Over the past year, one of IPA’s focus areas has been research and tools to strengthen the business-engineering interface for capital projects. This is a critical, early process to set projects up for success. If alignment is strong, good things tend to follow. For example, when the business is bought into the project objectives, the business is likely to assign the necessary resources to the project at the right time, and the project will benefit from this early functional participation. Objectives are clear, which makes the planning process more efficient. Changes are avoided, and so forth. However, if this interface is weak or missing, the project kicks off at a fundamental disadvantage. Stakeholders are much more likely to challenge the scope, cost, and design well into execution, leading to changes and poor results.
So, how can projects increase the alignment between the business and engineering functions, which often have very different priorities and metrics? One core practice that improves this alignment is an exercise called Classes of Facility Quality (CFQ). This exercise is a structured, face-to-face session where key stakeholders, including engineering, operations, and business, hammer out the parameters that will define project success. Typically, projects will consider a series of factors including expandability, project life, flexibility, reliability, maintainability, and automation, among others. Think about this list—these can be mouthwatering attributes for the project engineer or operator! “Yes, of course we want our project to use top-of-the-line technology, withstand a 100-year storm, adapt to any changes in feedstock specifications, and be incredibly easy to operate and maintain!” And then business starts thinking, “All of these attributes just look like dollar signs. Do I really need all this, or can I keep the capital cost down and still get the result I want?”
The CFQ exercise walks participants through a matrix showing the various levels, or “classes”, for these different characteristics, so everyone can come to agreement on the cost-benefit trade-offs. Once the project moves forward, this serves as a basis for making future decisions and avoiding late changes.
This practice is quite easy to adapt and employ on small projects and is just as powerful on small projects as on large projects. Small projects that use CFQ have better team development and planning, which sets them up for better cost effectiveness and predictable delivery. While critical, the session is not time-intensive—the typical small project might have a single meeting, no more than a few hours long, to accomplish this.
Only about 16 percent of small projects in Industry use this practice, but it is almost universally employed on small projects at the Best Sites—those sites that routinely achieve low capital cost and deliver projects as planned.
Does your site need to develop a Classes of Facility Quality process? Visit IPA’s Site & Sustaining Capital page.