Modularisation – The Next Step - Presentation by Bill Meyer, Foster Wheeler USA Corporation

Feb 2011Bill Meyer

Modularisation – The Next Step

William (Bill) Meyer -

B.E. (Civil) Hons., MBA.

Director Project Execution Development

Foster Wheeler USA Corporation

Houston, Texas.

william_meyer@fwhou.fwc.com

Feb 2011Bill Meyer

Topics

1. Where is modularisation going? Is there a trend?

2. What is the optimum size of module? Are larger modules

better?

3. What impacts are tomorrow’s modules likely to have on

construction?

Feb 2011Bill Meyer

Agenda

1. Introduction

2. Historical Perspective – Past Trends

3. Understanding why – Cost / benefit and decision

process

4. Optimising module sizes

5. Summary

6. Q & A

Feb 2011Bill Meyer

Accent

� Australian

University of Melbourne

� Bachelor of Engineering (Civil) Honors

� MBA

� ½ as specialist Heavy Lift and Transport contractor

– Vice President Mammoet USA

� ½ Foster Wheeler – Engineering, Procurement, Construction contractor

– Director Project Execution Development

– Focus on major project construction execution and project management

Feb 2011Bill Meyer

� Global Engineering and Construction Contractor and Power Equipment Supplier

� In business for over 100 years

� Strong history in technology development

� Proven track record of successful project execution

� A global presence

� Over 13,000 resources

� Permanent offices in 28 countries

� Financially strong

Foster Wheeler

Feb 2011Bill Meyer

Registered Office & Corporate CenterOperating Unit HQs and/or Main Engineering CenterRegional/Local Engineering CenterSales Offices

Bogota

Feb 2011Bill Meyer

Topics

1. Introduction

process

5. Summary

6. Q & A

Feb 2011Bill Meyer

Historical Perspective – past trends

Statoil Mongstad – Norway - 1988

� 221 modules

� 975 tonnes max module

� 6 module yards

Feb 2011Bill Meyer

Statoil Mongstad – Norway - 1988

� 221 modules

� 975 tonnes max module

� 6 module yards

� Schedule driven

Feb 2011Bill Meyer

Mobil Coryton – UK - 1993

� Isomerisation unit

� 58 Modules to 350 tonnes

� Barge delivery from one European fabricator

Feb 2011Bill Meyer

Mobil Coryton – UK - 1993

� Isomerisation unit

� 58 Modules to 350 tonnes

� Barge delivery from one European fabricator

� Schedule driven

Feb 2011Bill Meyer

ExxonMobil Singapore Aromatics - 1996

� 213 modules – 26,875 tonnes total

� 1150 tonnes max

� 7 module yards

� 39 barge voyages

� Schedule driven

Feb 2011Bill Meyer

Inco Goro – New Caledonia - 2006

� Nickel mine and ore processing plant

� 599 modules

� 600 tonnes max

� 2 main module

Feb 2011Bill Meyer

Inco Goro – New Caledonia - 2006

� Nickel mine and ore processing plant

� 599 modules

� 600 tonnes max

� 2 main module

� Cost driven

Feb 2011Bill Meyer

The Woodside-operated NWSV Phase V LNG Expansion – Australia – 2007

� 75 modules

� 1,800 tonnes max

� Pluto currently nearing completion

Feb 2011Bill Meyer

The Woodside-operated NWSV Phase V LNG Expansion – Australia – 2007

� 75 modules

� 1,800 tonnes max

� Pluto currently nearing completion

� Cost and schedule driven

Feb 2011Bill Meyer

1. Pre circa 2000, main reason to go modular was for schedule benefits

2. More recently, cost benefits have been the aim

Feb 2011Bill Meyer

Topics

1. Introduction

process

5. Summary

6. Q & A

Feb 2011Bill Meyer

Viable Modular Execution

Benefits > Price you have to pay for those Benefits

Feb 2011Bill Meyer

Viable Modular Execution

Benefits > Price you have to pay for those Benefits

Risk of NOT achieving those Net Benefits is Low, Manageable &

Risk Goals are Achievable

Feb 2011Bill Meyer

Modular Execution Benefits can be:

1. Cost reductions

Feb 2011Bill Meyer

1. Cost reductions

2. Schedule reductions

Feb 2011Bill Meyer

1. Cost reductions

Profit

Compliance

Feb 2011Bill Meyer

1. Cost reductions

3. Safety enhancements

Feb 2011Bill Meyer

1. Cost reductions

4. Quality enhancements

Feb 2011Bill Meyer

1. Cost reductions

5. Reduced impact on Society

Feb 2011Bill Meyer

1. Cost reductions

6. Reduced impact on Environment

Feb 2011Bill Meyer

1. Cost reductions

6. Reduced impact on Environment

7. And many more…

Feb 2011Bill Meyer

Decision Analysis – Modular or Stick built?

