Abstract
Global supply chains have been turbulent since the start of Covid19 bringing supply chain to the center of risk mitigation discussions. Since 2019 we have experienced numerous events that have strained trade throughout the world, exacerbated by a global pandemic that brought the world to a stop in 2019/2020, causing complete stoppages at ports throughout the world, record inflation levels in economies, currency fluctuations, to having to rely on airfreight only for critical supplies.
This “new normal” drives the industry to expand on a supply chain function characterized by strategic agility and resilience.
Energy Transition is the catalyst of our Mining & Metals activity for the next several years. Demand for copper, lithium, and rare earths will require a very agile supply chain to support the great demand for these minerals.
The current ecosystem that we operate in is preceded by:
2020 – Covid19
2021 – Russia-Ukraine War / Surge in global demand
2022 – Suez Canal Blockage
2023 – Israel-Hamas conflict, Red Sea Crisis, Panama Canal drought
2024 – Rising Tensions in Middle East as Israel-Iran-Hezbollah conflict intensifies
Deteriorating geopolitics and the risk of conflict escalation represent the new normal. There are four global trade choke points: the Panama Canal, the Suez Canal, the Strait of Hormuz, and the Strait of Malacca,
2020 to 2024 has been a period of peaks in volatility in commodities, currencies, fuel, freight rates, and interest rates.
Operating in this new environment brings out the best in our supply chain function. We deploy our highly skilled, talented and agile workforce globally to navigate through this new volatile environment. We leverage our market intelligence through the use of our Fluor-developed MDSA - Market Dynamics Spend Analytics tool (powered by IBM Watson), we leverage relationships with our strategic partners, maximize analytics of massive amounts of data that we process daily so we procure and contract strategically, expand on a sustainable supply chain, make full use of our integrated systems to procure and contract in line with our budgets and construction schedules, work closely with our construction and commissioning groups (Construction–driven projects), protecting our projects’ and client’s interests.
We deploy a second wave of professionals to factories, to stay close to raw material deliveries, fabrication, quality control, and logistics operations, with the objective to protect fabrication schedules and generate schedule contingency through lead time improvements. We have achieved this on a current project in execution.
Our agile and efficient Fluor supply chain force was instrumental in the completion of Quellaveco in 2023, one of our most challenging Mining & Metals projects in history, completed with excellence, on budget, and timely, expanding and upskilling local suppliers and contractors, while navigating through the most volatile supply chain market in recent times.
The focus of our supply chain team at Fluor is to transform challenges into growth opportunities as we operate in this new environment.