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The Impact Mega Projects have on In-Plant Project Execution

The Impact Mega Projects have on In-Plant Project Execution . Paul G Williams 19 June 2013 Houston, TX . Industry Perspective. Owners in today’s chemical and hydrocarbon process industries have aggressive expansion plans

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The Impact Mega Projects have on In-Plant Project Execution

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  1. The Impact Mega Projects have on In-Plant Project Execution Paul G Williams 19 June 2013 Houston, TX

  2. Industry Perspective • Owners in today’s chemical and hydrocarbon process industries have aggressive expansion plans • Incorporates additional yearly capital spending and several mega-scale expansions • Resurgence driven by low energy costs –contributes to over 50% of production cost for most facilities

  3. Background • Major expansions, new facilities and increased maintenance are draining available engineering, construction and fabrication resources • Mega projects draw resources from small in-plant projects and plant based technical/operational organizations • Large projects also suffer from lack of skilled resources from project management level to craft worker

  4. Background • Problem deepens when project drivers are defined by business goals to achieve completion date during high price cycles • Forces organizations to implement execution strategies without understandingcomplications that would occur (compared to conventional execution) • Example: the fast track execution • Requires level of organizational maturity and rigid and detailed planning from early project phase to completion

  5. Project Impact • Plant based project resources must plan and manage projects out of range of their experience level • Concepts are similar • Volume of data & complex interfaces is overwhelming • Traditional decision-making processes /communication lines not structured to address management’s need for decision-making details required on mega projects

  6. Project Impact • Plant based practice of going to local alliance contractors does not always work • Typically focus on small, in-plant, project workload and do an excellent job • When overstretched, they struggle to execute quality deliverables in a timely manner • Pricing is also an issue

  7. reality • Resources experienced in planning /executing complex projects tend to cost 12% to 17% more per man hour than plant-based counterparts • Large-sized projects warrant experienced team members • Typically comes with high price • Needs to be planned for accordingly

  8. opportunity • Good time to become a Project Manager (PM) from a demand standpoint

  9. pitfalls • Unfavorable time to become a PM from a guidance standpoint • Minimal mentorship • Thrown into a plant-based PM role soon after being hired • No time for honing skills through execution of various day-to-day roles /responsibilities • Expected to manage with 1 - 3 years experience rather than 10–15 year maturation process that once existed • Can be excellent plant-based project PMs, but with limited “battle wounds” and lessons learned, may have difficulty being successful on major projects

  10. trends • Owners sometimes hire Project Management Contractors (PMC) as Owner representatives • Not always a successful tactic • They believe this addresses lack of owner personnel in key project positions • PMCs are usually EPC contractors who are unfamiliar with Owner role

  11. Addressing the issue • Effectively executing mega-scale project in a plant-based environment can be achieved • As in any project, planning is key • Knowing what skills are available • Identifying gaps that exist • Understanding what drives our projects • Identifying how success is measured • These plans will NOT look similar to those of 10 years ago!

  12. Addressing the issue • Innovative methodologies need to be developed to allow execution of projects in resource-constrained environments • Innovative contract strategies are required to capture best available resources • Pricing realities need to be built into baselines • Realistic schedules are necessary to communicate achievable results • Validated cost estimates are required to assure cost expectations are able to be met • Resource plans need to be better defined (but may not match traditional organization charts)

  13. Contact Information Stephen L. Cabano Pathfinder, LLC slcabano@pathfinderinc.com www.pathfinderinc.com Gulf-Coast Office 16225 Park Ten Place Suite 500 Houston, TX 77084 P: (281) 292 – 5655 F: (281) 419 – 9977 Corporate Office 11 Allison Drive Cherry Hill, NJ 08003 P: (856) 424 – 7100 F: (856) 424 – 6414 Calgary Cherry Hill Houston Mexico City

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