Feb 2011Bill Meyer

Project

PhaseFEL 1

Conceptual FEL 2

Assess FEL 3

Define

Execution FEL 5

Evaluation

Evaluate Module Options

Modular Execution Decision

Timing is Critical

Feb 2011Bill Meyer

e.g. OSBL piping in existing racks

Major storage tanks

Feb 2011Bill Meyer

Site Survey includes

• Labour

Availability, productivity, quality, craft availability, cost, other projects in area, union impacts, regional / political issues etc

Feb 2011Bill Meyer

Labour Productivity

0 12 24 36 46 50 50 50 56 64 72 80 88 96 104

Graph 1 - Labor vs time (% of project schedule) – Direct hour impact if productivity shortfall of trainees

Feb 2011Bill Meyer

Result of productivity shortfall

0 12 24 36 46 50 50 50 56 64 72 80 88 96 104

Graph 2 - Labor vs time (% of project schedule) – Schedule impact if productivity shortfall of trainees

Feb 2011Bill Meyer

0 12 24 36 46 50 50 50 56 64 72 80 88 96 104

Graph 4 - Labor vs time (% of project schedule) – Manhours moved offsite

Move manhours offsite to pre-cast, pre-fab, pre-

assembly and modules

Skilled Labour Availability – Move manhours Offsite

Feb 2011Bill Meyer

• Labour

• Weather impacts

Feb 2011Bill Meyer

• Labour

• Weather impacts

• Logistics

On site and to site, route surveys, from fabrication yard, cost and technical capabilities, laydown areas

Feb 2011Bill Meyer

Site access restrictions can limit size of modules that can be

delivered to site

Feb 2011Bill Meyer

Logistics are project specific -

– Some sites have their own ports …

Feb 2011Bill Meyer

Logistics are project specific -

… others are road access only

Feb 2011Bill Meyer

• Labour

• Weather impacts

• Logistics

• Environmental impact

Feb 2011Bill Meyer

• Labour

• Weather impacts

• Logistics

• Safety

Feb 2011Bill Meyer

• Labour

• Weather impacts

• Logistics

• Safety

• Permit issues

Feb 2011Bill Meyer

• Labour

• Weather impacts

• Logistics

• Safety

• Permit issues

• Etc.

Feb 2011Bill Meyer

Module Yard Survey includes

• Labour

Productivity, cost, flexible workforce, skills, experience etc

Feb 2011Bill Meyer

Relative Costs to Fabricate Modules and Ship to Project X site

Philip

Project and Site Specific

Calendar Date Specific

Module Yard Specific

Feb 2011Bill Meyer

• Labour

• Yard capabilities

Covered fabrication, assembly area, loadout capabilities, management skills and experience, procurement capability, drafting capability, quality systems, safety records etc

Feb 2011Bill Meyer

• Labour

• Size of client management team

required

Feb 2011Bill Meyer

• Labour

required

• Shipping type and distances to site

Feb 2011Bill Meyer

• Labour

required

• Weather

Feb 2011Bill Meyer

• Labour

required

• Weather

• Political factors

Feb 2011Bill Meyer

• Labour

required

• Weather

• Political factors

• Etc

Feb 2011Bill Meyer

Will impact possible module sizes Type of plant

Scale of plant

Feb 2011Bill Meyer

Will impact possible module sizes Type of plant

Scale of plant

Feb 2011Bill Meyer

Economics of Modular Execution

For the cost estimates of stick and modular

Need only to focus on DIFFERENTIAL COSTS between stick built

and modular execution

Feb 2011Bill Meyer

Cost Downside

� Increased cost of steel / minor bulks / foundations

Feb 2011Bill Meyer

Cost Downside

� Increased cost of shipping

Feb 2011Bill Meyer

Cost Downside

� Potentially - increased cost of transport and installation

Feb 2011Bill Meyer

Cost Downside

Feb 2011Bill Meyer

Cost Downside

Feb 2011Bill Meyer

Cost Downside

Feb 2011Bill Meyer

Cost Downside

� Increased cost of Engineering

� Increased cost of client yard management

� Increased cost to set modules / extra field welds / hydro

Feb 2011Bill Meyer

Cost Upside

� Move labour cost offsite to cheaper / more productive laboursupply

Feb 2011Bill Meyer

20,000

40,000

60,000

80,000

100,000

120,000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33

months

20,000

40,000

60,000

80,000

100,000

120,000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33

months

Manhours moved offsite on a past modular project

Site Prep Civil Structural / Mech / Equip Piping E & I Indirects

Feb 2011Bill Meyer

Cost Upside

� Reduce indirect costs at site as less directs (construction supervision, consumables etc)

