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Avoid Capital Project Planning Mistakes
- 1. Right from the Start Mistakes and traps to avoid while developing and planning your capital projects
- 2. This presentation was originally presented by Adnan Siddiqui for an AIChE webinar on April 28, 2010. You can view a recording of the webinar with the audio part at: Right from the Start: Mistakes to Avoid While Planning Capital Projects(http://apps.aiche.org/chemeondemand/Preview.aspx?ID=78E438C3-8FDF-44F7-8D2C-70BD62483662) www.ConcepSysSolutions.com - Adnan Siddiqui AIChE Webinar
- 3. Agenda About capital project planning Importance of good planning Major decisions to be made Common mistakes and traps to avoid Recovering from poor planning www.ConcepSysSolutions.com - Adnan Siddiqui
- 4. ConcepSys Solutions Founded in 2008 to license ground breaking integrated conceptual design software – ConcepSys. Easy to use yet powerful tool for feasibility stage studies (FEL-2) of process industry projects A minimum of 50% savings in time and money compared to traditional work flow and other conceptual engineering software www.ConcepSysSolutions.com - Adnan Siddiqui
- 5. Capital Project Planning Development of initial design, cost estimate, and schedule to enable financial analysis and authorization of a capital project Also referred to as: Pre-Project Planning Front-End Loading (FEL) Front-End Engineering and Design (FEED) Pre-Construction www.ConcepSysSolutions.com - Adnan Siddiqui
- 6. Importance of Good Planning www.ConcepSysSolutions.com - Adnan Siddiqui
- 7. Typical FEL Process www.ConcepSysSolutions.com - Adnan Siddiqui
- 8. FEL 1 Major Decisions Capacity (product mix) Location Reliability Future expansion/modification Flexibility Input and outputs Technology www.ConcepSysSolutions.com - Adnan Siddiqui
- 9. FEL 2 Major Decisions Equipment sizing / type Non-process scope Control system strategy Design standards Level 1 schedule Long lead items Black and gray boxes www.ConcepSysSolutions.com - Adnan Siddiqui
- 10. FEL 3 Major Decisions Equipment supplier(s) OSBL scope Execution strategy Constructability EH&S LOPA / PHA www.ConcepSysSolutions.com - Adnan Siddiqui
- 11. Best Practices for FEL Gate reviews Value Improving Practices (VIPs) Attend June 2, 2010 AIChE webinar by Nat Schatz for more information Benchmarking Formal risk assessment (FMEA) Quality and completeness checks www.ConcepSysSolutions.com - Adnan Siddiqui
- 12. FEL 1 Mistakes Premature initiation Uncertain schedule, cost, capacity targets Ignoring technology risks www.ConcepSysSolutions.com - Adnan Siddiqui Image by elisharene via flickr.com
- 13. FEL 1 Traps We are using proven technology We will just scale up to new capacity This plant is just a copy of the existing one Past performance guarantees future performance www.ConcepSysSolutions.com - Adnan Siddiqui
- 14. FEL 2 Mistakes Premature completion Incomplete alternative evaluation Lack of operation input www.ConcepSysSolutions.com - Adnan Siddiqui Image by jonathan_moreau via flickr.com
- 15. FEL 2 Traps The gray boxes can be resolved later Inadequate attention to OSBL scope Incomplete or dysfunctional team Making the scope fit the expected cost instead of the expected objectives Lack of experienced process engineer involvement Inadequate peer / expert review www.ConcepSysSolutions.com - Adnan Siddiqui
- 16. FEL 3 Mistakes Inadequate detail Too much detail Ignorance of local conditions Poor resource planning Assumptions from FEL-2 are not verified or eliminated as needed www.ConcepSysSolutions.com - Adnan Siddiqui Image by proimos via flickr.com
- 17. FEL 3 Traps Scope creep Wrong scope Poor risk assessment www.ConcepSysSolutions.com - Adnan Siddiqui
- 18. Special Situations Joint ventures Emerging geographies New technology Fast track Retrofits / turnarounds www.ConcepSysSolutions.com - Adnan Siddiqui
- 20. If you have too few people on a project, they can’t solve the problems. www.ConcepSysSolutions.com - Adnan Siddiqui
- 21. Bonus Content Seven Laws of Projects (Matthew E. May) If you have too many, they create more problems than they can solve. A carelessly planned project will take three times longer to complete than expected. A carefully planned project will only take twice as long as expected. Ten estimators will estimate the same work in ten different ways. And one estimator will estimate ten different ways at ten different times. www.ConcepSysSolutions.com - Adnan Siddiqui
- 22. Summary Getting conceptual design right from the start is critical to getting more bang for your capital buck in the end! Each phase of conceptual design has mistakes and traps to avoid. Chapter 9 of Perry’s 8th Edition has more information on Front-End Loading Upcoming AIChE webinar on Value Improving Practices – June 2, 2010 www.ConcepSysSolutions.com - Adnan Siddiqui
- 23. Want to know more? Join Front-End Loader weekly email list for project management and conceptual design tips www.ConcepSysSolutions.com Send email to aasiddiqui@concepsyssolutions.com Sign-up to be notified for short and practical seminars and webinars Send email to get free copy of upcoming e-Book on process industry project conceptual design www.ConcepSysSolutions.com - Adnan Siddiqui
Notas del editor
- Seminar Abstract“Right from the Start – Mistakes and traps to avoid while developing and planning your capital projects”Proper planning of capital projects is critical to final outcome. To achieve a project’s goals with respect to cost, schedule, quality, and operation, project teams must deliver a high quality conceptual design and project plan. This webinar will start with an overview of current best practices and tools for project planning. After sharing the latest knowledge and research from leading project management entities, the webinar will list common mistakes and traps to avoid during project planning to ensure your project’s success. This webinar should be attended by project managers, process engineers, design engineers, and others involved in developing and planning capital projects.
- The level of detail must be sufficient to match a business or company’s financial risk tolerance.Discuss tradeoff between certainty and wasted effort for canceled projectsDiscuss impact of company culture on schedule vs. cost tradeoffs
- The red line indicates your ability to influence project costs (your influence declines as the project proceeds – the early decisions set the project cost)The blue line is the project cumulative (can also refer to cost of changes) – adding equipment on flowsheet is much easier than adding equiment during EPC phase or in the field before startup
- Typical front-end planning processFEL-1Led by the commercial / business team (marketing, finance, supply chain)May involved R&D and senior process engineersFEL-2 Typically the first contact with engineering Core engineering team and project leadership is establishedFEL-3Engineering team expanded – contractor engagement as necessary by the owner to bring discipline depth and capacityAdd graphic to address how the process is not isolated and outside factors (market conditions, competitor capital spending, government regulations, etc.) constrain as well as influence and disrupt this process
- Add graphic to indicate preliminary schedule and cost estimate or expectations are established in this stage
- Resource planning includes: Engineering, construction, bulks, major equipment.