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CONSTRUCTION SCHEDULING CONSULTING – SCHEDULE ACCELERATION

Our national energy policy calls for, or should call for, renewed development of nuclear and fossil power projects and expanded oil and gas exploration. The need to accelerate or speed-up delivery of new power and oil/gas processing facilities is also a key aspect of the administration’s plan. Accordingly, Holloway Consulting has published a series of articles that will address techniques used to speed-up delivery of such facilities through the compression or reduction of engineering, procurement and construction time frames. The primary objective of these articles is to identify and outline proven and effective practices for shortening project durations and accelerate completion, with emphasis on those techniques that have proven to be successful on heavy industry facilities.

CONSTRUCTION SCHEDULING CONSULTING – SCHEDULE COMPRESSION – ACCELERATION


The techniques to be discussed are not limited to traditional site management practices, but include tactics that may be exercised within all phases of projects including:

o Conceptual planning,
o Engineering/Design,
o Procurement,
o Construction, and
o Start-up.

Likewise, the scope of these articles goes beyond common schedule acceleration practices to examine current practices used by both major and low-cost utilities, contractors, consultants, independent power producers and power industry vendors.

CHANGES WITHIN THE UTILITY INDUSTRY

One only has to watch the evening news or read a newspaper to be reminded that increases in demand for electricity have exceeded capacity additions in recent years. Reserve margins are forecasted to be less than 20 percent in most U.S. NERC regions over the next five years. The recent black-outs and energy crisis in California also highlight the clear, near-term need for new power generating capacity. In addition, facility maintenance and upgrade projects are being prompted by the Clean Air Act, along with a national emphasis on fuel conservation and diversification.

Perhaps more importantly, the electric utility industry is suffering from an aging inventory of power plants. The average age of plants is approximately 25-years and strict environmental regulations and adverse public reaction is making the planning and construction of new plants increasingly difficult. While there wil1 be a limited number of large “grassroots” and nuclear projects in the future, smaller renovation and modernization projects will be abundant. Projects will emphasize emissions control, fuel conversion and increased plant control automation. In the long term, energy projects must increase in both number and size. The dozen or so new projects underway in Nevada are the latest examples of the western U.S. energy markets’ response to increased demand.

For the first time in the history of U.S. power generation, the non-utility generators added more capacity in the 1990s than did the utilities. The number of smaller cogeneration projects will continue to increase in order to meet peak or local load requirements, with many employing gas and steam turbine technologies. Cogeneration projects will continue to exploit plant design standardization and these smaller plants will require shorter lead times. Utility construction departments will feel an increasing pressure to demonstrate construction cost and time effectiveness against non-utility generators.

Although natural gas has a history of price volatility, it remains a relatively clean and abundant fuel and has become an alternative fuel source for power plants. Not surprisingly, the use of natural gas in cogeneration and gas turbine facilities is increasing. The increased efficiency of combined cycle units will also encourage greater use of natural gas as a fuel. An added advantage of a gas turbine facility is its shorter construction time.

FOCUS ON SCHEDULE DURATION

Forecasts of substantial electric load growth, combined with pressures to delay commitment to new generating stations to the latest possible date, suggest that schedule will be a significant driver of many future power projects. Statutory timeframes for environmental compliance-driven plant modifications will also have a similar effect.

These changes in the utility environment, combined with increased domestic and international competition and heightened consumer expectations over the past decade, have required utilities to reevaluate the approaches taken to deliver products and services. This applies not only to the generation of electricity but also to the execution of plant construction, and in particular to plant construction schedule performance. In order to be successful in this new business environment, owners, developers and producers will need to adopt new methods of facility planning, design, construction and start-up.

COMPRESSING PROJECT SCHEDULES

While just meeting planned project schedules remains elusive for many organizations and industries, others such as gaming and institutional projects have reached the point where compression of project schedules is essentially a requirement. In fact, increased attention is being focused on project schedule compression in virtually every sector of the construction industry. This is particularly true for energy and industrial projects, which typically yield significant cash flow streams on a daily basis. Beyond cash flow economies, other motives for compressing project schedules include imposed deadlines pertaining to environmental regulation compliance, permitting, and tax incentives.

