Construction of new process facilities: Projects range from line upgrades that cost less than $1 million to huge new campuses costing more than $4 billion. The geographic range is equally wide, with larger greenfield projects more likely in developing regions, and brownfield plant renovation projects more likely in North America.

But despite the wide range, they have one thing in common. They are systematic, collaborative efforts drawing on the expertise and experience of multiple disciplines, from accountants pushing essentially weightless electrons to construction navvies wielding tons of concrete.

In the end, both brownfield and greenfield plant projects are embodiments of systems for manufacture. The resulting plant space is (most people hope) a well-organized machine for production. So, too, is the project that results in the new space. At its most abstract, plant projects are also well-organized machines—systems that include the project owner, project managers for engineering, procurement and construction (EPCs) and/or main automation contractors (MACs).

As with any large project involving numerous professionals, an EPC/MAC project can present challenges to plant owners, engineers and operators. But everyone can work together to ensure a new or revamped plant meets both operational and business objectives.

An EPC/MAC project has much in common with large-scale technical projects in general. “FEE [front-end engineering] and preliminary planning are critical,” says Cameron Thrutchley, director of strategy at Honeywell Process Solutions, a Phoenix-based MAC. He cites front-end loading (FEL) levels as developed by Independent Project Analysis, Inc., an institute that provides education related to capital projects:

• FEL1, evaluation of business needs, where you “set your vision,” Thrutchley explains;
• FEL2, development of scope—“your philosophy around automation, safety, networks, all the issues”; and
• FEL3, authorizing the right project via “a detailed functional spec, one that’s integrated with the vision determined in the first stage.”

“The key moments for any EPC or MAC project comes at the beginning,” agrees Mark Freedman, senior partner with The Boston Consulting Group (BCG), and global leader of its Industrial Goods practice. “It’s essential to define an execution plan and stick to it.”

Still, while the basics devolve into tried-and-true capital project parameters, the details—and there are many of them—combine into a very special kind of project: one that requires an unusual amount of back-and-forth education among the players (because no single discipline ultimately knows much about the work the others do), and an unusual amount of collaboration (because nearly every detail is in one way or another tied to all the other details).

Because everything is under the gun—the plant’s safety, economic payback and the need for quality production at target rates—Freedman emphasizes one extremely important early step: “Put five to ten main risks down on paper—including how to mitigate them. It’s surprising how often this is not done.”

91.7 percent late

What happens without front-end engineering and design? A 2004 Honeywell research project involving more than 1,000 customers and project owners revealed that 91.7 percent of facility building or rebuilding projects finished late. Thrutchley adds, “And once we looked at the details, the situation was worse than this statistic reveals. There were the usual issues of budget and schedule, but there were also troubles during handoff to operations. Worse, many of the as-commissioned lines didn’t hit targeted production rates, sometimes for years after startup.”

That last issue is a primary area of concern. Thrutchley cites the conclusion of a study by one of Honeywell’s major oil and gas customers: a given facility will never reach its projected return on investment (ROI) objectives if it has failed to reach its production targets within a year.

ON THE WEB: 4 Questions—Project Management
Learn about small-scale project management in May 2011’s 4 Questions with John Person, vp, Tangent Engineering. Visit bit.ly/related_018

Thrutchley blames what he calls the traditional model for many of the problems—a model that sees an owner contracting with an EPC, who then throws contracts over the wall to an MAC for the automation portion.

“EPCs are world-class at plant design and build-out,” he says, “but the increasing proliferation of automation systems and controls, and the increasingly finer granularity of sensor and operational data, all add up to a situation where a typical EPC just can’t keep up. If the EPC works from a traditional, vendor-transactional point of view, an automation source becomes just a ‘vendor’ selected for cost alone. ‘Give me a DCS… or SIS… or field device in a box, three bids and a buy.’ But it just doesn’t work, 97 percent of the time. Important automation opportunities and ...