Dale R. Labitzke, PE Professional Chemical Engineering

Beyond the Ordinary

Vision has become a business buzz word. Managers are encouraged to visualize what their business will become and then generate a "roadmap" to get there. Engineers and architects have done this for centuries (although they have done rather poorly marketing it). You can rest assured that the architect that designed the Roman aqueducts could see them finished and then visualize the steps to construction long before the first stone was laid.

If you are planning to manage your project yourself, hopefully we can help you "see" your project and offer advice on the the tools and methods available to help you get there. If you opt to have your project professionally managed, you may be able to use some of the following remarks to help understand and oversee the progress.

If we were on your team, here's the way we would approach the venture.

Teams. We have found the establishment of teams with specific roles to effective. In our opinion, the effective approach to team resources is as follows:

The business team. Usually this is fixed by the owner. We can only suggest that this team recognize that it may need to consult subject matter experts for non-routine project work and non-routine land development. We've described some items to consider in the Chemical Engineering section of the site.
Real estate development team. This is outside our scope other than to say we encourage you to read our previous remarks and encourage you to take a proactive approach to dealing with the authorities and the community.
The product development team. We have discussed this team and product development activities in our chemical engineering section of this site. This team will continue to be active during the project by supplying initial market quantities and supporting market development. In our experience personnel on this team can also act as technical advisors to the project during design, safety reviews, and initial manufacturing.
The project team. The teams that we have used are usually comprised of the project manager, the project engineer (usually someone senior from the owner's technical staff, possibly the engineer performing the pilot design), the project purchasing agent, the construction manager, the project accountant, the engineering coordinator, and the project controller. We have provided articles describing these positions and encourage you to look them over. Personnel on this team might be candidates for management positions in the newly constructed business unit.
The construction team. This team is usually comprised by an experienced construction manager and field superintendents experienced in their construction specialty.
The startup-manufacturing team. This team, drawn from operating forces, is usually comprised of a product managers, chemists, engineers, supervisors, and safety personnel that work with the project engineer during design construction, audit the construction against design, conduct operator and laboratory technician training, perform plant start-up and demonstration, and then go on to be the process, quality, and production leaders.
The maintenance team. This team, drawn from operating forces, is usually comprised of engineers and supervisors that work with the construction manager during latter stages of construction, are active in commissioning of equipment and control programming, support operations during start-up and demonstration, and go on to be maintenance leaders.

The Architect-Engineer

One of the first, and a very important task is to select the Architect-Engineer (A-E).

To use the example of highway construction, the A-E may take the position that they are experts in roadways and based on their experience they will tell you how much the project will cost and when it can be done. This is the wrong A-E and should be disqualified from the bidding list. In chemical manufacturing, usually the client engineers are the experts, and the market sets the time frame and the cost allowed.
You also have to work out the communication path for the project that will be used in detailed design. What we recommend is transmitting to the A-E (project engineer to project manager to A-E) a set of simple documents that functionally describe the process to be built. Let us call this a design criteria. Very early in the preliminary design, the process to be designed and built will be separated into functional areas. To arbitrarily pick some names let us say Mixing Area, Forming and Pressing Area, and Solvent Recovery Area. When the detailed design start, the project manager gives the A-E a design criteria for each of these process areas. For the Solvent Recovery Area the design criteria might say that the area will receive a mixture of solvent and water at an average rate of 1000 lb/hr. The mixture is to be separated, the solvent stored (24 hr capacity), and the solvent returned for processing in the Mixing Area. The area will be built and fire protected for hazardous occupancy and operations are to be conducted remotely. The area is to be curbed and diked for spill control and covered for weather protection. Air emissions are to be kept to a minimum. The reply, called the Design Transmittal, after some amount of work by the A-E is a set of documents saying fairly exactly how all of the criteria will be achieved and a count of the number of drawings and specifications prepared to do the work. In addition the A-E has to understand that the finished design packages will be delivered by craft and area (concrete for Mixing, concrete for Forming and Pressing, piping for Mixing, etc) to support the construction schedule.
We check progress only by work remaining. Simply, if after half the time allocated goes by for a task one asks for the percent completed the answer will always be 50%. If you ask instead how many more work hours are needed to complete the task, the answer might be 400 hours. If the task was estimated at 600 hours, half the time is gone, and 400 hours of work remain, you have identified a problem for the project manager to look into. While most A-Es grumble about this kind of progress reporting, they agree that this method identifies problems faster than any other.
This kind of an arrangement is always time and material. When it comes time to pay, the A-E will want to be paid for hours spent whether they did you any good or not, and of course you only want to pay for completion. You will have to work this out.

Preliminary design

We encourage you to use the A-E for this work. One reason is they have resources available and another is the have no personal attachments to any par of the design or process so they are able to do a very professional job. They also can call on resources for the project estimate which needs to be fairly accurate for funding. During preliminary engineering the A-E will produce:

Project scope
Division of the plant into operating areas
Preliminary plant layout.
Material balance
Process Flow Diagram
Interlocking diagram
Equipment list
Specifications for major or long lead items of equipment
Environmental construction permit applications
Project estimate

Funding request
Waiting period

A waiting period is usually seen here while funding is approved and environmental permits are processed. We have some recommendations on how to use this time.

Write the Design Criteria.
Name the teams and team members.
The project team will be in residence at the A-E office and then at the jobsite. If policies or procedures are need to fund and authorize this operation , They can be prepared and approved now.
Prepare the control schedule. This is the detailed schedule used to measure progress in design and construction
Prepare the control budget and commitment register. These are the detailed budget tools used to measure budget performance. The commitment register is very similar to the records kept by the project accountant but money estimated and money committed are treated as money spent. To make a very simple example, let us take an $18,000 project, three $6000 pumps. The first day of the project the commitment register shows that the project is exactly on budget, three $6000 items. The day the purchase order for the first pump is written, that committed amount is substituted for the estimated amount. If the committed amount is more than the estimated amount, the project will show an over-run that day. The project manager will be notified and can decide if corrective action needs to be taken. Taking this approach will expose budget problems at the earliest moment, when there may be time to change the purchase or change something in a different part of the project before real over-runs accumulate.

Detailed design

The purchasing agent should ask for one last check that the specifications for the long lead equipment items are correct, and then place the orders.
The Design Criteria are presented to the A-E and the work interfacing the design transmittals and detailing the design transmittals begins.
As design transmittals are approved, budget information is extracted for the commitment register and the control schedule is updated.
As specifications are approved, items of equipment are ordered for delivery jobsite.
The A-E should prepare material take-off for all the construction items. You may want the project team to buy 80% of these items for delivery jobsite because of quantity discounting and to prevent mark-up by the construction contractors. The construction contractors can be allowed to furnish the balance at an agreed mark-up.

Construction

We don't directly manage construction and don't have many remarks to make on construction. There are some preparation items that need to be addressed.

We expect there to be many construction contract bids and many construction contracts basically a contract for each construction package prepared by the A-E. Managing this number of contacts, ensuring quality work, and conforming to schedule, is a full time job for the construction team.
Site fence and site security.
Receiving and storage for equipment and supplies
Construction office facilities
Task force facilities

When the concrete is cured, the welding done and the last bolt tightened, we should be able to go touch that factory that was only in our eye some months ago. We're not done yet. We still have to bring the facility on line and up to rate.

Back