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Prefabrication & Modular Construction Congress Overcoming Schedule Challenges by Using Modular Construction
Alberto Sanchez – Project Execution Manager Shanghai, China March 26, 2013
Prefabrication & Modular Construction Congress
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Modularisation Overview
Case Study: Small-Scale Chemical Plant
Advantages and Disadvantages of Modular Construction
A Different Way to Deliver Projects
Quick Selection Criteria for Modularisation
1
2
3
4
5
6
Agenda
Q & A
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Modularisation Overview
Case Study: Small-Scale Chemical Plant
Advantages and Disadvantages of Modular Construction
A Different Way to Deliver Projects
Quick Selection Criteria for Modularisation
1
2
3
4
5
6
Agenda
Q & A
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
What is Modular Construction?
Modular construction is a method for building parts of a project (modules) remote from the permanent project site
The module(s) is built off site usually to the maximum economical and manageable size
The assembled module(s) is transported to the final permanent site by either one or a combination of road, rail, waterways and air modes for installation (integration)
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Why Modular Construction?
Challenging Market Conditions
• Adverse site and local area conditions
• Difficult permitting and regulatory compliance
• Limited plot space • Labour availability
and quality • Difficult labour
conditions and high labour costs
• Productivity issues
• Extreme weather conditions
Demanding Project Drivers
• Competitive conditions (market share)
• More demanding schedules (requirements to get product to market rapidly)
• Improved safety, quality
• Cost savings • Project feasibility
and risk
Alternative Construction Methods
• Prefabrication (e.g. prefabricated buildings
• Preassembly (e.g. pre-assembled racks)
• Modularisation (e.g. skid-mounted units)
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Modularisation Overview
Case Study: Small-Scale Chemical Plant
Advantages and Disadvantages of Modular Construction
A Different Way to Deliver Projects
Quick Selection Criteria for Modularisation
1
2
3
4
5
6
Agenda
Q & A
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
A Different Way to Deliver Projects
Concept Design &
Construction Pre-Planning
Modules Fabrication &
Pre-Commissioning
Delivery & Integration
Identify Modularisation Opportunities &
Limitations Balance of
Plant Design
Selection of Balance of
Plant Contractor
Site Preparation & Infrastructure Construction
Modules Design
Selection of Modular Fabrication Contractor
Parallel activities • Compress schedule (civil work while pre-assembling) • Improve critical path
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Modularisation Overview
Case Study: Small-Scale Chemical Plant
Advantages and Disadvantages of Modular Construction
A Different Way to Deliver Projects
Quick Selection Criteria for Modularisation
1
2
3
4
5
6
Agenda
Q & A
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Case Study: Chemical Plant
Project Value: 80 MM US$ Location: Confidential Start Date: Jan 2007 Target Date: May 2008 Contract Type: EPCM +
incentive 60 pieces of equipment 10,000 LM of piping 1,200 ton of structural steel 50,000 LM electrical cables
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Case Study: Major Challenges
Demanding schedule, time to market requirements
Permitting and regulatory requirements
Limited plot space and laydown Limited local labour Political unrest Risks from high elevations works Extreme weather conditions Volatile material and local labour
costs
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Stick-Built Modular What’s the right construction strategy for the Project?
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Case Study: Stick-Built Option
TARGET DATE
6 MONTHS OF LATE
PRODUCTION
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Data
Finish Date of:
000023 - INITIAL PRODUCTION
Analysis
Iterations:
1000
Statistics
Bar Width:
week
Highlighters
P10 - Best Case
03/12/2008
P50 - Most Likely
25/12/2008
P90 - Worst Case
14/01/2009
14/11/2008
04/12/2008
24/12/2008
13/01/2009
02/02/2009
Distribution (start of interval)
0
20
40
60
80
100
120
140
160
180
H
its
0% 06/11/2008
5% 27/11/2008
10% 03/12/2008
15% 05/12/2008
20% 09/12/2008
25% 12/12/2008
30% 16/12/2008
35% 18/12/2008
40% 19/12/2008
45% 23/12/2008
50% 25/12/2008
55% 26/12/2008
60% 29/12/2008
65% 31/12/2008
70% 01/01/2009
75% 06/01/2009
80% 07/01/2009
85% 12/01/2009
90% 14/01/2009
95% 19/01/2009
100% 12/02/2009
Cum
ulat
ive
Freq
uenc
y
000023 - INITIAL PRODUCTION : Finish Date
Schedule Risk Analysis: Stick-Built
The stick-built option shows a potential delay of 6 to 8 months from the production target date of May 2008
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
1%
2%
3%
8%
10%
15%
20%
24%
26%
64%
001 - Long permitting and regulatory requirements
009 - Unforseen ground conditions
008 - Late mobilisation to site
005 - Extreme weather conditions at the site
002 - Limited plot space and laydown
010 - Local labour demonstrations
004 - Risks from high elevations works
007 - Low site productivity
003 - Limited local labour
011 - Late equipment deliveries
The result of the schedule risk analysis shows that the main causes of delays are particular to local or site risks, which are more difficult to manage
Schedule Risk Analysis: Stick-Built
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Client’s Questions: Why does construction take so long? How can schedule be reduced?
