Phusion News

TLC for the EPC

Improving Data Handover

I’m sure that most would be quite happy to accept that engineering procurement companies are surely experts in both the design and procurement aspects of their function. It’s also a given that, with plenty of EPCs around, the margins are always going to be tight. The bidding process is going to make sure that this remains true.

When I was at an industry conference a while back, one of the executives attending the event was none too happy. We’ve all been there! In this case he was reflecting on the fact that the EPCs are left making small margins on their work and he offered a comparison to the profits made by owner/operators on the same facilities. I’m sure there was a level of validity in what he was suggesting, but I do also feel that it is possible for EPCs to gain a slightly larger share of the pie. I would suggest that two simple keys to achieving this is to have the appetite and desire to do so. This isn’t a particularly original thought, I know, because the same could also be said of most other enterprises!

However, I do feel that the information handover and spares procurement elements of a major capital project are two areas that might be ripe for change. If this is so, then the EPC might be able to take on more – and increase their profit margins – by choosing and working with key partners who clearly understand both the operating and maintenance phases of any major project.

I feel it’s fair to say that EPCs are often heavily influenced by the information management requirements of their clients. These needs can often interfere with a range of tried and tested systems and processes which the EPC might wish to use as standard.

Here at Phusion IM, we appreciate this situation, and have worked to engineer new methods which then deliver what any individual client requires. We have also ensured that these still operate one way internally to preserve the necessary efficiency and effectiveness. My gentle contention here is that such an opportunity also exists for EPCs and those who supply them.

I would like to see a two-part process. Firstly, we all continue to work to facilitate convergence of information data handover requirements, standards, maintenance and sparing strategies, and methods of data collection across the gamut of owners and operators. Added to this, I would like to see us take the opportunity I feel exists to work together to facilitate and accelerate change.

Having gained often hard-won experience by being involved in some of the world’s largest projects, it seems to me that the situation often tends to pan out in the following way:

– The owner/operator making best use of lessons learned from involvement in previous projects, gathers together a dynamic team.

– This group then dissect or assemble the information handover requirements specifications.

– The process of selecting the EPCs for the FEED and then the project post FID takes place.

– The owner/operator then employs key contractors to carry out the data information management work. This is where our Phusion input occurs, as we task ourselves to ensure that the new systems are both correctly and completely populated.

– The owner/operator employs contractors who carry out integrity management to successfully define work packs and hierarchies. They also support the spares procurement review process.

I think it’s fair to say that, as the job matures, the maintenance and operations team grows. This leads to more requirements and expectations emerging, and it may be that these are not always warmly received.

In a world where most things seem to change ever more quickly, it is interesting that this process has not really altered in decades. Is it also fair to say that it is not always particularly effective? Here’s one scenario taking us through such a moment:

– The EPCS, as the design and procurement experts, might specify and order a pump from an Original Equipment Manufacturer. This is subsequently purchased, installed, commissioned and handed over.

– To ensure operations readiness, the owner/operator tries to order a replacement pump to hold as a spare.

– The OEM finds it difficult to interpret the provided material template, and this leads to much discussion and exchange of information.

A possible outcome of such a scenario is that either the wrong pump – or replacement parts – are procured. Some owners/operators will tell you that such actions results in the waste of many millions of dollars.

If you were nodding as you recognised the story I’ve told here, then you may accept my belief, having worked for owner/operators, that the problem is one of compartmentalism – each of us operating only in our own (often self-imposed) box.

Yet, I also believe that, with the right partners, an EPC can offer the owner/operator an improved level of service. This is particularly true if the EPC is paired with such partners who display a proven track record relating to the management of major projects.

There’s an old saying: ‘There’s never enough money to do things right, there’s always enough to do things again’. It may be a cynical thought – but is there also a germ of truth in it in the area we’ve been discussing? I’ll leave you to be the judge!

For further information, please don’t hesitate to contact me.