Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutd...
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
PROJECT MANAGEMENT A Handbook for Small Projects
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PROJECT MANAGEMENT A Handbook for Small Projects

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PROJECT MANAGEMENT: A Handbook for Small Projects

INTRODUCTION
This Information for Engineers document comprises two sections.

Section 1 contains the components of the GBHE Project Process, the capabilities and competencies required by a Project Manager and, finally, specific project management good practices including value improving practices.

Section 2 contains information that supports the practices contained within Section 1. This includes helpful checklists, references and information about deliverables and other examples, all of which will provide practical help to Project Managers and their project teams.

The document assists client sites in meeting the necessary engineering requirements related to safety, health and environmental matters on their sites, and supports the GBHE Safety, Security, Health and Environmental Policy.

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PROJECT MANAGEMENT A Handbook for Small Projects

  1. 1. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com GBH Enterprises, Ltd. PROJECT MANAGEMENT A Handbook for Small Projects Process Information Disclaimer Information contained in this publication or as otherwise supplied to Users is believed to be accurate and correct at time of going to press, and is given in good faith, but it is for the User to satisfy itself of the suitability of the Product for its own particular purpose. GBHE gives no warranty as to the fitness of the Product for any particular purpose and any implied warranty or condition (statutory or otherwise) is excluded except to the extent that exclusion is prevented by law. GBHE accepts no liability for loss, damage or personnel injury caused or resulting from reliance on this information. Freedom under Patent, Copyright and Designs cannot be assumed.
  2. 2. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com Contents SECTION 1 PRINCIPLE AND PRACTICES 1 INTRODUCTION 2 GBHE PROJECT PROCESS 2.1 Introduction 2.2 Project Opportunity 2.3 Project Definition 2.4 Project Implementation 2.5 Project Benefit 2.6 Project Review 2.7 Business Ownership 2.8 Measurement and Auditing 3 KEY CAPABILITIES 3.1 General Skills 3.2 Personal Competencies 4 PROJECT MANAGEMENT PRACTICES - PROJECT DEFINITION 4.1 Business Opportunity Testing & Objectives Setting 4.2 Developing the Project Scope 4.3 Project Strategies 4.4 The Project Organization 4.5 Project Estimating and Planning/Work Breakdown 5 PROJECT MANAGEMENT PRACTICES – PROJECT IMPLEMENTATION 5.1 Team Building and Team Management 5.2 Risk Management 5.3 Design Management 5.4 Contract Management 5.5 Construction Management 5.6 Commissioning Management 5.7 Change Control 5.8 Cost Management 5.9 Progress Monitoring, Control and Reporting 5.10 Information and Document Management
  3. 3. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com 6 PROJECT MANAGEMENT PRACTICES - PROJECT REVIEW 6.1 Project Close Out and Reports/Reviews 6.2 Measurement and Learning 7 VALUE IMPROVING PRACTICES 7.1 Introduction 7.2 Types of Value Improving Practice FIGURES 1 PROJECT PROCESS 2 COMMERCIAL STRATEGY & RISK RELATIONSHIP 3 GBHE RISK MANAGEMENT PROCESS SECTION 2 CHECKLISTS AND REFERENCES 8 INTRODUCTION TO THIS SECTION 9 PROJECT DEFINITION CHECKLISTS 9.1 Business Opportunity Testing & Objectives Setting 9.2 Developing the Project Scope 9.3 Project Strategies 9.4 Developing the Project Organization 9.5 Cost Estimating 9.6 Contractor Selection 9.7 Work Breakdown Structure (WBS) 9.8 Planning and Control 10 PROJECT IMPLEMENTATION 10.1 Cost Management 10.2 Change Control 10.3 Document Management 10.4 Construction Management 11 PROJECT REVIEW CHECKLISTS 11.1 Project Review, Reporting and Close-Out 11.2 Measurement (Learning Log) 12 REFERENCES DOCUMENTS REFERRED TO IN THIS INFORMATION FOR ENGINEERS DOCUMENT
