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Keys to master the execution of today's large EPC Projects
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HERVE
BARON
Today’s Projects:
Challenges & Key factors of success
Hervé Baron
Nov 29th, 2010
HERVE
BARON
Today’s Projects:
The main challenges and the Key factors of success
Overall Contractor responsibility: EPC (Engineering, Procurement, Construction)Mega Projects: > USD 1blnMultiple locations & actors: Low cost centers, Construction sub-contractedSchedule: Drastically tightened
HERVE
BARON
Today’s Projects:
The main challenges and the Key factors of success
Overall Contractor responsibility and mega project: Client leaves interface responsibility with ContractorOn-Shore vs Off-Shore, different set-up:On-shore: must set-up Temporary Site facilities and camp in remote location vs Off-Shore: at a shipyard
HERVE
BARON
Design Procurement Manufacturing Shipping
InstallationConstruction &
erectionInspection &
testsHand-over
Project execution synoptic
HERVE
BARON
• Technical ?
What are the main challenges ?
• Cost ?
• Quality ?
• Schedule ?
• Safety
• Size ?
HERVE
BARON
Technical?
The processes and technology are proven, no prototype.
Quality:
The project execution systems are well developed and standardized: vocabulary, methods and tools (planning, progress measurement, management of change, plant mechanical completion etc.) and fairly standard throughout the industry.
Cost?
Lump Sum Contract: quantities increase & market conditions risks with CONTRACTOR. Precise specifications, list of approved vendors make the Contract well nailed down for Company.
Schedule:
Large projects must now be completed in 36 months vs 45 months a few years ago.Schedule risk is with CONTRACTOR: both liquidated damages and time related costs
What are the main challenges ?
HERVE
BARON
Size:
Not human! Mega LNG Project 75,000 tons of equipment, 42,000 tons of steel (6 Eiffel towers!)
Multiple and ever changing actors, e.g. Engineering home office+ low cost centers
Construction is sub-contracted
The challenge is to keep control of the project
Safety challenge
Mega Projects25,000 people at peak, 80 nationalitiesVarious levels of education, supervision, time pressure
Diffusion of safety culture: raise awareness, STOP card etc.Management leadership: leadership by example: safety walkthrough, safety talks…
What are the main challenges ?
HERVE
BARON The Key factors of success?
Schedule:=> adapt to concurrent rather than sequential execution• Get the design input early… but get it right!• Avoid changes and re-works• Integrate the E, P and C work processes
Size:=> Develop and implement precise controls• Know your actual progress!• Control your suppliers and sub-contractors
HERVE
BARON
ENGINEERING
PROCUREMENT
CONSTRUCTION
Bill of materials
Drawings
The Past: sequential execution
HERVE
BARON
ENGINEERING
PROCUREMENT
CONSTRUCTION
ENGINEERING PROCUREMENT CONSTRUCTION
Today: concurrent execution
HERVE
BARON
ENGINEERING
PROCUREMENT
CONSTRUCTION
ENGINEERING PROCUREMENT CONSTRUCTION
Tightened schedule changed the execution from sequential to concurrent.
This drove the project to sharpen controls over its execution: identify and focus on critical path, pro-actively manage interfaces etc.
Today: concurrent execution
HERVE
BARON
Bill of Materials 1
Bill of Materials 2
ENGINEERING
PROCUREMENT
CONSTRUCTION
Drawings 1 Drawings 2
Today: concurrent execution
Derived challenges:• Get the design input early• Avoid changes and re-works• Integrate the E, P and C work processes
HERVE
BARON
Bill of Materials 1
Bill of Materials 2
ENGINEERING
PROCUREMENT
CONSTRUCTION
Drawings 1 Drawings 2
Today: concurrent execution
Engineering/Procurement interface:Close coordination for anticipated orders and revision of quantities, including cancellation etc.Engineering/Construction Interface:Prioritization based on start-up and construction sequence
Understanding of mutual needs, agreement on deliverablesRegular up-dates (work volumes and delivery schedule) by Engineering to Construction
Integration of tools (IT)
HERVE
BARON
Process simulations
Equipment inquiry & selection
Foundation drawings
Equipment list & duty
Vendor Engineering
Vendor data & drawings
CoolerCooler
Engineering is the integrator of the Plant equipmen t, and is highly dependent on vendor data
Getting the design input early
HERVE
BARON
Safety valves duty
Safety valves inquiry and purchase
Safety valves sizing & drawings
Safety valves location & piping
routingPiping calcs &
supports
Steel structure design and
drawings
Purchase steelFabrication
Shipping Structure at Site
Number, sizeestimates
Supports& loads estimates
Engineering must be right first time, which require s experience, good coordination between disciplines and anticipation
But get it right!
HERVE
BARON
For more information and…to get on top of Engineering in hours, not years!
A unique synthesis and reference manual
200 pages, 250 illustrations
To browse the book:http://goo.gl/dfDrS
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HERVE
BARON Integrate the work processes
Engineering to up-date the Construction sub-contractor with work volumes and delivery schedules for Construction sub-contractor to plan and mobilize efficiently
The Construction Sub-contractor is paid a fixed amount for a ton of steel installedIt is uncertain about the actual delivery schedule of drawings and materials, wants to avoid stand-by
HERVE
BARON Integrate the work processes
• Constructability reviews• Pre-fabrication• Engineering schedule to match Construction priorities/sequences• Engineering deliverables tailored to construction execution needs
Develop Engineering / Construction synergies
HERVE
BARON Avoid changes
Sources of changes:• Inherited/Open technical issues• Design development & Reviews• Client’s new requirements• 3rd party at interface
Resist avoidable changes – Contractual managementImpact of changes is exponential with time: implement early!• Interface management,• System to identify all impacts and track implementation of changes
Avoidable/ Unavoidable ?
HERVE
BARON Know your Project’s progress
The principles:• Draw the list of work items, total = 100%• Actual progress = Σ individual progress over all work items
The challenge:• The list of work items keeps changing – difficulty to keep track• The total work volume (100%) keeps changing• Increase by up to 30-50% are common
The keys:• Overall progress from detailed breakdown by individual work item/steps• Monitoring from up-to-date list of work items
HERVE
BARON Set-up an accurate progress measure
The overall picture is accurate…
If :
• its derives from progress of elementary work items,
• It reflects the true work volume, i.e., is based on up-dated list of work items,
Only through detailed status, broken down by individual work itemand work step completion can one ascertain the exact progress of the work.
HERVE
BARON How are the electrical works doing?
How to monitor construction progress, the case of Electrical cables for a FPSO:
254 km of Electrical cablesto pull, gland, terminate. What is the progress?
HERVE
BARON
Individual item (cable) and work step (pull/gland/terminate) status
Σ
How are the electrical works doing?
HERVE
BARON
“ You get what you inspect, not what you expect “
• Know your supplier work process/steps• Implement tight follow-up/expediting• Access you supplier's systems
Control your suppliers and sub-contractors
HERVE
BARON Know what drives the overall duration
For the explanation, please go to: http://www.toblog.fr/fr/baron/date/201010/blog.html
HERVE
BARON
http://www.toblog.fr/en/baron.html
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