Feb 2011Bill Meyer

Cost Upside

� Reduced cost of camp construction due to lower peak

Feb 2011Bill Meyer

Cost Upside

� Improved productivity (weather, flexible workforce, site accessibility, material flows, etc)

Feb 2011Bill Meyer

Cost Upside

� Reduced schedule reduces construction indirects

Feb 2011Bill Meyer

Cost Upside

� Reduced schedule reduces construction indirects

� [Positive impact to NPV if revenue stream begins earlier]

Feb 2011Bill Meyer

Cost Neutral

� Shipping of module materials to yard versus shipping to site

Feb 2011Bill Meyer

Cost Neutral

� Shipping of module materials to yard versus shipping to site

Feb 2011Bill Meyer

Module

versus

Stick built

Differentials

Modular versus Stick built costs

$100.0

Modular Cost Stick built Cost

Installation cost ∆

Shipping cost ∆

Const. Mngmt cost ∆

Foundation cost ∆

Steel cost ∆

Engineering cost ∆

Camp cost ∆

Labour cost

Savings

Existing Project Data

(Note – All projects have different cost drivers )

Feb 2011Bill Meyer

Marginal Cost of Construction

Marginal Cost of Construction / manhour =

Wages for Direct Labour

+ Indirect Labour (incl Inspection and QA)

+ Payroll Burdens / Benefits / Allowances / Premiums /

Camp Costs / Subsistence for Direct and Indirect Labour

+ Management Costs / Field Offices / Indirect Facilities

+ Construction Equipment / Small Tools and Consumables

+ Scaffold

+ Stick Built Materials Laydown and Distribution

Feb 2011Bill Meyer

Cost Benefits

Construction

Labour Productivity 2.20

Marginal Cost of Construction / mh $105.00

Relative Manhour Cost c/w Gulf Coast $231.00

Feb 2011Bill Meyer

Cost Benefits

Construction Module

Site Yard

Labour Productivity 2.20 1.20

Marginal Cost of Construction / mh $105.00 $55.00

Relative Manhour Cost c/w Gulf Coast $231.00 $66.00

Feb 2011Bill Meyer

Cost Benefits

Economic Productivity Factor

Construction Module

Site Yard

Economic Productivity Ratio 3.50 : 1

Feb 2011Bill Meyer

Cost Benefits

Economic Productivity Factor using a Far East Module Yard

Construction Module

Site Yard

Feb 2011Bill Meyer

Cost Benefits

Economic Productivity Factor using a Far East Module Yard

Construction Module

Site Yard

Feb 2011Bill Meyer

Cost Benefits

Economic Productivity Factor

Construction Module

Site Yard

Feb 2011Bill Meyer

$100.0

$120.0

$140.0

Shipping cost ∆

Steel cost ∆

Camp cost ∆

Labour cost

Shipping cost ∆

Steel cost ∆

Camp cost ∆

Labour cost

Shipping cost ∆

Steel cost ∆

Camp cost ∆

Labour cost

COST DRIVEN MODULAR

PROJECT

SCHEDULE DRIVEN

MODULAR PROJECT

COST DRIVEN STICK BUILT

PROJECT

Feb 2011Bill Meyer

Agenda

1. Introduction

process

5. Summary

6. Q & A

Feb 2011Bill Meyer

Manhour Density is Key

Feb 2011Bill Meyer

� The more manhours in a given shipping volume, the greater the cost benefit to moving those manhours offsite.

� This benefit must outweigh the cost to ship those manhoursback to site.

Feb 2011Bill Meyer

Cost of module shipment vs. module “size”

Module size / weight Large

Specialist Heavy Lift

Semi-Submersibles

Feb 2011Bill Meyer

� The more manhours in a given shipping volume, the greater the cost benefit to moving those manhours offsite.

� This benefit must outweigh the cost to ship those manhoursback to site.

� Second order effects then must be taken into account, such as extra steel costs, site transport and installation costs etc.