  4. 4. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com SECTION ONE PRINCIPLES AND PRACTICES 0 INTRODUCTION This Information for Engineers document comprises two sections. Section 1 contains the components of the GBHE Project Process, the capabilities and competencies required by a Project Manager and, finally, specific project management good practices including value improving practices. Section 2 contains information that supports the practices contained within Section 1. This includes helpful checklists, references and information about deliverables and other examples, all of which will provide practical help to Project Managers and their project teams. The document assists client sites in meeting the necessary engineering requirements related to safety, health and environmental matters on their sites, and supports the GBHE Safety, Security, Health and Environmental Policy. WHAT PROJECTS CAN IT BE APPLIED TO? Although the information contained is applicable to most projects, the document is aimed primarily at GBHE’s Consultancy and Associated Projects in the range of $40k to $5m and is adaptable across a wide range of technologies and geographic locations within this range. How you apply it depends mainly upon your Business and project strategies, the complexity of your project and the Business you belong to. Projects that are of higher cost or have some particular complexity may require the application of additional and more rigorous procedures. Such procedures can be found within each Business or organization and these will deal with the requirements of projects that are not covered by this document. WHY HAS IT BEEN WRITTEN? All GBHE's major competitors apply and work to a companywide consistent project process, one of the important features of which is a common language for all those involved. Evidence also shows that as a result, most achieve high levels of performance in delivering their projects. GBHE’s guidelines for capital investment projects now require GBHE Businesses to apply a consistent, GBHE Project Process.
  5. 5. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com This document has been written, therefore, to describe the content of the GBHE Project Process and also to provide a framework for good practice. This, supported by checklists and examples, will thereby help Project Managers and their teams to further raise GBHE's all round investment performance. Finally, although GBHE's Guidelines require the GBHE Project Process to be used company wide, this document has been produced to provide guidance not establish hard prescription. Following the GBHE Project Process or the content of this document does not imply working within a straight jacket of bureaucracy, nor does it guarantee success; but will go a long way towards making success more likely. WHO HAS IT BEEN WRITTEN FOR? It is hoped that both seasoned Project Managers and those learning the role will find the contents useful and helpful. Seasoned Project Managers as a useful reminder and new Project Managers as statement of the standards they need to achieve. It has not been produced to replace the need for project management experience and training but as a supplement to these. 2 GBHE PROJECT PROCESS 2.1 Introduction The GBHE Project Process is part of a total business investment process whose prime aim is helping to ensure that capital and revenue resources within the company are spent effectively and that key safety, health and environmental standards are met. The Project Process is set out in Figure 1 and defines the key stages and decision points that are required for all projects. It does not prescribe the way in which those stages are undertaken, this will normally be done by local project procedures appropriate to the nature and size of the project as well as the local business and regional context. For larger or more complex projects, additional decision gates may well be required. Business and project strategy usually determines how the Project Process is applied.
  6. 6. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com FIGURE 1 PROJECT PROCESS 2.2 Project Opportunity The Business identifies the opportunities and their nature, reviews alternatives and identifies the potential risks and benefits before defining the business objectives for the project and appointing a Business owner. The decision to proceed with the project and to provide appropriate resources is recorded. 2.3 Project Definition The project definition stage tests that the business objectives are clear and establishes critical success criteria for the project. The scope of the project is defined in sufficient detail to satisfy the sanctioning criteria; and planning of the execution of the project is completed in order to define roles and responsibilities and resourcing requirements; schedules are produced which are based on an appropriate work breakdown structure and estimation of costs. A defined project strategy, definition package, project schedule and sanction cost estimate are produced at this stage. 2.4 Project Implementation Following the sanction decision, project implementation proceeds in accordance with the defined project strategy and scope. The stages of implementation vary with the nature of the project but typically include detailed design, procurement, construction and start-up.
