Project Management Lecture 2/9/2015. Fundamental “Rules” of Project Engineering 1.While there is...

Project Management

Lecture2/9/2015

Fundamental “Rules” of Project Engineering

1. While there is never enough time to do it right, there is always enough time to do it again.

2. No surprises.3. At some point you have to build the plant.

Chemical Engineering Design

Why Are ChE’s Paid So WellTo Work in So Many Different Industries?

• They can start from a vaguely defined problem statement such as a customer need or a set of experimental results

• From the problem statement they develop an understanding of the important underlying physical science relevant to the problem

• Using this understanding they can develop a plan of action and set of detailed specifications, which if followed will lead to a predicted financial outcome

All the other ChE classes you took

The design courseaddresses these

© 2012 G.P. Towler / UOP. For educational use in conjunction with Towler & Sinnott Chemical Engineering Design only. Do not copy


The Design ProcessProblem statement

Implementation

PlanFinancialoutcome

XYZ Co.



Design Work Process

Determine Customer Needs

Set DesignSpecifications

R&D if Needed

Evaluate Economics& Select Design

Predict FitnessFor Service

Build PerformanceModels

Generate DesignConcepts

Procurement& Construction

Begin Operation

CustomerApproval

Detailed Design &Equipment Selection

Common to all design problems in all industries© 2012 G.P. Towler / UOP. For educational use in conjunction with Towler & Sinnott Chemical Engineering Design only. Do not copy


How do companies implement this design process?



The Design Team

ProjectSponsor

ContractorsCivil

Engineers

BusinessInput

R&DSpecialists

TechnicalSpecialists

Cost EngineerControl

EngineerConsultants

MechanicalEngineer(s)

ProcessEngineer(s)

ProjectManager



Nowadays(For most companies, most sectors)

ProjectSponsor

ContractorsCivil

Engineers

BusinessInput

R&DSpecialists

TechnicalSpecialists

Cost EngineerControl

EngineerConsultants

MechanicalEngineer(s)

ProcessEngineer(s)

ProjectManager

E&CCompany

TechnologyVendor

OperatingCompany



Implications

• Most major projects involve several companies working together

• “OpCo” might itself be a joint venture between several companies

• The companies might all be based in different regions of the world

• Teamwork, technology transfer and effective communications have high impact and value

• Good project management is more important than ever


“Stage Gated” Project Life Cycle

P1P2 P3

P4

Project Estimates, Plans, Schedules

• Each Engineering Discipline normally submits an estimate of hours needed to complete the project, along with a resource loaded schedule showing “milestone” dates for completion of deliverables, or specific % complete targets relevant to each project phase.

• These are built around the deliverables and known activities for each engineering discipline.

P1Conceptual

P2Evaluate

P3Define

P4Detailed Design

Process Capacity(s) A D D

Process Design Basis P D IFD

Block Flow Diagams (BFD's)

Process Sketches P

Process Simulation P D

Heat & Material Balance D

Process Flow Diagrams (PFD's) P IFD IFC

Material Selection Diagram (MSD's) P IFD IFC

Piping & Instrumentation Diagrams (P&ID's) P (?) IFD IFC

PSV Files P D

PHA Study A A

HAZOP Study D

LOPA Study D

Hydraulic Calculations P D

Process Equipment Data Sheets P D IFC

Sparing Philosophy A P D

LEGENDBLANK = Not Required or Applicable

A = Assumed (no engineering developed)

IFD = Issued for Design IFC = Issued for Construction

P = Preliminary (limited engineering work)

D = Definitive Based on Completed Work

Deliverables

Pro

cess

En

gin

eeri

ng

Typical Process Engineering Deliverables for Stage Gated Project

P1Conceptual

P2Evaluate

P3Define

P4Detailed Design

Project Name & Location D D D

Project Scope Description P P D

Product Description P D D

Interfaces with Existing Facilities P P D

Site Visit Results P D

Project Work Breakdown Structure P D

Engineering, Equipment & Installation Job Specifications & Standards

A D IFC

Labor Availability A P

Current Labor Market A P

Taxes/Laws Cost Impact A D

APP D D D

T/A Interdependability P P D

Project Execution Plan A P D

Contracting Strategy A P P

Purchasing Strategy P D

Approved Vendor List D

Estimate Plan D D D

Schedule P P D

Constructability Study P D

Construction Laydown Area & Crane Access P

Analyzed Final Cost Report D

Benchmarking Study & Performance Analysis P

Closeout Report D

Project Services Estimate D D D

Confidence Range -50%+100% +-30% +-15%

TIC Estimate Basis D D D

Approximate Unallocated Provision (Contingency) 25% 20% 10%

Risk (Cost) Analysis yes yes

Estimating MethodRATIO/

CAPACITY CURVE

Factored from Equipment

Equipment Quotes &

MTO's

Definitive using IFC Packages (90% Engrg)

Engineering Percent Complete <1% <5% 25-30

LEGENDBLANK = Not Required or Applicable

A = Assumed (no engineering developed)

IFD = Issued for Design IFC = Issued for Construction

Est

imat

e

P = Preliminary (limited engineering work)

D = Definitive Based on Completed Work

Deliverables

PM

AC

For Other Types of Projects – See Text Chapt. 1

• “Techno-Economic Analysis” (aka Feasibility Study) ….see Table 1.1 for Deliverables-Engineering Report Sections.

