An integrated rational decision making and inventory management model for managing supply chain risks in EPC: a power sector case

Abstract

The current scenario in an engineering, procurement and construction (EPC) industry demands immediate attention in terms of managing suppliers, contractors, materials, finances and other resources to beat the cut throat competition. The continuous emergence of new players with high velocity makes it imperative for companies to gain strategic competitive advantage by managing their information network and supply chain efficiently. This paper discusses the comprehensive model, for managing every day risk in supply chain of the engineering, procurement and construction industry with reference to power sector. The paper evaluates three aspects, viz. 1 the components of engineering, procurement and construction 2 importance of decision making in reducing the routine risks/uncertainties 3 an efficient inventory management model for empowering the supply chain in construction industry. And, the corresponding objectives are: a to identify decision making model that is relevant for all areas of decision making b to determine an efficient material management solution; suitable in the context of construction industry. The methodology included a comparative analysis of the benefits and limitations of possible alternatives before proposing the framework. The results have been supported by examples that have direct relationship in the context of the case.