Post on 06-Apr-2018
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Value ImprovingPractices (VIPs)
forCapital Projects
Steven M. BuckManager, Capital ProjectsFebruary 2010
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Motivation for Value Improving Practices
Value Improving Practices were introduced in the US in the 1930sas a method to challenge project scopes and aimed at designingand building the bare minimum for the purpose
According to US literature the consistent utilization of VIPs cansave 5 – 10% of capital investment cost
Value Improving Practices improve alignment between businessand engineering stakeholders due to intensified dialogue and
detailed clarification of project objectives and prioritiesValue Improving Practices provide a systematic approach tocreatively challenge and document project decisions to enhancethe level of quality, cost effectiveness, and reduce projectexecution time.
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How does VIP work?
Project Team Hard working
?
Challengers Experiencedin technical areas,VIP protocoland projects, not
part of project team
VIP Asking questions,creating ideas,creating more ideas,evaluating options,
adding value
Project Team Smart working
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VIP: A Contribution to CompetitiveEngineering and Successful Projects
VIPs will provide:
A systematic approach tochallenge the team
Optimization with total cost ofownership
Align business goals and projectobjective/priorities
Document success and bestpractices
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Value Improving Practices Impact
VIPs Analysis
Explore Appraise/Select
Define Execute Operate
P o t e
n t i a l t o I m p a c
t V a
l u e
Project Phase
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BASF VIP Practices
VIP Content
1. Project Catcher Workshop for processes from research
2. Project & Site Classification Fix the project task, characterize the project
3. Process Optimization Identify competitive process variants; improve technical implementation
4. Energy & Wastes Reduce manufacturing costs and achieve sustainable conservation of resource
5. Logistics & Site Competitive integration of the project into supply chains / the site / Verbund.
6. Reliability, Availability &Maintainability
Investigation in minimal Total Cost of Ownership and maintenance strategy – project and plan specific in agreement with the site
7. Process Control & OperationManagement
Optimal economical concept for process and operations management
8. Function, Cost & RiskAnalysis
Determine the minimum Total Cost of Ownership for fulfillment of the definedprocess function
9. Execution Strategy & RiskAssessment
Develop best-possible execution/procurement strategy, address and assessrelevant risks
10. Constructability Optimization plant erection and planning by consideration of SHE, Civil andConstruction requirements during Engineering
11. Commissioning & Start-up Optimization transfer construction to start-up (after mechanical completion)
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Value Improving Practices for LargeCapital Projects
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Timeline Gates & VIPs
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Project & Site Classification
Clarification and alignment ofProject Objectives
Determine if project is ready to
start basic engineeringDecide what Value ImprovingPractices should be applied
Initial discussion of Division ofWork and project organization
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Process Optimization
Systematic review of theprocess concept to identifyopportunities for optimization
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Energy & Wastes Optimization
Evaluate process concept for energyoptimization and waste minimization
Heat integration (Pinch Analysis) are
considered for energy optimizationProject resultant wastes are tracedback to their generation to determine ifalternate steps can reduce or eliminate
wastes
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Logistics and Site Optimization
Inbound and outbound material flow
Transportation modes
Storage requirement
Site congestion issues
Loading and unloading requirements
Manufacturing strategyCapacity flexibility
Coordination with Site Master Plan
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Reliability, Availability & Maintainability
Review to determine optimum maintenance strategy and projectconcept to achieve minimum total cost of ownership to meetrequired plant availability
Define spare parts strategyStandardization of equipment
Special predictive and preventive techniques
Identification of special cleaning, start-up andmaintainability issues
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Process Control and OperationManagement
Review application of advancedprocess control techniques
Alarm management
Governmental reporting requirements
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Function, Cost and Risk Analysis
Evaluation of alternatives to a achieve the functionality of thevarious project parts
Risk assessment of alternatives
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Execution Strategy & Risk Assessment
Review of Procurement Planand Execution Strategy
Identification and assessment
of project risksDevelopment of RiskManagement Plan to mitigaterisks
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Constructability
A series of reviews toconsider constructionplanning, execution andstrategy issues
Claim avoidance
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Commissioning and Start-up
Develop overall commissioning and start-up concept for project
Identification of system boundary conditions
System sequence and turnover
Commissioning time schedule and resources
Special testing requirements
Safety concept related to system turnover
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VIP Example
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VIP Results of How the Tortoise Won !!!
+
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VIP Example: Buying a Vehicle vs a Project
$9,990 $190,000
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VIP Example: Buying a Vehicle vs a Project
VEHICLE VIP PRACTICE
Objectives/Cost/Timing Project Classification
Truck/SUV/Car/Specifications Function Cost and Risk Analysis
Diesel/Gasoline/Hybrid/Electric Energy and Waste OptimizaitonPurchase/Lease Execution Strategy and Risk Assessment
Instrumentation/GPS/DVD player Process Control & Operation Management
Maintenance/Reliability/Cost/Complexity Reliability, Availability & Maintainability
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VIP Example: Buying a Vehicle vs a Project
$35,000
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VIP : A Contribution to CompetitiveEngineering and Successful Projects