• “Technical Proposal” ….see Table 1.2 for typical parts of a proposal that must be generated.

• Note: A Basic Engineering Design Report (BEDR) – Table 1.3 puts together all the typical Stage Gated Project Deliverables…at different Phases of each Project.


The Project Plan

• Is developed & implemented by the project manager

• Sets deadlines for completion of activities & intermediate deliverables

• Allows scheduling of subordinate or dependent tasks

• Allows estimation of the required manpower resources at each stage of the project

• Determines the procurement schedule & gives an estimate of when cash outlays are expected

ID Task Name

1 Project KO Meeting2 Process Commercialization

3 Verify Operating Conditions

4 Process Design - Flowsheet

5 Verify Full Design Criteria

6 Process Design/Optimization

7 Cold Flow Modeling8 Design Sparger9 Approve Sparger Design10 Construction of Wedge11 PP design/construction/shakedown12 Cold Flow Testing13 Catalyst Scale-up

14 Catalyst Scale-up

15 Demonstration Plant

16 Commercialization Team Formed

17 Demo Plant Design Basis

18 Process Engineering

19 PFD Review

20 Basic Engineering

21 P&ID review

22 Detailed Engineering

23 Layout Review

24 Procurement

25 Fabrication

26 Delivery & Installation

27 Begin Run

3/31

74 days

206 days

7/15

150 days

251 days

1/12

2/22

5/18

8/31

12/28

M-1 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13 M14 M15 M16 M17 M18 M19 M20 M21 M22 M23



Example: 11-Week Plan for a Process Design Project



What’s In a Project Plan?

List of tasksList of tasks




Durations, startand end dates

Durations, startand end dates




Predecessortasks

Predecessortasks




ResourceallocationsResource

allocations




GanttchartGanttchart



Tools for Project Planning

• Specialized software for larger projects– MS Project– SureTrak– Primavera Project Planner– Enterprise PM– Cobra

• Small project plans & Gantt charts can be drawn in spreadsheets or using cheap software (<$100)– AceProject (free on-line)– TurboProject– Project Vision– Quick Gantt


How do you develop a Project Plan?

1. Develop Project Scope, and Design Basis (Rough Draft-Outline Based on what you have been told)

2. Develop Project Man Hour Estimate3. Develop Project Schedule4. Resource Load the Schedule based on Man Hour

Estimate5. Iterate with Resource and Schedule Constraints to

meet project requirements.6. Publish Documents (Scope, Estimate, Schedule) for

Review & Approval

How do you develop a Project Plan?

• Start by “Scoping” your project:– “In Scope” means you have deliverables for your

project.– “Out of Scope” means no deliverables, or any

other considerations, calculations, etc.– Write up a Scope of Study document, listing

project intent and deliverables.– Develop and initial Design (or Study) Basis

Document, to identify your basis (and things you need to pin down in your project later as TBD).

Project Plan Development, cont.

• Next - Estimate the man-hours needed for each deliverable. Note that each deliverable may have several separate activities/tasks you need to estimate.– Add in required hours for reviews, meetings,

travel, etc.– Include your own safety/risk review.


• Develop the Schedule. Organize your separate activities/tasks in order by which you can complete them (Identify predecessors). – Start from Deadline and work backwards…or..– Start with Kick-off date and work forwards.

• Identify Milestone dates. These can include:– Completion dates (or % Complete dates).– When Deliverables are to be issued for review & comment.– Review Meetings.– Key Decision Points.


• Document resources available to accomplish required man-hours

• Iterate?• Demonstrate Plan via GANT chart, Flowchart,

etc.

Cost Estimates for “Stage Gated” Project Life Cycle

P1P2 P3

P4

PFD’s0% 100%

P&ID’s 0% 30 to 50% 100%

Project Cost Estimate Quality

P1 P2 P3 P4

Class 5 EstimateClass 4 Estimate

Text Book AACE Cost Estimate Classes:

Class 3 Estimate

Class 2 Estimate

Project Life Cycle

Inherently Safe Design (ISD)

P1P2

P3

P4

Impact of Cost & Schedule + Need for ISD

on Process Engineering

• You must PLAN your work.• You must Estimate your work.• You must Schedule your work.• You must Track your progress on

your work.• You must report your progress and

update your Estimate & Schedule as Needed.

Fundamental “Rules” of Project Engineering(For Process Engineers)

1. While there is never enough time to do it right, there is always enough time to do it again.

• You have to “Scope, Estimate, and Plan (Schedule, and Resource Load) your project”.

2. No surprises.• You need to update your Estimate & Plan

3. At some point you have to build the plant.• You need to produce your Deliverables.

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