HERVE

BARON

Todays Projects:
Challenges & Key
factors of success

Herv Baron
Nov 29th, 2010

HERVE
BARON

Todays Projects:
The main challenges and the Key factors of
success

Overall Contractor responsibility: EPC (Engineering, Procurement,

Construction)
Mega Projects: > USD 1bln
Multiple locations & actors: Low cost centers, Construction sub-contracted
Schedule: Drastically tightened

HERVE
BARON

Todays Projects:
The main challenges and the Key factors of
success

Overall Contractor responsibility and mega project: Client leaves interface

responsibility with Contractor
On-Shore vs Off-Shore, different set-up:
On-shore: must set-up Temporary Site facilities and camp in remote
location vs Off-Shore: at a shipyard

HERVE
BARON

Project execution synoptic

Design

Procurement

Manufacturing

Installation

Construction &
erection

Inspection &
tests

Shipping

Hand-over

HERVE
BARON

Technical ?
Cost ?
Quality ?
Schedule ?
Size ?
Safety

What are the main challenges ?

HERVE
BARON

What are the main challenges ?

Technical?
The processes and technology are proven, no prototype.
Quality:
The project execution systems are well developed and standardized: vocabulary,
methods and tools (planning, progress measurement, management of change, plant
mechanical completion etc.) and fairly standard throughout the industry.
Cost?
Lump Sum Contract: quantities increase & market conditions risks with
CONTRACTOR. Precise specifications, list of approved vendors make the Contract
well nailed down for Company.
Schedule:
Large projects must now be completed in 36 months vs 45 months a few years ago.
Schedule risk is with CONTRACTOR: both liquidated damages and time related
costs

HERVE
BARON

What are the main challenges ?

Size:
Not human! Mega LNG Project 75,000 tons of equipment, 42,000 tons of steel (6
Eiffel towers!)
Multiple and ever changing actors, e.g. Engineering home office+ low cost centers
Construction is sub-contracted
The challenge is to keep control of the project
Safety challenge
Mega Projects
25,000 people at peak, 80 nationalities
Various levels of education, supervision, time pressure
Diffusion of safety culture: raise awareness, STOP card etc.
Management leadership: leadership by example: safety walkthrough, safety talks

HERVE
BARON

The Key factors of success?

Schedule:
=> adapt to concurrent rather than sequential execution
Get the design input early but get it right!
Avoid changes and re-works
Integrate the E, P and C work processes

Size:
=> Develop and implement precise controls
Know your actual progress!
Control your suppliers and sub-contractors

HERVE
BARON

The Past: sequential execution

ENGINEERING

Drawings

Bill of
materials

PROCUREMENT
CONSTRUCTION

HERVE
BARON

Today: concurrent execution

ENGINEERING

PROCUREMENT

CONSTRUCTION

ENGINEERING
PROCUREMENT
CONSTRUCTION

HERVE
BARON

Today: concurrent execution

ENGINEERING

PROCUREMENT

CONSTRUCTION

ENGINEERING
PROCUREMENT
CONSTRUCTION
Tightened schedule changed the execution from sequential to concurrent.
This drove the project to sharpen controls over its execution: identify and focus on critical path,
pro-actively manage interfaces etc.

HERVE
BARON

Today: concurrent execution

ENGINEERING

Bill of
Materials 1

Bill of
Materials 2

Drawings 1

Drawings 2

PROCUREMENT
CONSTRUCTION

Derived challenges:
Get the design input early
Avoid changes and re-works
Integrate the E, P and C work processes

HERVE
BARON

Today: concurrent execution

ENGINEERING

Bill of
Materials 1

Bill of
Materials 2

Drawings 1

Drawings 2

PROCUREMENT
CONSTRUCTION
Engineering/Procurement interface:
Close coordination for anticipated orders and revision of quantities, including cancellation etc.
Engineering/Construction Interface:
Prioritization based on start-up and construction sequence
Understanding of mutual needs, agreement on deliverables
Regular up-dates (work volumes and delivery schedule) by Engineering to Construction
Integration of tools (IT)

HERVE
BARON

Getting the design input early

Engineering is the integrator of the Plant equipment, and is highly dependent

on vendor data
Process
simulations

Cooler

Equipment
list & duty
Equipment
inquiry &
selection

Vendor
Engineering

Vendor data
& drawings

Foundation
drawings

HERVE
BARON

But get it right!

