aerni consulting services unit rates and calculation of norm hours for erection services project...
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1Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Aerni consulting services Cost reduction/Cost estimating
Zürich/Maur, 2010
2Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Process- and 3D-object oriented cost models2
Experience and current situation1
Content
3 Possible services and results
4 Comos prototype for piping estimate (enclosure)
3Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Aerni consulting was founded in 2001, its focus isconsulting in the system- and plant business
Our Goal is helping companies to become morecompetitive
Support of companies and teams with provenmethods, innovations and ideas. But also with apragmatic approach and a cross functional view ofthe company
Or with project-/program management of definedimprovement projects/programs
1Experience - Support
4Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Aerni consulting has developed proprietary methods and tools in thefollowing areas:
• Plant optimization/development and cost reduction
• Knowledge management and reuse in the engineering process,including more accurate cost estimating
• Prototype for cost estimation in Comos (piping mat, pref and erection)
• Process reengineering adapted to the plant business (6 Sigma)
• IT application benchmarks on Net Present Value basis
• Innovation (business, products and processes)
1Experience – Methods and tools
5Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
The thorough implementation of optimized/modularized/standardizedplants/reused engineered solutions will allow to achieve significant morevalue for all stakeholders
Customer
Plants,services,
technologiesWorkflows
Capabilities
Tools and methods (PLM, CAEs, 6 Sigma, DFx, etc)
Performance, cost consistency,quality and cost
Customer needs
Best-in-class people
Optimization/modularization/standardization
6 Sigma
Experience – Life Cycle Cost (LCC) reduction in the plant building industry
Improvement of 10-20% in Net Present
Value forsystem/plant
Reduction of engineeringhours and cycle time up to
50% and cost of poor
quality by 25%
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6Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Only smart cost estimating and control models allow to support the LCC/ cost reduction potential in the plant business industry
Major elements of a LCC optimization/ cost reduction program
1: Get cost transparency– Plant / equipment / bulk cost structure– Baseline setting
2: Set targets and Priority setting
3: Optimize process and reduce costs (LCC reduction)– Process optimization– Key package units/equipment / commodity strategy– Low cost country sourcing (LCS)– Redesign to cost and standardization
4: Measure and follow-up: Initiative monitoring and metrics
5: Apply to projects: compliance mechanisms
Life Cycle Cost (LCC) reduction in the plant building industry 1
7Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Our experience – R&D and cost reduction
Our experience is in the implementation of cost reduction and/orperformance improvement of new products
Modularisation/Standardisation of wet cooling towersThe team (England, France, Germany, Belgium) developped a new familyof wet cooling towers within 4 months with a cost reduction of17%
Modularisation/Standardisation of waste heat recovery boilers forcombined cycle power plants.The team achieved a cost reduction of 25% within 8 months
Support in the development of a new pump family (conjoint Analysis, FMEA andmodularisation)
Voice of the customer for combined cycle power plants
Development of a cost reduction methodology for the plant business anddevelopment of new cost estimating workflow for piping and civil including newstructures, unit rates and calculation of norm hours for erection services
Project management for the modularisation/standardisation of steam reformersImprovement of plant NPV by approx.15 % in 4 months
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8Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
The various structures coexist for the necessity of order execution, therelationship are not made explicit in a common data model and consistencyis difficult
Functional process structure 3D structure Cost structure
Feed treatmentP10
Reforming & WHRP11
Etc.
H2 plant
Design area PR
Design area 1
H2 plant
Vessels
reactors
mechanical equipment
pump P80P1
rot equipment
HV
MCC P80P1M1
MV
LV
Electrical
Piping
Bulk
H2 plant
Experience – a sample of current essential plant structures Illustrative
Relationships
Relationships
Relationships
1
9Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Equipmentspecifications
Supplier drawings
Location view
Product view
During plant development or bid/project execution, different documents areproduced which show different views, abstraction levels and data redundancy
PFD
P&ID 1
Single line 1
3D Plant Model
3D Product ModelMechanicaldata sheet
Concept
Basic
Detail -Procurement -Production
Construction -Commissioning
Engineering-Phases
Plot Plan 1
P&ID n
3D piping Steel structure
Isometricdrawings
Piping BOM
Current situation
Functional View
10Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Various tools and structures characterize often the cost estimating and costcontrol landscape
• One tool to consolidate the cost from various disciplines and to calculate final priceto customer (own development, SAP, MS-excel or other).
