Stud Mas Indu Auth Facu Com Title Sub Cred Key Sub Dire COS Mai Sub Sub EP p HZ2
dy program ster Degree ustrial Econ hor: Li Yan ulty supervi mpany Thesi
e of thesis:
contractor M dits (ECTS) y words:
contractor M ectional Dril SL
in Contracto contractor S contractor P project 25-8/EP24-2
Fa
/ Specializa Program of omy
nwei isor: Profess
is Advisor:
Managemen ): 30 ETCS
Managemen lling or
Selection Performance
2/XJ24-3B
aculty of S
MAST
ation:
f
sor. Tore Ma Li Yong (C
nt in Directio
nt
e Evaluation
Science a
TER’S
Spring Open A
arkeset
COSL)
onal Drilling
n
Pages:
China,
nd Techn
THES
semester, 2 Access
g Departmen
71 (body) June 2015
nology
SIS
015
nt of COSL
I wo Feng spon COS I wo and had com Fina me w feel Afte final
ould like to gyang and nsored my f SL, without ould like to valuable su
done durin mbine industr
ally, I would with whatev lonely whe er 18 years f
lly apply to
o express m many oth full time stu them this c thank my t upporting an ng my study ry activities d like to tha ver “crazy”
rever and w full time stu me at this m
“Mom
Ackn
my apprecia hers at Chi udy for this could not be thesis advis nd instructio y in UIS in s and academ ank my fam
decisions I whenever I a udies as a stu
moment as r m won’t wo
nowledg
ation to Mr ina Oilfield Master degr possible.
or Professo on during the
2014. He h mic research ily and frien I’ve made. W am actually
udent, one s rewarding:
orry about m
ement
r. Li, Yong d Services ree from ye or Tore Mar e thesis writ has also be h together a nds who hav With your l
alone.
statement cu my study any
g, Mr. Zi, S Limited (C ear 2013 to 2 rkeset for gi
ting process een the role long my car ve believe i love and sup urrently pop ymore”
Shilong, M COSL) wh 2014 on beh iving me co s just like w model for reers.
in me and su pporting, I d pular in Chin
Mr. Xu, o had half of onstant what he me to upport do not na can
Tab Cha 1.1.
1.2.
1.3.
1.4.
1.4.
1.4.2 1.4.3 1.4.4 Cha 2.1.
2.1.
2.1.2 2.1.3 2.2.
2.3.
Cha 3.1.
3.2.
Cha 4.1.
4.1.
4.1.2 4.1.3 4.1.3 4.1.3 4.1.4 4.1.5 4.1.6 4.1.7 4.1.8 4.1.9 4.1.9
ble of Conte In apter 1.
Ty M Ob M 1 Th
2 Re
3 Da
4 Et
W apter 2.
Re Hi 1.
Ho 2.
Le 3.
Be Fa Pr apter 3.
A A Ge apter 4.
Su Pu 1.
Te 2.
Re 3.
3.1. Ge
3.2. M
Op 4.
Pl 5.
Op 6.
Ov 7.
Fl 8.
W 9.
9.1 Ge ents
troduction . ypes of Subc Major Challen bjective of T Methodology
hesis Structu esearch wor ata Resourc thics, Valida Why subcontr elationship B ierarchical S orizontal Ne ean Supply M enefits of Su actors Affec reviously us Neural Net Web-based eneral view ubcontractor urpose of Re erms and De esponsibility eneral Mana Marketing De peration and anning and peration Un versea Proje
ow Chart ...
Working Proc eneral Princ
...
contractor ..
nges Faced The Thesis . y of The Stud
ure ...
rk flow ...
es ...
ation and re racting ...
Between Ge Subcontract etwork-Typ Model of Th ubcontractin cting Subcon ed subcontr twork Metho d Subcontrac of subcontr r Manageme egulation on efinitions ...
y and Autho ager ...
ept. ...
d QHSE De Financing D nit ...
ect Team ....
...
cedure ...
ciples ...
...
...
By COSL . ...
dy ...
...
...
...
liability of t ...
e njneral Co tor-Contract pe Subcontra he Subcontr ng ...
ntractors’ Pe ractor select od In SC Ra ctor Evaluat ractor mana ent Regulati n Bidding &
...
ority ...
...
...
ept. ...
Dept. ...
...
...
...
...
...
...
...
...
...
...
...
...
...
the data ...
...
ontractor An tor Relation actor-Contra
ractor-Contr ...
erformance tion method ating ...
tion System agement syst
ion On Bidd
& Bid Invitat ...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
nd Subcontr nship ...
actor Relatio ractor Relat ...
...
ds ...
...
m ...
tem of cosl ding & Bid tion ...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
ractor ...
...
onship...
tionship ...
...
...
...
...
...
...
d Invitation . ...
...
...
...
...
...
...
...
...
...
...
...
... 8
... 9
... 9
... 10
... 10
... 10
... 11
... 12
... 13
... 14
... 15
... 15
... 15
... 15
... 18
... 18
... 21
... 22
... 222
... 27
... 27
... 27
... 27
... 28
... 28
... 28
... 28
... 28
... 28
... 28
... 31
... 31
... 31
4.1.
4.1.
4.1.
4.2.
4.2.
4.2.2 4.2.3 4.2.4 4.2.5 Cha 5.1.
5.2.
5.2.
5.2.2 5.2.3 5.2.4 5.2.5 5.2.6 Cha 6.1 6.2 6.3 Cha 7.1 7.2 7.3 App Refe
SE 10.
Bi 11.
11.1 Res Re Pu 1.
Te 2.
Re 3.
W 4.
On 5.
A apter 5.
Fa Ill 1 Pr 2 Su
3 Se
4 Su
5 Pe
6 Fin Su apter 6.
W W Ch 7. Co apter
Fi Re Li pendix A. 52
erence 53
ELECTION idding Docu sponse Befo
egulations o urpose ...
erms And D esponsibility Working Proc nsite Coord
new try of s actor-Based lustrative Ex oject Descri ubcontractor ensitivity Of ubcontractor erformance
nancial Ana ummary of T What the auth What Can Be hallenges Fa onclusions .
ndings and ecommenda imitation Of 2
3-56
N OF Evalua uments Eval ore Bidding on Subcontra
...
