The following is the second installment of our “Spring Equipment Buying Tips” column. In the first part of this series, we explored the nuances of specification and requisition documents and their importance in the procurement process. We also looked at the bidding process and some of the key factors to consider during that engagement with equipment vendors. Here, we continue that discussion with a look at delivery requirements and key post-agreement steps that are critical to ensure a seamless buying experience.
Knock-Down and Delivery
The delivery requirements for machinery are referred to as "knock-down" conditions. This section of the proposal or contract specifies the number of pieces or pre-assembled skids in which the equipment will be delivered. This will indicate the level of pre-fabrication and required site work, a critical consideration since on-site assembly and fabrication can be expensive and risky.
A key consideration is determining who should handle the transportation of equipment and machinery to the site – whether it should be the responsibility of the vendor, the purchaser or a third-party logistics provider.
For this reason, one-piece deliveries are preferable. But sometimes this isn’t practical if the machine is very large and heavy. In this case, buyers should at least request prefabricated pieces to the maximum extent possible.
A key consideration is determining who should handle the transportation of equipment and machinery to the site – whether it should be the responsibility of the vendor, the purchaser or a third-party logistics provider. There have been various approaches adopted in the past. One option is to engage a dedicated transportation company to oversee the delivery and logistics of all components. Alternatively, the transportation could be included within the vendor's scope of work. Other factors like the availability of heavy cranes for lifting, insurance coverage and coordination between different parties also influence this decision. The logistics involved in transporting equipment to the site is often more complex than it initially appears.
Why Vendors Delay
The required delivery date is usually indicated in the requisition documents based on the general schedule of the plant. The policy of many vendors is to take as many orders as possible at any given time. However, vendors often fail to expand their manpower or manufacturing facilities if they get more orders than they can handle putting on-time delivery at risk.
As a general rule, buyers should supply all required technical data to any vendor before or at order placement. Timeliness is particularly important for large-size equipment purchases because they are nearly always on and any delay in their order placement would impact the of supply, installation or commissioning of the plant.
For many equipment packages, the delivery timeline is typically specified as a number of months, such as 8, 10 or 14 months. A crucial aspect that requires careful consideration is the official start point for this delivery period. This data should be clearly defined within the contract to avoid any potential misinterpretations or risks. Logically, the delivery period should begin from the date when the purchase order is formally placed. However, this is an area where vendors may attempt to introduce ambiguous language.
For example, some proposals might state that the delivery period begins on the last day of the kickoff meeting or final approval of major documents. Such cases could lead to delivery delays and other problems.
In some cases, a vendor might need some critical data from the buyer to begin designing the equipment. As a general rule, buyers should supply all required technical data to any vendor before or at order placement. Timeliness is particularly important for large-size equipment purchases because they are nearly always on and any delay in their order placement would impact the of supply, installation or commissioning of the plant. In some cases, the start date is contingent upon providing key data to the vendor; if there's a two to three-month delay in delivering that data, it can lead to several months of delay in machinery delivery.
Based on my experience, many of these delays can be avoided. Most
After Order: Kickoff Meeting
The first major step after the order is the kickoff meeting. It’s important to have all parties involved in the transaction present at the kickoff meeting, including all the vendor’s internal teams. In some cases, the vendor may pass on documents to another internal group, such as the executive team. When this happens, documents often get misplaced, leading to confusion and potential delays. issue commonly encountered after completing the order. Ask both the vendor proposal team and vendor executive team to attend the kickoff meeting to make sure the internal transition was proper and the new team can start the task effectively.
The kickoff meeting is not a design review session. Therefore, detailed design review exercises should be avoided. However, key comments might be discussed, and clarification, discussion and agreement on key figures and critical parameters and aspects of package or machinery are necessary to facilitate the issue of key documents. The executive team should have reviewed the contracts and related documents prior to the meeting, so they can raise questions on anything that is unclear. The kickoff meeting is also the point at which critical milestones related to machinery detail design, fabrication, shop tests and delivery should be reaffirmed.
The layout, general arrangement drawings and key documents should be reviewed during the kickoff meeting, as well.
The kickoff meeting is not a design review session. Therefore, detailed design review exercises should be avoided. However, key comments might be discussed, and clarification, discussion and agreement on key figures and critical parameters and aspects of package or machinery are necessary to facilitate the issue of key documents.
The general arrangement with the locations and details of battery limit nozzles and allowable nozzle loads are necessary, so the purchaser and the vendor can begin the piping design (vendor will design the piping inside the package [inside battery limits] and the buyer will design the piping of the plant, outside the battery limits). Similarly, some other key documents or data are needed for both vendor’s electrical and control teams of the vendor and the purchaser to proceed their works.
Drafts of layouts and general arrangement drawings are typically included in proposals, but those are just rough drafts, often very preliminary, and the real ones suitable for each specific job will be issued one or a few months after the kickoff meeting.
Even so, the kickoff meeting is a good opportunity to remind everyone of the urgency of these documents to prevent delays. This is an ideal time to resolve any issues related to the drawings. At this stage, most of the major issues should have already been address. This is not the time for major revisions, which could result in a delivery delay. The kickoff session is a place for some fast and firm decisions.
The length of a kickoff meeting depends on the complexity of machinery and the level of details and key requirements. It should be verified in advance that enough time is allocated for discussions and that all major topics are covered in the kickoff agenda. Even for medium-size equipment and orders, buyers and vendors should plan for a two- to three-day kickoff meeting. It is better to solve all potential issues during the kickoff sessions rather than dealing with them later.
Post-Kickoff
After the initial kickoff meeting, the vendor will provide documentation and drawings, which the buyer must carefully review and provide feedback on. The vendor is responsible for supplying the required equipment packages and machinery, typically with a guarantee period of one to two years. However, this warranty does not absolve the buyer from meticulously verifying every aspect of the vendor-provided information to ensure completeness and accuracy.
Particular attention must be paid to reviewing and verifying the interfacing systems and battery limits – the critical points where the plant interconnects with the vendor-supplied equipment packages. These include piping connections, foundation interfaces, electrical and control system integrations.
The vendor is responsible for supplying the required equipment packages and machinery, typically with a guarantee period of one to two years.
Thorough understanding, verification and agreement on these interface points is paramount, as any oversight could prevent the proper integration and operation of the machinery within the broader plant control and operating environment. A detailed review upfront prevents costly issues during commissioning and operation.
Selecting equipment for a chemical processing plant requires diligent scrutiny of vendor documentation, with focus on verifying all integration points, to ensure a smooth commissioning and successful long-term operation aligned with production goals.
To read Part 1 in this series, visit www.chemicalprocessing.com/processing-equipment/design-simulation/article/55036465/spring-equipment-buying-tips-for-chemical-plant-operators-part-1-of-2.
