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Small Capital Projects: Upgrade Your Site Capabilities

December 30, 2018

The 3 simple steps directors can take to start supporting site-based capital project managers

 

Site-based capital projects are small but complex, critical business priorities for modern petrochemical companies. As an industry, we have given them short shrift.

 

The unsung heroes who manage these initiatives don’t enjoy the clean slate that greenfield and megaproject managers do – they must juggle established budgets, schedule around shutdowns and make do with existing engineering data and site access. In addition to this remarkable complexity, these projects are almost always undertaken to comply with environmental regulations or to improve (or maintain) processing capacity, which is critical to keeping the site operational and earning.

 

Yet, a recent analysis by IPA suggests at least 14% of site-based project managers need their capital project systems to be better adapted to their unique requirements. They also want more resources – like operations/production input and cost-controls – and more time for front-end definition.

 

 

Here are three simple steps that site and program/project directors can take to support site-based capital project managers. These steps will help your team achieve increased visibility, capture new efficiencies and measurably improve outcomes.

 

1 | Empower Your Construction Managers

 

The most powerful way to adapt a company’s project delivery system to smaller site-based initiatives is to enhance the role of construction management across the lifecycle of the project. Front-end definition takes a great deal of time and resources, and smaller site-based projects are often pressed for both. If you make construction management a cornerstone of the project front-end development efforts, you’ll leverage the unique insights and skills that construction managers bring to the table.

 

With construction managers at the helm, your team will naturally take a more construction-driven approach to project management, and you’ll benefit from increased visibility and efficiency. Ultimately you may find – as we have – that a production schedule driven by transparent, predictable work packages is more effective than one driven exclusively by a scheduling tool such as Primavera P6.

 

2 | Develop solid on-site construction management capacity

 

There is no substitute for Owner involvement when it comes to small, site-based project delivery. The people who fill key project roles -- including project management, engineering management and construction management -- should be trained in-house and working on-site. This means that, in many cases, the best decision is for Owners to hire and train their own people. It’s the best way to build solid, reliable in-house construction expertise that will support your efforts to prioritize work over the long term. In turn, you’ll benefit from greater project predictability.

 

 

3 | Start Measuring Project Execution Metrics

 

A recent examination of 100 site-based projects found that just 37% met their success-based criteria – which means nearly two out of three projects do not. Why?

 

Most sites collect and analyze a full suite of cost and schedule metrics, but execution and collaboration metrics are overlooked -- and for good reason. Traditional project delivery processes for small-capital projects are not structured to support the measurement of the physical scope installation in relation to how teams collaborate to deliver these scopes. It’s an old saw in business management, but it’s true: What gets measured gets managed. You must measure execution and collaboration in order to manage them well.

 

Consider how your site and sustaining capital projects might improve if you were measuring and managing the following basic execution metrics:

  • What percentage of Engineering Work Packages (EWP) are ready on time?

  • How many Construction Work Packages (CWP) are delivered to contractors on time?

  • How long does it take to convert a CWP into Installation Work Packages (IWP)?

  • What is the turnover rate on your IWPs?

  • What are the quantities trends per scope elements? How do they compare to project estimates?

Collecting and analyzing metrics like these will give you unprecedented insight into where exactly your system is breaking down, and what can be done about it – especially if you’re also gathering supporting data like decision context and rationale. This can be a source of competitive advantage for sites who work on enhancing the predictability of their project delivery.

 

With a construction-driven, metrics-driven management approach to your site projects, you’ll enjoy more predictable project execution, fewer cost overruns, and a happier team.

 

 

 

 

 

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