Re-Engineering the EPC Process (Archived)

RT-124 Topic Summary
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Overview

Re-engineering is a fundamental rethinking and radical redesign of a process to achieve dramatic improvements in performance. The projects which are reengineered due to short schedule, tight budget, or technical complexity by adoption of extraordinary approaches are labeled as “Crisis Projects” or “Exceptional Projects.” This topic investigates and evaluates whether the techniques and methods used for the “Crisis Projects” could be adapted to re-engineer the existing EPC process. In today’s competitive global marketplace, Owners, EPC contractors, subcontractors, and material suppliers will benefit tremendously by re-engineering the EPC processes. They concluded that in many cases, individual projects were executed by adoption of extraordinary approaches that made them “Exceptional Projects.” With this idea, 30 case studies of “Crisis Projects” were closely analyzed and their extra-ordinary approaches were identified as best practices to be followed by the EPC industry.

RT-124 concluded that re-engineering the entire EPC process was insurmountable and unrealistic. The purpose of this research is to investigate EPC processes to:

  1. Take advantage of existing methods used by owners and contractors in exceptional situations and projects.
  2. Evaluate these methods by incorporating them in existing models of the EPC process.

This research topic does not provide a specific re-engineered EPC process but it provides compelling evidence that fundamental changes in the process can lead to dramatic results and deliver guidance to the industries and organizations for implementing re-engineering efforts. The research clearly demonstrates that dramatic schedule and cost improvements are achievable for EPC projects. It also suggests rules and barriers to change can be broken. For successful change, organizations must take ownership of process re-engineering. 

Key Findings and Implementation Tools

1 : Cost/Schedule Comparison

This research indicates that re-engineering processes can significantly reduce project duration and cost. Fifty percent of all case studies demonstrated a decrease in cost with an associated decrease in schedule. Schedule reduction varies from 12 to 85%. (RS124-1, p. 6)
Reference: (RS124-1)

2 : Safety and Quality

Safety was paramount on all of the case studies analyzed. Safety and quality were not compromised for decreases in schedule duration or cost reduction. In fact, safety awareness during exceptional project management was heightened to an extent that the safety performance was excellent in all case studies analyzed. (RS124-1, p. 7)
Reference: (RS124-1)

3 : Variety

The variety of the project types and complexities represented in this study demonstrates that re-engineering is not limited to a particular type facility, sector, and driver. (RS124-1, p. 4)
Reference: (RS124-1)

4 : Primary Categories of Changes

While no single change was identified as a sole cause of reduction in schedule these 4 categories had discernable impacts on project schedule. These top 4 change categories represent 70% of the schedule reduction the exceptional case study projects. (RS124-1, p. 9)

  • Delivery approach/execution plan
  • Engineer’s role
  • Design process
  • Procurement process
Companies cannot expect to implement only one or two changes and/or techniques and experience dramatic improvements in cost and schedule performance. Work process changes in each category rely on one another. More importantly, work process changes must be coupled with a set of non-measurable organizational changes that establish the environment for success. These factors can be labeled as “no fear” factors. They require owners, managers, and companies to change the way they have been doing business by relinquishing some amount of control, being dedicated to the process, and rethinking the construction process.
Reference: (RS124-1)

5 : Barriers to Implementation

Reasons for resistance to change include soft, organizational, and tangible issues. Examples of each are shown below, but the detailed list is included in the research. (RS124-1, p. 13)

  • Soft Issues – natural resistance to change, comfort with the status quo
  • Organizational issues – culture, empowerment
  • Tangible issues – liability, credibility
Reference: (RS124-1)
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Key Performance Indicators

Improved cost, Improved schedule, Improved quality

Research Publications

Re-Engineering the EPC Process - RR124-11

Publication Date: 12/2000 Type: Research Report Pages: 140 Status: Archived Reference

Exceptional Projects and Methods of Improving Project Performance - RS124-1

Publication Date: 06/1999 Type: Research Summary Pages: 17 Status: Archived Supporting Product


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