integrating supply chain and critical chain concepts in engineer-procure-construct (epc) projects

Integrating supply chain and critical chain conceptsin engineer-procure-construct (EPC) projects

K.T. Yeo*, J.H. Ning

Centre of Engineering and Technology Management, Division of Systems and Engineering Management,

School of Mechanical and Production Engineering, Nanyang Technological University, Nanyang Avenue, Singapore

Received 21 September 2000; received in revised form 28 November 2000; accepted 2 March 2001

Abstract

The present practice of Engineer-Procure-Construct (EPC) projects in the engineering and construction industry receives manycriticisms and requires improvement. This paper examines the nature and characteristics of EPC projects with special interest in

project procurement management. An enhanced framework for procurement is proposed by coupling the concepts of Supply ChainManagement and Critical Chain Project Management, with the latter drawing ideas from the Theory of Constraints. The proposedframework broadly embraces three streams of approaches namely, cultural, process and technological. Special attention is given toa systems approach of buffer management as a mechanism to improve the management of uncertainty in procurement. # 2002

Elsevier Science Ltd and IPMA. All rights reserved.

Keywords: Supply Chain; Critical Chain; EPC projects; Procurement; Uncertainties

1. Problematic engineering and construction industry

The engineering and construction industry faces for-midable challenges. As a whole, the industry worldwidecontinues to perform unsatisfactorily. It suffers fromlow profit margin, persistent project overruns in sche-dule and budget, and is plagued with claims and coun-ter-claims. A recent UK construction industry surveyshowed that the profit margin on construction work is1–2% [1]. American Construction Industry Institute(CII) finds that approximately one-third of the projectsmiss cost and schedule targets [2]. A critical aspect ofproject failure is construction delay, which often resultsin construction claims. Another survey in UK showsthat 52% of UK construction projects end up withclaims of some type [3].The construction industry receives many criticisms.

Mohamed [4] claims that the current practices andmechanisms of the construction industry are inherentlyinefficient, which inevitably leads to wastes [4]. Lim’s [5]study on construction productivity in Singapore showsthat the industry is perceived as a low-productivity sector.

De la Garza [6] thinks that the construction industryproductivity has been static for almost two decades. Aninvestigation on time waste reveals that the site work-force spends a considerable amount of time waiting forapproval or for materials to arrive on site. The amountof work on non-value-adding activities was found to beas high as 40% of the overall project duration frominception to completion [4].The CII in the US, in their industry-wide investiga-

tion, concludes that project performance, measured interms of cost, schedule, technical, quality, safety, andprofit objectives, has room for substantial improvementfor the industry as a whole [2]. The ConstructionIndustry Board (CIB) of the UK specifically suggestedthat the construction industry should be more competi-tive and aim at reducing construction costs by 30% [7].Mohamed [4] reckoned that 25% time saving is achiev-able in a typical construction work package withoutincreasing allocated resources.

2. Integrated EPC activities

An EPC project can be a complex one-of-a-kindproduct development, made up of a large number of

0263-7863/02/$22.00 # 2002 Elsevier Science Ltd and IPMA. All rights reserved.

PI I : S0263-7863(01 )00021-7

International Journal of Project Management 20 (2002) 253–262

www.elsevier.com/locate/ijproman

* Corresponding author. Tel.: +65-799-5502; fax: +65-791-18-59.

E-mail address: [email protected] (K.T. Yeo).

interconnected subsystems and components, requiringconsiderable human efforts and financial commitment.The EPC activities are time-phased according to specifiedprecedence and resource requirements and constraints.Engineering/Design (E) is the process by which the

needs, wishes, and desires of an owner or developer aredefined, quantified, qualified into clear requirements whichwill be communicated to the builders or contractors.The engineering/design phase has the highest level ofinfluence of the project, as many key decisions will bemade during the pre-project planning and engineeringphases. These decisions will lead to the commitment of alarge sum of the funds and other resources necessary forthe successful implementation and completion of theproject. The design of an engineering system is usuallyaccomplished through a series of steps to include con-ceptual design, preliminary design and detail design [8].The engineering and design phase is closely followed

by the procurement (P) phase. A contractor begins toprocure project equipment and construction materialsupon receipts of engineering drawings, specificationsand other relevant documents. The main procurement/logistics activities include sourcing, purchasing, contract-ing, and on-site materials management. A contractorbegins to construct specified facilities in construction(C) phase according to work packages prepared duringthe engineering phase, and use equipment and materialsobtained in the procurement phase. The sequencing ofconstruction will be initially planned to reflect the mostlogical and cost-effective approach to meet startup andhandover dates [9].

