A vendor-designed assembly is an activity that comprises of on-site assembly and erection of semi-finished factory intermediate products according to design by vendor. Examples of vendor designed assemblies include elevators, travellators, pre-engineered buildings, pre-cast structures, UPVC windows etc. Whereas basic requirements may be spelt by the owner/architect, most design specifications are vendor-specific. Invariably, these items are contracted as design-build. Some vendor assemblies can be functionally replaced by equivalent conventional activities such as wooden windows.
Two consequences of this arrangement are:
- A spectrum of products from different vendors may satisfy the basic requirements of the project, but each product may offer differential advantages and/or limitations. With an objective to maximize the benefits, actual purchase decision requires benchmarking of all competent products with a multi-criteria technical evaluation comparing offerings of different products. Usually technical information is solicited from potential vendors through an expression of interest. The differential specifications of each vendor are graded on a suitable scale of points. The product that produces the maximum points is selected for purchase. This step is used for all vendor-designed products – assemblies or otherwise.
- A vendor-designed assembly requires distinct measurements for inventory control (vis components supplied), progress tracking (vis stages of fabrication), similar to conventional works, in addition to the measurement for contractual payment (finished installation) applicable for vendor-designed product. Cost of assembly may be governed by market price of final installation, and derivation of market price from cost price of inventory composition may not be evident due to unavailability of the design or other reasons. In other words, cost function is not homogeneous in the measured integral, due to coefficients that are unknown or non-linear by design or cost function is not sum-product of resource-cost and composition vector.
A vendor-designed assembly can be ideally modelled as follows:
- Intermediate goods such as 6 Pax 6-15m Hoist-way Guide rails, Motor/pump with frame, 8 Pax car frame, shell and interiors, are regarded as primary resources. The cost of primary resource is proportional to market price of finished product. Note that products are described by architectural requirement of final installation instead of product type or geometry – Guide rails are described by Pax capacity and length of shaft, as the designation of rolled steel section used as guide rail is vendor-specific. Note also that inventory should be measured as installation component instead of actual section. For example, Register should record inventory as Hoist-way Guiderail instead of the rolled steel section. In case of a wrong entry, it should be corrected so upon reconciliation.
- If more than one type of resource is anticipated, primary resource may be supplemented by secondary resources with zero cost.
- Procedures are composed as “By-Resource” using semi-finished primary intermediates as leading resource and corresponding work force. Unit of procedure is unit of leading resource and composition of other resources is scaled based on the equivalence ratio of substitutes of leading resource. The composition of resources may not be exact or even scientific, as contribution of vendor designed items are unknown. However, an error in the composition might only lead to a discrepancy between supply and consumption inventory, but still helps in tracking progress. During take-off, composition ratio of resources such as length of traction rope per length of shaft may be set as global/direct parameters.
- Works are quantified by architectural requirement such as length of elevator shaft
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