Client’s Position: Long time for local approvals and regulatory
requirements increase risks of delays Strong requirements to get product to market
on time
Strategic Decision
Client’s Requirement: Essential change is required to deliver project faster Relocate work to offsite locations with a more controlled working
environment (modular construction approach)
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Modularisation Overview
Case Study: Small-Scale Chemical Plant
Advantages and Disadvantages of Modular Construction
A Different Way to Deliver Projects
Quick Selection Criteria for Modularisation
1
2
3
4
5
6
Agenda
Q & A
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Field labor productivity is much less than shop productivity Field labor costs are higher than shop labor costs Weather may affect the construction phase Plant process/system allow modularisation Local labor requirements do not restrict use of modular
construction Transport envelope allows transportation of economical
modules size / weight Site permits and regulatory approvals are not readily available Lifting and transportation available, economical Fabrication capacity is available Schedule is important or critical
Quick Selection Criteria for Modularisation
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Strategic Decision Framework
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Case Study: Modular Option
TARGET DATE
PRO
DU
CTI
ON
PO
TEN
TIA
LLY
AH
EAD
OF
TAR
GET
DA
TE
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Data
Finish Date of:
000020 - INITIAL PRODUCTION
Analysis
Iterations:
1000
Statistics
Bar Width:
week
Highlighters
P10 - Best Case
08/05/2008
P50 - Most Likely
26/05/2008
P90 - Worst Case
11/06/2008
28/04/2008
18/05/2008
07/06/2008
27/06/2008
17/07/2008
Distribution (start of interval)
0
20
40
60
80
100
120
140
160
180
200
220
240
H
its
0% 16/04/2008
5% 06/05/2008
10% 08/05/2008
15% 12/05/2008
20% 14/05/2008
25% 16/05/2008
30% 19/05/2008
35% 20/05/2008
40% 22/05/2008
45% 23/05/2008
50% 26/05/2008
55% 27/05/2008
60% 28/05/2008
65% 29/05/2008
70% 30/05/2008
75% 03/06/2008
80% 04/06/2008
85% 06/06/2008
90% 11/06/2008
95% 18/06/2008
100% 21/07/2008
Cum
ulat
ive
Freq
uenc
y
000020 - INITIAL PRODUCTION : Finish Date
Schedule Risk Analysis: Modular
The modular option shows a high probability to meet the production target date of May 2008
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
5%
6%
8%
10%
12%
23%
23%
25%
26%
32%
015 - System(s) not completed in the fabrication yard
001 - Long permitting and regulatory requirements
013 - Key constructability aspects of the modularization not captured in the design
012 - Late design changes (low tolerance modularised plant)
011 - Late equipment deliveries
008 - Late mobilisation to site
002 - Limited plot space and laydown
009 - Unforseen ground conditions
004 - Risks from high elevations works
010 - Local labour demonstrations
Schedule Risk Analysis: Modular
The result of the schedule risk analysis shows that the main causes of delays are now particular to offsite risks, which are easier to manage
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Cost Analysis
(*) Excludes costs associated with losses in production or market shares due to late production date using stick-built
Modular Stick-Built Delta Construction Construction Mod-SB Project Management Cost $5,411,533 $5,614,557 $203,025 Engineering & Design Cost $7,305,791 $6,977,790 $328,001 Major Equipment Cost $5,997,570 $5,997,570 $0 Bulk Materials Cost $8,397,044 $7,921,740 $475,304 Site Preparation Cost $2,687,054 $2,851,826 $164,772 Fabrication Shop Labour Cost $4,535,610 $3,372,180 $1,163,430 Transportation & Lifting Cost $1,626,990 $1,182,960 $444,030 Construction Management Cost $1,713,940 $2,489,750 $775,810 Field Subcontract Cost $12,006,760 $13,927,680 $1,920,920 Direct Field Labour Cost $21,673,400 $25,462,470 $3,789,070
Total Estimated Cost = $71,355,692 (*) $75,798,524 $4,442,831
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
What? Small-Scale Chemical Facility How? Modules built offsite Final assembly / alignment on site Why? Strong requirements to get product to
market on time (business needs) Local or site risks reduction Results? 6-month schedule reduction 4.4 MM USD cost savings Project risks reduction
Conclusions
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
Modularisation Overview
Case Study: Small-Scale Chemical Plant
Advantages and Disadvantages of Modular Construction
A Different Way to Deliver Projects
Quick Selection Criteria for Modularisation
1
2
3
4
5
6
Agenda
Q & A
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
► Improved safety ►Schedule compressed (civil work while pre-assembling) ►Shorter onsite duration ►Less field labour required (lower work density) ►Cost of housing the field labour at site is reduced ►Higher shop productivity ►Weather related delays are minimized ►Benefit from cheaper labour in low wage area or country ►Lower overall project costs ►Quality is improved (controlled work area) ►Permitting advantages ►Reduce plant footprint ►Simplified foundation requirements ►Decreased site risks
What are the benefits?
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
►Additional front-end planning ►Early decision whether to modularise or not ►Additional engineering & design considerations ►Additional transportation logistic considerations and costs ►Additional interface considerations ►Less flexibility for design changes ► Increased structural steel required ►Estimating & cost control are much more complex ► Insurance costs more than conventional ►Layout of plant critical for access ►Rejection to take work outside the country
What are the impediments?
A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China
THANK YOU!
Prefabrication & Modular Construction