So, what are “schedule compression techniques”? They are strategies of either a technical or managerial nature that serve to reduce overall project durations. Techniques that have proven to be particularly effective in Holloway Consulting’s experience and that of our clients include:

SCHEDULE COMPRESSION TECHNIQUES

Owner Project Management

1. Promote a positive attitude among owner personnel and all project team members.
2. Prepare a formalized project execution plan.
3. Promote and enforce a win-win relationship between owner and contractor organizations.
4. Conduct cross-training and rotate personnel assignments in order to promote the integration of plant construction with plant operation.
5. Reduce or eliminate layers of management.
6. Create incentives by tying personnel salaries and bonuses to plant operating profits and/or construction cost savings.

Engineering and Design  

1. Formalize design/construct-ability reviews.
2. Establish a common purpose between engineering and construction organizations.
3. Require the EPC project team and start-up managers to plan the start-up sequences in detail.
4. Produce fast-track/semi-detailed engineering packages that will allow early field start. Engineering should be “package-driven” and focused on the schedule critical path.
5. Standardize plant designs to the greatest extent possible.
6. Optimize modularization and pre-assembly of selected components.
7. Enforce a strict change control procedure.
8. Promote engineering performance excellence with financial incentives.
9. Expedite small, critical projects through “construction-based engineering.”

Planning, Scheduling and Job Control

1. Establish an aggressive integrated CPM-based schedule for the engineering, procurement and construction organizations.
2. Involve the vendors in defining the schedule milestones for engineering/fabrication/installation of major equipment.
3. Make full use of advanced CPM scheduling and resource management software systems such as Primavera Project Planner.
4. Develop hierarchical schedules with progressive levels of greater detail.
5. Enhance the achievability of schedules by examining the number and size of crews, worker densities and other factors affecting productivity.
6. Hold the contractors and vendors to scheduled early start dates.

Contracts/Specifications/Procurement

1. On union jobs, give deference to local rather than out-of-town contractors that may face issues with the local union hall.
2. Motivate contractors by awarding lump-sum contracts and minimizing the amount of Time and Materials (T&M) work.
3. Consider procurement of packaged equipment units.
4. Avoid excessively restrictive specifications.
5. Consider availability of management personnel and past schedule performance in selecting contractors and vendors.
6. Require fabricators to fabricate strictly according to the erection sequence.
7. Include significant financial incentives and penalties for schedule performance of both contractors and vendors.
8. Guarantee delivery dates of owner-furnished equipment.
9. Accelerate purchasing and contract negotiations with the use of electronic data interchange.
10. Make use of a dedicated expeditor for vendor drawings and materials.
11. Conduct monthly progress/status meetings with major equipment suppliers.
12. Contracts should explicitly address system turnover dates.

Field Craft Management

1. Aggressively monitor craft labor productivity.
2. Use a detailed, accurate, efficient system for determining percentage of completion based on earned value using craft labor hours.
3. Start difficult field activities as soon as possible.
4. Use overtime judiciously.
5. Consider the use of multiple shifts when appropriate.
6. In strong organized labor regions, plan for labor productivity incentives as man-loading and overtime are reduced.
7. Take daily photos of job progress and look for ways to improve work sequencing.

System Turnover and Start-up

1. Transition from bulk commodities to a systems or startup-based schedule, as early as possible.
2. Maintain tight control over an expedited start-up schedule.
3. During start-up ensure that owner field personnel possess both adequate authority and technical capability.
4. Train system operators in advance of plant start-up.

Each of these techniques will be addressed in detail in future articles. Please contact us if we have omitted techniques that have proven effective for you.

Holloway Consulting
CPM Scheduling Consultants
12081 W. Alameda Pkwy., #450
Lakewood, CO 80228-2701
Denver Phone: (303) 984-1941
International : (888) 545-0666
Fax: (303) 716-0432

Email: steve.holloway@disputesinconstruction.com
Blog: disputesinconstruction.com
Web: hcgexperts.com

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