Current Engineering Trends for the Execution of Capital Projects

It is increasingly common to hear from contractors and business specialists highlight the cost reduction achieved during the execution of capital projects by implementing, at least, one of the following approaches on project execution:

• Engineering, Procurement and Construction execution based on Advanced Work Packaging (AWP).
• Implementation of High-Value Engineering Centers (HVEC).
• Application of 4D Planning and Scheduling (4D-P&S).
• Application of Building Information Modeling (BIM).

A summary of the key characteristics of each approach is given below:

Advanced Work Packaging (AWP):

Engineering, Procurement and Construction execution based on the AWP means the sequential packetization of engineering deliverables so that the flow of this project information responds to the needs of the field construction, this in the form of predefined and sequentially programmed Construction Work Packages (CWP), that result in specific Installation Work Packages (IWP) of short execution periods.

In short, AWP is a construction-driven process that adopts the philosophy of “beginning with the end in mind.” The work packaging and constraint management process removes the guesswork from executing at the workface by tightly defining the scope of all work involved, and by ensuring that all things necessary for execution are in place.

Studies indicate that, under AWP scheme, capital projects have shown field productivity increases of up to 25% and reduction in total project costs by up to 10%.

 High-Value Engineering Centers (HVEC):

Implementation of High-Value Engineering Centers means activating the remote participation of well-trained engineers working at engineering centers in developing countries such as Mexico, Indonesia, Venezuela, India, and Africa, called High-Value Engineering Centers (HVEC), which allows obtaining highly qualified engineering teams at a low cost.

4D Planning and Scheduling (4D-P&S):

4D Planning and Scheduling means the linking of a 3D digital model with time or schedule-related information to create animated sequences that show a structure’s components being built up, including both permanent and temporary works. 

4D-P&S allows visualizing the project as sequential tasks planned in a model to create simulation, and also allows changing the tasks and dependencies to optimize and validate the sequence of activities. From this, you can evaluate whether the project is constructible as planned and also visualize the effects of the schedule on the model, and compare planned dates against actual dates. Costs can also be assigned to tasks to track the cost of a project throughout its schedule. Also, for instance, 4D-P&S visualization may allow scheduling a crane placement during the construction phase, improving its performance and thus avoiding any possible interference.

Building Information Modeling (BIM):

The BIM approach means that all project stakeholders (e.g., architects, engineers, contractors, owner, etc.) actively collaborate to create a complete virtual model of the project. It enables the virtual information of the model to be handed from the design team to the main contractor and subcontractors and then on to the owner/operator; so that each stakeholder adds specific data, comments or constrains to the single shared model. This greater collaboration between stakeholders takes full advantage of the potential cost reduction opportunities. Also, the BIM approach focuses on the concept that different components of a model “know” what they are supposed to do, so as the 3D model is altered, these types of components self-adjust in logical ways.

Studies indicate that the application of BIM brings reducing costs (up to 40% of unbudgeted change orders eliminated), improving the accuracy and speed of cost estimates (up to 80% reduction in time taken to generate cost estimate and cost estimation accuracy within 3%), increasing clashes/interferences prevention (up to 10% of the contract value is saved by detecting clashes), and shortening execution time (up to 7% reduction in project time) 

But, all engineering approaches above-mentioned have their risks of deviation from the goals set.

Namely:

1.      Some potential risks of the AWP approach:

·      The AWP approach basically addresses Engineering Work Packages (EWP), Construction Work Packages (CWP), and Installation Work Packages (IWP). Therefore, Procurement Work Packages (PWP) must be well aligned with the respective CWP and IWP to avoid the lack of material or equipment in the field. Here, procurement manager monitoring is crucial.

·        Lack of clear AWP implementation strategy.

·        Lack of appropriate stakeholder support for the AWP.

·        Lack of identifying the key personnel required for supporting AWP.

·    Inadequate sizing of the Installation Work Packages (IWP) and also an inadequate estimate of the respective execution times.

·        Inadequate Installation Work Packages sequence.

·        Potential redundancy in the IWP contingencies.

·    Potential loss of the benefit of economies of scale in the acquisition of materials and equipment for the IWP.

2.      Some potential risks of the HVEC approach:

·        Inadequate communication between the Project Main Office (PMO) and the HVEC.

·        Lack of adequate supervision within the HVEC and by the PMO.

·      Transfer of incomplete work packages from the PMO to the HVEC, without an adequate definition of the split of work between both parties.

·        Lack of accountability within the HVEC.

·    Staff turnover in the HVEC with the consequent loss of personnel already trained and committed to the project.

·   Redundancy between PMO and HVEC in the use of expensive special software. That means a lack of integration between both parties about the efficient use of software licenses that could be shared.

·   Lack of integration between the IT groups of PMO and HVEC to achieve optimal communication between their servers.

·        Lack of an adequate execution plan shared between the PMO and the HVEC.

