Design is another term for changing the outer appearance of the assets as build during the projects, e.g. the routing of pipelines or the size of the new stack. The network activities are created in the design phase. This is the first step towards the procurement process because the network activities are used to create purchase requisitions, which will later on be transferred into a purchase order. The figure illustrates the four types of network activities available in the Project Builder work list.
As mentioned before there are four types of network activities:
- Material activities
- Service activities
- Internal labor activities
- Primary cost activities
Material activities are used for the determination of materials required either from stock or from external vendors. Required materials can be added directly to generate a purchase requisition or an internal stock reservation. Service activities are used for the determination of services required from external vendors. Internal labor activities are used for the planning and consumption of internal resources. Moreover IAS 16 requires a full cost approach. So the internal labor costs are part of the capitalized assets resulting from investment projects.
Primary costs activities are available for any primary costs that are not incurred through purchase orders or stock consumption, for example travel costs or contingency. There are some defaults that have to be taken into account when purchasing materials and services. Materials and services should not be requested together in the same activity. The requisition approver has to be in line with the amount noted in the current manual of authorities. Additional text should be added for generic materials and services, in order to specify what kind of service or equipment should be ordered. The purchasing group is entered at the line item level when the request needs to go to another buyer other than your default. The purchasing group can either be a regional clustering, or include staff from the purchasing department, which is clustered in groups for certain technical disciplines, e.g. piping or scaffolding. Unloading point is a required field and initializes the warehouse shuttle service to the construction site.