Definitions ..
y And Auth cedure ...
ination and subcontract Weigh Sum xample ...
iption...
r Capability f Each Facto r selection ..
Comparison alysis of Fac This Study . hor had learn
Done Furth aced During ...
conclusions ations For D f This Study
ators Of Bid luating ...
...
acted Opera ...
...
hority ...
...
Supervision tor managem m Method F
...
...
y Evaluation or To Projec
...
n ...
ctor-Based C ...
nt ...
her Of This g The Thesis
...
s of this stud Directional D y ...
d Documents ...
...
ation ...
...
...
...
...
n Managem ment in ep p or Subcontr ...
...
n ...
ct ...
...
...
Checklist M ...
...
Study ...
s Writing Pr ...
dy ...
Drilling Dep ...
s ...
...
...
...
...
...
...
...
ment ...
project ...
ractor Selec ...
...
...
...
...
...
Method ...
...
...
...
rocess ...
...
...
partment Of ...
...
...
...
...
...
...
...
...
...
...
tion ...
...
...
...
...
...
...
...
...
...
...
...
...
...
f COSL ...
...
... 31
... 31
... 31
... 34
... 34
... 34
... 34
... 34
... 37
... 40
... 40
... 41
... 41
... 41
... 43
... 44
... 45
... 45
... 47
... 47
... 48
... 48
... 50
... 50
... 50
... 50
Table of Figures
Figure 1 The outsourcing and subcontracting process ... Error! Bookmark not defined.
Figure 2 The model of a hierarchical subcontracting system ... 14
Figure 3 The evolution of subcontractors’ core business offered to the main contractor . 15 Figure 4 A simple example of Neural network architectureError! Bookmark not defined. Figure 5 Phases during a typical bidding process ... Error! Bookmark not defined. Figure 6 Simplified sub-contractor selection during the bidding process ... 24
Figure 7 Evaluation criteria for subcontractor selection ... 25
Figure 8 Evaluating and selecting subcontractor using WEBSES... 26
Figure 9 Division-level bidding flow chart ... 29
Figure 10 Regional-level bidding flow chart ... 30
Tables
Table 1 Financial condition in recent three years of COSL ... 27
Table 2 Workload and Difficulty Index of HZ25-8&EP24-2&XJ24-3B ... 41
Table 3 Evaluation of key equipments’capability………... ....42
Table 4 Experience of each subcontractor ... 42
Table 5 Timely delivery of the subcontractors ... 43
Table 6 Cost per meter of the subcontractors ... 43
Table 7 Price of the subcontractor ... 43
Table 8 Sensitivity to the identified factors………. ... 44
Table 9 Final score of each subcontractor to each sub-project ... 44
Table 10 Performance comparison of SLB ... 45
Table 11 Performance comparison of BHI ... 45
Table 12 Performance comparison of HAL ... 45
Table 13 Improvement rate of the three subcontractors ... 45
Table 14 Workload distribution of the three subcontractors ... 46
Table 15 Saved time per year ... 46
Table 16 Cash value of the performance improvement ... 46
Abbreviations
CI – Construction Industry SC – Subcontractor NN – Neural Network
JCT - Joint Contracts Tribunal RSS – Rotary Steerable System LWD – Logging While Drilling MWD – Measuring While Drilling TVD – Total Vertical Depth MD – Measured Depth CLD – Closure Distance SLB – Schlumberger BHI – Bakerhughes HAL - Halliburton
NPT – Non-Production Time
CH
Alon inev amo cont term and have adva strat good succ Subc pros inclu field Ked mov Kha Nort thro who subc prov villa cont
HAPTER
ng with the vitably conn ong compan tractor and m competitiv
focus on a f e a world cl anced tech tegically mo d understan cess.
contracting specting in
uding oil in ds such as dem & Reuv
ving some amanarong
theastern re ugh which m o are local
contractors i vides raw m age industry tractor. A ty
Fig
R 1. INT
e rapidly ch nected with nies become
subcontract ve advantag few core ac lass status. E hnology fie ore critical f nding of the
can be tr manufactu ndustry. Su
accounting veni (Magn
activities (Khamana egion of Th
medium-siz villagers.
in the villag materials or
y has finish ypical subco
g.1. The outso
TRODU
hanging env h each othe
es more an tor at the sa ge, compani tivities and Especially c elds find for survival
e need of t raced back ring indust ubcontractin
to other o nezi et al.,
to other arong, 2000
hailand, sta zed or large The main ge. When vi tools of pro hed the con ontracting p
urcing and su
UCTION
vironment o er directly o nd more co ame time. A ies have to subcontract companies o extensive than before the main co k to 1920s
try, and fin ng takes pl organization 2006) state organizatio 0)decribed ating that s industries s contractor illagers have oduction to
ntracted wo process is ill
ubcontracting
N
of industry or indirectly omplex. A c As a main co
constantly r t all other ac operating in
subcontrac e. In the mea ontractor is
, first used nally spread
ace when o ns that are ed that subc ons to ach
the subco ubcontractin subcontract
provides te e finished th the village ork, the wo lustrated by
g process (Kh
economy, y, and the company c ontractor, to
reorganize t ctivities in w
volatile, hig cting more anwhile, as
important d in const d into almo organization experts. M contracting
hieve effec ontracting ng in the a
some work echnology a he training,
to produce ork is retur Fig.1 below
hamanarong,
each comp inter-relatio an be both o maintain a their value which they gh customiz e attractive a subcontra for a comp truction ind ost all indu ns moved jo Magnezi, Da
is the proc ctive produ
process in area is a p
to subcontr and skills the subcont goods. Wh rned to the w.
2000)
any is onship h main
a long- chains do not zed, or e and actor, a
pany’s dustry, ustries, obs in ankner, cess of uction.
n the process
ractors to the tractor hen the e main
Dire dom drill tech syste com com direc subc mark
1.1.
