Project Efficiency 4

[jeebusmn]

I work at a medium sized EPC that function more like a small EPC because it grew by buying up small companies all over the place. Because of that, it hasn't at least in my office had a lot of experience in taking on large jobs. There are people here that are compentent. The problems are not in people understanding the technical aspects of the jobs, at least in my I&E department. Most of the work is mule work, which the nature of detailed engineering. It is a lot of checking, rechecking, and coordinating with different departments and vendors.

The part I am having problem reconciling is that “if so much of this is mule work, shouldn't stuff be slammed out like clockwork and be tight?”. I mean non of this is new or rocket science. I am pretty green and have worked with some guys who know the technical aspects but when it comes to doing the job it feels like it is management by emergency because of bad planning and lack of foresight. One hand is not talking to the other. Piecemeal distribution of work instead of clear-cut project responsibilities, which I believe contributes to some fogginess in the going ons of the project. The gist of to what I am getting to is that the projects never feel tight.

Every contract I have been on has been a time and material thing so there really is not a hard push to be super efficient. Some here and elsewhere have said that EPC’s are just in the business of selling hours. So maybe there is not an incentive for things to be tight.

Take some of this with a grain of salt because I am pretty green. Not every job I have worked on has been a mess but none of them have felt as tight as they could have been. Some of that may just be hindsight. Are projects ever tight? Do they ever get worked though in a clockwork kind of fashion?

 

[KENAT]

In aerospace, the only job that ever went even vaguely like clockwork was a mad rush job to integrate a 'system' onto an aircraft in about 2 months (task would normally have been around 3 years, we'd previously been impressed when we did it in about a year).

I think all of the other tasks I've ever worked, both aerospace & machine design, seemed like they could've been managed better.

KENAT,

Have you reminded yourself of faq731-376 recently, or taken a look at posting policies:

http://eng-tips.com/market.cfm?

 

[nickelkid]

My experience with projects of the nature you have described is that the smoothest projects are a direct result of competent Project Management. Unfortunately I can only think of a few projects that had it.

 

[IRstuff]

There's an old saying, "The battle plan is the first casualty." So, even the best-laid plans of mice and men are only good until the rubber meets the road.

Did I mix enough metaphors? While there are companies that are truly worse than others, the others aren't really all that good, either. The reason, of course, is that all companies are composed of people, who are fallible and have foibles.

The best you can do is to observe and learn, so that you don't repeat the same mistakes.

TTFN

FAQ731-376

 

[Gymmeh]

when i started my job I was already 1 year behind schedule on all my projects

After working 3 weeks of 50-55hrs to catch-up, I am now only 1 year and 4 days behind schedule...

 

[Gymmeh]

I forgot to add... its all managements fault.

 

[ChemEng84]

as a new process engineer, you fill my heart with optemistic and happeniss

 

[SomptingGuy]

What is an EPC?

- Steve

 

[ChemEng84]

Engineering Procurment & Construction

 

[ajack1]

In automotive all projects need to be “tight” these days.

Basically there are two types of people those that moan but offer no solutions and those that make the decisions.

Have I ever worked on a project that with the benefit of hindsight nothing would have been done any different? No, I doubt if anyone has.

So basically the decision makers will continue to make mistakes, and the moaners will continue to moan about them.

 

[graybeach]

I think it comes down to keeping a handle on the scope, and avoiding do-overs.

The scope of work must be very clear from the start. This way, changes can be accounted for because you know what you started with.

Avoiding do-overs means that the big brains go to work at the beginning of the project to chart a course for completing the scope. All too often I see consultants start projects by having cad technicians plop details from previous projects on new drawings. Then they assemble the "drawings" with some old unapplicable specifications and call it 30%. Do the hard thinking at the beginning and everything else falls into place.

 

[KENAT]

ajack,

I'm not sure how accurate your "Basically there are two types of people those that moan but offer no solutions and those that make the decisions." line is.

I moan at times, but I also make suggestions, they just often don't fit in with the latest management trend etc. so get discounted.

I've done project management at a previous employer, including our portion of the task I mentioned above. While the programs tended to resemble not so organized chaos at times, the ones I actually had any control over came in on time and on cost (actually one was a tiny bit over but there were some dodgy shenanigans involving travelers cheques and manufacturing overruns on 'build to print' tasks which I'm not accepting blame for;-)).