3. Challenges of EPC projects

EPC projects face a number of challenges namely, inter-dependence of activities, phase overlaps, work fragmen-tation, complex organizational structure, and uncertaintyin accurate prediction of desired outcomes. In the engi-neering and construction industry, larger firms usuallyuse matrix organisation for the management of projects.Matrix organisation remains a complex structure.Project activities are highly inter-dependent as they

are intricately connected and have a complex processrelationship. For example, it is not only upstreamactivities, which affect the downstream activities, but thereverse is also true. Austin [10] gives an example on theinterdependence of the design activities, as illustrated inFig. 1. Thousands of these interdependent activitiesmake up an intricately linked human activity system, inthe case of a large engineering project. Informationtransfer is essential and iterations typical [11].De la Garza [6] considers work fragmentation invol-

ving multiple organisations, a major challenge [6].Owners, design firms, construction firms, equipmentand material suppliers, bankers, lawyers, government

agencies, end users, facility operators, maintenanceteams and demolition firms are some of the participantsinvolved in the life cycle of any constructed facility. Thelarge number of participants in the project causes theproblems of fragmentation. Project participants exchangeinformation back-and-forth at all times. Adversarialrelationships between organisations may also arise dueto work fragmentation.The duration of some activities is unpredictable, espe-

cially in negotiation, obtaining approval from autho-rities, and in international materials procurement andsupplies. Capital equipment from international suppliersusually has longer lead-time, and hence, higher uncer-tainty in timely arrival on site. The need to exchangeinformation and drawings between suppliers may fur-ther delay the procurement time. The technical specifi-cations of capital equipment may interrelate with otherequipment and subsystems from different suppliers [12].Phase overlaps of engineering/design, procurement

and construction as shown in Fig. 2 increase the risk ofproject overruns in schedule and cost, due to the lack ofcomplete information and frequent changes, especiallythose attributed to external factors.Surveys by Ogunlana [13] and Chan [14] demonstrate

that the project changes and variations are critical fac-tors that cause project delay and failure. It is generallyperceived that the engineering construction industry hasbecome inflexible and unresponsive to the needs of itscustomers, which caused project changes and rework. Ithas been estimated by the US’s Construction IndustryInstitute that rework constitutes 12.4% of the totalinstalled-project cost in industrial projects [15].

Fig. 1. Interdependence of activities.

Fig. 2. Phase overlaps [9].

254 K.T. Yeo, J.H. Ning / International Journal of Project Management 20 (2002) 253–262

These project challenges always act together, and fur-ther complicate the project execution. The managementof interdependence of project activities will becomeincreasingly critical as the phases are extensively over-lapped in order to compress schedule. Fig. 3 lists thepresent practice of EPC project as an ‘As Is’ model.

4. Ways ahead to better performance

There has been no lack of effort to improve the per-formance of engineering projects. ‘New’ models abound.Fast-track, Concurrent Engineering, JIT LogisticsManagement, Business Process Re-engineering andPartnering are well known examples. Each model has itsown focal point and emphasis on how higher perfor-mance can be achieved. The following is a sample list ofsuch proposals to improve project performance.

. Use or re-use proven and conservative design toreduce risk of engineering changes.

. Select and use familiar and reliable vendors tosimplify and shorten procurement process and tocut project duration [16].

. Involve the downstream participants to play a moreactive role inupstreamactivities to reduce theproblemsof design iterations and rework. Encourage projectteam members to work together at an early stage tohelp avoid and resolve conflicts at later stage [17].

. Emphasise closer co-operation between the pro-curement and construction functions to enable adirect receipt of materials from suppliers to con-struction site as work-in-progress (WIP) [1,18].

. Re-organise the business processes and the flow ofproject activities and information. Minimise oreliminate non-value-adding processes. Employinformation technology to improve the informa-tion storage, retrieval and processing [4].

. Use partnering as a way to deal with the problemsof work fragmentation, lack of integration andadversarial relationship.

. Break down the boundaries between project func-tions to improve communication, coordinationand collaboration [19].