  7. 7. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com Appropriate monitoring, validation and control measures are employed to track progress, control costs, ensure safety and limit change to ensure the project objectives are achieved. The deliverable at the end of this stage is a productive asset, which meets the business objectives. 2.5 Project Benefit The Business ensures that the project benefits defined at the outset of the project continue to be realized throughout the operating life of the asset. 2.6 Project Review All projects complete an appropriate review process, which ensures that learning from the project, both positive and negative, is captured and recorded. This includes both project learning and business learning in terms of whether business objectives have been achieved by the investment. Appropriate mechanisms are put in place to ensure such learning is disseminated throughout the Business and project communities to maintain effective feedback for future improvement. 2.7 Business Ownership Each GBHE project has an identified Business owner responsible for delivery of the project benefit and accountable for managing the integration of activities from identification of project opportunity through to delivery of project benefit and completion of project review. The Business owner has responsibility for ensuring that the capability is in place for the effective delivery of all stages of the project process. This usually requires the appointment of a suitably qualified Project Manager. The Business owner also has responsibility for ensuring that essential safety, health and environmental requirements are met throughout the project process. 2.8 Measurement and Auditing Each stage of the GBHE Project Process includes the definition of key deliverables. These deliverables form the basis on which decisions will be made to proceed, or otherwise, to the next stage of the project process. It is important that these deliverables are measurable and that suitable audits or project assessments are carried out from time to time to ensure that the process is being effectively and consistently applied.
  8. 8. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com These can take the form of self-assessments or may be peer assessments or independent audits. It is particularly important that regular assurance of SHE compliance on projects is undertaken. 3 KEY CAPABILITIES In order to successfully complete projects there are a number of key competencies and skills that are required within the project team. If the team is lacking in any of these capability areas, the project may still be successful but the risk of failure is greatly increased. Project management is both an art and a science, combining a structured logical approach, which requires discipline with a range of skills which require experience and judgment. The need for these key skills and competencies is not reduced merely because the project is small. 3.1 General Skills The key skill areas are as follows: • Adoption of a project process and appropriate procedures to ensure that objectives are understood, scope defined and strategy planned before implementation takes place. The GBHE Project Process is defined in Section 2. It is part of the responsibility of the Project Manager to ensure that the discipline of the process is applied throughout the project. • The project team needs clearly defined roles and responsibilities, which cover all the project requirements. The internal interfaces between project team members need to be clear as well as the interfaces outside the project team (e.g. with the Business, works, other projects, etc.). The interfaces with contractors and suppliers are especially important and need to be properly managed. • The Project Manager must ensure that all the appropriate skills are available and harnessed at the right time. Unlike many line management jobs, the Project Manager will often need to draw upon the skills of people who have other accountabilities in the organization. Access to resources is a key requirement of project management. • Since projects usually involve the integration of related activities in a defined time frame, good team building and communications skills are required by the Project Manager. Similarly, good projects depend heavily upon planning and preparation and it is essential that those skills are available within the project team.
  9. 9. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com • It is a key requirement in all projects that knowledge in the technology is available to the project team. For the core skills of project management, process and engineering design, knowledge of hazards and statutory requirements, operational knowledge, construction management, purchasing and contract management etc., these will often exist within the project team. There are, however, other knowledge and skills which may be required to ensure a successful project, such as risk management, scientific know-how, legal and financial knowledge, and the project team needs to have access to these where appropriate. • Some knowledge and skills can be developed through training and education; others are only developed by practice and experience. It is important that all members of the team have been trained to a level that enables them to discharge their responsibilities and have the appropriate level of experience where skill and judgment is required. It is the responsibility of the Project Manager to ensure that the skill balance in the team is sufficient to enable the project to be successfully completed. 3.2 Personal Competencies The following make up the basic personal competencies required by the Project Manager and they also need to exist to some extent or another within the rest of the project team. 3.2.1 Defining This is about helping customers, suppliers and the project team makes up their minds and is aware of the consequences of their decisions. 3.2.2 Scanning This is surveying the totality of the project including such things as business politics, the market, goals, technology and progress against plans and budgets, whilst maintaining a clear appreciation of the whole project. 3.2.3 Strategic Thinking This is being able to identify key methods of approach that, if successfully accomplished, will greatly facilitate the completion of the many tasks to be done. Once decided, these become the key elements of the strategy.
