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Efficient Project Management

How to Apply Project Management
Techniques in EPC Projects
06/05/2014 | Autor / Editor: Deepak Makhijani / Dominik Stephan
Project management can become the
makeitorbreakitfactor for
engineering ventures, experts agree.
While tight schedules and limited
budgets put pressure on all EPC
ventures, adapting the right strategy
can help to make your project a
success.
The word Project can be used to
describe an endeavor in which a number
of tasks is performed to accomplish a
particular aim. Projects are usually
undertaken to achieve business
objectives such as engineering,
mechanical/construction services or
research for new product development.
This article talks about Engineering, Procurement and Construction (EPC) Projects in
India and how the organizations are executing these projects using modern techniques
and effective management.
Today managing projects in short periods within tight budgets has become the focus.
Managing a project is quite different from managing a steady state organization: While
projects have a distinct life cycle a beginning and an end a steady state
organization runs continuously. Effective project management therefore requires a clear
concept and an efficient project group within the organization. Most important are
compatibility in interpersonal relations and clarity in mutual understanding and
communication. All involved individuals must clearly know their responsibilities and
what is expected from them. When seamlessly integrated, the collective expertise,
experience and working systems can vastly add to the efficiency.
Transform you Needs into an Actual Project
Transforming the business needs into a physical set requires the effectiveness of a
A well managed EPC project in oil and gas
industry results in higher efficiency and better
productivity. (Picture: Honeywell Process
Solutions)
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series of processes, tools and techniques, and most of all, skills and experience.
Together, these culminate into what is called World Class Project Management
(WCPM). This requirement starts with the early identification of opportunities and
business drivers and evolves into planning and execution. The first step in the process
is to define the situation and determine the desired outcome. Once the situation is
defined, the team leader sets the roles and responsibilities of all involved. Each team
member has an established role and is held accountable for execution, while following
rules and regulations. This takes much of the guesswork out of executing the plan and
establishes efficient and effective method to manage a project regardless of the time
constraints.
GALLERY
Select a picture to open the gallery (4 Pictures)
3D Modelling and Visualization in Project Management
The detailed engineering of the project requires cutting-edge plant simulation and
design systems. Typical 3D model software such as Plant Design Management System
(PDMS) help to design the plant taking into account the bill of material of the
components and orientation of the equipment to prevent fouling or inadequacy of
space. A typical 3D model is shown in figure 1. This reduces cost of re-engineering and
modification costs as the orientation of the equipment in the available plot area can be
visualized online and remedial action can be taken at the time of equipment fabrication.
The relentless push to expand oil and petrochemical plants places even greater
demands on the design and construction of larger, more complex refineries and
facilities worldwide. The importance of bringing new liquefaction plants and crude
crackers online becomes a major challenge to both plant owners and engineering
companies. The latest 3D modeling and visualization applications continue to support
all key aspects of oil and gas projects, from concepts through detailed design and
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construction, into plant operation and maintenance.
How to Use of Integrated IT Systems
Today, one cannot think of project management without using information technology
(IT). The advent of the internet in the 1990s has helped to change the role of IT from a
sole tool for scheduling applications to create project plans for sub-projects and
disciplines, enabling macrolevel planning. Typical software solutions help to save a
copy of the original plan, as well as all later adjustments.
The mistakes committed during a project should be a lesson to learn: Certain type of
software enables a detailed project analysis, providing the ability to forecast trends,
isolate problems and show estimated costs and time for completion. Taking into
account the tough global competition, IT is no longer a luxury but a necessity. It is
possible to measure the ROI in IT, though it may not be as definitive since intangible
capability upgradation and knowledge utilization benefits are involved.
Knowledge Management: Top Trend for Project Engineers
Today, as there is a critical need of knowledge management and information storage,
the design software can directly tunnel into the SAP R/3 transaction system to enable
data storage and retrieval. There is a need to integrate information to generate life cycle
databases for ready reference of all working disciplines to achieve efficiency in all
environments. In absence of readymade solutions to fit their requirement, some EPC
companies such as L&T have invested around US$ 0,87 million per year in the IT.
In large projects, there is a need to design and engineer thousands of items followed by
their procurement from hundreds of suppliers scattered globally. This provides a huge
potential for eprocurement: Most of the EPC companies have launched a web initiative
that enables vendors/suppliers to register their products and services online. On
requirement, the companies could establish contact with the registered vendors and
take offers for their projects. This reduces the cost of floating the enquiry, follow up and
facilitates the EPC companies to have a choice of variety of suppliers/vendors for their
requirements.
The use of technology has enabled suppliers to invoice for products offered online and
payments for the same to be directed to their respective accounts online. This reduces
the paperwork and the processing time for payment significantly and increases the
bond/relationship between the customers and suppliers.
Choosing the Right Software
The different software packages offer varying capabilities and flexibility. However, one
should keep in mind that the latest software will not guarantee success. Instead,
software decisions should be driven by the scope of the indented use, determined by
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the needs or requirements that must be served to satisfy the objective. Microsoft.Net
technology enables unprecedented levels of software integration through use of
extensible language (XML) web services small, discrete building blocks that connect
to each other as well as larger applications through the use of Internet. On the other
hand, Microsoft Project/Primavera Enterprise helps one to manage schedules, resource
project status and project information report. It provides organizations with an
extensible technology platform to securely develop and successfully deploy best
practices for project management across the organization.
The Right Framework to Boost for Industry Projects
Government initiatives to bring in competition and put an end to monopoly would
provide more opportunities for the EPC players. Bandwidth and infrastructure are two
other significant areas which require individual focus in order to further enhance the role
of new technologies. Over the coming years, investment in IT is going to grow three fold
(e-commerce, e-procurement and other such technologies). It is therefore left to the
decision makers to make proper investment in the right software and make the most of
talent as well as the tool (software).
