The approach taken during front-end engineering feasibility studies and scope development frequently determines whether an industrial control project will be successful. Unfortunately, budgetary and timing constraints normally limit the approach and resources used during these critical phases of project development, which ultimately result in unanticipated costs, technical complications, and schedule delays during subsequent project implementation.
For example, plant operations or maintenance personnel are routinely tasked with developing project scopes and capital budget estimates in a short period of time while continuing to support on-going, day-to-day plant operations.
In such situations, operations or maintenance personnel often have little choice but to build a total installed cost (TIC) estimate based primarily upon budgetary quotations for major equipment (based themselves upon minimal, if any, technical requirements specification) but with minimal time allocated to all other aspects of the project’s TIC.
Although this approach can be good for initial project evaluation and preliminary screenings, when capital budget allocations and schedules are based upon such estimates, the following types of challenges tend to develop during project implementation:
• Compliance with detailed codes and technical design standards introduce costs and/or delays.
• Strategic alternatives for truly optimum solutions, such as different technologies, creative implementation tactics, or other vendors’ product offerings, are not discovered until too late in the project schedule, typically after long-lead equipment has already been ordered and detailed design has started.
• Subtle, often unknown, technical design assumptions implicit in the original plan are proven invalid and result in costly changes or delays during implementation.
• Constructability, operability, or maintenance concerns are expressed in late stages, frequently during well-intentioned project reviews after detailed design has progressed and budgets have been established.
On the other hand, if you want to maximize your project success, here are some useful techniques:
• Leverage the relatively small cost of a quality scope and solid conceptual design to realize significant long term savings and achieve an optimum solution.
• Be confident that that the conceptual design basis for the estimate is based upon a workable solution.
• Identify any implicit, hidden, or critical technical assumptions in the conceptual design worthy of confirmation.
• Manage (reduce) the project scoping cost by making realistic but conservative assumptions regarding generally known or established details that are not likely to introduce unexpected costs or delays.
• Consult external resources that can fully commit to scope development under the direction of plant personnel who can then better support on-going operations while offering key objectives and insight.
• Work closely and collaborate with such external resources on a time and material basis so the external resources will be encouraged to offer a variety of alternatives for consideration by plant personnel.
• Review the conceptual design with operations, maintenance, and construction personnel before finalizing the capital budget.
• Leverage prior experiences and lessons learned of all available resources.
• Anticipate the effort required to analyze and address the additional level of numerous details as required during the transition from an “80% design” to a “100% design.”
With few exceptions, the incremental cost for a solid project scope and estimate will (a) yield a positive net present value to the project’s overall TIC and (b) be recovered during a more efficient and effective detailed design and development process as a result.