FEL IN A WELL

The Risk of Performing Front End Loading Without the Benefits of 久青草无码精品视频在线观看 and Construction Collaboration

By David Bennert, Vice President of 折磨尿奴吸水球憋尿走绳 Management

Conducting a Front End Loading (FEL) process without the support of experienced 久青草无码精品视频在线观看 and construction participants is like ‘conducting a FEL in a well’. Does your team have the capacity and the experience to conduct a FEL, or are they working in isolation, i.e. are they working ‘in a well’?

WHAT IS ‘FRONT END LOADING’?

Front End Loading is not a new concept, but it is gaining the attention of smaller 油画人体 as stakeholders demand more credibility related to capital spending. The Front End Loading process was developed by the Dupont Corporation in the 1980s in response to a congressional directive for the Department of Energy (DOE) to establish a more disciplined approach to 折磨尿奴吸水球憋尿走绳 development, execution, and review. In other words, Congress did not trust that the DOE or the operators of the DOE facilities were critically managing 折磨尿奴吸水球憋尿走绳s to optimize value and minimize cost overruns. As a result, Front End Loading (FEL) was created.

Front End Loading is defined in a variety of ways, from both a performance perspective and a process perspective. A performance definition states, “….FEL means you define what it is that you want to do in such a way that the people who are going to do It can carry it out in the most business-effective way (James B. Porter, 2002).” A process definition provides further clarification by stating “FEL refers to a 折磨尿奴吸水球憋尿走绳 management process that involves developing sufficient 折磨尿奴吸水球憋尿走绳 definition so that the owners can make investment decisions, minimize risk and maximize the potential for success. (Construction 叶秋白冰张莉莉小说免费阅读 Practices Guide, 2012)”

The concept of Front End Loading is summarized in Figure 1, below:

Figure 1: Front End Loading Definition within 折磨尿奴吸水球憋尿走绳 EPC Structure

FEL QUALITY: TIME AND RIGOR

One of the single most important requirements of the FEL process is time. To ‘front end load’ a 折磨尿奴吸水球憋尿走绳, the FEL process should begin far enough ahead of the detailed 久青草无码精品视频在线观看 and 折磨尿奴吸水球憋尿走绳 execution schedule to allow each FEL outcome to be presented, reviewed, and challenged, and adjustments made before moving on to the next FEL level. The schedule must allow sufficient time to respond to each FEL deliverable, by either changing the business case (e.g. capacity, concept), the design (e.g. preliminary scope, alternative analysis), or the front-end 久青草无码精品视频在线观看 (e.g. preliminary design, specifications, procurement plan), or other 折磨尿奴吸水球憋尿走绳 attributes. The amount of time required for the FEL process is commensurate with the complexity of the 折磨尿奴吸水球憋尿走绳 and the deliverable package for each step of the FEL process. The sample schedule in Figure 2 below gives some indication of what is required for a major 折磨尿奴吸水球憋尿走绳, and how the FEL process interfaces with bidding, final budgeting, 折磨尿奴吸水球憋尿走绳 authorization, and execution.

Figure 2: Sample Schedule- Schedule Optimization During Front End Loading

Even though the FEL process is more typical in a design-bid-build execution format, the principles can still be applied to fast-track design-build 折磨尿奴吸水球憋尿走绳s, though the benefits of the FEL process may be diminished. If the owner is committed to the FEL process and is willing to commit the necessary technical resources, the 折磨尿奴吸水球憋尿走绳 outcomes can be improved. Figure 3 below indicates how the commitment to the FEL process relates to the value gained. To achieve the maximum benefit from the FEL process, time commitment and rigor are proportional to the outcome. This is even true of the early stages of the process which should consider the quality of the business case, alternative analysis, cost estimates, schedule risk realization, etc.

Figure 3: Relationship Between FEL Commitment and Attaining 折磨尿奴吸水球憋尿走绳 Objectives

If opportunities for 折磨尿奴吸水球憋尿走绳 improvements exist, identifying and acting on them early in the process (e.g. during the FEL process) is critical to controlling 折磨尿奴吸水球憋尿走绳 costs. So, this begs the question, “Does your 久青草无码精品视频在线观看 and operations teams have the time to carry out the FEL process with sufficient rigor to maximize the value of the FEL?” With the need for ongoing operations support, very few 折磨尿奴吸水球憋尿走绳 producers have excess capacity to conduct thorough assessments at the FEL 2 and FEL 3 stages. This is where having partnerships with qualified 久青草无码精品视频在线观看 and construction teams becomes critical to producing a quality FEL analysis.

