Achieve Alignment on Capital Projects

Capital projects command a large percentage of a company’s time and resources. By using collaborative project approaches, participants can work together to develop and achieve predictable project outcomes.
By Brian Gallagher
February 24, 2020

Industrial, power and process construction projects face a unique set of challenges and opportunities. Each plant, unit, process or facility is unique and requires custom-designed equipment as well as complex mechanical, electrical and process piping systems. This translates into capital projects that require a significant investment in time and resources, before breaking ground.

Gaining and maintaining alignment during the early phases of front-end pre-project planning is critical to achieving predictable project outcomes. The construction industry has the opportunity to realize economies that can be achieved by aligning stakeholders and sophisticated processes. Capital project delivery can improve by taking advantage of advanced workflows.

The Construction Industry Institute (CII)—the research and development center dedicated to improving capital project delivery—defines alignment as the condition when project participants are working within acceptable tolerances to develop and meet a defined set of project objectives. Owners and contractors need to ensure everyone on the team has exactly the same vision of what the objectives are and how they are going to successfully achieve those objectives.

Project success is dependent on strong alignment among project team members and key project stakeholders. Industrial, power and process owners require high quality and safe capital projects as quickly as possible, at the lowest possible cost. Owners, contractors and all other stakeholders must work together to achieve alignment on these projects by clearly defining roles and responsibilities to avoid issues, collaborate on effort and share risk. Goal alignment among members of a project team is foundational, allowing individual team members to work toward—and achieve—common project outcomes.

As early as 1997, CII took steps to improve the ability of owners and contractors to work together to clearly define roles and responsibilities. They developed the Owner-Contractor Work Structure (OCWS), a tool that provides owners with “a decision-making process to identify project competencies, determine whether these competencies are core or non-core to the owner, and decide upon the most effective approach to outsourcing different project competencies.” An updated and simplified version of the OCWS, the Core Competency Toolkit, was issued in 2005. The Core Competency Toolkit provides a practical framework for allocating various project activities among contractors, as well as guides hiring and outsourcing decisions.

In addition to the complexity of industrial, power and process construction projects, another change in the industry has driven the need for greater collaboration among all stakeholders. CII explains that “owner companies are increasingly shifting project responsibilities to contractors, which may result in inadequate staffing to develop and execute capital projects.” With more decision-makers involved in any given project, there’s an increased risk of gaps or duplication of effort. Fortunately, current technologies and strategies can help address the increased risk.

There are three ways contemporary practices can help companies achieve predictable project outcomes. They can reduce the unknowns, enable faster decision-making and eliminate baton-passing.

Reduce the Unknowns

In some industries, such as the financial industry, data and analytical tools are now integrated into daily business practices. The construction industry, by comparison, lags in the adoption of these tools, especially during capital planning and appropriation phases. Data and analysis tools are quickly becoming of great use during these phases.

Businesses depend on capital projects to expand production capacity and accelerate growth, so capital projects inherently assume risk: the asset must add more to the bottom line than it consumes. All too frequently, decisions made during early planning stages rest on assumptions and rough calculations. These decisions eventually lead to lost time and money, as construction or even plant operation teams are forced to compensate by dealing with clashes or other incompatibilities.

Capital planning involves big questions, including the following.

  • When is plant expansion or retrofit more beneficial than a new greenfield facility?
  • What basic building footprint is required to accommodate production and process equipment (now and in the future)?
  • How well do existing site conditions, utilities and access roads serve the intended site?
  • What are regional construction costs and labor availability?

Historical data sets, with numbers on costs, craft productivity and weather patterns can answer some of these questions. A conceptual computer model—which can later form the basis for the design and engineering teams’ working BIM model—capture and organize relevant information, getting team members on the same page.

Make Decisions Quicker

Having a wealth of information instantly available allows front-end planners to collaborate, compare alternatives and make informed decisions very quickly. The evaluation of a site, phasing and constructability used to take a project team six to eight weeks. But models and other collaboration tools can help the team arrive at decisions within days instead of months.

The information presented in collaboration tools has the advantage of being dynamic rather than static. Multiple scenarios can be compared by adjusting a few numbers or by altering a conceptual model’s footprint, building material type, massing, siting and more. Cost estimates on energy, life cycle, topography/grading and scheduling/sequencing are then updated in real time.

Early predictions also save time down the road. For example, historical data on plant maintenance, combined with information such as new-build equipment literature, can be used to predict maintenance needs for the future plant, preventing unplanned shutdowns or other surprise events. Gates, or review processes, ensure that projects meet owner-established criteria at the beginning of the project in order to move forward.

Finally, a collaborative workflow, combined with state-of-the-art technologies, achieves efficiencies by helping designers and construction firms understand an owner’s approach, thought process and critical items.

Eliminate Baton-Passing

For industrial, power and process construction and operations, the greatest progress in the adoption of data sets and collaboration tools has been in the area of project delivery. Advanced construction technology supports the sharing of ideas and information between various contractors, designers, engineers, suppliers and owners.

For example, in the past few years, advances have been made on BIM integration of mechanical, electrical and plumbing design. Laser-scanned information on existing conditions are now regularly fed into BIM models, improving the models’ accuracy. Because BIM models allow greater precision in scheduling, the team can now take advantage of just-in-time deliveries or fabrication. The 5D (estimating) component of BIM can be used to inform value engineering efforts, as well. These efficiencies and more contribute to better overall project outcomes.

Capital projects have always commanded a large percentage of a company’s time and resources. By using collaborative project approaches (combined with the best available technologies) to achieve alignment on capital projects, participants can work together to develop and meet a uniformly defined and understood set of objectives and achieve predictable project outcomes. The result is reduced unknowns, faster decisions and fewer gaps in workflow—all leading to greater success in industrial, power and process construction and expansion projects.

by Brian Gallagher
Brian Gallagher has over 30 years of experience leading strategic planning, organizational development, marketing and sales efforts for design and construction firms. He is author of three books and was named a Top 20 Construction Influencer by Procore.

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