New quantitative research studies focused on improving the development and execution of capital projects are set for presentation at the 2021 annual meeting of the Industry Benchmarking Consortium (IBC 2021). Again this year, Independent Project Analysis (IPA), Inc. will host the event as a series of virtual meetings exclusive to employees of IBC member companies. This year’s IBC theme will focus on the early stages of project definition when business objectives are translated into project scopes.
The first IBC 2021 webinar is set for March 23, with IPA Founder and President Edward Merrow delivering a keynote address on critical issues facing the projects industry as the COVID-19 pandemic tailwinds continue. In addition to webinars featuring new industry research study presentations, the virtual IBC 2021 event includes industrial sector breakout sessions and project performance competitiveness briefings for large and site and sustaining capital projects. The webinar event schedule runs from the end of March through the end of April. Each IBC session is delivered live twice to accommodate all time zones.
The IBC is a voluntary association of owner firms in the chemical, petroleum, minerals processing, food and consumer products, life sciences, pulp and paper, and power and infrastructure industries that employ IPA’s quantitative benchmarking approach to improve the value from their capital project systems. Through benchmarkings of both large and site-based systems conducted by IPA, IBC member companies receive exclusive insights into how their capital project systems and project outcomes stack up against their industry peers with respect to safety, cost, schedule, and operational performance. Member companies agree to support the continuous improvement of their own capital processes through measuring and comparing performance metrics.
Six new research studies are on deck for IBC 2021:
Conceptual Estimating and Scheduling for Business Decision-Making
Owner companies routinely tell IPA of their struggles with early (conceptual) estimating. These estimates are generally prepared based on very limited information, and subsequently have wide accuracy ranges. The development of tools to generate more centered estimates for cost and schedule as well as a better characterization of the estimate ranges can empower businesses to make more informed project decisions.
Getting Gate 1 Deliverables Right
One of the persistent problems in projects is that the Gate 1 deliverables are not well-formed, leaving holes for the scope development team to fill in with assumptions. This creates the problem called bring me a rock, which consumes a lot of time and leads to sub-optimal scopes of work that need to be improved in FEED or even into execution. This study focuses especially on the regulatory context for projects, stakeholder issues, framing of the business case, and adequacy of the Basic Data where that could be an issue.
Making the Agile Manifesto Agile for Heavy Industrial Projects
A number of IPA clients have started implementing some form of Agile in their project systems. Agile is a well-developed methodology that has been around for 20 years and, though initially intended for the software industry, has helped make positive change across industries. This study is a careful dissection of Agile from the point of view of opportunities and limitations when applied to projects.
Measuring Engineering Quality
Delivering engineering that is of high quality is critical to capital project success. It only makes sense that capital project systems should focus on measuring and improving engineering quality as a key aspect of their improvement efforts. The problem is that Industry does not have robust measures for assessing engineering quality, pushing back on poor engineering quality, or even understanding what today’s standard of quality should be. The current market environment only amplifies the need to measure and improve engineering quality for the health of our Industry. The objective of this study is to establish a basis for measuring engineering quality on capital projects and to offer strategies that some member companies are implementing to improve engineering quality.
Digitalization’s Role in Standardization
The process industries are facing a crisis. Engineering, procurement, and construction (EPC) firms are withdrawing from process industry work because it is high risk and low reward. Our work requires precise engineering and mistakes can be catastrophic in terms of safety. Meanwhile, process-oriented EPCs are making tiny returns on revenue. This means that standardization of technology and designs will become increasingly essential because standardization reduces the need for new engineering. Digitalization may make standardization actually work for the industry for the first time. This study will look at using digitalization technologies as a path for achieving true standardization.
Closing the Operational Production Gap
Cost, schedule, and operability are the triumvirate of performance outcomes resulting in value on capital investments. Assessing the three collectively is key to understanding the full story of whether a project delivered on its promises. The primary goal of this study will be to help member companies examine and mitigate against the most influential early risk factors in business-led decision-making that affect operational performance. Simply put, what is it that businesses need to do to avoid a colossal waste of capital in underutilized assets?
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