Transforming capital project schedules and costs
07 June 2016
Suzanne Gill reports on the European introduction of a new initiative from Emerson Process Management which is designed to help improve scheduling and costs for capital engineering projects, helping companies to achieve top quartile performance.
In his opening keynote presentation at this years Emerson User Group EMEA conference, Steve Sonnenberg, president of Emerson Process Management, emphasised the reason for the event’ theme of ‘New reality – New opportunity,’ saying: “Lower oil and gas prices are affecting all of us in some way and these conditions will be with us for some time. I forsee a slow recovery in energy prices so we do need to assume that the current state of affairs is the new reality. However with this new reality come new opportunities – to move away from traditional practices, to try new ideas and to focus efforts where they will have the greatest impact.”
Sonnenberg went on to say that executives today are being challenged by their boards to be the best in the industry and to maintain and improve profitability even in challenging times and this has led to a push to achieve top quartile performance. Explaining why, he said: “Plant availability can range from less than 84% for bottom quartile performers to over 97% for enterprises in the top quartile. Even a 1% gain in availability of a refinery could mean as much as 5 million euros extra in profit every year and this can be achieved without investing a single euro in new capacity.”
Sonnenberg’s advice on hoe to move up into the next quartile of industry performers is to start by choosing an area that you know can be improved upon – for example, aim to achieve operational excellence. Safety is always at the top of this list, so could you change work practices or training methods? Could you utilise new technologies to minimise and mitigate risk? Also consider whether there are new ways that you could optimise production and whether you have the most effective tools and expertise to hand to get the most out of your operation.
Another area to look at is reliability, which is an essential factor in reducing downtime. “Gaining benefits here does not need more money to be spent on maintenance,” said Sonnenberg. “With the right approach it is possible to increase availability while at the same time reducing maintenance costs.”
A survey undertaken by Solomon Consulting Group has shown that plants with the highest availability among the top quartile performers also have the lowest maintenance costs. It has also identified that those in the bottom quartile will spend 3.5 times more on maintenance.
Energy and cost reductions
Energy emissions is another area that can be used to help reduce costs. Energy will be the biggest variable operating cost for any company – up to 30% for a typical industrial facility. Studies have shown that up to 37% of energy is wasted, so aiming to eliminate waste energy can offer a real opportunity to improve profits. It would also result in lower emissions which is important to all companies today to help meet ever more stringent emissions targets.
Roel Van Doren, president of Emerson Process Management in Europe, went on to explain how companies can move into the top quartile for capital project performance by delivering projects on budget and on schedule.
He explained that, currently, 65% of industry capital projects over 1 billion euros fail to meet targets. The numbers are not much better for smaller projects, where 35 % of projects also fail to meet targets.
“We need to think about projects differently,” said Van Doren. “Process automation can be used as a lever to improve project costs and schedules. But to make this happen there also needs to be a transformational change in the way that projects are designed, engineered and executed. Remember that top quartile capital projects are completed at half the cost and in half the time compared to below par performing projects and fourth quartile projects.”
Van Doren explained that managing project costs requires the elimination of unnecessary work and the utilisation of standardised technologies to help reduce design hours, construction materials and labour – for example through the greater use of wireless technology.
“Risk also need to be managed,” continued Van Doren. “The best way to do this is to reduce complexity. We need to find ways to simplify projects. Modularisation is a popular concept but traditional methodologies like Factory Acceptance Tests (FATS) make it difficult. However, what if you could do a virtualised software acceptance test in the Cloud and then connect a skid, to the virtualised system to undertake checks. This would decouple the traditional dependence between different suppliers and hardware and software to make concurrent workstreams possible and to eliminate traditional project bottlenecks.”
Schedules are another area that he looked at. “The biggest impact on the schedule will be design changes, so we need find a way to better way to accommodate late changes and I believe that technology can help here too. Control systems, for example, that can automatically discover and assign field devices and the pervasive use of wireless instrumentation and networks. The technology already exists to allow IO to be added or changed during a project without the need for any rework and utilising this technology would eliminate around 80% of the engineering and technician hours during commissioning.”
Emerson’s newly launched Project Certainly initiative has been developed to help companies improve capital project performance. It offers a transformational approach and redefines the way projects are designed, engineered and executed.
“Project Certainty is not just about technology,” concluded Van Doren. “It is about leading change in an organisation and building new elements into a project plan from its outset.”
So, what is it?
Project Certainty is a combined technology and engineering-based approach for improved capital efficiency and more reliable project schedules.
According to Jim Nyquist, president of Emerson Process Management’s Systems and Solution business, industry has reached a tipping point in which projects are not sustainable with current budget and schedule excesses and that, in order to achieve game-changing performance in projects, transformative and comprehensive approaches such as Project Certainty, are necessary.
It begins with early engagement during engineering and design studies to define project goals and high impact strategies to meet those goals. Despite traditionally accounting for just 4% of a projects investment, automation can offer repeatable ways to eliminate cost, reduce complexity and accommodate late-stage project changes, beyond the automation discipline.
Project Certainty relies on the right design engineering strategy to help eliminate centralised control system room requirements by up to 80%, and can reduce piping in some applications by up to 60%. Further, project-wide equipment reliability analysis could offer huge cost reductions for capital spare parts.
Emerson’s new project approach also addresses the complexity of data and documentation through the use of innovative technologies that provide features such as a single source of project data and automated documentation.
Emerson’s own technologies – such as electronic marshalling with CHARMs, and pervasive wireless field instrumentation – can help project teams to accommodate last-minute design changes without impacting schedule.
The technologies and methodologies are already available to help companies achieve top quartile performance. However, in addition to just using technology, collaboration and commitment to eliminate outdated project approaches and drive change into the industry is also vital and this is where Emerson hopes that Project Certainly will help to make a real difference.
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