5. Focus on procurement

Different researches focus on different aspects ofimprovement to EPC projects. This paper gives emphasison the importance of procurement and logistics to meeton-site requirements as a major area of constraint andopportunity, which can be exploited to dramaticallyimprove the overall performance of project delivery.Engineering project procurement covers bulk construc-tion materials, major equipment and services. The criticalimportance of procurement is due to the following facts:

1. it is a connecting function between engineeringand construction. Procured materials are thefoundation of constructed facilities;

2. material costs represent a major portion of totalcosts in EPC projects;

3. it is highly dependent on external companies, whoare the suppliers and subcontractors;

4. procurement needs more communication andnegotiation with these external parties;

5. the control is not as strong as in the case of engi-neering and construction, especially in outsourcingand purchasing long lead-time equipment;

6. unlike the manufacturing industry, neither themajor equipment suppliers nor the client keepsbuffer inventory for the project;

7. the capital equipment is very costly and requireslong lead-time to manufacture;

Fig. 3. An EPC process model.

K.T. Yeo, J.H. Ning / International Journal of Project Management 20 (2002) 253–262 255

8. suppliers and prime contractors separately usetime buffers to protect themselves from uncer-tainty due to unforeseen circumstances; and

9. successful procurement management can lead tosuperior performance in overall project cost anddelivery.

Each engineering project is unique even if similardesign is involved. Procurement planning is unique foreach project. A new site condition, a new client in adifferent country or new suppliers can lead to new pro-ject requirements. The considerable overlaps of engi-neering/design phase with the procurement phaseincrease uncertainties. The procurement decisions onlong lead-time items are usually made soon after thepreliminary designs are finished and before the con-struction designs and drawings are completed. Theuncertainty of procurement may affect the entire con-struction process and overall project schedule.

6. New management paradigms

The profit margins in construction are extremelysqueezed often to a mere few percentages, due to fiercecompetition through price-cutting among the con-tractors. A few percentage-point improvements in pro-curement costs can go a long way to improve the overallprofitability of the construction industry. Such improve-ment is achievable if some of the currently availablemanagement paradigms can be exploited for themanagement of uncertainties in project procurement.We will just concentrate on the relevance and cou-pling of two related ideas of supply chain manage-ment (SCM) and critical chain project management(CCPM).

6.1. SCM

6.1.1. The essence of SCMSCM is the process of strategically managing the

movement and storage (if necessary) of materials, partsand finished product from supplies, through the manu-facturing process and on to customers or end user, aswell as the associated information flows. SCM is prob-ably the latest procurement and logistics philosophybeing adopted. Initially, the objective of logistics is toreduce the procurement cost. Now the objective is beingextended to build logistics as a strategic corporate com-petence. Further objectives of logistics includeimprovement of production flexibility, order fill rate andreduction of order fulfilment lead-time. The strategy isto integrate core logistics functions with marketing,production and financial functions. The SCM approachadvocates that a company should extend its internalfocus to suppliers and supplier’s suppliers [20]. Theessences of supply chain management are [21]:

1. enhancing trust among supply chain members;2. re-engineering the business process to build a net-worked enterprise model; and

3. employing IT/IS to accelerate information flowingin both intra and inter organisations.

SCM is the integration of all activities across thesupply chain through improved supply chain relation-ships, to achieve a sustainable competitive advantage.SCM has three components: information system man-agement, strategic material management and managingsupply chain relationships. The drivers of supply chainmanagement are hence:

1. real time information sharing;2. co-ordinated procurement process in the wholechain; and

3. collaborative attitude among all of the chainmembers.

The more advanced level of the supply chain system isan outward-looking, extended and networked constella-tion that span across traditional organisational bound-aries; leverage on and link together critical competenciesof supply chain partners. Poirrer [22] gives a laconic onthe essence of SCM, that future success belongs to thebest value chain constellations, not individual corpora-tions. The real power of SCM lies with its ability toprovide today’s enterprise with radically new opportu-nities to create marketplace advantage by leveragingsupply channel partnerships, information and commu-nication technologies, and the knowledge and innovativecapabilities of the entire chain’s resources.

