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Integrated Acquisition Engineering Model for acquiring heavy engineering assets

Shinde, Jagdish Shivaji, Ma, Lin, & Karim, Azharul (2011) Integrated Acquisition Engineering Model for acquiring heavy engineering assets. In Singh, Manish, Rao, Raj B.K.N., & Liyanage, J.P. (Eds.) Integrated Acquisition Engineering Model for acquiring heavy engineering assets, COMADEM International, Clarion Hotel, Stavanger, Norway, pp. 1625-1631.

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Abstract

In asset intensive industries such as mining, oil & gas, utilities etc. most of the capital expenditure happens on acquiring engineering assets. Process of acquiring assets is called as “Procurement” or “Acquisition”. An asset procurement decision should be taken in consideration with the installation, commissioning, operational, maintenance and disposal needs of an asset or spare. However, such cross-functional collaboration and communication does not appear to happen between engineering, maintenance, warehousing and procurement functions in many asset intensive industries. Acquisition planning and execution are two distinct parts of asset acquisition process. Acquisition planning or procurement planning is responsible for determining exactly what is required to be purchased. It is important that an asset acquisition decision is the result of cross-functional decision making process. An acquisition decision leads to a formal purchase order. Most costly asset decisions occur even before they are acquired. Therefore, acquisition decision should be an outcome of an integrated planning & decision making process. Asset intensive organizations both, Government and non Government in Australia spent AUD 102.5 Billion on asset acquisition in year 2008-09. There is widespread evidence of many assets and spare not being used or utilized and in the end are written off. This clearly shows that many organizations end up buying assets or spares which were not required or non-conforming to the needs of user functions. It is due the fact that strategic and software driven procurement process do not consider all the requirements from various functions within the organization which contribute to the operation and maintenance of the asset over its life cycle. There is a lot of research done on how to implement an effective procurement process. There are numerous software solutions available for executing a procurement process. However, not much research is done on how to arrive at a cross functional procurement planning process. It is also important to link procurement planning process to procurement execution process. This research will discuss ““Acquisition Engineering Model” (AEM) framework, which aims at assisting acquisition decision making based on various criteria to satisfy cross-functional organizational requirements. Acquisition Engineering Model (AEM) will consider inputs from corporate asset management strategy, production management, maintenance management, warehousing, finance and HSE. Therefore, it is essential that the multi-criteria driven acquisition planning process is carried out and its output is fed to the asset acquisition (procurement execution) process. An effective procurement decision making framework to perform acquisition planning which considers various functional criteria will be discussed in this paper.

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ID Code: 41942
Item Type: Conference Paper
Keywords: Procurement, Multi-criteria, Asset, Maintenance, Operations
ISBN: 0-9541307-2-3
Subjects: Australian and New Zealand Standard Research Classification > ENGINEERING (090000) > MECHANICAL ENGINEERING (091300)
Divisions: Past > QUT Faculties & Divisions > Faculty of Built Environment and Engineering
Past > Schools > School of Engineering Systems
Copyright Owner: Copyright 2011 COMADEM International and The Authors.
Copyright Statement: Date – 9 March 2011 Proceedings of the 24nd International Congress on Condition Monitoring and Diagnostic Engineering Management - COMADEM 2011 • Proceedings Proceedings of the 24th International Congress on Condition Monitoring and Diagnostic Engineering Management (COMADEM2011) • Volume Editors Dr. Maneesh Singh, Prof. Raj B. K. N. Rao and Prof. J. P. Liyanage • TITLE OF THE CONTRIBUTION INTEGRATED ACQUISITION ENGINEERING MODEL FOR ACQUIRING HEAVY ENGINEERING ASSETS • Complete name and affiliation of the author & co-author/s: JAGDISH SHINDE PROF. LIN MA DR. AZHARUL KARIM Queensland University of Technology, Brisbane, Australia. It is herein agreed that: • The copyright to the contribution identified above is transferred to COMADEM International. The copyright transfer covers the exclusive right to reproduce and distribute the contribution, including reprints, translations, photographic reproductions, microform, electronic form (offline, online) or any other reproductions of similar nature. • The Author may publish his/her contribution on his/her personal Web page, by prominently adding "© COMADEM International", meaning that the copyright for this contribution is held by COMADEM International. • The Author may not publish his/her contribution anywhere else without the prior written permission of the publisher unless it has been changed substantially. • The Author warrants that his/her contribution is original and does not infringe on any copyright, trademark, patent, statutory right or propriety right of others. • The Author signs for and accepts responsibility for releasing this material on behalf of any and all co-authors. • In return for these rights, the Publisher agrees to publish the identified contribution at his own cost and expense. • The undersigned hereby gives permission to COMADEM International to publish the above contribution to the above book. Author's Signature : .........................................................................
Deposited On: 09 Jun 2011 08:47
Last Modified: 01 Jul 2011 14:12

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