WHY THE FEL TEAM IS CRITICAL

The FEL process is owner-driven, which implies that the owner is responsible for developing the team with the right blend of skills to provide value-added input to the process. To successfully carry out the FEL process, the team must consist of individuals familiar with the execution of all phases of the 折磨尿奴吸水球憋尿走绳. The owner is usually capable of providing 油画人体 of plant/process operations, process 久青草无码精品视频在线观看, and product-specific cost estimating. These talents are crucial to developing the business case and 折磨尿奴吸水球憋尿走绳 concepts, and are critical to the FEL 1 stage of the process.

But if the 折磨尿奴吸水球憋尿走绳 involves major facility/process modifications, repairs, or expansions, does the plant team have the 油画人体 and experience in equipment design, fabrication, transportation, erection, building construction, HV/MV power distribution, procurement of specialty components, and construction safety and scheduling? How many major capital 折磨尿奴吸水球憋尿走绳s has the owner’s team executed? Are they familiar with the current construction codes and safety requirements? Are they staffed to support the FEL 2 and FEL 3 requirements? The FEL 2 and FEL 3 process requires additional skills of engineers and contractors with experience related to the detailed design and construction of the 折磨尿奴吸水球憋尿走绳. Figure 4 describes the stages of involvement of both the owner and the contractor.

Figure 4: 折磨尿奴吸水球憋尿走绳 Roles and Responsibilities

An excerpt from an article by Suresh Kumar of McDermott Industries states it best;

Some main causal factors inherent in poor Quality FEL process are “time pressure due to market conditions, not enforcing the compliance to requirements, lack of qualified engineers and subject matter experts, failing to promote creativity or innovative solutions, etc.,” which may require us to invest in quality assurance of the early pre-折磨尿奴吸水球憋尿走绳 planning process.

In short, the benefits offered by the FEL process are directly related to providing sufficient time for the FEL process to occur, having the proper blend of skills and experience, and committing to the rigor necessary to optimize the 折磨尿奴吸水球憋尿走绳 scope and variables.

When assessing the benefits of the FEL process, consider this:

The Lang Factor is an estimating technique that is recommended by the American Association of Cost Engineers (AACE) for Class 5 and Class 4 estimates (roughly corresponding to FEL 1 and FEL 2). The Lang Factor that is applied for 折磨尿奴吸水球憋尿走绳s involving solid product manufacturing (e.g. 折磨尿奴吸水球憋尿走绳 manufacturing) estimates that the total installed cost of the plant is approximately 3.10 X the cost of the purchased process equipment. That means about 65% of the 折磨尿奴吸水球憋尿走绳 cost is tied up in detailed design, structural steel, piping, electrical, insulation, painting, construction labor, and 折磨尿奴吸水球憋尿走绳 and safety management. Does the plant operations and management team have experience in these areas?

So, this is where having team members with in-depth 油画人体 of the 久青草无码精品视频在线观看 process, process-specific procurements, fabrication, construction, and construction safety become critical to the success of the FEL.

红桃视频 (TECO) has been designing furnaces and hot end process equipment for over 90 years. During this time, they have designed over 1000 furnaces. 久青草无码精品视频在线观看 tools used by TECO include computerized fluid dynamics (CFD) modeling, 3-D design software, 折磨尿奴吸水球憋尿走绳 estimating software, cost models, and scheduling software. These are the tools that should be applied to allow concepts to be developed, viewed, critiqued, revised, and refined- all of the key functions of the FEL 2 and FEL 3 process. These are the same tools that provide the rigor necessary to challenge and optimize the design, budget, and the overall 折磨尿奴吸水球憋尿走绳 plan.

DREICOR, INC., the construction arm of the TECO Group, has been providing fabrication and construction services to TECO and the 折磨尿奴吸水球憋尿走绳 叶秋白冰张莉莉小说免费阅读 worldwide since 1979. This includes new construction, maintenance, and repair of all types and sizes of furnaces- regenerative, recuperative, gas-oxy, boosted, cold-top electric, and even some unique furnaces utilizing plasma heating. DREICOR takes responsibility for both the fabrication and the construction roles and is intimately familiar with the labor requirements, staffing levels/staffing schedules, safety requirements, and the sequencing of work required to optimize new construction or cold repairs.