6.1.2. Some lessons for project procurementThe following are some of the lessons learned in

manufacturing based SCM and adapted as appropriatefor project procurement:

1. treat procurement as a strategic link in the projectdelivery value chain, in the context of a singleextended virtual enterprise, and use it to maximisestakeholders’ value;

2. develop strategic and tactical plans to ensuretimely delivery of materials and equipment toprotect project completion date;

3. develop a networked information system to ensuretimely information on project schedule, siterequirements, tracking material movement, andthe latest promised delivery dates;

4. business process redesign to reduce administrativedelays by streamlining or eliminating paperworkand non-value-adding procedures;

5. process redesign to reduce the length of the pro-curement pipeline;

6. continuously improve to remove process bottlenecksor constraints and to increase project throughput, byeliminating supply and demand uncertainties;


7. push procurement of non-critical materials as lateas possible, while executing order placement ofcritical items as early as possible;

8. achieve JIT logistics for on-site material deliveryto avoid temporary on-site storage, double hand-ling, and maintenance;

9. improve supply chain relationship management:select reliable and quality supply chain partnerswho have the capabilities and commitment; pro-tect the partners’ interests and be sensitive to theirneeds, and demand the same of your partners ifnecessary.

6.1.3. The SCOR model for project procurementThe Supply Chain Operations Reference (SCOR)

model is developed by the Supply Chain Council, todescribe the business activities associated with all phasesof satisfying a customer’s demand. It integrates the well-known concepts of business process reengineering(BPR), Benchmarking and Best Practice Analysis into across-functional framework [23]. SCOR model spans all

customer interactions, from order entry through paidinvoice; all physical material transactions, from suppli-er’s supplier to customer’s customer; and all marketinteractions, from the understanding of aggregatedemand to the fulfilment of each order. The SCORmodel consists of a series of Plan-Source-Make-Deliv-ery functions by an extended supply chain constellationas illustrated in Fig. 4.Translate the SCOR model for engineering procure-

ment, and the sequence is similar to that stipulated inPMBOK’s project procurement processes [24], whichcan be combined as shown in Table 1.The SCOR model suggests that the Plan-Source-

Make-Deliver building blocks can be used to describesupply chains that are very simple or very complexusing a common set of definitions. Consequently, dis-parate industries can be linked to describe the depth andbreath of virtually any supply chain. The SCOR modelhas been able to provide a basis for supply chainimprovement for global projects as well as site-specificprojects.

Fig. 4. SCOR model [22].

Table 1

The Plan-Source-Make-Deliver model of project procurement management

Plan Source Make Deliver

Procurement planning

Understand project needs, supplier

availability and market conditions;

make-or-buy decision; contract

type.

Source selection

Contract negotiation according to

organisation’s procurement policies;

screening, weighting, and evaluation

systems

Contract administration

Systems and processes for quality

control, engineering and contract

change control, performance

(expediting) reporting, and

payment

Transportation and installation

Management of traffic, freight,

import/export requirements,

installation schedule,

temporary storage

Solicitation planning

Prepare tender or bid documents,

supply chain configuration.

Solicitation

Bidders conference or briefing (if

necessary), advertising or soliciting

Placement of orders Final contract close-out

documentation

Procurement audits, close-out

contract file and Formal

acceptance and closure


6.2. Critical chain method

Goldratt [25] proposes a Critical Chain Project Man-agement (CCPM) method, to overcome some of theproblems inherent in the traditional project planningand scheduling methods, notably the basic Critical PathMethod (CPM). The critical chain method, applying theTheory of Constraints (TOC), offers an enhancedapproach to manage the associated risk and uncertaintyin the project value chain and to achieve improved per-formance in project time management.

6.2.1. Theory of ConstraintsTheory of Constraints (TOC) is a common-sense way

of understanding a system’s performance. TOC statesthat, ‘‘Any system must have a constraint that limits itsoutput.’’ The system’s constraint is like the weakest linkof a chain. No matter what you do to improve otherlinks in the chain, the chain does not become strongeruntil you improve the strength of the weakest link [26].Goldratt proposes a five-step process to achieve con-tinual improvement and to get the most out of a pro-ductive system, in relation to the stated system goal.Fig. 5 illustrates the sequence of the five steps.

6.2.2. Uncertainties in project chainGoldratt reckons that there are three kinds of uncer-

tainties in project planning and scheduling namely,‘‘task time uncertainty’’, ‘‘path time uncertainty’’, and‘‘resource uncertainties.’’ Generally, when a projectplanner making a schedule, he would add a ‘‘safety’’allowance or ‘‘padding’’ in his time estimation to pro-vide localised protection to a task [25].For illustration as shown in Fig. 6, each activity is

assigned a segment of time tg, the target time. The pos-sibility of the activity executor to finish the activity by tgis, for an example, 80%, which is 30% above the meantime, tm. The problem is that, in practice, not all activitiesneed tg to finish. The activity executor may well finishthe activity in less than tg or even tm. However, theexecutor will only submit his work at tg, which was theestimated ‘‘due date’’. Therefore, Goldratt opposes theidea of paying too much attention to intermediate ‘duedates’ as this encourages the wasting of time. The timewastage is due to a number of causes, which include:

1. Student’s Syndrome: once a resource has nego-tiated a tg, which contains ‘‘safety’’ margin whichis viewed as a ‘‘padding’’, the executor re-evaluatesthe task and decides how long it will most likelytake, say tm. Then he gets caught up working onother tasks, knowing he has built-in ‘‘safety’’.When he realises the remaining duration is squeezedto become just enough to meet the due date, hequickly ramps up the effort level. At that point, ifhe encounters an unexpected problem as Murphy’s

Law strikes, the deadline is missed. If he crashesthe task, quality would likely be compromised.

2. Parkinson’s law: work expands to fill the timeavailable due to the ‘‘padded’’ due dates.

3. Multi-tasking: the effect of multitasking is thatfragmentation of task and equipment’s set up timewould cause tasks to delay due to loss of con-centration. The impact is more serious when deal-ing with creative work.

4. Merging events: because tasks can have multiplenecessary predecessors, delays are usually passedon, while gains are not. In a dynamic situation,subcritical project paths may turn into a criticalpath when they slip.

Fig. 5. Five steps in TOC approach [26].

Fig. 6. Activity time uncertainity.


6.2.3. Critical chain approachIn CCPM, Godratt suggests that when making plan

and schedule, the planner, firstly, assumes that eachactivity executor finishes his task at the mean time tm.All the ’paddings’ in activities should be removed [25].Further suggestion is made that for a 95% level of con-fidence (that the estimate will not be exceeded) estimation,all the originally padded time estimates could be cut byhalf to obtain the mean time estimates (Fig. 7) [27].

6.2.3.1. Project buffer. After the cut in time duration,the planner would then add a dynamic project buffer atthe end of the project for overall schedule protection. Ifan activity is finished earlier than scheduled, the nextactivity will start earlier. If a critical activity is finishedlatter than its scheduled due date, the project buffer willabsorb it (Fig. 7a,b)

6.2.3.2. Feeding buffers. For non-critical chains, nota-bly the sub-critical chains, an appropriate amount of‘‘feeding buffer’’ will be inserted at the end of each ofthese non- or sub-critical chains in order to protect thelongest path, which is the critical chain, from being‘‘penetrated’’. Any slip in a sub-critical chain will beabsorbed by the feeding buffer (Fig. 7b).

6.2.3.3. Buffer estimates. By the random numberAggregation Theory, the overall variance of a project

chain, critical or non-critical, will be considerably lessthan the sum of all the individual variances for tasks onthe project chain. In other words, the amount of buffernecessary to protect a project chain would be much lessthan the summated safety paddings removed from theindividual tasks. Goldratt makes the following impor-tant recommendation that the originally aggregatedbuffer is to be cut by half (Fig. 7c). This recommenda-tion is of course arbitrary and needs further validation.

6.2.3.4. Resource de-conflict. In Fig. 7d, a criticalresource ‘‘B’’ is simultaneously deployed in more thanone path, and it has to be ‘‘de-conflicted.’’ The resourcede-conflict is necessary due to critical resource con-straint and, as a result, it may cause the critical chain toshift and extend.

7. Framework for improved engineering procurement

This paper proposes an enhanced framework forimproved project procurement by incorporating boththe supply chain and critical chain concepts.

7.1. Importance of ‘‘partering’’ relationship

A positive partnering relationship requires carefullypre-qualifying and the selection of reliable materials and

Fig. 7. Critical Chain Schedule [27].


equipment suppliers. The supply chain can be extendedand built around them. Such a partnering relationshipmay be selectively cultivated in which partners cannegotiate and make strategic contracts flexibly andrapidly. Purchasing commiment may be negotiated andmade even before a project starts.In the networked enterprise, information systems may

be extended and linked so that information flows in andamong organizations are enabled, especially throughInternetworking.Upon building the trust and information systems inte-

gration among the partners, certain intermediate pro-cesses can be eliminated or simplified. For example, thesourcing, negotiating and contracting procedures may bestreamlined and made simple. Suppliers will be in a betterposition to provide inputs to project planning andimprove the planning efficiency and project performancedue to timely availability of more accurate information.The partnering relationship with the vendors and sub-

contractors allows and enables the inplementation of theCritical Chain methodology. The uncertainty in time esti-mation can be reduced due to focus on task execution andimproved confidence in estimation. ‘Padding’, a local pro-tection for procurement activities may be removed. Theprocurement/logistics schedule can be made ‘tighter.’’ Stu-dent syndrome and multi-tasking will be discouraged.Activitiess are more likely to be completed in the reducedmean time. Partnering helps to cut short the procurementpipeline, and reduces sources of variations and uncertainty.

