How valve manufacturers respond to quotations - Valve World

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How valve manufacturers respond to quotations An interview with Ms. Fu Liping, Jacobs Engineering (Shanghai) Co., Ltd.

Jacobs Group is a world-renowned consulting company which provides consulting, design and management services through subsidiaries around the world for projects in the fields of transportation, water, energy, environment, construction, and defence. Since entering the Chinese market in 1978, Jacobs Engineering has completed more than 300 projects with major domestic design institutes and engineering companies in the chemical, petrochemical and pharmaceutical industries, and established its own procurement centre. Valve World visited Jacobs Engineering (Shanghai) Co Ltd, where we interviewed Ms. Fu Liping, their instrumentation and control systems manager, in order to find out more about her views on valve procurement and applications.

By Yuzhong Shen

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E N D -U S E R R E P O RT the municipal, chemical, energy, wasteincineration, construction, and water supply fields, among many others. In terms of our engineering abilities in particular, Jacobs can be said to be one of the strongest in the world. In terms of the Chinese market, the company has not been around for all that long. Since acquiring Aker Kvaerner’s Chinese operations in 2010, we have really only been active in this country for just over 2 years. Many of our employees originally came from Aker Kvaerner, and have now been fully integrated into the company. The majority of our projects in China are in the chemical and fine chemicals industries, and include a number of former Aker Kvaerner clients such as Dow Corning, DuPont, Bayer, and Dow Chemicals. Projects with these customers tend to be relatively large in scope. In addition, we are also expanding into the fields of pharmaceuticals – one example is a major pharmaceuticals production project we are running with the American Eli Lilly Company. Overall, there are a lot of chemicals projects around at the moment, and our business is mostly focused on the preliminary design stage. We do also carry out some detailed design work but, considering the relative youth of the Jacobs Shanghai company, the number of EPC projects is still fairly small. Furthermore, Jacobs Engineering also has offices in Beijing and Nanjing, with the Nanjing office being involved with projects for Ashland, DSM, Wacker and many others.

In terms of the global market, Jacobs’ business scope is very wide. The Jacobs Group not only has its own, relatively large scale of operations, but also actively pursues the acquisition of other companies. As a result, our business now covers a wide range of applications in

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What countries do these valve products usually come from? We deal with both domestic and foreign valve manufacturers. When valves need to be procured from foreign manufacturers, these will often involve special materials. Even if some international brands have joint venture plants in China, certain special products, such as offset design butterfly valves, may still need to be directly imported from Italy. This is determined according to the specific valve type or material, and special requirements will often mean the valves will need to be imported.

Does Jacobs Engineering also purchase Chinese products for overseas projects?

As Jacobs Engineering’s history in the Chinese market is still relatively short, a lot of our business has been achieved through mergers and acquisitions. As such, a lot of my work involves systematic engineering design, but also some business development work. In addition, I am also responsible for project staffing, project quality control and other aspects.

We have a list of major suppliers, all of whom have long-term cooperative agreements with our company. As for overseas projects, the company employs a global sourcing strategy, so if overseas projects require the purchase of products from domestic suppliers, then the branch responsible for that particular overseas project will discuss technical details direct with the suppliers. We will then come into the picture later, in order to carry out the procurement. In other words, the purchasing decision will be made by the overseas company.

What sort of valves do you encounter as part of your job?

Will you always be involved in supplier assessment?

I mostly work with ball valves, butterfly valves, diaphragm valves, knife gate valves,

Yes. In the first instance, the purchasing department has a main approved vendor

As manager for instrumentation, what are the main aspects of your job? What are the main areas that Jacobs Engineering is currently involved in on the international and domestic markets?

and similar sorts of valves, most of them being of the adjustable type. These valves are mainly used in chemical and fine chemicals processes, although diaphragm valves tend to be used more in the pharmaceutical field. Our valve selection process is: we will devise the instrument specifications as part of the preliminary design stage, where we will also define the type of valves to be used. After determining the type of valve, we also need to get in touch with the enduser. They will then adjust our selections based on their own experience; in other words, it is ultimately the end-user who will decide on the type of valves to be used.

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E N D -U S E R R E P O RT list. Before new suppliers can be added to this list, we need to assess their overall situation together with the purchasing department. This will include both the commercial and technical qualifications of the potential supplier. Of course, the purchasing department may also carry out this work independently. Both domestic and foreign manufacturers will need to undergo this supplier assessment process, and potential new suppliers and companies have often already worked with our company in the past, or may have been included in the project list during a past project. Suppliers may also need to provide reference lists, letters of recommendation from the end-user, or similar documentation.

What sort of problems do you encounter during your valve procurement and use? Overall, our first concern is the delivery time. We tend to use valve manufacturers with whom we have had a history of cooperation, so generally we do not encounter problems of a technical nature. But, in addition to meeting our technical requirements, delivery time is extremely critical. As an example, imported butterfly valves will have a very long delivery period, often more than six months,

which can have a significant impact on the overall progress of a project. Or taking control valves as another example, we might purchase an international brand product where all we need is the valve body; the actuators may be provided by another company. Assembling these components and commissioning them takes time, sometimes even a month or two, making the total delivery time even longer. In terms of technology and quality, I do not think we have encountered any serious problems so far. In fact, for technical and quality issues involving valves, the factory or end-user will actually have a lot more experience than we do. Our work is focused mainly on the engineering stage of a project: the end-user will obviously have more say in terms of the subsequent performance and application of the valves.

Do you have any advice for either domestic or international suppliers? Generally speaking, we currently work mostly with joint venture operations of international brands; only a small number of our suppliers are fully domestic companies. Our main reason for using imported products is that the majority of our projects involve international

customers who may have used certain brands of valves in previous projects overseas. Since they are accustomed to these brands, even if they have new projects in China, they will not necessarily be willing to look at domestic brands as an alternative. On the other hand, we do still have situations where we would prefer to use domestic suppliers, and hope that manufacturers can respond positively to our requests. Looking at domestic valves we have used in the past, when carrying out the initial design stage for our projects, especially during the cost estimation phase, we will send out a number of requests for quotation to domestic manufacturers. However, a number of these domestic valve companies simply will not respond. Even though there tends not to be any specific procurement data in these requests, if suppliers were able to actively provide a response it would no doubt be beneficial for them. Even if the final supplier may be chosen amongst a number of competitors, they would at least have an opportunity to take part in the bidding process. My suggestion to manufacturers is therefore not to give up on such an opportunity; it they are willing to take part from the earliest stages of the project, it may turn out to be a large windfall for them.

About Jacobs Engineering The company is headquartered in the USA, in Pasadena, California, and is one of the world’s most famous engineering companies. They specialise in consulting, design and management services for projects in the transportation, water, energy, environment, finance, civil engineering, construction, and defence industries. Jacobs Engineering Group has 58,000 employees and works through a worldwide network of subsidiaries and agencies, in order to provide customers with a wide range of professional services, including project management, consulting, engineering, construction, procurement, cost management, calculations, construction management, operations and maintenance, as well as environmental and safety assessments. Jacobs Engineering provides planning and design services covering the entire project cycle within the construction industry. One of the company’s main strengths is its ability to utilise its global resources for technical coordination during large-scale project implementation. All projects are carried out in line with (British, European, and International) BS EN ISO9001: 2000 quality management standards and the company has an industry-leading ‘zero accidents’ health and safety process approach. In addition, the company also provides customers with information systems, quality management services, human resource management, health and safety experts, as well as many other industry experts in various fields to provide professional advice. In 2010, Jacobs acquired another major engineering consulting firm, the Aker Engineering Company, after which the company has grown exponentially in scope.

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