3D modeling helps companies by using latest design codes and standards to prevent
substandard regulatory violations as well as costly and potentially dangerous system
failures. 3D modeling offers a solution to create as quickly as possible from existing
designs or licensors. The solution is rule based and relationship driven to promote
design consistency through the complete process. Of course, integration is a key
element in passing the data in a controlled manner between the engineering tasks,
such as instrument and electrical design as well as physical 3D modeling. Safety,
integrity management, regulatory compliance, time to market, operational uptime all
of these are factors for which the oil and gas market depends on quality information. 3D
modeling offers the longest track record in the industry for delivering integrated
engineering information throughout an assets life cycle.
The my SAP project systems combine industry experience and expertise to provide
number of key capabilities such as managing projects and products throughout their
lifecycles. The my SAP project module is capable of conceptual design/engineering,
product/project estimating, integration with CAD/CAM/CAE and GIS systems and
collaborative planning and engineering that makes it possible to have a single platform
for managing the entire project cycle.
Manage the Supply Chain
The system helps companies to form a supply chain of collaborators and partners to
plan and forecast demand and supply, direct procurement, manufacturing, outsourcing,
order fulfillment and subcontractor performance. These partners share their
inventory/stock and track the status of the orders on a common database of the SAP
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module. The computer can perform all calculations and create planned order releases
and update inventory positions. However, the computers role is only suggestive in
nature; it does not issue purchase or manufacturing orders or reschedule open orders.
SAP is easier to implement in cluster business organization such as engineering and
construction, as the experience with similar companies enables the availability of
proven rapid implementation methods and solution based approaches.
This means the company can be up and running quickly and cost effectively with a
solution that meets the clients specific needs. Larsen & Toubro of India has been
experiencing new challenges ever since the economic liberalization and opening of the
global markets. In order to compete effectively in this scenario, the company felt the
need for computerized management control systems that could be uniformly
implemented across the enterprise. In order to maximize returns of investment, improve
business intelligence and form a value chain of business partners enabling faster
communication and high end integration, the company selected SAP as strategic
partner for implementing the systems.
Figure 2 shows the business model of project information systems using SAP project
systems in the organization: The company was linked to its customer and contractor via
Internet server link. A common database was updated with information from the
relevant source, like the project status or site progress details. The Internet link enabled
online updating of project information and seamless integration of the information
availability, enabling prompt action on critical activities.
The my SAP supply chain management is a supply chain solution that provides the
tools to implement the above philosophy to real business value, by dramatically
improving the ability to plan, respond and execute. My SAP SCM enables the
organization to adapt to the inevitable exceptions that occur in the race to meet the
market demands.
Modular Design & Construction
Today, global players and technological advancements have significantly changed the
way in which projects are being implemented. These include use of 3D design software,
extensive use of enterprise resource planning systems, e-commerce and
advancements in information technology. The harnessing of these techniques has
given rise to innovative approaches like modularization.
EPC contractors are increasingly resorting to the advantages of modularization where
applicable, especially in terms of feasibility and required capabilities. Modularization is a
design, fabrication and construction technique of breaking up a plant into sub-sections
(called modules) and fabricating these modules at a remote location. As these modules
come with all equipment, piping, structurals, electrical, insulation, painting, etc. they can
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be readily assembled along with adjacent modules at the installation site. Modular
plants are particularly well suited for remote and difficult site locations.
Modular fabrication requires minimal site work and lesser mobilization of labor at site in
terms of duration. Further, foundation requirements are also simplified and module
erection at site requires minimum space, minizing the effefect of harsh site conditions
such as heavy rains, freezing cold or scorching heat.
Since modular fabrication is carried in controlled shop environment, labor productivity is
high. It is possible to maintain very high standards of quality and safety at the shop floor
compared to project site. It allows for very low tolerances for ensuring smooth
interaction during erection at site. Ensuring minimal disruptions to the operating plant is
of paramount importance. Construction at site is often governed by restrictions imposed
due to safety regulations in operating plants. Modular construction lowers the need for
hot work permits and planned shutdowns of existing operations. Module fabrication can
commence at the fabricators shop even before regulatory or environment approvals
are obtained for clients work site. The time saving bonus with modular approach
provides for greater scope for concurrent engineering due to higher extent of
standardization. It is possible to utilize existing module layouts, P&I diagrams, 3D-
Models, etc. for new facilities that result in shorter schedules.
Reduction in Capital Costs
Modularization offers reduced capital costs, depending on the project size, location and
scope. The total number of man hours is reduced on account of better productivity,
lesser supervision requirement and efficient material handling. Further, delays on
account of labor relations issues often encountered at site are also minimized.
Modular plants are more amenable to retrofitting and revamp. As the modules are
readily movable, the complete plant can be moved to a new location. Thus, the project
management of EPC projects requires a broad understanding and planning, use of
technology, modularization of the packages and above all, effective management of the
resources to provide a best fit for the project needs. It is only with seamless integration
of effective management along with the use of technology, that projects can be
executed in a faster track domain.
* Courteously of PROCESS India

Copyright 2014 - Vogel Business Media
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FIG 1: Project management schedule (Picture: Deepak Makhijani)
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FIG 2: Project information systems implemented using SAP project systems (Picture: Deepak Makhijani)
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A well managed EPC project in oil and gas industry results in higher efficiency and better productivity.
(Picture: Honeywell Process Solutions)
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A well managed EPC project in oil and gas industry results in higher efficiency and better productivity.
(Picture: Honeywell Process Solutions)
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Fig. 2: Enterprise-wide project management through extranet from anywhere and at any time linking
company, customer and contractor (Picture: Deepak Makhijani)