·        Inadequate planning of the HVEC activities within the PMO’s master plan.

3.      Some potential risks of the 4D Planning and Scheduling approach:

·        Project size could be a decisive factor for 4D-P&S applicability.

·       At the beginning of the project, the implementation of 4D-P&S may take longer time than other planning and programming approaches.

·        Planning and Scheduling with too many details that could reduce accuracy.

·        Increased exposure to the planning fallacy (for example, increased optimism bias, lack of proper unpacking of tasks, etc.)

4.      Some potential risk of the BIM approach:

·        At the beginning of the project, if there are no references to start modeling, BIM modeling could take longer than other CAD modeling and negatively impact productivity. But it should be noted that in the final phases of the project, BIM provides better performance for the extraction of 2D drawings, better model rendering, and expedite the exchange of model information with the client.

·        BIM upfront cost of modeling could be higher than CAD.

·        Project size could be a decisive factor for BIM applicability.

Therefore, it is recommended to evaluate each approach in light of its risks and to identify how to apply them and whether they are viable or not.

Next Steps Ahead:

• Fully integration among AWP, HVEC, 4D-P&S, and BIM.
• Tearing down the barriers, not written but widely accepted, as a result of fears of the Project Main Office management about the potential risks to which the HVEC would expose them during project execution.

Namely:

ü  No more than 30% of the engineering deliverables would be allocated to HVEC.

ü All key activities and deliverables must be kept within the execution of the Project Main Office.

• Tearing down the paradigm that states that non-BIM 3D modeling approaches (e.g., CADWorx, Smartplant, PDS, etc.) should be used for the design of piping/mechanical and electrical assemblies for industrial plants, while BIM should be used exclusively in the design and construction of commercial and office buildings.

Transparency, Accountability, and Commitment to the Projects Execution.

Currently, the requests and expectations of clients for the projects they hire are increasingly demanding in terms of execution times and costs. Nowadays, projects with execution times of less than one year are frequent, and more frequent those with execution times of 6 months or less, all with very tight budgets. Along with this, now it is also frequent that customers do not completely define from the beginning what is the scope of the work to be hired, but they only express their needs or what they aim to. Also added to this is the request to estimate as soon as possible the costs of major equipment and key contracts to have the necessary budget in advance.

To address the challenges described above, the current trend calls for strategies structured in accordance with PMI best practices and the application of three fundamental keys that would provide the solid base needed to achieve successful team management and a satisfied customer. These fundamental or essential pillars to be applied by all: managers, intermediate leadership and, executing staff, are the Transparency in the performance of the activities, the Accountability of this performance and the Commitment to the objectives of the project and the client needs.

Transparency, Accountability, and Commitment, essentially independent pillars, once activated, they positively interrelate among themselves. Therefore, Transparency leads to trust and then to a harmonious and safe work environment, which consequently drives to the reinforcement of natural leadership and then to Accountability at all levels, which in turn leads to alignment with the Commitment to the client, their needs and, the own organization ones.

For the activation of Transparency, Accountability, and Commitment within the working group, the following is recommended:

Transparency:

• Promote open communication and the exchange of information as a habit. This is the execution without secrets. It should be noted here that the internal security information of the organization may be exempt from transparency (e.g., administration, finance, and, human resources).
• Promote honesty and camaraderie among members.
• Encourage the need to receive comments.
• Promote due respect among all.
• Admit errors, if any, without fear of reprisal.
• Listen to each other. Do not assume anything a priori.

Transparency in the actions of the organization and communication of the team is as simple as establishing an execution without secrets. This is, executing the actions in such a way that others can easily see them. People like to know things. No one feels comfortable surrounded by secrets and hidden information, especially in a workplace.

Productive people thrive on teams that rely on trust.

Accountability:

• Clearly identify the roles.
• Promoting periodic alignment with the objective.
• Promoting expansion of the focal vision and reinforce the global vision.
• Delegate activities and promote the sense of ownership over the results obtained from this delegation.
• Strengthen the working group self-confidence in the approach of solutions that lead to appropriate and timely decisions. Managers remain behind the scene vigilant and responsible for what the team is handling.
• Emphasize that the management is confident in the working group.
• Dignify the integrity of each person in the working group.
• Emphasize that management supports and defends the working group regarding proposals that led to the decisions taken, the risks assumed and the results obtained.
• Promote problem-solving without seeking blame.

The promotion of accountability of the working group responsibilities helps establish peer respect and guide the team to meet their expectations.

Commitment:

• Give staff visibility and recognition within the organization.
• Define clearly from the start the expectations to be met.
• Identify realistic goals
• Provide the staff with the necessary training.
• Provide recognition about achievements, big or small.

Teams that manage to internalize the commitment use a common language, share ideas and opinions and debate them internally, supporting the decisions as a group, even if someone initially disagrees.

Spanish version available at: 
https://ingconcurrente.blogspot.com/2018/07/la-transparencia-la-rendicion-de.html