  10. 10. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com 3.2.4 Selecting This is differentiating between those issues having a potentially great impact on the project and those not so important. 3.2.5 Resourcing This is finding the necessary resources to take advantage of an opportunity or to resolve an issue or problem. 3.2.6 Influencing This is using personal skills to get things done. 3.2.7 Interfacing This is making sure that intergroup relationships promote the project rather than draining its energy. 4 PROJECT MANAGEMENT PRACTICES - PROJECT DEFINITION 4.1 Business Opportunity Testing & Objectives Setting A successful project not only meets its own targets but delivers a benefit and acceptable rate of return for the Business. It thus follows that both the project objectives and the underlying Business drivers must be fully aligned, developed and understood. If the latter have not been thoroughly developed, then the expenditure incurred by the project team is likely to be abortive or wasted. Further, it is difficult for a Project Manager to set the project objectives if there is limited clarity around the reason for proceeding with the project and the issues that affect it. Hence it follows that the Project Manager needs to establish the background to the project when they first become involved and certainly before committing significant expenditure or other key resource. There are a number of key questions (see Section 2 checklists) which can aid this process.
  11. 11. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com Having answered these questions, the Project Manager can then develop the project strategy and objectives. This is sometimes best achieved by working backwards from the end of the project and questioning what each stage of the project requires from the preceding stage (i.e. what do commissioning require from construction)? What does construction need from design and procurement to achieve this, and in turn, what does procurement require from design? The Project Manager then can set objectives for each area and stage of the project which are consistent with the overall direction of the work. They can then use these objectives to determine and select the relevant resources and services for the project. 4.2 Developing the Project Scope 4.2.1 Introduction Successful projects are categorized by good early definition, enabling only viable business options to be evaluated, approved and implemented. The Project Definition stage is concerned with developing definition, identifying and assessing options, evaluating and recycling them through a series of decision stages. Only viable proposals are then taken forward and considered for approval by the sanctioning authority concerned. There are 3 key phases during definition (i.e. Assessment, Optimization and Development). Normally, 2 key documents are produced: • Project Proposal; • Project Specification and Strategy. These are used to describe for example project boundaries, scope, cost and timing. They are key documents and are used to drive out issues and ensure alignment between the client, engineering and operational stakeholders. The Project Manager takes the project team through the 3 important and distinct phases, assessment, optimization and development, which systematically and progressively improves definition and limits costly re-cycle and re-work. Poor definition leads to a poor project outcome. Throughout, the project proposal and project specification are re-visited, improved and re-issued.
  12. 12. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com Perhaps only the more complex of small projects will involve these 3 discrete definition and re-cycle phases. However, following such systematic discipline is good practice and can only help in improving the completeness of the scope and the viability of the overall investment (not just the project). 4.2.2 Importance of Scope Development A good scope is a prerequisite for a successful project. Scope development is a key activity that involves taking the client’s Project Proposal and building it into a working project scope. The Project Manager in conjunction with the Project Owner makes certain this work is carried out thoroughly and that the scope fulfils the original intent and is supported by all stakeholders. A Project Scope document is produced which, amongst other reasons for its production, helps the scope to be tested to ensure adequacy and value. The scope documents are important because: • By reviewing the project proposal and specification documents with the client it confirms correct interpretation of Design Brief by the Project Manager. Also: o Becomes the official record of agreement between client and Project Manager; o Serves as a base case from which to control change; o Ensures a consistent understanding of the brief across the project team; o Is the basis for the estimate; o Is the basis for the program; o As new people are brought into the Project Team this is where they start; o They are key documents in the Project Review, which is an important part of the Project Process.
