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Projectmanagement Advanced > Financing, Procurement and Logistics > Flashcards

Financing, Procurement and Logistics Flashcards

1
Q

Cash-Flow Financing

A
  • Large infrastructure projects
  • Financing from
    expected earnings
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2
Q

Commercial lenders

A
  • EulerHermes
  • Delcrede Ducroire
  • OPEC - Fund for International Development
  • China Export-Import Bank
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3
Q

Classic funders

A
  • World Bank
  • KfW – Kreditanstalt für Wiederaufbau
  • African Development Bank
  • AFD – Agence Française de
    Development
  • Asian Infrastructure Investment Bank
  • Islamic Development Bank
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4
Q

Financing Models

A
  • Build-Own-Operate (BOO)
  • Design-Build-Operate
    (DBO)
  • Renovate-Own-Transfer
    (ROT)
  • Design-Construct-Manage-
    Finance (DCMF)
  • Design-Build-Operate-
    Transfer (DBOT)
  • Build-Rent-Transfer
    (BRT)
  • Build-Operate-Transfer
    (BOT)
  • Build-Own-Operate-
    Transfer (BOOT)
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5
Q

Characteristics of a project financing

A
  • Cash-Flow Financing
  • Off-Balance-Sheet Financing
  • Risk Sharing
  • Sponsor
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6
Q

Off-Balance-Sheet Financing

A
  • Liability of the sponsors
  • Guarantees outside the
    balance sheet of the sponsors
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7
Q

Risk Sharing

A
  • Risk distribution
  • Sponsors
  • Banks
  • Insurances
  • Suppliers
  • Etc.
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8
Q

Sponsors

A

Promoter providing equity capital for implementation of project and exercising an ownership function

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9
Q

Guarentee in Germany

A
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10
Q

Guarantee in international projects

A
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11
Q

Strategic Procurement

A
  • Market/price evaluation
  • Global procurement
  • Customer relationship
  • Process improvement
  • Product improvement
  • Volume concentration
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12
Q

Make-Or-Buy-Portfolio

A

Internal influence factors:
- Has the service a high strategic importance (differentiation possibility, performance on critical
path, etc.) ?
- Are technical know-how and
capital available?

External influence factors:
- Are services available on
procurement market? Is there a suitable subcontractor?
- What are advantages of outsourcing in terms of price, quality, flexibility and reliability?

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13
Q

Procurement Process

A
  1. develop general product and supplier information
  2. meet demands
  3. assess supply market
  4. set procurement strategy
    Strategy:
  5. select suppliers
    Tactic:
  6. conduct negotiations
    Contract:
  7. integrate suppliers
  8. continuous evaluation
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14
Q

Strategies of procurement objects –”Standardization and modularization”

A

Strategies:
Standardization through …
… increased use of
components, methods or processes
… prefabrication
… modularization

Goals:
- Improving productivity and quality
- Reduction of costs and construction time

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15
Q

Strategies of procurement financing

A
  • Local Sourcing
  • National Sourcing
  • Global Sourcing
  • Supplier Credit
  • Operate-Leasing
  • Bill of Exchange
  • Finance Leasing
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16
Q

Local Sourcing

A
  • Purchasing from suppliers in immediate vicinity of construction site
  • Low logistical risk potential
  • low costs of communication and order processing
  • intensive cooperation and high flexibility
17
Q

National Sourcing

A
  • Sources of supply in own country
  • Price reduction through expansion of possible
    procurement sources
18
Q

Global Sourcing

A
  • Global purchasing through indirect import
  • Cost advantages due to lower wages, taxes, energy and raw materials
  • Lower standards of environmental protection
  • Reduced dependence on national suppliers and
    more intense competition
  • Political, cultural, legal and tax risks
  • Logistical uncertainties (risk correlates with length of transport routes)
19
Q

Supplier Credit

A
  • If customer does not pay supplier, a credit relationship arises
  • Credit granted either with express authorization or involuntarily
  • particularly convenient and simple form of debt financing
  • no interest, but costs due to non-utilization of cash discount
20
Q

Operate Leasing

A
  • Rental agreement terminable by both parties at
    short notice (useful life shorter than technical
    life, e.g. rental of equipment for construction period)
  • Advantage: Increase in liquidity and avoidance of risks
21
Q

Bill of Exchange

A
  • Security that is subject to strict legal regulations and can be passed on to third parties as a means of payment
    ▪ Supplier advantage: Liquidity is not burdened
    ▪ Advantage for the customer: Extension of payment period to up to 180 days
22
Q

Finance Leasing

A
  • Lease agreement not terminable for a certain
    period of time
  • Rates are to cover acquisition, ancillary and
    financing costs
23
Q

Strategies of procurement organization

A
  • Central procurement
  • Lead-Buyer-System
  • Decentralized procurement
24
Q

Central procurement: Advantages

A
  • Higher demand and negotiating power towards suppliers = more favorable prices
  • Uniform appearance -> reduction of market segmentation efforts by suppliers
  • Better enforceability of strategic procurement decisions -> e.g. framework agreements
  • Less coordination effort
  • Development of special knowledge about building
    materials and materials of complex trades
  • Lower probability of bribery
25
Q

Central Procurement: Disadvatages

A
  • Bureaucratization tendencies -> cumbersome and reduced flexibility
  • Remote operation and market -> low employee satisfaction and motivation
26
Q

Logistics in construction projects

A
  1. Planning building usage
    Start Planning Logistics:
  2. Building design
  3. Planning construction
  4. Construction (Construction site logistics)
    End Planning Logistics:
  5. Building usage
27
Q

Logistic goods in construction project

A

Construction site:
- Employees
- Spare parts
- Devices
- Materials
- Know-How

28
Q

Transport systems in logistics

A
  • ship
  • truck
  • train
  • plane
29
Q

Ship
1. Duration
2. Flexibility
3. Reliability &
Punctuality
4. Stress on
transported goods

A
  1. Low transport speed
    • Fixed routes
      - Low departure density
      - No weight and volume limitation
  3. Exactly to the day
    • Containers: low
      - Conventional packaging: high
30
Q

Truck
1. Duration
2. Flexibility
3. Reliability &
Punctuality
4. Stress on
transported goods

A
  1. Average transport speed
    • Spatially and temporally very flexible
      - Weight and volume limitation
  3. Exactly to days
    • Containers: low
      - Conventional packaging: medium
31
Q

Train
1. Duration
2. Flexibility
3. Reliability &
Punctuality
4. Stress on
transported goods

A
  1. Average transport speed
    • Spatially and temporally limited flexibility
      - Weight and volume limitation
  3. Exactly to the day
    • Containers: low
      - Conventional packaging: medium
32
Q

Plane
1. Duration
2. Flexibility
3. Reliability &
Punctuality
4. Stress on
transported goods

A
  1. High transport speed
    • Tightly woven network
      - High departure density
      - Weight and volume
      limitation
    • Exactly to the hour
      - Possible delays with clearance in host country
  4. Low
33
Q

Spare parts supply

A

Option 1:
Provision of extensive spare parts warehouse
- Advantage:
Constant availability of many spare parts
- Disadvantage:
Commitment of a large capital for a long time

Option 2:
Quick purchase and transportation after demand
determination
- Advantage:
Exclusively purchase of required spare parts
- Disadvantage:
High purchase/transport costs per part

Optimal: combining both methods (first phase:
option 1, second phase: option 2)

Projectmanagement Advanced (6 decks)

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