A su perf subc main paid mos rang num The In th cont work furth In th and subc skill The cont cons subc Dom A su or g emp Nom Cert final prof
ectional dril mestic offsho
ling. But di hnique in di
em, in most mpanies such mes to world
ctional dril contractor s ket and qua
Types o .
ubcontractor form part o contractor is n contractor d for service st common ge of opport mber now op incentive t his way the tractor coul
k for the sa her specializ he United K
service a contractor c ls to a wide Joint Contr tract for con struction ind contractor(1 mestic subc ubcontractor goods or exe ployed by th minated sub
tain contrac l selection a fit from the
ling, as an i ore oil drilli fferent from irectional d t projects CO h as Schlum dwide oil ind
lling depar selecting pr alify in the a
of Subco
r is an indi or all of th s like a pers r) to perform es provided
concept of tunities for perate in the to hire subc e general co
d have prov ame compa ze their skil Kingdom eco
diverse in community w
range of co racts Tribun nstruction, g dustry. Acco 1998) are ide ontractor r is who co ecute work f he main cont bcontractor cts permit th and approva
use of nom
important pa ing industry m the situat drilling such
OSL has to mberge, Bake dustry, almo rtment, to rocess. So h abroad mark
ontracto
ividual or i he obligatio on who is h m a specific to the proje a subcontra subcontract information contractors i
ontractor re vided by its anies rather
ls.
onomy, the nfrastructure with the ma ompanies.
nal, also kno guidance not ording to JC entified as b
ntracts with forming par tractor.
r
he architect al of subcon minated sub
art of oil ind y, COSL is t
tion of the o h as Rotary
subcontract erhughes an ost each oil get the p how to ma ket is critical
r
in many ca ons of anoth hired by a ge
c task as pa ect by the or actor is in b tor is much n technolog is either to eceives the self, at lowe
than differe need to resp e has encou ajority of su own as the J
tes and othe CT standard below:
h the main c rt of the ma
t or supervi ntractors. Th bcontractors
dustry, is hi the largest m other indust y Steerable t this part o nd Halliburto
company h roject, CO anage these
l for COSL’
ases a comp her's contra eneral contr art of the ov riginating g uilding wor wider and i gy and inform
reduce cost same or be er overall r ent ones. T pond to a ra uraged flex ubcontractor CT, produc er standard d d form contr
contractor to in contract.
ising office he main cont on site, bu
igh-tech inte main contrac try, due to
Assembly f service to on. On the as its own m OSL has to
subcontrac
’s success.
pany that s act(2007). I ractor (or pri verall projec general contr rks and civil it is possible mation secto ts or to miti etter service isk. Many s This allows
apidly chang xibility and
rs now prov es standard documentati racts, three t
o supply or Essentially
er to reserve tractor is pe ut must prov
ensive. In C ctor in direc
lack of adv and MWD/
some world other hand, main contrac o qualify i
ctors in dom
igns a cont In other w ime contrac ct and is nor
ractor. Wh l engineerin e that the gr ors of busin igate project e than the g subcontracto
subcontract ging enviro d diversity viding speci
forms of ion for use i types of
fix any ma y this contra
e the right ermitted to m
vide "attend China’s
ctional vanced /LWD d class , when ctor in in the mestic
tract to ord, a ctor, or
rmally hile the ng, the reatest ness.
t risks.
general ors do tors to onment in its ialised
in the
aterials actor is
of the make a dance"
(usu nom subc subc Nam Effe the m of th
1.2.
Core com choi is ha over
1.3.
In r COS subc over follo 1) 2) 3) 4)
1.4.
1.4
The subc illus to s subc The subc and
ually the pr minated sub contractors contractor.
med subcon ectively the main contra he main con
Major .
e technology mpanies such
ice for Well ard for Well rseas marke
Objecti .
response to SL, the the contracting rseas marke owing quest Why subco How to ma Give a gen directional Introduce a EP project.
Method .
.1 Thesi
e second c contractor a strate the be subcontracti contracting.
e third cha contractor, a
WBSES me
rovision of bcontractor
establishes ntractors
same as a actor to supp ntract. Essen
Challen
y in offshor h as BHI, SL l-Tech COS
l-Tech COS et.
ive of Th
the high s sis will foc cost in Ch et as well. A
tions:
ontracting an ake subcontr
neral view drilling dep a factor-bas
dology o s Structu
chapter wi and contrac enefit brough
ing and no apter will s
and then sh ethod.
f water, pow to do his a direct co
domestic su ply or fix an ntially this c
ges Face
re directiona LB and HAL SL’s directio SL’s directio
he Thesi
subcontracti cus on how hina’s dom At the end o
nd the benef ractor select
of the subc partment and sed weight s
f The St ure
ill firstly s ctor, and th ht by subco ormally ide
tart with ge how some d
wer, restroo job). In ontractual r
ubcontracto ny materials contractor is
ed By CO
al drilling in L, so subcon onal drilling onal drilling
is
ing proporti w to manag mestic mark of the thesi fit of subcon tion.
contractor m d find out th sum method
tudy
show us t hen use co
ntracting to entified crit eneral view detail of two
oms, and o effect the relationship
or - A subco s or goods o employed b
OSL
ndustry is ow ntracting wi department g departmen
ion of dire ge the subco ket and ma
s, the autho ntracting.
managemen he weakness d of subcon
the shift o onstruction o answer the
tical factor w of number
o specific m
other servic appointmen
between th
ontractor wh or execute w by the main
wned by som ill be the ch t. Dragged b nt to be quali
ctional dril ontractors t aintain its c
or will be ab
nt system u s of this sys ntractor man
f the relat industry as e question w r needed to rs of metho methods suc
ces to enab nt of nom he client an
ho contract work formin n contractor.
me internati hoice and the
by this reali ified in the
lling operat to lower CO competiven
ble to answ
used by CO tem.
nagement u
tionship be s an examp why it is nec
o consider ods used to
ch as NN m ble the minated
nd the
ts with ng part
.
ional e only
ty, it
tion in OSL’s ess in wer the
OSL in used in
etween ple to cessary
when select method
The fourth chapter will give a general view of the subcontractor management system used by COSL‘s Directional Drilling Department and point out the weakness of this system.
The fifth chapter will illustrate a factor-based weigh sum method of subcontractor management and use an example to illustrate the benefit it brought to Shenzhen base of COSL Well-tech directional drilling department in EP project.
The sixth chapter will discuss the research process of the thesis, including what the author had learnt and what can done further based on this study.
The Seventh chapter will offer conclusion of the study, recommendations will be presented and the limitations of the study will be explained.