• Each discipline quantifies their Material Take-Offs (MTOs) or Bill Of Quantities(BOQs) with their unit rates (own developments, MS-excel) and enters the summarydata into the above consolidation tool.
• Division of work is ensured by project management and discipline in a separatedocument or ev. in the cost consolidation tool.
• Data integrity between disciplines is more or less realized through equipment lists,PFDs and layout drawings
• Each main location often has its own tool/data
• Cost objects are not attached to engineering objects with the consequence thatengineers would like to know the cost to optimize their plants but have seldom theinformation at their fingertips
• Purchase order positions in the ERPs often have a different granularity than theunit rates negotiated with the supplier
Experience – Current situation typical EPC company 1
11Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Economies of scope and scale, cost transparency and reduction ofcomplexity are also in the plant business important cost reduction drivers
• Plant optimization/cost reduction is not feasible without cost information
• Accuracy of cost estimation is better if a company can rely on data from pastprojects (BOQs and unit rates)
• Data consistency between disciplines and project phases (tendering, basicengineering, detailed eng, etc) can best be achieved by using the least amount ofdatabases and structures/data models which ensure consistency between disciplineand project phases
• Avoid if possible data duplication and ensure that data are only entered once
• Start IT projects with the big picture in mind but with a limited scope and complexityto achieve quick results
Experience – Key findings from past projects for EPC companies 1
12Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Cost tools required by an EPC company
• The process and 3D configuration of the plant shall automatically produce the necessarycost objects to ensure consistency of scope and cost (Reuse information from ongoing orclosed projects in tendering and execution)
• Tool to achieve target cost in proposal and order execution
• Confidence in estimate (Goal +/- X% between as sold und as built)
• Allow management to compare BOQs and unit rates between the different projects forestimates and as built projects
• Control BOQs and unit rates from tendering to as built (status as ordered, as engineered, asprocured and as built)
• Support for the optimization of technical solution( Allocation of cost to the structures of thetechnical solutions (Process catalog and 3D catalog)) by allowing engineers to see the costof what they have engineered
• Show quickly and quantify precisely the effects of changes to the supply- and work-split
• Flexibility with regard to price changes (project in a different country or with other suppliers
• Allowing Bids from key suppliers with slender resources and BOQs of most expensive items
• Allocation of cost to disciplines
• Seamless transition from old cost structure to new structure
Requirement to cost structure and estimating tool
1
13Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Process- and 3D-object oriented cost models2
Experience and current situation1
Content
3 Possible services and results
4 Comos prototype for piping estimate (enclosure)
14Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Based on process and 3 D structure (for Budget and firm price proposal )
Process EqV1V1
Process ValveV1Q1
etc
Feed treatmentV1--V1
etc.
ReformingG1--V1
etc
Gas coolingE1--V1
Etc.
Radiation Zone CGB1B1--V1
WHR CGB1B2--V1
Comb air blowerB1B3--V1
Reformer & WHR MEUVB1--T1
HEX steel structure EUVB2B4--V1
Desulfurization EUVB2B2--V1
etc
HEX steel structureMEUV B2--V1
PlantZürich
Process structure Additional functionsfrom 3D-structure
Selectedprocess unit
variants
SelectedMEU
variants
Selected EUvariants
2Process- and 3D-object oriented cost models and estimating Illustrative
15Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
View level 5 is a quantification of Bill Of Quantity (BOQ) linked to unit pricesper BOQ-type and elements
Process Equipment
Basic
Ext. basic
Detail
Engineering
Valve material
Valve erection
ValveV1Q1-Q1
Pipe material
Pipe erection
Piping
Insulationmaterial
Insulationerection
Insulation
Process valveV1Q1
Purchasing
Process valves Process pipes Engineering
Purchasing
Primary element
TransmitterSwitches
Instrument
Hook upmaterial
Hook uperection
Weather protec.Material
Weather protec.erection
Hook up
Pipe material
Pipe erection
Piping
Process instrumentV1T1
Basic
Ext. basic
Detail
Engineering
Process Instruments
process unit variantV1--T1
Example of a process oriented cost model 2Illustrative
16Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
The structure of the cost model allows an evaluation of BOM and costaccording to different views
cost structure
Cost model
Previous ProjectManagement Structure
Discipline Structure
Procurement structure
3D Structure
Process- and 3D-object oriented cost models and estimating 2
17Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
The estimate is configurated by the choice of process and 3D structureelements with additional scope of work and delivery
Scope of Work
Work categoryProject management
Conceptual engineering
Basic engineering
Extended basic
Detail engineering
Procurement
Material supply
Transport
Erection supervision
Erection
Commissioning
Cost ModelScope of delivery
FunctionalScope
Scope of Work
detail
Functional scope
Gaseous Feed Handling L L L L L L L L L C L
Feed Compression L L L L L L C C C C L
Feed Purification L L L L L L L L L C L
H2 Recycle L L L L L L C C C C L
Liquid Feed Handling etc.
