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Procurement and Dotcoms

Back in 2000, as the CEO of a then-highly-visible construction-related dotcom (HeavyWare), I was invited to speak at a forum at the Haas School of Business, University of California: The Berkeley Forum on Procurement and Marketplace Transformation. . I was not infected with the boundless enthusiasm and unrealistic expectations of many participants in the dotcom boom. I had a dotcom because I had already seen that the internet was going to be a big deal, but I also knew that the complexities of commercial construction were daunting in real life. In speaking there I felt like a party crasher because I did not speak of how internet magic would rapidly transform procurement in commercial construction. As I have noticed many times (most recently in comments on this AEC Bytes blog post on BIM), software folks are apparently unable to imagine the complexities embedded in the what and how of commercial construction (there is no blame here, it took me years to begin to vaguely grasp the full complexity).

There has been much change since this was written. Construction-related dotcoms either disappeared or morphed into much less ambitious companies. At the same as the dotcom euphoria was subsiding, an organization was emerging with more realistic approach. It was driven by large owners. Fiatech has a goal to  make step change improvement in the design,  engineering, construction, and maintenance of large capital assets. Their work on procurement is eminently sensible, focused on foundational work, and in line with my points in this presentation. The scope of their procurement projects is: Provide the building blocks of standard processes, classification systems, and data exchange mechanisms to enable fully integrated and automated procurement and supply management systems. These systems support the seamless execution of procurement functions throughout the selection, delivery, and payment processes.

In line with my understanding of the critical nature of interfaces in construction, they recognize that although commonly used materials compose a large percentage of capital projects, the process for selection and procurement consumes considerable amounts of time and is prone to a variety of errors and oversights. Their first product-specific project involves valves. Valves are critical in many industries. From my particular informational perspective valves are a product with known and bounded attributes and constraints and most important, with well-defined standard interfaces to other elements (pipes, etc.). In BIM terms, information about valves can be a BIM object that actually knows its place – knows the rules about interface – and can possibly be part of a model that requires no or minimal human intelligence to become a set of manufacturing and installation instructions rather than a statement of “design intent.” This of course is a major step to facilitating procurement.

Nevertheless, the principles I roughly outlined in this presentation have not changed and are worth considering. Also, keep in mind that overall, A/E/C is more chaotic and complex than E/P/ C and my context is typically A/E/C, because I live there.

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