The Chemical Manufacturing Industry frequently suffers from inefficient project execution challenges resulting in schedule and budget overruns. These issues tend to compromise investment returns and impede the company’s growth plans. This series of articles analyzes the project lifecycle, its pitfalls, and measures for effective project execution. An earlier article breaks down the project lifecycle into its various phases. This article from the series covers the first phase of the lifecycle, namely the Engineering Phase. The objective of this phase is to develop high-quality and cost-effective documentation for the project in a timely manner to arrive at the procurement specifications, construction drawings, and statutory approval packages for the project.
An aspect of manufacturing excellence is organizational adaptability toward market dynamics. The agility with which one adjusts to the changing market demands often decides manufacturing success. Similarly, it may be perceived that successful project execution features the ability to rapidly change with dynamic project requirements. There may also be a perception that changes made before the start of plant construction are inconsequential since concrete is yet to be poured into the ground. However, this could not be farther from the truth. Arguably, the leading cause of poor project execution is loosely defined and/or changing project requirements. Not to lose out on the adaptability of the plant, well-defined and steady project requirements should account for the flexibility expected from the plant. Changes, if necessary, should be disciplined via a controlled change management process.
Engineering documents evolve through a structured work process. The documents contain immense amounts of interlinked data. Rapid and uncontrolled changes tend to result in incoherent documents. Late-breaking changes – especially in process parameters – have cascading effects across the project. Consequently, these approaches tend to result in cost and schedule overruns plus a potentially suboptimal plant. A stage-gate process with effective change management affects discipline on these changes thereby enabling well-defined and steady project requirements. Development of engineering documents at each stage should begin only after the stage gate conditions are met in form of signed-off documents as shown below in Figure 1 and Table 1.
|Gate 1||Entry to Conceptual |
|Gate 2||Exit from the Conceptual Design Stage / Entry into FEED Stage||PFD, Material Selection Diagram, Equipment List, Conceptual Capex (Optional)|
|Gate 3||Exit from FEED Stage / |
Entry to Detail
|P&IDs, UFD, PDS, Conceptual |
Layout, FEED CapEx (Optional)
|Gate 4||Exit from Detail|
|MDS, Equipment layout, |
3D Model, IDS, Control System, E & I Layouts, DE CapEx
Table 1: Stage-Gate Process for the Engineering Phase
Next, if documents need to be changed after the closure of the stage gate, then a change management process should control these changes. This process mandates the following steps (as shown in Figure 2):
•Request for Change: The project team identifies a change that needs to be made to the signed-off documents and requests for the change along with a suitable justification
•Impact Assessment: Jointly with the engineering consultant, the project team assesses the impact of the change in terms of project schedule and CapEx.
•Approval of Change: After due consideration of the justification for the change along with its time and cost implications, the Management-sponsor approves the change. Changes that are not approved would naturally be discarded.
•Execution of Change: Jointly with the engineering consultant, the project team executes the change.
Incorporating these procedures controls the dynamic changes in the engineering phase of the project mitigating a severe challenge in the workflow. In addition, other considerations like the selection of the right engineering consultant, standardization of systems, and proficient monitoring systems for quality and schedule are also crucial for effective engineering. Together these systems ensure a smooth and effective engineering phase of the project.