1.4.2 Research Work Flow
Please refer to the diagram below for the work flow of the thesis.
1.4
From have
S Ov Re an
M
.3 Data R
m the resea e been used
Summary o fthe Identified ass
Overview o Subcontractor
Bidding verview of subc
mentho elationship of c nd subcontracto Manufacturing Why subc Definition of
Table 1 Th
Resourc
arch work fl by the thes
e Study Fa ociated factors of Subcontracto management in g process
S ontractor selec ods used contractor or in CI and
industry contracting
Revie subcontractor
hesis resear
es
low illustrat is:
Discussio andings and re the study A new try of W
Subc or management
n Subco
Subcontractor S tion NNM Subcontracto
HSC relation O How ew of the deve Ty
ch work flow
ted in Tabl
n and conclusio sults of y
R Well‐Tech COSL's contractor selec project t system of We ontractor mana
operation pro election metho of subcontracto
method or management nshihp
Objective of the w to select subc elopment of sub
ypes of subcont
w (Khamana
e 5, we can
on of the Study Recommendatio Well‐Tech CO Directional Dri Departmen s subcontractin ction in EP
ll‐Tech COSL's D agement in ocess
ods used in CI in or selection
t system overvi HNSC relation Thesis ontractor bcontractor ma
tractor
arong, 2000)
n see that f
ons for
SL's illing nt
lim g job
Compariso pe Directional Drill
Weakness o mana ndustry
ew nship
L con A suitable me
selection i Directional nagement
Role of Well‐T Drillin
)
four kinds o
mitation of the on of subcontrac
erformance ing Departmen of this subcontr gement system
WBSES Lean supply mo
ntractor‐subcon relationship ethod for subco
in Well‐Tech CO Drilling Depart Tech COSL's Dir ng Department
of data
study ctors' t ractor m
del of ntractor p ntractor OSL's
tment ectional
1) Data of subcontractor management within subcontractor selection process at construction industry.
2) Data of financial performance of Well-Tech COSL directional drilling department.
3) Data of subcontractor management within bidding and operation process at Well- Tech COSL directional drilling department.
4) Data of performance of some international enterprises such as SLB, BHI and HAL in previous and recently finished subcontracted projects.
1.4.4 Ethics, Validation And Reliability Of The Data
From the research work flow we can see that all the data being cited by the study are derived from credited literatures, or credited public data base that are open to everyone to use.
Meanwhile the research process are based more on industry practice review, it is not data critical but most qualitative and situate at industry overall level, therefore the conclusion and comments is validate and reliable to the industry in general in spite of limitations of the quantitative data being collected from different industries and geologic regions.
CH
2.1.
As m radic core subc there cont on F base acco 1996 vola mor Roz
2.1.1
This solv be d far a resp seco narr subc
HAPTER
Relatio .
Subcon
mentioned i cal changes e activities, contracting e has been tractor relati Finnish man ed on long- ording to th
6, while th atile, high c re attractive zemeijer, 199
Hier 1.
s type of sub ving, and is o described as
as five layer ponsibility fo
ond tier subc rower range contractors a
Fig.
R 2. WH
onship B ntractor
in Chapter 1 s. Companie where they all other ac n a clear ionships am nufacturers
-term contr e study, an he same fig customized, e and strateg
96).
archical
bcontractor- one importa a tier struct rs below gen or product d contractors
of products are given ev
.2. The model
HY SUB
etween G
1, the conte es are reorg can achiev ctivities in shift towar mong the ma shows that racts increa average of gure in 198 or advance gically mor
l Subcon
-contractor r ant reason fo ture (see Fig neral contra developmen are smaller, s, and work ven less sop
l of a hierarch
BCONTR
General
ext in which ganizing the ve and main
which they rds long-te anufacturers the number ased from 6 f 42% of the 88 was 38%
ed technolo re crucial fo
ntractor-
relationship or the comp g. 1); sub-su actor. The fir nt, systems u , have less e on producti phisticated in
hical subcont
RACTI
Contrac
h most comp eir value ch ntain a long- y do not hav
erm, comm s. One study r of subcon 66% to 83 e sales went
%. Especia ogy fields fi for survival
-Contrac
p emphasize petitiveness ub-contracti rst tier supp undertakings expertise, ge ion and/or p n terms of c
tracting syste
ING
ctor And
panies oper hains and fo -term comp ve a world- mitment-base y conducted ntractors wh
% between t to the gen ally compan find extensiv than befor
ctor Rela
s synergisti of Japanese ing in Japan pliers have b s and JIT de enerally spe processing. T competence
m (Lehtinen,
d
rate is under ocusing on etitive adva -class status ed subcontr d by Ulla Le hose product n and 1996 neral contrac
nies operat ve subcontr re(van Weel
ationship
c problem e producers.
n may go dow been given
eliveries. Th cialize in a The third-tie
and activiti
, 1999)
rgoing a few antage,
s. And ractor- ehtinen
tion is 6. And
ctor in ting in racting
le and
p
It can wn as he
er es.
2.1.2
Alon partn be d busi prof exch tech Und grad
Fig.
In th gene cont resp Whi gene
2.1.3
Lean bank play mea capi think
Hori 2.
Rela
ng with the nerships is b described as
iness enterpr fessional ski hange of ide hnology dev der this type dually as pre
3. The evolut
he first stage eral contract tractor beco ponsibility fr
ile a subcon eral contract
Lean 3.
Rela
n thinking krupt Japa yer(Wikimed ans using lea ital – whil
king(Woma
Specify by pre- complex
Identify product
zontal N tionship
developmen being adopt
a “network rises, includ ills and expe eas, informa
elopment ba of relations esented in F
tion of subcon
e the subcon tors. When omes succes rom product ntractor evol
tors other v
n Supply tionship
was born o anese autom dia Founda ast amount o
e giving c ack et al., 20
Value. Valu -existing o xity of no in y the value
to the custo
Network- p
nt of industr ted at an inc k-type” orga ding small to
ertise. The m ation and be
ased on long ship, the cor Fig. 3
ntractors’ cor
ntractor usu the relation sively more tion to syste lves towards alue-added
Model o p
out of stud maker in tion, 2015) of effort, en customers e 013) are illu ue can be de rganisations nterest to the stream. The omer.
