vip for capital projects

8/3/2019 VIP for Capital Projects

http://slidepdf.com/reader/full/vip-for-capital-projects 1/24

Value ImprovingPractices (VIPs)

forCapital Projects

Steven M. BuckManager, Capital ProjectsFebruary 2010



2

Motivation for Value Improving Practices

Value Improving Practices were introduced in the US in the 1930sas a method to challenge project scopes and aimed at designingand building the bare minimum for the purpose

According to US literature the consistent utilization of VIPs cansave 5 – 10% of capital investment cost

Value Improving Practices improve alignment between businessand engineering stakeholders due to intensified dialogue and

detailed clarification of project objectives and prioritiesValue Improving Practices provide a systematic approach tocreatively challenge and document project decisions to enhancethe level of quality, cost effectiveness, and reduce projectexecution time.



3

How does VIP work?

Project Team Hard working

?

Challengers Experiencedin technical areas,VIP protocoland projects, not

part of project team

VIP Asking questions,creating ideas,creating more ideas,evaluating options,

adding value

Project Team Smart working



4

VIP: A Contribution to CompetitiveEngineering and Successful Projects

VIPs will provide:

A systematic approach tochallenge the team

Optimization with total cost ofownership

Align business goals and projectobjective/priorities

Document success and bestpractices



5

Value Improving Practices Impact

VIPs Analysis

Explore Appraise/Select

Define Execute Operate

P o t e

n t i a l t o I m p a c

t V a

l u e

Project Phase



6

BASF VIP Practices

VIP Content

1. Project Catcher Workshop for processes from research

2. Project & Site Classification Fix the project task, characterize the project

3. Process Optimization Identify competitive process variants; improve technical implementation

4. Energy & Wastes Reduce manufacturing costs and achieve sustainable conservation of resource

5. Logistics & Site Competitive integration of the project into supply chains / the site / Verbund.

6. Reliability, Availability &Maintainability

Investigation in minimal Total Cost of Ownership and maintenance strategy – project and plan specific in agreement with the site

7. Process Control & OperationManagement

Optimal economical concept for process and operations management

8. Function, Cost & RiskAnalysis

Determine the minimum Total Cost of Ownership for fulfillment of the definedprocess function

9. Execution Strategy & RiskAssessment

Develop best-possible execution/procurement strategy, address and assessrelevant risks

10. Constructability Optimization plant erection and planning by consideration of SHE, Civil andConstruction requirements during Engineering

11. Commissioning & Start-up Optimization transfer construction to start-up (after mechanical completion)



Value Improving Practices for LargeCapital Projects



Timeline Gates & VIPs



Project & Site Classification

Clarification and alignment ofProject Objectives

Determine if project is ready to

start basic engineeringDecide what Value ImprovingPractices should be applied

Initial discussion of Division ofWork and project organization



Process Optimization

Systematic review of theprocess concept to identifyopportunities for optimization



Energy & Wastes Optimization

Evaluate process concept for energyoptimization and waste minimization

Heat integration (Pinch Analysis) are

considered for energy optimizationProject resultant wastes are tracedback to their generation to determine ifalternate steps can reduce or eliminate

wastes



Logistics and Site Optimization

Inbound and outbound material flow

Transportation modes

Storage requirement

Site congestion issues

Loading and unloading requirements

Manufacturing strategyCapacity flexibility

Coordination with Site Master Plan



Reliability, Availability & Maintainability

Review to determine optimum maintenance strategy and projectconcept to achieve minimum total cost of ownership to meetrequired plant availability

Define spare parts strategyStandardization of equipment

Special predictive and preventive techniques

Identification of special cleaning, start-up andmaintainability issues



Process Control and OperationManagement

Review application of advancedprocess control techniques

Alarm management

Governmental reporting requirements



Function, Cost and Risk Analysis

Evaluation of alternatives to a achieve the functionality of thevarious project parts

Risk assessment of alternatives



Execution Strategy & Risk Assessment

Review of Procurement Planand Execution Strategy

Identification and assessment

of project risksDevelopment of RiskManagement Plan to mitigaterisks



Constructability

A series of reviews toconsider constructionplanning, execution andstrategy issues

Claim avoidance



Commissioning and Start-up

Develop overall commissioning and start-up concept for project

Identification of system boundary conditions

System sequence and turnover

Commissioning time schedule and resources

Special testing requirements

Safety concept related to system turnover



VIP Example



VIP Results of How the Tortoise Won !!!

+



VIP Example: Buying a Vehicle vs a Project

$9,990 $190,000




VEHICLE VIP PRACTICE

Objectives/Cost/Timing Project Classification

Truck/SUV/Car/Specifications Function Cost and Risk Analysis

Diesel/Gasoline/Hybrid/Electric Energy and Waste OptimizaitonPurchase/Lease Execution Strategy and Risk Assessment

Instrumentation/GPS/DVD player Process Control & Operation Management

Maintenance/Reliability/Cost/Complexity Reliability, Availability & Maintainability



23


$35,000



VIP : A Contribution to CompetitiveEngineering and Successful Projects

vip for capital projects

Documents