Engineering must be right first time, which requires experience, good

coordination between disciplines and anticipation
Safety valves
duty
Safety valves
inquiry and
purchase

Number,
size
estimates

Safety valves
sizing & drawings

Safety valves
location & piping
routing
Piping calcs &
supports
Supports
& loads estimates

Steel structure
design and
drawings

Purchase steel
Fabrication
Shipping

Structure
at Site

HERVE
BARON

Learn more, much more on Engineering

A unique synthesis for the

busy Project professional
270 pages
300 illustrations

HERVE
BARON

Learn more, much more on Engineering

Table of Contents

HERVE
BARON

Learn more, much more on Engineering

Order direct on the publisher website:

http://www.editionstechnip.com/en/cataloguedetail/1111/oil-gas-engineering-guide-the.html

HERVE
BARON

Integrate the work processes

The Construction Sub-contractor is paid a

fixed amount for a ton of steel installed
It is uncertain about the actual delivery
schedule of drawings and materials, wants
to avoid stand-by
Engineering to up-date the Construction
sub-contractor with work volumes and
delivery schedules for Construction subcontractor to plan and mobilize efficiently

HERVE
BARON

Integrate the work processes

Develop Engineering /
Construction synergies

Constructability reviews
Pre-fabrication
Engineering schedule to
match Construction
priorities/sequences
Engineering deliverables
tailored to construction
execution needs

HERVE
BARON

Avoid changes

Sources of changes:
Inherited/Open technical issues
Design development & Reviews
Clients new requirements
3rd party at interface

Avoidable/
Unavoidable ?

Resist avoidable changes Contractual management

Impact of changes is exponential with time: implement early!
Interface management,
System to identify all impacts and track implementation of changes

HERVE
BARON

Know your Projects progress

The principles:
Draw the list of work items, total = 100%
Actual progress = individual progress over all work items

The challenge:
The list of work items keeps changing difficulty to keep track
The total work volume (100%) keeps changing
Increase by up to 30-50% are common

The keys:
Overall progress from detailed breakdown by individual work item/steps
Monitoring from up-to-date list of work items

HERVE
BARON

Set-up an accurate progress measure

The overall picture is accurate

If :
its derives from progress of
elementary work items,
It reflects the true work volume,
i.e., is based on up-dated list of
work items,

Only through detailed status, broken down by individual work item

and work step completion can one ascertain the exact progress of the work.

HERVE
BARON

How are the electrical works doing?

How to monitor construction progress, the case of Electrical cables for a FPSO:
254 km of Electrical cablesto pull, gland, terminate. What is the progress?

HERVE
BARON

How are the electrical works doing?

Individual item (cable) and work step (pull/gland/terminate) status

HERVE
BARON

Control your suppliers and sub-contractors

You get what you inspect, not

what you expect
Know your supplier work
process/steps
Implement tight followup/expediting
Access you supplier's systems

HERVE
BARON

Know what drives the overall duration

For the explanation, please go to:

The Oil & Gas Engineering Guide, 2nd Edition, Herve Baron, Editions Technip, Mars 2015
http://www.editionstechnip.com/en/catalogue-detail/1111/oil-gas-engineering-guide-the.html

HERVE
BARON

Know what drives the overall duration

HERVE
BARON

Go for more!

You enjoyed this presentation?

Share my experience on other topics:
Engineering
Contract Management
Project Control
Attend my classroom training
List and schedule of coming sessions at:
http://www.toblog.fr/en/baron.html