Cost Engineering_Analyse Your Projects Through Estimating Life Cycle

7/28/2019 Cost Engineering_Analyse Your Projects Through Estimating Life Cycle

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Analysing your Projects through your Estimating Life CycleRaymond Hagedoorn (CCE)


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Projectinitiation

note

40%

Screening

estimate

Economics

Step 1

Feasibilitystudy

25%Study

estimate

Economics

Step 2

Developmentplan

25%

Budgetestimate

Economics

Step 3

initial

execution

plan

Initial

commit.plan

Basis fordesign

Projectspecification

10%Control

estimate

commit.plan

Economics

Step 4

Operationsreference

plan

Projectexecution

plan

Detaileddesign

Materialsprocurement

ConstructionCommission.

start-uphandover

Approval Approval

Review

Approval

Review

Approval

Identicalto

Executionphase

Abandon

project

Commit. &cost control

Contractcontrol

Purchaseorder control

Reporting

Operationsreferenceplan

Close out

Projectdebrief

Change

control

5%Counter

estimate

Step 5

Identification phase Definition phase Execution phaseOperational

phase

Abandon

phase

Step 6 Step 7

Identicalto

Executionphase

Project Life Cycle


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AACE Cost Estimate Classification System - Process Industries

Primary

Characteristic

Secondary Characteristic

ESTIMATECLASS

LEVEL OFPROJECT

DEFINITION

ENDUSAGE

METHODOLOGY EXPECTEDACCURACY

RANGE

PREPARATIONEFFORT

5 0% to 2% concept

screening

capacity factored,

parametricmodels, judgment,

or analogy

L: -20% to -50%

H: +30% to + 100%

1

4 1% to 15% study or

feasibility

equipment

factored orparametric models

L: -15% to -30%

H: +20% to + 50%

2 to 4

3 10% to 40% budget,

authorization orcontrol

semi-detailed unit

cost withassembly level line

items

L: -10% to -20%

H: +10% to + 30%

3 to 10

2 30% to 70% control or bid /tender

detailed unit costwith forced

detailed take-off

L: -5% to -15%

H: +5% to + 20%

4 to 20

1 50% to 100% check estimate or

bid / tender

detailed unit cost

with detailed take-off

L: -3% to -10%

H: +3% to + 15%

5 to 100

How much time is spent?


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Estimating cycle: the ideal scenario

INITIATION UP TO CLOSE-OUT PHASE


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www.costengineering.eu

> Learn from your estimates in previous phase

> Compare class 4 -> class 3 -> class 2

> Learn from your past projects

> Compare similar projects and historical data

> Classification required!

> Analyze scope development

> Perform health checks to be more confident

> Time analysis and cash flow trending

> Determine key metrics to benchmark your organization

> Business intelligence through regression analysis, pivottables, or other methods of data mining

Analyse your Projects through the Life Cycle


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> Estimate your whole project life cycle (design, build, maintain) in one system;

> Class 4 (40%), Class 3 (20%), Class 2 (10%) in one package

> Gradual increase of accuracy (Class 3, Class 2)

> Closing the loop: analyze benchmarks in class 2 estimates as input for class 4

estimates.> Enhance your business intelligence through transparency:

> Knowing your exact cost(direct, allowances, indirect, escalation, contingency)

> Knowing the effects on cost of

scope changes> Keep an overview in complex projects

Estimating with Cleopatra


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Breakdown structures

How to compare various levels of granularity?


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Breakdown structures: multi-dimensional view


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Show case:

Example project Estimating through

the project life cycle

Analyse the variousphases


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> Scope> Distillate process: raw product to middle distillate> By products: top and bottom> 28 pieces of equipment (columns, heat exchangers,

tanks, pumps, vessels)

> Executed in Western-Europe> Price level date 2011> Finish date: November 2012> Project life cycle: from feed to execution

> Plant design

> 3D model> Process flow diagram> Equipment list

Show case: Example Plant
http://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(Animation).avihttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(PFD).jpghttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(Equipment_list).xlshttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(Equipment_list).xlshttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(PFD).jpghttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(Animation).avi


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> Class 4 estimate (40% accuracy):> Based on Factors> Parametric Equipment Models> Applying Hand methodology> Distribution of disciplines

> Class 3 estimate (20% accuracy):> Object re-use (Engineering Standards)> Tuning for more accuracy> Include allowance, indirect, escalation and contingency> Disciplines: piping, mechanical, E&I, civil, etc.> Parts to be estimated

> Class 2 estimate (10% accuracy)

> Detailed Unit-Cost> Bill of Quantity / Material take off input> Equipment Parameters

http://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(PFD)-Estimate.jpghttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(BOQ-Estimate).xlshttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(BOQ-Estimate).xlshttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(BOQ-Estimate).xlshttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(BOQ-Estimate).xlshttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(PFD)-Estimate.jpghttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(PFD)-Estimate.jpg


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> Learn from estimates in previous phases> Compare Class 4 with Class 3 Estimate> Compare Class 3 with Class 2 Estimate> Compare Class 2 (industry norm) with Class 1 (vendor norm)

> Metrics & Benchmarking> Analyze metrics using pivot tables> View Key Quantities> Closing the loop: class 1 ratios for factor estimating

> Business intelligence

> Regression analysis> Create What-if scenario

> Cash Flow Analysis> Show cash flow and schedule



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Questions ?

Cost Engineering

E-mail: [email protected]

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Cost Engineering_Analyse Your Projects Through Estimating Life Cycle