-Type Su
ry, a new ty creasing rate anization, wi o medium s main feature enefits, joint
g-term trust re business
re business of
ually offers o nship betwee e integrated
em producti s a system s operations.
of The S
dying the ri the early . Lean is d nergy, equip exactly wha ustrated as b
efined only s, especiall e customer.
e value stre
ubcontra
ype of subco e by US and ith cooperat size firms, e
es defining t problem so t and faith.
of the subco
ffered to the m
only limited en the subco
with time, t ion as well a subcontracto
Subcontr
ise of Toyo 1950s to doing more pment, time, at they wa below:
by ultimate ly engineer eam is all th
actor-Co
ontractor-Co d European c tion between
ach with its this partner olving, resea
ontractor us
main contrac
d number of ontractor an the subcontr as research a or, it starts t
ractor-C
ota Motor C today’s with less.
, facility spa ant. The pr e customer.
rs and exp he actions n
ontractor
ontractor companies.
n a wide ran s own
ship are arch and sually evolve
ctor(Lehtinen
f operations nd the genera
ractor takes and develop to offer to th
ontracto
Company f dominant
In other w ace, materia rinciples of Value is dis perts. They needed to b
r
It can nge of
es
n, 1999)
to its al pment.
he
or
from a global ord, it als and
f lean storted y add bring a
Lean enab and Subc econ corr way Offs inve subc Norm sche
To r thing
a
Flow. M single-ta
Pull. Le
Pursue p mistake n supply mo bling flow a
Warburton, contracting nomy, but o responding d ys in differe
shore supply entory to s
contractor-c mally the p eme 1.
reach a lean gs we shoul a) Global l The glob complex are redu main are location shown in
Make the va ask process t the custom perfection. T
s.
odel of the s and the elim , 2003). It is operation t often under demands on ent markets
y offers att upport a s contractor r hysical flow
S
supply mod ld pay attent logistic
bal logistic xity of the p uced as much
eas of impro n. Packaging
n the follow
alue-creating on large ba mer pull the There is no subcontract mination of s initially de
o low cost o rtaken witho n the associa
and deliver tractive cost slower resp relationship w in the sup
Scheme 1. Phy
del of subco tion to.
is the bigge physical flow
h as possibl ovement are g costs are m wing scheme
g steps flow atches.
product fro end to the p tor-contracto wasteful va eveloped in overseas sup out adequat ated delivery
ry systems t benefits, b
onse capab emphasise pply chain c
ysical flow in
ontractor-co
est concern i ws. Costs an le while kee e the packag minimized w
e.
w. Eliminate m you. Sell process of re
or relationsh ariation with manufactur ppliers is an te regard fo y systems. P need to be but the trad bility. Ther es the opti can be simpl
the supply ch
ontractor rela
in such a su nd transit tim eping the sam ging design while respec
e departmen l one. Make
educing tim hip is closel hin the supp ring industry n attractive or the mark Products com
designed w de-off is oft
eby, lean s imization o ly described
hain
ationship, th
upply chain a mes attached me level of
and the dist cting several
nts that exe one.
me, space, co ly associate ply chain(St y.
lure in our ket needs an
mpete in dif with this in ten high lev supply mod on supply
d in the foll
here are thre
as suggests d to these fl service. Th tribution cen l constraints
ecute a
ost and d with tratton global nd the fferent
mind.
vels of del of
chain.
lowing
ee
the ows e two ntre s as
b
c
These co any valu b) Value s
Under th product terms of
Every n practice operatio the supp c) Product Given th much as reducing planning
osts are gen ue to the pro tream map he lean mod throughout f time and m
ew opportun s. Typical c onal aspects
ply chain pe tion planni he plant loca s possible in g mainly the g.
Scheme
nerally unde oduct in acc pping
del, as show t the supply money.
Sche
nity must fi constraints a . Thus, mult erformances
ing
ations and t ncreasing th e transit tim
e 2. Packagin
esired since p ordance to c wn in the sch
chain proce
me 3. Value s
it several co are attached tidisciplinar .
the market s ereby the pe mes. Scheme
g cost distrib
packaging y customer ne heme, it con
esses and ide
stream mappi
nstraints ch to fiscal, le ry solutions
scale, it is cr erformances e 4 below sh
bution
yet necessar eeds.
siders the v entifies the
ing
haracterizing egal, politica are designe
rucial to pro s of the supp hows the pro
ry does not a
alue added t wastes main
g the busine al, commerc ed for increa
oduce locally ply chain by oduction
add
to the nly in
ss cial or
asing
y as y
2.2.
2
3
4
2.3.
Man (labo sche risk.
of su 1)
Producti constrai the finan
Benefit
1) Subcont if a com costs, su subcontr work do 2) Subcont without 2005) ex small en to produ 3) Subcont compan break ev best.
4) Subcont have acc example when it Northea
Factors .
naging subc our, materi eduled, and . Following ubcontracto Uncertaint
ion opportu nts like the ncial structu
ts of Sub
tracting can mpany emplo
uch as wage ract to other o not meet th
tracting enab expanding xplained tha nterprises ca uce for them tracting enab ny burdened
ven. Throug tracting allo cess to a nec e(Khamanar
is time to g ast Thailand
s Affecti
contractors ial, and ma
then pushin g I’ll presen ors.
ty in Work
Sch
unities are an availability ure and the g
bcontrac
n greatly red oys labourer es per day an r companies he requirem ble main co their faciliti at new produ an rarely ma m or reduce t bles itself to by such non gh subcontra ow main con cessary amo rong, 2000)
row crops, s d have a high
ing Subc
does not s achinery/equ ng them to s nt you some kload
eme 4. Produ
nalysed whi y of raw mat global logis
cting
duce main co rs itself, it w nd health in s, it only nee ment of quali
ontractors to ies or buyin uction requi ake. Thus, th their cost of o focus on it n-core busin acting, main ntractor to fi ount of perm
, labourers i such as rice h turnover r
contracto
simply invo uipment) in speed up th factors tha
uction plannin
ile consideri terials, the p
tics.