Feb 2011Bill Meyer

� Identify the labour intensive sections on the site…(highlighted red)

Feb 2011Bill Meyer

� Aggregate where feasible…

Feb 2011Bill Meyer

� Construct off-site

Feb 2011Bill Meyer

Interconnectivity factors

Feb 2011Bill Meyer

�� Additional hookup at the interfaceAdditional hookup at the interface

�� Additional ship spaceAdditional ship space

�� Additional Installation costsAdditional Installation costs

�� Delta steelDelta steel

Feb 2011Bill Meyer

�� Additional hookup at the interfaceAdditional hookup at the interface

�� Additional ship spaceAdditional ship space

�� Additional Installation costsAdditional Installation costs

�� Delta steelDelta steel

Feb 2011Bill Meyer

Vertical and horizontal splits for this CCR

Feb 2011Bill Meyer

Agenda

1. Introduction

process

5. Summary

6. Q & A

Feb 2011Bill Meyer

Summary

1. Where is modularisation going? Is there a trend?

� More modularisation is the trend for jobs in high labour

cost areas / low quantity of skilled labour areas

� Trend will be driven by demand for resources and energy

� Market segment dependant

� BRIC – IC low , BR depends on location of site and yards

Feb 2011Bill Meyer

Summary

2. Are larger modules better?

� Depends on plant scale and type / shipping

distances and costs / logistics constraints

� Relative costs of shipping vs. big / small / splitting

� For any given shipping cost curve – typically yes!

� Manhour density of plant modules > breakeven

� Height of C. of G!

Feb 2011Bill Meyer

Summary

3. What impacts are tomorrow’s modules likely to have on

construction?

� In general – reduces construction risk (but shifts it to E&P)

� Construction equipment

� Technology exists to move and install large loads

� Crane size development driven by larger equipment items

and need for longer reach, not primarily module sizes

� Innovation is still key!

Feb 2011Bill Meyer

ANY QUESTIONS ?

Modularisation – The Next Step - Presentation by Bill Meyer, Foster Wheeler USA Corporation

Documents

Transcript of Modularisation – The Next Step - Presentation by Bill Meyer, Foster Wheeler USA Corporation

Java Core | Java 8 and OSGi Modularisation | Tim Ellison & Neil Bartlett

Wheeler residence

A Review of Optimal Group Size and Modularisation or ... · PDF fileA Review of Optimal Group Size and Modularisation or Continuous Entry Format for Program Delivery . Lynn Stewart,

Principle - Design Principles of Modularisation

Damian Vujchich, Fluor, Case Study: Modularisation for Iron Ore Plant in Western Australia

Effects of modularisation - Cambridge Assessment of modularisation Carmen L. Vidal Rodeiro and Rita Nádas Research Division Assessment Research and Development Cambridge Assessment

Modularisation and Recognition of basic VET via … 1– February 2014 Modularisation and Recognition of basic VET via ECVET and EQF The EU funded project “EQF meets ECVET” which

Modularisation techniques new

The role of modularisation and unitisation in … role of modularisation and unitisation in vocational education and training Luxembourg: Publications Office of the European Union,

Advances in plant modularisation · expansion of an existing reﬁnery that Saipem is performing in Suriname(1), the new units realized by Foster Wheeler in a reﬁnery in Belgium

Marek Frankowicz Introducing Flexibility, Modularisation And Individualisation Of Programmes

A Review of Optimal Group Size and Modularisation …A Review of Optimal Group Size and Modularisation or Continuous Entry Format for Program Delivery Lynn Stewart, Ph.D., C.Psych.

Modularisation of · PDF fileDATE (View – slidemaster – slide 1) 1 CER The Voice of European Railways Modularisation of ETCS a way to reduce investment and maintenance costs

Two Wheeler Company, New Motorcycles, Two Wheeler …€¦ · Two Wheeler Company, New Motorcycles, Two Wheeler Manufacturers Company ...

F. Wheeler Loomisnasonline.org/.../memoir-pdfs/loomis-francis-w.pdf · FRANCIS WHEELER LOOMIS August 4, 1889-February 9, 1976 BY FREDERICK SEITZ F RANCIS WHEELER LOOMIS—or Wheeler

002-0201 Modularisation and Its Limitations in the ... This CD...002-0201 Modularisation and Its Limitations in the Automobile Industry Second World Conference on POM and 15th POM

Introducing ECTS, Learning Outcomes and Modularisation into the University System

two wheeler

Modularisation and Its Limitations

„EQF meets ECVET“ Modularisation and Recognition of basic VET via ECVET & EQF 1.