part II: Quantitative Analysis In part I the system was analysed and from the synthesis it can be concluded that the relations between different processes in a project are of major importance. The interdependencies between different projects influence the total project time. To assess the influence of the interdependencies the total project time the impact of the sequence of events is evaluated. This sequence of events is called the critical path of a project. One alternative set up will be tested in this analysis; this scenario is based on the conclusions of part I. The goal of the scenario analysis is to quantify the improvements in the internal supply chain of PPD. The changes in the process should be shown in a different critical path and a reduction in total process time. To improve the flexibility the two main lessons are taken into account in the improved schedule. • The first lesson is to have a “Kingpin”, a central point to be the controller of the whole process. • The second lesson is that preparation is key for flexibility. This is done by: a split in the information flow and the equipment flow and creating an explicit step of organising equipment. By decoupling planning of the equipment from the mobilisation process more time_to_respond is created. With these changes the chain will be more flexible in order to improve the resilience of the internal supply chain of welding equipment and consumables. From the analysis it can be concluded that the new supply chain set-up is more flexible and in the end will increase the resilience. The two disruptions did not have an effect on the internal supply chain in the new internal supply chain set-up. The effect of moving the step of planning the equipment forward in the chain created time_to_respond to a disruption. And with this creation build in the system one of the major aspects of a resilient chain is gained. Part III: Roadmap The framework of Sheffi proposed three types of solutions to increase the resilience of a supply chain. This can be done by increasing the flexibility and redundancy, and changing the culture. Per type of solution the following should be implemented to increase the resilience of the internal equipment and consumables supply chain. Flexibility; the procedures and the equipment needs to be pre-qualified onshore before going offshore. This is the reason that preparation is key. The new internal supply chain set-up splits the internal supply chain in an information and a physical flow of goods. With parallel processes the internal supply chain has time_to_respond to disruptions and contributes to a more resilient supply chain. Redundancy; the equipment database needs to be fully up to date before decisions concerning equipment can be made. When all the equipment is updated an assessment can be made on the criticalness of certain equipment. And criteria can be set up to make the make or buy decisions. Culture; the culture issue has not been a major part of this thesis. However, using the OCAI method as an initial analysis it is apparent that a culture change is a necessary. This cultural change is a precondition to implement the measures.

resilience
supply chain
disruption

http://resolver.tudelft.nl/uuid:f8da5bbf-b6dc-4c70-8175-c62510874b3c

2016-09-19

Student theses

master thesis

(c) 2013 Eggink, H.N.P.