ontractor’s p will have a la surance, bu ed to pay fo ity, it can re o receive a la ng more mac
ires substan hey will loo f investment ts core busin ness, it wou n contractor inish an ord manent work
in Northeast e and corn. C ate during th
ors’ Per
olve asking nto the jobs
e work with at can greatl
ng
ing the mos plant produc
production c arge amoun ut if a compa or finished w efuse to pay.
arger than d chines. Swe ntial investm ok for new b
t.
ness. Otherw uld not even
can focus o der on time e
kers. For t Thailand l Consequentl he growing
formanc
them to a site whenev hout a clear ly influence
t relevant ction resourc
cost. For ex nt of employ any choose t work, and if
.
designed ord nson (Swen ments, which business part
wise, if a allow itself on what they even if it do leave factori ly, factories
season.
ce
allocate reso ver an activ r consciousn e the perform
ces,
xample, yment
to f some der nson, h
tners f to y do oes not
ies s in
ources vity is ness of
mance
The overall trend in almost all industries is to do the job faster and cheaper. So the subcontractor have to organise themselves to tackle this new context of tightened supply chain, which implies shorter but also more reliable delivery times.
A subcontractor must be able to suggest a price and a delivery date to its general contractor as soon as he receives a rough description of the expected order. And along with it is the truth that most of time, the subcontractor workload consists in a mix of certain orders (often corresponding to repetitive orders) and uncertain ones (corresponding to orders under negotiation).
Most of the time, delivery dates are suggested on the base of the production manager’s expertise; this can be efficient in a stable and known context, but this stability is more and more rare in the industrial environment(Geneste et al., 2003). In order to achieve a faster response to the final customers’ demand, the subcontractor’s managerial focus should be on issues concerning material and information flow in the network and within the companies. In the future, more shared education and other mutual development projects are needed between the general contractors and subcontractors to overcome the problems in logistics management and to promote the development of subcontractors’
business.
2) Labour Skill
As we all know, workers especially skilled/experienced workers may be unavailable when in the industry boom period. Each worker may have tens even hundreds of opportunities to work on numerous projects. So, most subcontractors have to recruit new workers to maintain the sufficiency of labour, but the quality of these newcomers is uncertain.
3) Field Coordination
The field coordination is considered the other most important factor. Some interface problems may arise during operation. Normally CPM (critical path method) is adopted by most general contractors to plan a project and evaluate the schedule of the project, and the critical path is always determined ahead of the project execution. But, when duration of the near-critical path is close to that of the critical path, the field coordination becomes particularly important. If the activities on near-critical or non-critical path are not planned properly, the duration of the project can be greatly affected which means longer project duration, more investment. Consequently, field daily coordination meetings are always needed to arrange the activities on the near-critical path.
4) Material Delivery
Though material delivery is considered least important among all factors, it can also lead to great uncertainty on project duration. Material delivery always goes along with uncertainty in work order. So here we consider both expected and unexpected material delivery.
As part of a project, material delivery is also determined when the plan of the project comes out. Doing a project, timely delivery of material generally is expected, otherwise, there will be extra float time on both critical and non-critical path. But, when the project
meets a sudden change such as something unexpected happen and the project cannot go exactly with plan, material delivery plan need to be changed either. Otherwise, the project may have to stop and wait for material, which means more non-production time and more money. In summary, how to manage subcontractors to timely delivery to both expected and unexpected work orders is an important part of subcontractor management.
CH
Subc impo main et al Met mod crite linea (Rah resp Kum mod Mor (Cro Alsu bid e Alar syste selec for a Rus com et al – 1.
Holt eval the u disa Kum partn (Ma and perf with In al will man
HAPTER
contracting ortant role i nly depend l., 2008).
thods have dels (Hatush eria (Russel ar program hman and K ponsibility-r maraswamy del for cont reover, Jase owley and ugair (Alsug
evaluation a rcon and M em that inco ction. They a comprehe sell and Sk mputer progr l., 1990) dev t et al. (Holt luating cons use of diffe advantages o maraswamy nering princ aturana et al
partnering formance an h periodic fe ll, a large nu
give som nagement in
R 3. PR
SUB ME
has been in the succe on the phil
been prop h and Skitmo
ll and Skibn mming (Ela
Kumaraswam elated fact
(Palaneesw tractor preq elskis and R
Hancher, gair, 1999) h and have pro Mourgues (A
orporates th y developed nsive evalu kibniewski ( ram to aid d veloped QU t et al., 1994 struction bid rent contrac of these met
and Matt ciples can b l., 2007) de practices.
nd allows M eedback.
umber of SC me details o
SC rating a
EVIOU BCONT ETHOD
widely use ess of constr
osophy of s posed using
ore, 1998), niewski, 198 azouni and
my, 2004) s tors for s waran and qualification Russel (Jase
1995), Ru have identif oposed meth Alarcón and he contracto a conceptu uation and u (Russell and
ecision mak UALIFIER – 4) provided dders. Furth ctor selectio thods.
thews (Kum be profitably
eveloped an The metho MCs to help C selection of two me and a Web-b
USLY U TRACT
S
d in the co ruction proj selecting “th g approache
evidential r 88), fuzzy s
Metwally, showed the selecting d
Kumarasw n and bid e elskis and R
usselKumar fied commo
hodologies d Mourgues, or’s perform
ual model th used it for th d Skibniews kers in prequ
– 2 by addin example ap hermore, Ho on methodol
maraswamy y applied to on-site eva od supports
SCs improv methods ha ethods: a n
based subco
SED OR SEL
onstruction jects. The su he right per es such as
easoning (S set theory ( , 2000). R importance different p wamy, 2000 valuation in Russell, 19 raswamy ( nly used cri for contract , 2002) pro mance predic hat helps to he proposed ski, 1990) d ualification.
ng some ext pplications o olt (Holt, 1 logies and d y and Matt the SC sele aluation met SC selecti ve their per ave been pro neural netw ontractor eva
LECTIO
industry (C uccess level rson for the multi-crite Sönmez et al
(Singh and Rahman and
of relationa parties. Pal
) focused n design an
92), Crow (Kumaraswa iteria for pre tor selection oposed a co
ction as one identify in d contractor developed Q . Then, Rus tra function of multi-attr 998) review discussed th
thews, 200 ection proce thod based o ion based o rformance b oposed. In th work applic
aluation sys
ON
CI). SCs pl l of these pr right job”(A ria utility t l., 2002), de Tiong, 2005 d Kumaras al, trust and laneeswaran on develop nd build pro wley and Ha
amy, 1996 equalificatio n.
ontractor sel of the crite formation n
selection sy QUALIFIER sell et al. (R ns to QUAL
ribute analy wed and an he advantag 00) showed
ss. Maturan on lean prin on their pre by providing
his part the cation to su stem.
lay an rojects Arslan theory ecision 5) and swamy d joint-
n and ping a
ojects.
ancher ) and on and lection eria for needed ystem.
