March 2019

Project Management

The top three causes of contractor and engineering misalignment

When contractors, engineers and operations teams at downstream processing plants do not work together at optimal efficiency, it can present serious problems.

When contractors, engineers and operations teams at downstream processing plants do not work together at optimal efficiency, it can present serious problems. If these teams are not aligned, and if information is not properly shared, it can get in the way of safety, productivity and cost control.

Fiatech, which is now part of the Construction Industry Institute, estimates that the typical engineering, procurement and construction (EPC) firm will budget less than 0.3% of the total project cost for information handover. However, Fiatech also found that an additional expense of 2%–4% of the total project cost is required by the owner-operator to manually correct and enter required information into operations and maintenance (O&M) systems. For example, on a $400-MM project, approximately $1 MM might be budgeted by the EPC firm, but the owner-operator must invest an additional $8 MM–$16 MM in “hidden” data entry and validation costs. The study’s good news is that 60% of those hidden costs can be avoided through periodic, structured and automated information exchanges between EPC and O&M systems. This means that $5 MM–$10 MM of operational costs can be saved on a $400-MM capital project.

The reader might wonder why this is so hard and why the hidden costs are so great. The author’s team has analyzed these challenges and observed that, across a range of process industries, hidden costs can emerge from three main sources:

  1. Different work styles, personalities and motivations between EPC and O&M systems
  2. An over-reliance on email and file transfer protocol (FTP) communications
  3. Drawing libraries that do not reflect what is built.

Different work styles, personalities and motivations

Multiple types of people with different responsibilities and outlooks must collaborate seamlessly to avoid wasting money in handoffs.

The first person involved is the on-time, on-budget contractor. The contractor who is building a new unit or managing a turnaround is motivated to complete the job on time and on budget. Contractors are not overly interested in how project or design documentation is applied for operational use, especially given that those documents represent as little as 20% of project documents. In addition, contractors do not have the time, motivation or resources to check that they are working from the most up-to-date information. Their priority is to get the job done on time, on budget and with reasonable quality. Since they work with computer-aided design (CAD) drawings, they can improvise to complete the work. However, this creates problems the next time the system is worked on by a different contractor. Simply put, contractors are less likely to detail the as-built version beyond what is required for them to get paid.

The second person involved is the engineer. Hydrocarbon plant engineers are responsible for designing solutions that meet codes and specifications, and that are safe, resilient and durable. These engineers are experts at creating detailed drawings with CAD systems, and they typically have sound processes. They know the systems, understand how everything is supposed to work and which fail-safe mechanisms are needed to do so. Plant engineers are typically practical people who depend on record keeping and precision. They require data and accurate records to deal with problems at both the macro (plant efficiency) and micro (component performance) levels.

Engineers plan and build the processing plants. They are responsible for keeping plan drawings and CAD files up to date. They apply scientific principles to design and implement systems that perform the right duties and comply with regulations, thus ensuring that systems are safe for workers. They collaborate within and across disciplines to make an overall system work. Their blind spot may be a tendency to work “by the book” and “off the drawings” instead of “in the real world.”

The third person involved is in production and is responsible for maintaining the license to operate. Operational personnel must optimize production and protect their licenses to operate. This includes maintaining documentation such as operating procedures, certificates, specifications, manuals, and piping and instrumentation diagrams (P&IDs). All too often, operations personnel do not ensure that the right requirements are in place for data handover. While procurement can hold the contractor accountable for delivering to the letter of the agreement, the structure and format of the data may not be in the format needed by operations personnel. The result can be a handover of PDFs that cannot be edited and updated. Consequently, when the next change is needed, the design documents must be recreated from scratch, which costs money and time.

Over-reliance on email and FTP communications

When we asked audience members in a recent webinar how they communicate engineering information, 44% responded that they use email. Unfortunately, email is not dependable for managing the information flow for hydrocarbon plant projects.

Email allows transmission of engineering drawings as attachments. When these files are transmitted correctly, there is no problem. Unfortunately, email is subject to human errors, such as:

  • Omitting the attachment
  • Attaching a file size that is too large to send
  • Attaching the wrong design file or version
  • Failing to attach all documents.

In one of our company’s surveys, it was found that 28% of engineers use FTP communications to share engineering information. While this process addresses file size issues, it also introduces the risk of sending an incorrect file. Overall, it is easy to make mistakes and share the wrong information with the wrong people when depending on FTP communications.

Other problems with using FTP communications for sharing engineering information are:

  • Version control—Was the correct version sent? Does that recipient know if an updated version of the drawing becomes available?
  • Access, especially in the field—Many phones do not have an app for sharing, opening, accessing or sharing information via FTP communications.
FIG. 1. Maintenance workers in the field.
FIG. 1. Maintenance workers in the field.

As new team members are added, providing access to the right files becomes a challenge. If information lives in emails, new team members must then receive all the right emails or a new batch of files via FTP communications. Information has been shared, but this does not mean that the correct information is available to the right people in a work order system.

‘As-built’ is not reflected in the drawings

When changes occur in a plant, whether they are made by the operator or contractor, they are often not documented in the master engineering drawings. With O&M personnel, this happens because they are busy executing work orders and do not have time to update the documentation. When performing their work in the field, maintenance workers must have up-to-date information for the sake of safety and compliance (Fig. 1).

Each engineer depends on team members to keep master information complete and accurate. This process is crucial when work is handled concurrently across disciplines or departments. If maintenance personnel or contractors have made changes that are not reflected in the master documents, this may lead to errors that can impact plant performance, reliability and/or safety. Engineers may encounter delays, quality control issues and the need for rework when changes are not reflected in the current drawings and when master documents are not kept up to date.

The solution: A master documentation system

An engineering information management (EIM) system for documents can contain the costs and risks of misalignment between all parties. EIM systems provide a centralized, easy-to-access, single source of truth. The best EIM systems provide a mobile interface that allows contractors and maintenance personnel to update and view as-built plans, with notifications when documents change and/or need approval. Operators can have direct access to the relevant technical documentation when viewing work orders, equipment specifications or job plans by tapping directly into the current CAD drawings or building management system. This attention to detail keeps contractors and engineers on the same page and provides an audit trail for compliance to hold each party accountable. HP

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