Here too they have the habit if half assing it up front for the prototype or similar and then trying to tidy up at the end, which rarely seems to work out. If they’d spend a little more time doing things properly up front, the transfer to production would be so much easier.


KENAT,

Have you reminded yourself of faq731-376 recently, or taken a look at posting policies:

http://eng-tips.com/market.cfm?

 

[pmover]

in the 3.5-years with an EPC firm, I can tell you that i was always busy - my plate was full. I was involved with major projects + many other short-duration projects. regardless, having good PM (like that of RCHandy response) and closely working with the client in defining the project scope of work (planning and preparation) will lead to a well executed project. i had good relations with other engr's, the piper's, and support staff. i also had a dam good boss (sharp saavy engineer that took no bs and he was definitely honest, fair, and forthright). in retrospect, it was my best work experience professionally. i see positives and negatives with all firms, but the success or failure of any project/business or otherwise is dependent upon effective communication. practice your comms skills . . . listen and observe the grizzly and saavy veterans. you will do well . . .

good luck!
-pmover

 

[BillBirch]

Thanks jeebusmn, (for the opportunity for one of my favourite rants).

The trouble with EPC contractors is that there are not many of them who really understand EPC contracts and have a clear strategy to implement them.

In my field (oil and gas)EPC contracts first came to our attention around 25 years ago. The contractor was badly "burned", by the client (a major oil company) and subsequently never recovered, after having a proud history dating back to the industrial revolution.

Since then, I have had a cynical disregard for oil companies using this strategy. The risks are more bearable for the oil companies (with pay-back sometimes only in weeks), whereas the contractors do not realise that they are not gambling with chips - but often their company. Oil companies often talk hollowly of "risk and Reward", but the contractors could never , in their wildest dreams, expect the rewards that the oil companies could look forward to. Conversely, the "risk" that is shared, is always skewed against the contractor. The lure of the big contract values often tempt them into accepting ridiculous terms - which are getting worse.

Only last year, I was involved in a pipeline lump-sum EPC bid that did not allow unit rates for inestimable tasks. Similarly, oil companies try (and succeed) to force contractors to accept damages up to the value of full lost production for late completion. This normally would be thrown out of court if the contractors have equal legal resources as the oil companies.

With that out of the way...

Many so-called EPC contractors fell into this category without thinking through the implications. Many of these companies were previously engineering companies, with the ability to provide overall project management services, and sometimes field manpower. Procurement services were often also available.

The fundamental differences between the "good old days" and current EPC practices is that the previous scheme had the relevant party bearing the risk, and the contractors would procure on behalf of the client who paid for the material and equipment.

Designs may have been lump-sum, but were often reimbursible, while project managent and procurement were generally reimbursible.

The companies that generally focussed on design were, indeed (as you say), in the business of "selling hours", and many cannot shake the habit. Perhaps the engineering managers and design engineers do not realise that their company can be more profitable even when their own contribution is reduced?

In design projects in which I have been involved, client have been very prescriptive in defining deliverables, even to the point of duplication between one deliverable and the next. Design groups should stop justifying their "slaughter of the rain forests" simply because "the client always wants this much paperwork". That is OK if he is paying directly, but as a design component in an EPC contractor, you should be vigilant about optinising your design deliverables - there sometimes can be "too much information".

My formula for success in EPC projects is -
Do only enough design as necessary to build and meet contractual obligations.

Sub-contract detail design for packages to the suppliers - It is cheaper.

Procurement is where money is made - spend your effort there.

Construction and logistics is where you lose it. Budget, based on a schedule, and stick to it. Every day over means paying staff, hire of equipment, offices, etc, eating into contingencies, profit or worse.

Within the construction budget, brainstorm your construction strategies to death - significant cost savings can sometimes be made by challenging the basic design.

Finally, I don't believe that clients are doing themselves any favours by employing an EPC contract strategy. It is not in the contractor's interest to supply the best equipment, I know that clients, when buying on their own behalf, often award to the lowest bidder, but good EPC contractors have a way of rooting out even lower priced suppliers - and they have to survive through the warranty period!

Regards,
Bill