Successful EPC: Are You Global or All Over the Map?
A unifying, strategic vision will lead to successful project delivery for EPC contractors
Successful delivery of an engineering, procurement and construction (EPC) project requires the contractor to operate with a unifying, strategic vision. Without it, an EPC company’s offerings will be all over the map. I am proud to say that Fluor is not one of these companies.
Lower commodity prices are impacting our customers’ cash flows and their ability to fund projects the way they’ve done in the past. The EPC industry has a responsibility to rise to the challenge and improve the capital efficiency of projects so that clients can continue their strategic investments. The EPC contractor’s offerings must be united behind that vision.
Whether an EPC company operates around the world or in one location, adopting a “global” mindset—ensuring that all resources are focused on delivering maximum predictability and capital efficiency—will allow clients to push forward with their most important capital projects.
The goal of work in the home office is to support construction, and a construction-driven mindset is necessary in every phase for projects to achieve capital efficiency. Construction and operations teams must be engaged from day one, creating innovative designs focused on efficient construction.
For example, significantly increasing the portion of a facility that can be modularized, such as electrical and instrumentation materials, can greatly reduce plot space requirements, material quantities and onsite labor requirements, yielding substantial cost savings. This approach requires critical alignment up front between engineering disciplines and onsite operations teams. Extensive modularization on Shell’s Quest Carbon Capture and Storage Project in Canada helped deliver the capture portion of the facility at 30% below initial cost estimates.
Construction Cost Savings
Scaffolding, which can account for 20-40% of direct labor costs on a large-scale industrial project, is another area where substantial cost savings are achieved through construction-driven planning from the beginning. Incorporating scaffolding into a project’s detailed design will significantly optimize quantities and onsite productivity and can potentially cut scaffolding hours in half when compared to other projects. Use of this type of solution on the North West Redwater Partnership’s Sturgeon Refinery Project in Canada was recently recognized with a Celebration of Engineering & Technology Innovation (CETI) Award by Fiatech, an international organization dedicated to the betterment of the capital project industry, for the project execution advantages it delivers.
A close working relationship and partnerships with fabrication yards allow fabrication teams to work hand-in-hand with engineering and procurement, advising on module design and shipping recommendations. This collaboration allows work to flow seamlessly between phases, creating schedule certainty and cost savings from minimized interfaces. It stands in stark contrast to a traditional execution approach where engineering teams pass off designs and responsibility to fabrication yards, creating silos between phases and requiring fabrication yards to start at square one.
Similarly, skilled, talented craft professionals are essential to completing projects with the quality, budget and schedule certainty clients expect. The EPC industry has a responsibility to invest in the craft workforce of the future through a sustainable, long-term commitment to craft training.
Training not only increases productivity and safety in the field, but supports employee retention in these high-demand careers.
Through its U.S. Gulf Coast Craft Training Center in Pasadena, Texas, for example, Fluor aims to develop a strong pipeline of craft resources for future opportunities. The Training Center offers entry-level training in the electrical, instrumentation, millwright and pipefitting disciplines as well as welder upgrade training at no cost to trainees and with no obligation to work for Fluor. With highly qualified craft professionals, companies can leverage the collaborative and efficient designs developed in the home office to further enhance productivity and safety at the jobsite.
These types of resources span across project phases and across the globe, but all improve the capital efficiency and delivery predictability of projects. I challenge you to examine your company’s assets and determine: Are you global or all over the map?
Jack Penley is president of Construction and Fabrication for Fluor, overseeing a 30,000-strong craft workforce and five fabrication yards globally. He is known for improving construction methods and implementing new technologies to move the construction industry forward. For more information on Fluor, visit www.fluor.com.