7.2. Feeding buffers for procurement uncertainties

Though each procurement activity individually doesnot have padding, there is still a project buffer to protectthe required project completion date. The enhancedframework proposes that discrete ‘feeding’ buffers beadded to all major materials and equipment procure-ment parallel chains, which have been already tightenedconsiderably, to provide ‘protection’ so that the criticalchain for construction can be protected.Fig. 8 shows an improved procurement performance

using buffer management under the new framework.For the procurement of the major equipment, the twoimportant control dates are ‘Promised Delivery (PD)’dates by the equipment vendors and the ‘Required-on-Site (ROS)’ dates according to the master project sche-dule. Between these two dates, an appropriate amountof feeding buffer is inserted. Estimation of the buffers isbased on a careful and systematic classification of per-ceived risk and uncertainties associated with the entireprocurement and logistics process for each major pro-curement item. The risk identification and assessmentwill be conducted in the procurement planning stagebased on past experience, historical data, supplier’sinputs, and current market forecast.In the critical chain management, project activities

including those of procurement are to be made critical ona ‘‘tight’’ 50/50 even-chance time estimates. Unnecessaryearly placement of orders for non-critical materials and

Fig. 8. Buffer management in procurement.


equipment is to be avoided, while advanced materialsplanning is, however, necessary for long lead-time criticalequipment from overseas manufacturers. Goldratt sug-gests that non-critical paths should be started as late aspossible (ALAP), but it should be protected with feedingbuffers to prevent any delay from passing on to the cri-tical chain thus causing project schedule overrun [25].Based on TOC, major constraints and bottlenecks will

be continually identified, exploited, removed or elevated

as appropriate, in the entire procurement chain, in acontinuous process improvement effort. The strategicallyinserted feeding buffers will be simultaneously and jointlyplanned, tracked and managed by both the contractorand vendors concerned. The critical chain approach,provides a powerful basis for raising the criticality andperformance of procurement. The outcome will be fur-ther enhanced with the supply chain system, process,and IT infrastructure as well as a partnering mindset

Fig. 9. From‘‘As-Is’’ to ‘‘To-Be’’ EPC project performance.


that encourages the leveraging on external partners’resources and strengths.

7.3. From ‘‘As Is’’ to ‘‘To Be’’ project performance

Fig. 9 illustrates a shift from an ‘‘As Is’’ situation to thatof a ‘‘To Be’’ scenario with significantly improved out-comes, as enabled by the twinning of the concepts of supplychain management and critical chain project management.The proposed framework though largely conceptual,

promises great potentials for achieving practical improve-ment in EPC projects in general and procurement inparticular. The twin concepts of SCM and CCPM pro-vide both the logic and culture needed for enhancedproject performance.

8. Conclusions

Performance in terms of productivity and profitability ofengineering and construction projects has not been satis-factory. There is a strong belief that there is room for fur-ther improvement. This paper proposes the jointapplication of SCM and CCPM concepts and methods forthe management of risk and uncertainty of EPC projectswith special focus on procurement. The broad proposalshave three streams of approach namely, cultural, process,and technology (IT). Culturally, the proposal hinges on themanagement of partnering and trusting relationships withthe project stakeholders, particularly vendors and sub-contractors in supplies and supports of equipment/materi-als and services. The emphasis is to create an outward-looking and extended value system that leverages on theresources and strengths of the external partners. It requiresa major change in the corporate mindset. Systemically, it isto take a holistic view of the project chain as a process withassociated risk and uncertainties caused by time andresource constraints. The Theory of Constraints is to givefocus on the constraints or bottlenecks, and bring dis-cipline in planning and execution of EPC projects. Tech-nologically, information and communication technologies,especially Internet technology and related e-commerce,should be exploited to elevate or overcome major systemicconstraints. E-procurement and collaborative projectmanagement are some of the recent trends in leveragingInternet technology. This is an exploratory and conceptualpaper and we believe more research and development canand should be conducted in these areas, particularly in thecoupling of SCM and CCPM.

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integrating supply chain and critical chain concepts in engineer-procure-construct (epc) projects

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