R -1, a Russell LIFIER ysis for alysed es and d how na et al.
nciples evious g them author upport
3.1.
From sche
a b c M th su th th e b a a re 1 m 1
2
3
3.2.
A Neur .
m a methodo ematized in
Selecti a).
Parame b).
Compe ).
Main contra his is norm ubcontracto his subcontr here is a coh experience, becomes a p and belief.
ambiguity in educe the ex
998) devel method inclu
) Design o definition rules;
Fig. 4. A s
2) Programm network way to pr 3) Testing.
A Web .
ral Netw
ological poi three phase ion of the ra eters evalua etitor compa
ctor trying mally based ors and the c ractor select herent way t common se roblem usua The compl nvolved in t xperts ‘subj loped this N udes three p
of the NN.
n of the ne
simple examp
ming. This learn the de rovide a res This means
-based S
ork Met
int of view, es:
ating parame ation;
arison;
to select a on the eva competitors
tion process to solve the ense, or no ally solved exity of su the decision ectivity. In Neural Net phases:
Usually th etwork arch
ple of Neural
results in ecision mak sponse to the s checking th
Subcontr
thod In S
the process eters to be a
specialized aluation of b
‘characteri s it is not alw e problem. T ot explicitab by subjectiv ubcontractor n making pro
this recogn twork meth his phase c itecture and
network arch
a training kers’ behavio e informatio he network
ractor Ev
SC Ratin
s of subcontr assessed;
firm to car both the bi stics such a ways easy to This coheren
ble rules. T ve criteria, b r selecting, ocess, requi ition, Vito A hod to optim
can be divi d the defini
hitecture (Alb
set of exa our. Further on introduce performanc
valuatio ng
ractor selec
rry out part ds received as reliability o recognize nce can be ro Then, subcon based on pe
due to the ires a forma Albino (Alb
mize this p ided into tw ition of the
bino and Gar
amples suita rmore, the n ed by the us ce with a spe
n System
tion can be
of a projec d by the po y, size, etc.
precise rule ooted in intu ntractor sel ersonal expe e uncertaint alization aim bino and Ga
process. Th wo activitie network in
avelli, 1998)
able to mak network lear sers.
ecific algori
m
ct, and otential But in es, but uition, lection erience ty and med to
ravelli, he NN es: the nternal
ke the rns the ithm.
The Serk relev the b be il
Bidd espe amo duri
Web-based kan Kivrak
vant sub-wo bidding pro llustrated by
ding for co ecially in th ount of prof ng the biddi
d subcontra (Arslan et orks, speed ocess in con
y Fig. 5.
Fig.5. Phase
onstruction he internatio
fit level is ing process
actor evalua al., 2008) a up the selec struction in
s during a typ
projects is onal constru critically de
is illustrate
ation system aiming to se ction proces dustry. Pha
pical bidding
s a critical uction mark etermined a ed in Fig.6.
m was propo elect the mo ss and gain
ses during a
process(Arsl
l decision ket (Dikmen at this stage
osed by Go ost appropri time and co a typical bid
lan et al., 200
for constru n and Birgo e. A simplif
okhan Arsla iate SCs fo ost savings d
dding proce
8)
uction comp onul, 2004)
fied SC sel an and
r their during ess can
panies as the lection
Norm tradi that righ deve The cont a
Fig.6. Simp
mally, the l itional appr companies ht SCs for th
eloped.
web-based tains the fol a) Identify the crite qualified complet
plified sub-con
lowest bid p roaches (Tse should imp he right job d sub-contra llowing proc y the factors eria may in d members tion of the w
ntractor selec
price is usua erng and Lin plement a sy b. Thus, the actor evalua cedure.
that should nclude the s, reputation work on time
ction during t
ally the key n, 2002). Bu ystematic ev e web-based ation system d be conside
quality of n of the co
e, etc.
the bidding p
y determinan ut Arslan an valuation pr d sub-contr m was base ered in the su
production, ompany, ac
process (Arsla
nt factor for nd Serkan K rocess in th actor evalu ed on the IT
ubcontracto , efficiency ccessibility
an et al., 2008
r selecting S Kivrak point he selection ation system T technolog or selection y, employm to the com
)
SCs in ted out of the m was gy. It prcess:
ment of mpany,
b c
d
b) Data co MySQL data, and c) Set SC
illustrate
d) SC evalu In WEB which a Fig.8, th
ollection: co L, which is a d provide fa evaluation c ed by Fig7.
Fig.7. Evalu
uation in W BSES, SCs
are grouped he evaluatin
ollecting rel a database m ast search an criterion: co
uation criteria
WEBSES can be eval d under the ng process is
ated data a management
nd short pro ost, quality,
a for subcontr
luated acco se headings s illustrated.
s much as p t system tha ocessing tim time and ad
ractor selecti
rding to the s: cost, qua .
possible to at can handl me.
dequacy an
ion (Arslan et
e sets of ev ality, time a
form a dat le large volu
d so on. It c
t al., 2008)
valuation cri and adequa
tabase, ume of can be
iterion acy. In
The on l cont selec sub-
Fig.8. Ev
WEBSES p lowest bid tracting pro ction proces -contract wo
valuating and
provides us price by c ocess and im
ss. It may b orks of the c
d selecting sub
s a fair and considering mprove the
ecome an ef construction
b-contractor
objective a a combine e decision q ffective way n projects.
using WEBS
ssessment.
ed criterion quality. It c y in the sele
SES (Arslan e
It eliminate n. It can sp can also red ection of the
t al., 2008).
es the depen peed up the duce costs e right SCs f
ndence e sub-
of the for the
CH
From to k impo cont back cont drill subc unde whe CNO this main high man Tabl Fina
S
Acc aspe oper
4.1.
