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    Strategic Management Reflects The Most Effective Way For Enterprises

    2014/1/6 9:30:00 39

    Capital AccountContract ModePremiumDelivery Mode

    < p > now in some capital project management, on the one hand, many asset owners are trapped here, and it seems difficult.

    Some enterprises treat each capital project in isolation, and separately customize it < a href= "http://www.91se91.com/business/" > resource < /a >, not coordinating the contract work of each project team with the long-term capital strategy of the enterprise.

    Some enterprises have signed agreements, cocoon and bind themselves, chose improper contracting modes, or misjudged the risks involved in capital projects, organizational resources or skills.

    These mistakes may lead to a missed opportunity for the company, and the project will be greatly delayed and cost more than billions of dollars.

    In contrast, a small number of asset owners are familiar with the contract approach, benefiting from better project design, lower cost and less delay, thus gaining a significant competitive advantage.

    In order to achieve overall efficiency among multiple projects, these enterprises have standardized the engineering activities and improved the procedural contracting mode, so that the economic benefits of each project can be considered according to the specific skills and experience required by the project.

    At the same time, compared with less successful companies, these enterprises have tried to strengthen competition among contractors who wish to cooperate with them, and have done more detailed risk assessment.

    Finally, these enterprises invest less in talent development, and encourage cross functional cooperation to help their capital projects achieve the maximum net present value.

    < /p >


    < p >, therefore, we should strengthen the < a href= "http://www.91se91.com/business/" > capital project management < /a >, and focus on improving the skills of capital project management.

    In some cases, this problem may change the economic benefits of the project.

    Intensified competition will increase the losses caused by bad decisions, making enterprises more likely to make bad decisions.

    These enterprises can not only provide reference for suppliers of energy and energy intensive commodities, but also draw relevant experience and lessons from the asset intensive industries such as hi-tech, telecommunications and automobiles.

    At the same time, these lessons are useful for public sector and private sector development of large infrastructure projects as well as for investors seeking to profit from these projects.

    In a constantly changing environment, under the pressure of strong pressure, enterprises have adopted a seemingly lowest cost contract mode in order to win the support of scarce projects needed for an environmental renovation project.

    However, after the paction was finalized, the company lost the ability to bargain with the contractor, and the previously undefined cost began to rise.

    To make matters worse, the company found that the contractor did not include the best punishment for the progress of the contractor because the contract did not include the effective punishment measures for the progress delay of the contractor.

    These factors have caused hundreds of millions of dollars in extra cost and delayed the project for nearly a year.

    < /p >


    At the same time, the number, scale, scope and complexity of the projects increased, which further increased the investment and risk of the owners of P.

    In addition, due to the reduction of risk reduction methods, the a href= "http://www.91se91.com/business/" > risk scale < /a > and the scope of assets owners have increased, thus increasing their financial risks.

    In the 80s and 90s of the last century, the relatively small scale of investment allowed asset owners to bargain with the general contractors of engineering design, procurement and construction, and finally agreed on a very favorable fixed price contract.

    Today, this practice is very difficult to achieve.

    In fact, most contractors will not be able to cope with the huge risks associated with today's super large projects if they do not insist on demanding high premiums to deal with the worst cases.

    < /p >


    < p > with the gradual emergence and multiplying of financial risks, many asset owners have been struggling to meet multiple projects.

    In some enterprises, project management skills have declined.

    Moreover, due to cultural factors, many asset owners focus too much on engineering design and create a business environment that does not attach enough importance to business skills, which often leads to very undesirable consequences.

    A small number of enterprises have successfully avoided these troubles.

    The contract method adopted can provide reference for all asset owners.

    < /p >


    < p > strengthen capital project management and focus on improving capital project management skills, so that effective management and supervision can increase efficiency for capital projects and promote steady economic growth.

    Effective management of capital account requires strategic vision.

    < /p >


    < p > to stimulate economic growth and increase investment in capital projects, many projects are unprecedented in scale and complicated in technology.

    We must have a strategic vision to strengthen capital account management and focus on the enhancement of capital project management skills.

    While some owners of assets seek to maximize their engineering design, cost and time schedule, they only treat the projects in an isolated way, without taking full account of the potential correlations between the current projects or future projects.

    In contrast, companies with outstanding performance can understand their capital strategy deeply and clearly understand how the current projects will affect their future projects, and establish the basis of contracting ways.

    < /p >


    < p > enterprises that need to carry out several projects at the same time may wish to follow the same way. We need to have a long-term vision and strengthen the relationship with key < a href= "http://www.91se91.com/business/" > Supplier < /a >.

    This relationship helps asset owners to cut costs, acquire the required capacity and facilitate innovation.

    Enhancing the attractiveness of projects to partners is an important consideration in the face of today's tight supply environment.

    Some enterprises use their relationship with supplier development to stimulate innovation.

    Enterprises and professional suppliers have developed close and long-term partnership so as to achieve the goal of improving their own operation technology.

    In addition, an enterprise has sorted the tasks of each project successively, thus reducing the number of suppliers, but at the same time, it has a closer relationship with the selected suppliers.

    < /p >


    < p > to achieve the maximum value of each item, create an optimized delivery mode for the paction; carefully arrange the contract awarding process to ensure the full competition among suppliers; design the contract structure to make the incentive mechanism of the supplier consistent with its own incentive mechanism.

    If an asset owner chooses an improper contracting mode, even if the best technical concept or situational analysis is provided for the business argumentation of the project, it will become worthless.

    But the top asset owners will adjust these archetypal models by optimizing the availability of suppliers, considering the various effects of cost and schedule, and clearly defining their roles.

    The owner of such assets will determine which participant of the project can best perform all the components of the project and carefully consider the level of financial risk borne by the supplier.

    For complex and risky projects, the total cost paction will make the capital cost of the project too high.

    Therefore, the contract mode has been improved, and a balance has been achieved between the budget and its capabilities.

    This approach helps enterprises acquire key skills, improve their relationship with equipment suppliers, and at the same time, capital costs will also be controlled at an acceptable level, making them more attractive to suppliers.

    < /p >


    < p > there must be a sound contract awarding process.

    Once the basic plan of < a href= "http://www.91se91.com/business/ > Contract Mode < /a > is confirmed, it can be tendered.

    What most asset owners do is simply bargaining.

    But top asset owners follow an elaborate contract granting process that allows them to observe both the potential interaction with the supplier and the pparency of the entire granting process to ensure full competition and the quality of the bid.

    As part of the process, smart companies will have a thorough understanding of what the contract means from a contractor's point of view.

    These asset owners spend great efforts to find out which areas of design, cost or other uncertainties may cause trouble in the future and work hard to solve them.

    In addition, smart companies will approach different suppliers in the early stages of the process, stimulate competition among them, and discover new ideas and opportunities for standardization.

    Because setting excessive specifications in the design stage will often make the acceptance capacity the threshold to limit the number of contractors, thereby artificially raising the cost. Therefore, the top asset owners will relax the scope of specifications so as to enhance their bargaining power and attract more suppliers.

    In contrast, enterprises with mediocre performance tend to streamline their contract awarding process in order to make up for the loss of other stages of the project, so they are too early to fall into the undesirable deal and lose bargaining power.

    < /p >


    < p > in short, strategic vision is a must for effective management of capital projects, and is also necessary for strengthening capital account management and achieving maximum value of projects in the face of economic crisis.

    < /p >

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