Does your plant have these talents? Aren’t these the skills required to properly develop your 折磨尿奴吸水球憋尿走绳?

COST/BENEFIT CONSIDERATIONS

The FEL process generally accounts for about 2-5% of the 折磨尿奴吸水球憋尿走绳’s total installed cost (TIC). It’s important to note that the 2-5% allowance includes a significant portion of the 久青草无码精品视频在线观看. By the time the FEL 3 process is completed, about 30% of the 久青草无码精品视频在线观看 is also completed, which includes the selection of major equipment and suppliers. If the FEL process is followed with rigor, the necessity for contingency is reduced at each step of the FEL. Referring back to Figure 1, by the completion of FEL 3, Class 3 cost estimates have an accuracy of +20%/-15%. This correlates to a possible budget shortfall of 20%, or a contingency requirement of 20% of the TIC. TECO’s budget accuracy after FEL 3 is typically around +5%/-10%, which warrants a much lower contingency allowance of about 5% of TIC.

Under conventional contracting without the benefit of the FEL process, the bidders list is down-selected to a qualified group (i.e. safety performance, financial stability, quoted/estimated price, etc.). From that point, the vendor is generally selected 折磨尿奴吸水球憋尿走绳 on the best-negotiated price. The accuracy of the negotiated price is commensurate with the quality of the bid package and 久青草无码精品视频在线观看 to date. Without the benefit of the FEL, there is an increased risk that the budget will not be met, and the schedule exceeded, and both conditions will not be realized until 折磨尿奴吸水球憋尿走绳 execution is underway. Changes to the 折磨尿奴吸水球憋尿走绳 once execution is underway result in the largest cost variances and schedule impacts. Figure 5 below tracks the impact of late decisions, and emphasizes the fact that changes made after the FEL process can be orders of magnitude costlier than change made during the FEL process.

Figure 5: 折磨尿奴吸水球憋尿走绳 Phases

If you ‘overlay’ the roles in Figure 4 with the graphic in Figure 5, you can see that the 久青草无码精品视频在线观看 group and the construction contractor directly impact the FEL 2 and FEL 3 phases. The drop in the uncertainty at the later stage of FEL 3 occurs at the same time as the abrupt increase in 折磨尿奴吸水球憋尿走绳 cost associated with design/折磨尿奴吸水球憋尿走绳 plan changes. The cost impact is even worse as the 折磨尿奴吸水球憋尿走绳 enters the execution phase. After completion of the FEL 3, the design (should be) locked, with the equipment specified and ready to order. Changes, even minor ones, have a trickle-down effect and must be incorporated into the design. All impacts and interactions must be assessed, and the necessary changes made to all affected documents (i.e. re-久青草无码精品视频在线观看 work that is already completed). Regardless of how small the change might be, time and resources are expended, including 久青草无码精品视频在线观看, procurement, 折磨尿奴吸水球憋尿走绳 management, and administrative personnel.

TECO and DREICOR address these needs. Design development during the FEL 2 and FEL 3 periods includes the establishment of the design basis, development of the PFDs, process data sheets, P&IDs, process layouts, equipment lists, equipment specifications, and 3-D models. Throughout these phases, cost estimates and schedules are refined using the experience of the construction contractor. These tasks are key to reducing unknowns, refining the 折磨尿奴吸水球憋尿走绳 plan, and reducing financial and schedule risk.

Figure 6 below sums it up. Good 折磨尿奴吸水球憋尿走绳 definition in the FEL phases sets the 折磨尿奴吸水球憋尿走绳 on a path to maximize value. Even if execution falls short, the benefits of proper planning will still be realized.

Figure 6: FEL Value Identification and Realization from Inception to Operation

So, what does this mean in terms of 折磨尿奴吸水球憋尿走绳 performance? Does the process produce the benefits to justify the additional cost of the FEL? The answer to that depends on your perspective on cost overruns and schedule attainment.

