A Sao Paolo construction worker was recently asked if they would have the stadium ready for Kick-off on June 12th, 2014. As he surveyed the scaffolding and general chaos, he asked “Morning or Afternoon?”.
Infrastructure projects such as the Olympics or World Cup are even more complex than the usual fare of airport or high-speed rail construction because of the inability to flex the delivery date. No supply chain mix-up was going to delay the opening ceremony of the London Olympics.
From the sublime to the ridiculous
Construction projects which ran into difficulty range from the sublime to the ridiculous. The Sagrada Familia cathedral in Barcelona remains unfinished after 130 years but still looks striking, with its cranes. At the other end of the scale, Edinburgh Tram is five years late, and is currently running at three times the cost and only one-third of the route will be built.
In the procurement world, engineering and construction projects remain one of the most challenging. But it may be time for the networked economy to finally be able to solve some of these problems.
Business networks can create a shared workspace for all of the documents associated with the project (drawings, plans, certificates, etc.). Now, for sure, this can be done with Dropbox or Google Drive, but the advantage of a business network is that it can also include living documents such as RFPs, quotes, contracts, orders, call-offs and invoices.
Efficient management of tenders
In construction projects, there are often competing goals which must be carefully managed. These types of projects will have some very large contracts which need to have a high amount of rigour. Cloud-based solutions give the opportunity to provide a high degree of transparency, and also satisfy the need to publish RFPs in a public “journal.”
However, an even more critical need is the ability to find suppliers from a wide pool. For these types of projects (such as the Olympics and the World Cup), there is huge pressure on the organizing committee to place orders with local firms. This can be very challenging for the contractors, who typically have their own lists of preferred suppliers.
Finding competitive local suppliers, which the contractor feels comfortable using, is exactly what a business network is good for. By plugging the contractors into a network of suppliers, the commissioning body can allow small, local businesses to get a piece of the action.
Dealing with the unexpected
This comes down to managing supplier risk. A business network should have the ability to give different phases of the project a risk profile, which should include not just the contractors, but their suppliers and their suppliers’ suppliers. To some extents this is a crowd-sourcing problem, and can be solved with a mixture of supplier ratings (somewhat like TripAdvisor), sentiment analysis (applying Big Data analytics to unstructured data of news feeds, wire services, and even Twitter), and predictive analytics on data such as delivery reliability.
Similar doom and gloom was expressed about the Greeks in 2004 (and that is in fact where I recycled that opening joke from). I went to those Olympics, and everything looked great to me.
Will the World Cup infrastructure be ready? In football, never bet against Brazil.