Research On Procurement Management Of International EPC Projects From The Perspective Of Supply Chain Integration

As the implementation of “go global” strategy and “the Belt and Road” initiative,international projects delivered by Chinese contractors are growing rapidlyin revenue and areas.EPC(Engineering-Procurement-Construction)approach has been widely adopted by clients and contractors in international marketsrelyinging on its advantages of effectively integrating and allocating resources.Procurement is the core process in EPC project delivery,which is critical to the cost,time and quality of the whole project.It is argued that supply chain integration can help international EPC contractors integrate the overall procurement process,and obtain and manage resources by establishing partnering relationships with supply chain stakeholders,to improve supply chain operation efficiency and procurement management level.Therefore,based on the theories of supply chain integration,organization and partnering,this study develops the conceptual model of procurement management in international EPC projects,which shows that supply chain integration can promote procurement management process and then enhance procurement performance.An index system has been constructed which can be used to measure the procurement management level of international EPC projects.Questionnaire,interview and case study have been applied for empirical research.Survey results indicate: 1)The procurement management level of Chinese contractors in international EPC projects,that is,information management,procurement performance evaluation and logistics performance need to be improved.2)The social network and social capital of stakeholders’ cooperation and inter-organizational linking,which show that a)cooperation with headquater and inter-organizational linking with contractor affect more procurement activities;and b)cooperations with headquarter,designer and international material supplier,inter-organizational linkings with international equipment supplier and designerplay more critical roles in procurement activities.3)The conceptual model has been tested and its mechanism in procurement management of international EPC projects also interpreted,i.e.a)cooperation with stakeholders has more influence on procurement management process;b)supply chain integration has more effect on contracting management;c)logistics management has more impact on procurement performance;and d)procurement management process has more influence on operation.4)5 representative EPC projects in Zambia,Fiji and Venezuelahave been chosen for case study,which reveals the critical procurement management issues and strategies during the implementation of these international EPC projects,further confirming the theoretical and surveyed results.Based on the analysis above,the improvement approaches of procurement management in international EPC projects have been proposed,including establishing partnering relationships with key supply chain participants from global markets,enhancing interface management with stakeholders,strengthening the procurement process management,and integrating both upstream and downstream information flows;procurement management plan for international EPC projects has been designed to provide guidance for contractors to manage the overall procurement activities.