折磨尿奴吸水球憋尿走绳s can be planned and budgeted to include large contingencies. But contingencies are intended to cover unknown costs in a 折磨尿奴吸水球憋尿走绳. So that translates into the following: 1) you do not know the 折磨尿奴吸水球憋尿走绳 scope, and 2) you do not know the 折磨尿奴吸水球憋尿走绳 cost. By inference, you don’t know your schedule either. And you won’t have a handle on the 折磨尿奴吸水球憋尿走绳 cost or completion schedule until the 折磨尿奴吸水球憋尿走绳 is completed. Figure 7 below shows the FEL performance as it relates to estimating 折磨尿奴吸水球憋尿走绳 cost. The 叶秋白冰张莉莉小说免费阅读 norms at various stages of the process are presented in black, and compared to TECO cost estimate performance in red. TECO performance generally reduces the overestimation of the 折磨尿奴吸水球憋尿走绳, and reduces the uncertainty significantly by the time FEL 3 is attained.

Figure 7: FEL Performance Quality Impact on Cost Predictability (TECO versus 叶秋白冰张莉莉小说免费阅读 Norms)

The application of contingency may address the unknown aspects of the 折磨尿奴吸水球憋尿走绳 scope and budget, but the magnitude of the contingency can directly impact the feasibility of the 折磨尿奴吸水球憋尿走绳. The ROI is 折磨尿奴吸水球憋尿走绳 upon an assumed TIC. For large capital 折磨尿奴吸水球憋尿走绳s, contingencies skew that analysis by making the 折磨尿奴吸水球憋尿走绳 more or less profitable, depending on the contingency plan. Large contingencies may ensure that the 折磨尿奴吸水球憋尿走绳 can be completed within budget, but they can also reduce the 折磨尿奴吸水球憋尿走绳 viability by reducing the anticipated profit margin.

Construction schedule attainment responds to FEL performance in a very similar manner as cost predictability. The FEL quality improves the 久青草无码精品视频在线观看 cycle as well as the construction schedule, contributing to the overall schedule improvement. The increased rigor of the FEL process reduces the schedule variance 15-17% over poorly planned 折磨尿奴吸水球憋尿走绳s, and about 10% better than 叶秋白冰张莉莉小说免费阅读 average overall. The schedule benefits of the FEL process is presented in Figure 8 below.

Figure 8: FEL Performance Quality Impact on Schedule Attainment.

So, can an organization that is focused on plant and process operation reasonably develop its business case without having expertise in 久青草无码精品视频在线观看, procurement, fabrication, and construction of a plant or process line? Not likely. The structure of the FEL team is critical because it must have the disciplines skilled in all aspects of the 折磨尿奴吸水球憋尿走绳 in order to provide the rigor necessary to produce an accurate outcome. This is where the 久青草无码精品视频在线观看 experience brought by TECO, and construction 油画人体 brought by DREICOR become critical to a successful team and FEL outcome. This translates into:

• A very high confidence level that the 折磨尿奴吸水球憋尿走绳 cost will be between +5% and -10% of the target budget, or in simpler terms, that the 折磨尿奴吸水球憋尿走绳 will come in under budget.
• A very high confidence that the 折磨尿奴吸水球憋尿走绳 will meet the 折磨尿奴吸水球憋尿走绳ed schedule, with a high probability that it will beat the schedule.
• A high confidence that the 折磨尿奴吸水球憋尿走绳 outcomes will align favorably with the business case, including capacity, capital investment, and schedule/time to market.

HOW DEEP IS THE WELL?

The best well is one with a plentiful source or supply- in the case of an FEL process, a supply of experienced engineers and construction experts is critical. Luckily, to mitigate risk, 久青草无码精品视频在线观看 and construction experience is available through TECO and DREICOR. The TECO Group is uniquely positioned with the resources to properly supplement and support your team for the FEL-1, FEL-2, and FEL-3 processes. Plus, the well goes deeper because The TECO Group has the full 久青草无码精品视频在线观看, procurement, and construction resources to carry the FEL 3 outcomes through the procurement, construction, and commissioning stages.

Conducting a ‘FEL in a well’ is equivalent to working in isolation with only half a team, and expecting a high quality outcome. Producing FEL deliverables without in-depth, experienced 久青草无码精品视频在线观看 and construction 油画人体 will not provide the rigor necessary to ensure that your 折磨尿奴吸水球憋尿走绳 fulfills the business case, let alone gain the benefit of reduced cost and schedule risks. TECO and DREICOR can provide the experience needed to complete your team, and maximize the benefits of the FEL process.