  13. 13. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com 4.2.3 Getting the Right Project The scope development phase is the stage at which the client and project team have the maximum influence on the project outcome. More projects have failed to deliver business benefit through doing the wrong project than through poor execution. The client discusses the business case with the Project Manager, stresses what’s important and what is less important. Alternative solutions and ideas are also investigated. It is rare that first ideas cannot be improved upon. Where appropriate, input from the following is also key: • Business. • Marketing. • Engineering, Design and Construction. • Purchasing, Tax positions for overseas projects. • Commissioning. • Operations. • Maintenance. • Environmental. • Safety. • Occupational Health.
  14. 14. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com 4.2.4 Value Improving Practices (VIP’s) Studies of past projects have shown that applying VIP’s at the right stage will enhance the quality of the project scope. Value improving practice is covered in Section 7 of this document. However, the following are examples of those deployed during Project Definition: • Value Analysis: Breaks the scope down into its functional elements and allocates the estimated costs allowing judgments to be made on value for money. • Conceptual Analysis: Similar to above but carried out earlier in the project process using a conceptual or very preliminary estimate. • BETA Studies - (Business, Engineering and Technical Assessment): Compares business aspirations and needs with proposed engineering solutions. • Risk Management: Identifies project risks and develops a risk management process to manage through the project. 4.2.5 Definition Phases • Assessment: This is concerned with establishing understanding of the key project drivers and influences, the development of an outline scope and the evaluation of the project economics to assess viability. The project scope is developed to a point where an order of cost estimate can be produced (likely ±30%) and the timescale can be confirmed with reasonable confidence. With this information a first-pass economic assessment can be made by the Business to support decision making.
  15. 15. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com • Optimization: This involves further developing understanding and optimizing the project economics. It is the phase, for example, where such things as the site would normally be confirmed and process design and layouts optimized. Alternative technologies are evaluated and VIP practices are applied such as VA. If this phase is carried out properly, costs can be reduced considerably and/or operability improved. Optimization and risk mitigation are the key drivers. The likely outcome at the end of this phase is that an optimal solution is developed; confidence in the outcome increased considerably, scope fixed and key project strategies in place which will exist through to completion. Only fully optimized and viable investments are taken forward to the development phase. Costs will be evaluated to ±20% confidence. If this is completed then the client will have reworked economics and be in the position to consider commitments to increased pre-sanction funds. • Development: This is concerned with developing definition, improving implementation strategies and commercial arrangements to a point where the implementation phase can be initiated. It helps reduce risk by increasing knowledge/definition and starts the preparation for implementation. At the end of development the project will have been defined to a point where delivery, in accordance with the investment case, can be formally assured. Costs are evaluated to ±10% confidence and a firm project schedule is available. Contractual/commercial strategies and arrangements will also be fully developed. 4.3 Project Strategies 4.3.1 Introduction To meet the business objectives and to provide a firm basis for management and control requires a project strategy to be established as an early and key part of project definition. The project strategy considers, for example, such things as purchasing and contracting options, project organization roles and responsibilities, timing and budgeting, information management, how the project is to be designed, constructed and commissioned, role of the client, communications and much more.
