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Construction business - Clarification required

former_member513364
Participant
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Hi Experts,

The Business requirement in construction industry is as explained below. Line of business is plant construction. Each site is treated as project. various phases of construction and equipments involved in plant construction are treated as WBS. Eg: if it is power plant construction, Boiler, Generator, Heat Exchanger etc.. will be WBS. There will be network for each WBS. Purchase of raw materials and bought out items will be done as centralized purchase. The materials from vendors will be directly dispatched to site. the materials will be issued to team deployed at site for fabrication(eg: silo, bunker etc..). After completion of fabrication these items (silo, bunker etc) will be stored in site till erection activity starts. All the fabricated items and bought out items will be issued for erection as final stage of project.

I need some clarity in the following areas.

  1. all raw materials and bought out items will be directly reaching site. So do we need to consider each site as plant, because GR of materials, GI of materials for fabrication, storing of fabricated items happens in site.
  2. if the fabrication activity is done by a subcontractor, material issue to contractor and subsequent material traceability is possible under subcontracting PO. What if I have my own team will do fabrication. Can I do GI of raw materials against network. GI to network is consumption of materials, I will not have the traceability of fabricated item. since it is a construction industry I am not considering PP. How to issue raw materials to my own team in site for fabrication purpose.

Request guidance of experts to get clarity on above points.

Thanks in advance.

Regards,

Murthy

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
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Hi Murthy ,

As per your requirement is construction of plant errection in different site level:

1. In such scenario, You can maintain plant for each site level for material procurements ,transfer postings, and for project consumption.

2.If  the fabrication activity is done by a subcontractor, material issue to contractor and subsequent material traceability is possible under subcontracting PO, then I suggest for an(  sperate  Storage location/ Virtual Stoarage Location )  for Sub Contractor, and all the materials which were issued to Subcontractor can be traced, with transfer posting .

3. If your own team does the fabrication work , u can track their services with service entry sheet , with free issue of material.

GI to Network can be done, Since network is also an cost object , but it will go under Netwrok consumption process.

I hope it might be useful to your requirement.

Regards,

former_member513364
Participant
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Dear Kumar,

Thanks for your inputs. In your reply pt. 3, you have advised to track services through service entry sheet, means are you asking me to issue a service PO to my team @ site along with free issue materials. IS my understanding correct. Thanks,

Regards,

Former Member
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Dear Murthy ,

yes your understanding was correct .

Regards,

vrkumar

Answers (0)