4.1.1
This oblig Divi reas
4.1.2 4.1.
HAPTER
m chapter 1- know what
ortant is wh tractor. CO kground, ha tractor of o ling market contract mo er the curre en the subco OOC, and th mode, sub nly depend her profit ra nagement sy
le 1
ancial condit Year Subcontract
Profit Ra ording to C ects: one is
ration.
Subcon .
Bid Inv Purp 1.
s procedure gations of ision can p
onably utili
Term 2.
.2.1 Categ
R 4. GE
SUB SYS
-3 we have subcontract hat benefit OSL Directi as been exp offshore dir t. But due ore than 90%
ently used ontract rate hen subcon bcontractor ds on the p
ate. This c ystem.
tion in recen
t Rate ate
COSL’s QH managemen
ntractor vitation pose of R
is hereby the bid inv provide the ize existing
ms and D gory of Bi
ENERAL BCONT STEM O
a full view tor manage an effectiv onal Drillin periencing a
rectional dr to the lac
% of its proj subcontract gets highe ntract the pro
gets paid a performance
hapter will
nt three year 2012 93.37%
11.24%
HSE manual nt on Biddi
Manage Regulatio
formulated viter and bi e service m
resources o
Definition id Docum
L VIEW TRACT
OF CO
of all aspec ement is, ho ve subcontra ng Departm a rapid expa rilling oper ck of RSS
jects (see T tor managem er. In China
oject to the according to e of the su l give us a
rs of COSL 2
%
%
, its subcon ing, the othe
ement Re on on Bi
to avoid c idder durin meeting the f the divisio
ns ents
W OF OR MA SL
cts of subcon ow to mana actor manag ment, taking anding, and ration in do
and LWD Table 1). Fro ment system a, COSL ge
other direc o daily ser ubcontractor a detail view
2013 88.99%
11.42%
ntractor man er one is m
egulation dding &
ommercial ng the biddi
e requireme on.
ANAGE
ntractor man age subcont gement can g advantage d now is th
omestic off D/MWD pa om the table
m, the prof et a lump-su ctional drilli rvice rate, s r, higher pe w of COSL
%
%
nagement sy management
n On Bid
& Bid Inv
risks, speci ing process ents of bid
MENT
nagement. W tractor, and n bring to g e of its sta he biggest g fshore direc ackage, it h e, we can se fit rate get um contract ing compan so the prof erformance L’s subcont
2014 94.88%
10.90%
ystem cover on subcont
dding &
vitation
ify the righ s, and ensu d document
We get d most general
ate-run general ctional has to ee that
lower t from nies. In fit rate
level, tractor
%
% rs two tracted
hts and ure the ts and
4.1.3 4.1
4.1
4.1.4
4.1.5
4.1.6
4.1.7
a) The D overse led by and ha b) Region
for ma of oper
Resp 3.
.3.1. Gen
The ge examin docu m
.3.2. Ma
a) Market bidding coordin teams, bidding b) To be conduc organiz huge o Prepar c) Be res
regiona d) The inf
Oper 4.
The oper QHSE r Pla nn
5.
The Plan paymen
Oper 6.
Each ope level bi decidin bid doc
Over 7.
a) After commu initial e
ivision-leve as market, e
the Compa aving import nal-level bid ature custom ration unit.
ponsibilit neral M
eneral man nation and ments at di
arketing
ting Dept.
g of operat nating and
and for rep g projects, e
responsibl ct initial re ze all functi operation in
ation and de sponsible fo
al level.
formation o
ration an
ration & QH related artic ning and F nning & Fina nt terms, and
ration U
eration unit d document g on biddin uments.
rsea Proj
the overse unicate with evaluation t
el bid docum emerging m any or auth tant signific d documents mers, the serv
ty and A anager
nager o f t d approva ivision lev
Dept.
is the Div tion service guiding the porting to th
etc.
le for the f eview, fill t
ional depart ncome and m
elivery of bi for the urgi of all bid doc
nd QHSE
HSE dept. is cles of the bi
Financing ancing Dept d contract cl
nit
shall be resp ts, fill the fo
g or not, an
ject Tea
eas base o h the corpor thereof and
ments: mea market and e horized by t
cance for the s: means do vice content
Authority
he divisio l of ev alu vel.
vision’s ce projects, a e bidding w e Division’s following w the Prelimin tments for j major influe
id documen ing and ma
cuments sha
E Dept.
responsible id documen g Dept.
t. is respons lauses on pa ponsible for orm of initia nd for the pre
m
obtains the rate’s local
decide on b
ans the bid emerging bu the Internati
e Division.
omestic non ts therein ar
y
on is respo ation com
entralized m and shall be
work of all s leaders in work of div
nary Review joint review ence, and fo nts;
anagement all be subjec e for the pre nts.
sible for the ayment, insu r initial eval al evaluation eparation, m
e bid docu overseas ins bidding or no
documents usiness or th ional Busin n-interregion re in the ran
onsible of mments of
management e responsibl l bases and
charge the vision-level w Form of w of bid doc orm the min
work of b ct to statistic eparation an
review on f urance and t luation of lo n on bid doc mailing, filin
uments, it stitution and ot.
of the Divi he bid docu ness Market
nal bid docu nge of servic
f the th e bid
t departmen le for organ
overseas p progress of l bid docum f Bid docum cuments inv
nutes of me bid documen
cs and track nd review of
fund guaran tax, etc.
ocal regiona cuments and ng and track
shall pos d the Divisi
ision’s uments Dept.
uments ce area
nt for nizing, project f major ments:
ments;
olving eeting.
nts of king.
f
ntee,
al- d king of
itively ion for
4.1.8
b) To be assistan
Flow 8.
F i g . 9
responsible nce of Mark
w Chart
9 . D i v i s i o n -
e for prepara keting Dept
- l e v e l b i d d
ation and de . and local o
i n g f l o w c h
elivery of lo overseas ins
h a r t ( C O S L
ocal bid doc stitution.
- W e l l T e c h ,
cuments und
, 2 0 1 4 )
der the
F i g . 1 0 . R e g i o n a l - ll e v e l b i d d i n g f l o w c h aa r t ( C O S L - W E L L T E CC H , 2 0 1 4 )