  16. 16. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com Formulating the project strategy involves considering all issues likely to affect the project and the way in which they can be satisfied; the outcome provides a framework for carrying out all subsequent project activities. As such, the project strategy provides alignment of business objectives with those of the project and this is therefore central to the successful outcome of the project. 4.3.2 Contract and Procurement Strategy 4.3.2.1 Contract Strategy The Project Manager must make available all the required skills and resources to the project to effectively achieve its aims. It is only on very small projects, however, that all of the skills required are available in-house. For the majority of projects, some skills within the project team must be supplemented by the use of outside resources. Procuring these skills will be done through a contract. The efficiency of the project will be determined by the Project Manager's selection and subsequent management of the contract. The successful management of any Contractor depends on a mutually respectful relationship, with the objectives of both parties aligned to the objectives of the Project. The relationship is crucial to success, and recognizing that the Contractor has been engaged to supplement a skills shortfall within the project team is the best way of avoiding the temptation for scarce specialist client resources to get involved in detail which is the scope of the Contractor. Many an escalation in scope and project cost has occurred because of 'preferential engineering' - a difference of professional opinion, when either solution would achieve the contract objective. It is worth bearing in mind that: "A Contractor selected with the appropriate skills for the scope of works required, and with appropriate reward for the complexity of the work and the market conditions prevailing at the time, will perform to the standard required by the terms of engagement" A comprehensive contracting strategy is therefore essential for all projects and it needs to cover all "procurement" activities. This is the foundation for effective contract management and formulation commences during Project Definition. The key to a successful outcome is a strategy that is aligned with the overall investment objectives of the project and the aspirations of the contractor or supplier. The contracting strategy defines the number of different contracts, the scope of work of the contracts, the structure of the contracts, the timing of contractors and so forth.
  17. 17. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com Choosing the contract type should be based on sound objectives with respect to such things as performance, time schedule, quality, and scope, flexibility of design, the client’s involvement and risk allocation. The way in which you engage and manage the contractor is therefore extremely important. A "win - win" approach which embodies appropriate incentives balanced with associated risk is the most likely route to success. The type of contract that emerges will then help to deliver the required outcomes for GBHE in terms of efficiency, scope, cost and time and will also be aligned to the aspirations of the contractor or supplier. • Careful planning is essential, and preparing a contract plan which embodies the key elements to be contracted out, the preferred strategy and a related schedule is good practice. Having enough time to complete contract negotiations is key to getting the strategy you need, and making sure that you have enough time for all the steps is essential. • It is essential to reflect the kind of constraints (some of which are identified below) the project is facing in the strategy. Identifying these as soon as possible during project definition, as part of the overall process for formulating overall project strategy, will help you. • Consider and promote strategy that includes innovative approaches to incentives as far as you can. For instance, these could be based upon schedule, total project cost, quality, man-hours, client satisfaction and so on. • If the project is part of a joint venture or other type of co-operative alliance, this will have significant impact on the contract strategy. The joint venture partners, or similar, will have specific objectives of their own in addition to the overall product strategy, this also needs to be incorporated and you will need to plan for a long lead time to complete the strategy stage. • A key output of the strategy is the decision on the type of contract. There are a number of contract options. All arrangements bring with them different risks, advantages and, importantly, dictate the need for different levels of contribution and hence responsibility from the client. • A project is different from a manufacturing operation. In addition to direct labor and direct materials a project organization may involve multiple layers of management for example, as subcontractors work under larger contractors and vendors. The result being mark ups for overhead and profit and contingencies have a great effect on the final cost. The Project Manager is however expected to achieve efficiencies through the selection of an appropriate contract strategy and, specifically, thereby:
  18. 18. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com • Eliminating mark ups by eliminating layers of subcontracting; • Eliminating mark ups through selection of competitive bidders who are matched to the size of the project; • Eliminating mark ups for contingency during the bidding and procurement cycles through good scope definition; • Reducing construction costs through proper evaluation and selection of alternatives; • Reducing engineering design costs through leadership and complimentary services. • The Project Manager, specialists within the project team and the Project Owner are jointly involved and responsible for the development of the contract strategy. Examples of the constraints that the projects face that need to be taken into account are as follows: • Flexibility in execution; • Time schedule; • Client involvement; • Project budget; • Availability of client personnel; • Risks connected with the project; • Technical complexity of the project. • Capabilities of available contractors; • Location of the project; • Uncertainties; • Quality of the work;
  19. 19. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com • Point in life cycle of product. 4.3.2.2 Types of Contract There are a number of contract types frequently used and referred to industry- wide. However, the use of this terminology is often variable; therefore the important consideration is that a contract needs to be selected which will be aimed at delivering the project objectives, and the scope must be clearly and unambiguously defined in the contract document. The following are some frequently used contract types: Management by Client: Each complete work package is contracted separately. The commercial basis for the different contracts is variable. The client supervises the contracts and manages the contractors. This type involves a high management overhead for the client in terms of the management effort needed to control the individual contract interfaces. Engineering, Procurement, Construction Management (EPCM): Detailed engineering, procurement and construction contract. The commercial basis can vary from anything between lump sum and full reimbursable. If a single contract is placed on a lump sum approach, the client usually places a contract with a single contractor who carries the total responsibility for the project. The contractor may in turn subcontract part of the work, but remains totally responsible. If established properly and managed effectively these arrangements, based on a well-defined scope, involve the least amount of contract interface management effort for the client. Turn Key: The scope of works normally comprises detailed engineering, procurement and construction up to and including commissioning. The commercial basis for the total project is always a lump sum price. A Main contractor handles the contract and may sub-contract specialist works to appropriate subcontractors. Complete turnkey contracting involving little or no client involvement up to take-over has not been widely used by GBHE.
