If you aren’t aware of the pitfalls, you might fall into a hole. Here’s how new construction and plant upgrade projects get in trouble.
We’ve all seen jokes about people, primarily men, who think they are handy enough to take on some sort of home improvement project, only to call in professionals when things get out of hand. Those guys might be well intentioned, but they don’t understand the complexity of what they’re taking on.
When it comes to new process plant construction or upgrade projects launched using in-house resources that get bogged down and fall behind schedule, professionals are often called in to help. In this post, I’ll look at why these issues occur, and then I will follow up with a second post on ways to prevent these project problems.
Process plant construction projects are challenging undertakings. This is true for a simple upgrade in an existing plant, a complex new greenfield production facility, and most everything in between. Process control and automation systems are invariably involved, or they may be the primary item if the project is a control system upgrade. Whether small or large, construction projects have common risks:
- Cost overruns of capital (CapEx) and operating (OpEx) budgets.
- Schedule delays make a project drag on, increasing CapEx costs while delaying cash flow expected from new production capabilities.
- Companies often underestimate the true cost impact of a delayed startup because they consider out-of-pocket costs without factoring in the lost income from production beginning behind schedule.
- Some improvement projects are ultimately considered failures even after they begin full production because they don’t deliver expected production levels. Disappointment grows if product quality or quantity never reaches levels necessary to justify the effort and expense.
Any company considering launching an upgrade or new plant has to ask, “Why do so many projects fare so badly?” Here are some common mistakes:
- Inadequate planning, or more accurately, the wrong kind of planning: Many companies understand the importance of planning, but simply don’t know how to do it. With so many critical tasks, which ones need the most attention?
- Planning too late in the schedule: Planning can never begin too early, but many companies assign tasks to people with too much to do already, resulting in procrastination with critical steps not happening early enough.
- Bringing inadequate resources to the project: How many of your people have time to work on an upgrade project? Do the ones with available time have the right skills?
- Inexperience: Even the most well-meaning and conscientious people may not be able to help because they have little or no relevant experience. An individual may be very good at running a plant, but those skills won’t necessarily help manage an electrical contractor.
- Linear or serial thinking: The timeline for a project may end up being too long because some planners are convinced only one project task can be worked on at a time.
- Too few people recognize problems developing: An inexperienced person trying to manage construction may not be able to tell when a minor problem threatens to turn into a big one. Knowing which small action taken at a critical time can prevent a disaster is a rare skill and only comes from extensive project management experience.
The unfortunate results of under-performing projects are easy to see: the plant starts up late, costs are too high, the process doesn’t deliver the expected performance, and documentation is inaccurate or incomplete. The new part of the plant will eventually start up and begin production, but it still is often viewed as a failure along with the people who tried to make it happen, unfair as such a judgment might be. In my next post, I will show how to prevent these and other unpleasant project problems.