MEA Washing
Reformer
Steam System
Fuel System
Prereformer
Etc.
L: Linde
C: Customer
Functional view
Gaseous Feed Handling x x
Feed Compression x x
Feed Purification x x
H2 Recycle x x
Liquid Feed Handling etc.
MEA Washing
Reformer
Steam System
Fuel System
Prereformer
Etc.
Delivery
Columns x
Adsorbers x
Reactors x
Vessels x
Tube type heat exchangers x
Tanks x
Oil separators x
Etc.
Interaction between engineering, project management and cost estimating 2
18Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Valves, pipes etc
For reuse to happen from functional solution decision to layout decision, thedata must flow accross functional borders and across executed projects
Process Unit
Process unitvariant
ProcessEquipment
Main Erection Unit Variant(MEUV)
Erection Unit Variant(EUV) and size class
Plot Plan withmost equivalent
MEUVs/EUVs
Selection of solution -Decision> Topology
Design -Decision
> Dimensioning
Layout -Decision
> Positioning
Process selection 3D catalog
Allocationof processEquipment
Workflow
Workflow from process selection to plot plan 2
19Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
For reuse to happen, the plant needs to be structured into process units,process units variants and execution options for Equipments
Dif
fere
nt
level
of
reu
se
Structured selection of process solution
ProcessValves
Process unit
Process unitvariant
ProcessEquipment
Feedwater treatment
2 pressures with 2*100%, 2*100%
ProcessPipes selected PFD-Template
Execution options
V1W2
W3 Q2
Q1
W8
W1
W5
W7
Q3
W4
L1
W6
W9
G1PD1 G2PD2
W10
P1
Illustrative 2
20Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Selection of Plot Plan template having the most equivalent MEUVs and EUVsas starting point for the design of the plot plan
Structured selection of 3D solution Illustrative
Main Erection Unit +B2
Main ErectionUnit +B3
Main ErectionUnit +B1
100 m
80
m
Main Erection Unit +B4Variant: +B4—V1
2
21Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Source: Eli Lilly
2Modularization/standardization
22Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
2
Source: Eli Lilly
Modularization/standardization
23Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
508 Modules
2Modularization/standardization
Source: Eli Lilly
24Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
2Modularization/standardization
Source: Technip PELC 2005
25Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
SimulatorComos
PFDComosP&ID
I....
Engineering tools
Templates Templates Templates
System and process map
ERP (SAP)
Tendering EngineeringProcurement
& LogisticsConstruction
Comos
Info fromas built
BOQ/cost
BOQ BOQ cost BOQ asbuilt
3D-CAD
Templates
2
Electr....
Templates
26Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Exchange of data between engineering tools and cost estimating is notnecessary anymore as the cost objects are attached to the engineeringobjects
Comos asEngineeringDatabase
Objectstorage
PFD
3D Model
P&ID
Logical Diagrams
Loop Diagrams
PFD IsometricsHook Ups
Units/subunits
Elements /Subelements
EstimateDetails/Rate Codes
Design optimization and bidding
Unit rates
2
27Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
Process- and 3D-object oriented cost models2
Experience and current situation1
Content
3 Possible services and results
4 Comos prototype for piping estimate (enclosure)
28Aerni consulting_services_en_20100616.ppt-Copyright c 2010 Alain Aerni all rights reserved
The deliverables are optimized for quick results by selecting first a reducedscope (discipline and product line) and a meaningful work split
Deliverables of Aerni consulting:
• Project Management or consulting of Client projectmanager
• Design of a new integrated estimating workflow
• Defining unit rates and and rate codes
• User requirement specification,
• System specification, design specification,implementation (ev worksplit between Client, Aerniconsulting and Comos),
• Formatting, assembling and loading of necessaryhistorical data
• Installation and module testing
• Training of workflow with lead users
Results:
Short term
• New estimating workflow fora discipline in one productline
• Process catalog with BOQsand cost in Comos toestimate cost and prices forone discipline and productline
Medium term
• New estimating workflow
• Process catalog with BOQsand cost in Comos toestimate cost and prices
Possible Aerni consulting services and results 3