  20. 20. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com Construction Installation Contracts: Construction/installation contracts can be grouped into four approaches based on the risk allocation and commercial arrangement: • Lump Sum Construction Contract: A single contract approach on a lump sum basis. The client places a contract with the construction contractor who carries the total responsibility for the construction. The contractor may in turn subcontract part of the work, but remains totally responsible. The contractor bears the economic risk of the execution. A lump sum contract based on full design generally leads to the best defined program and lowest costs, but not necessarily the shortest project execution time. • Management Contractor: Single contract approach. The client places a contract covering the entire construction with the management contractor, for a fee related to a target total cost for the installation subcontracts. The contractor will manage the construction/installation subcontracts, which may be on a fixed price or reimbursable basis. The client agrees to pay the management contractor for the actual cost of the subcontracts, which may be a higher or lower figure than the target set. The contractor carries responsibility for the entire construction activity. • Main Contractor (sometimes called Coordinating Contractor): Multiple contract approach. The client places several contracts with various contractors to execute the construction. One of the contractors also manages the other contractors and co-ordinates the execution. Each contractor is responsible for and carries the financial risk for its own scope of work. The commercial basis for the contracts is variable. This approach usually also requires a higher level of client management activity. • Construction Management: Similar to coordinating contractor, with the difference being that the construction management contractor performs construction management only and no actual construction.
  21. 21. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com Contracts are placed in the name and on behalf of the client with installation contractors by the construction management contractor. The construction management contractor carries financial risk for its own scope of services. The commercial basis for the contracts is variable. 4.3.2.3 Commercial Considerations The key to commercial success must be in acquiring commercial awareness. This is a subject in itself and too large to be covered in detail here. Help is available through both internal and external courses that are designed to reinforce practical experience. Contracts are classified by the price type, examples being, firm and fixed price, cost plus, reimbursable and incentive. You can’t rely too heavily on this terminology, for example some of these are sometimes transposed in trade practices and combined as fixed firm price or firm fixed price etc. leading to confusion. The degree to which cost, time, performance and profit is linked is reflected by the type of contract selected and needs to be resolved as part of the contract strategy. In addition, payment and the mechanisms involved is an exceedingly important part of the commercial considerations. Performance driven contracts will often, for example, benefit by payment being linked to completion of specific deliverables or other specific milestone achievements. This greatly improves the likelihood for control and helps to mitigate against risk. 4.3.2.4 Commercial Arrangements The two extremes of the wide variety of commercial arrangement available are: (1) Lump Sum (or fixed price). (2) Reimbursable (or cost plus). The variations between Lump Sum and Reimbursable are almost limitless. For each project the optimum commercial basis has to be developed based on the project objectives, client requirements and specific circumstances. The commercial strategy should be developed by a team including the Project Owner, where appropriate the Commercial Manager and the Project Manager. Figure 2 illustrates the decision process. The commercial strategy reflects on the commercial basis of the contract and is independent of its scope of work.
  22. 22. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com FIGURE 2 COMMERCIAL STRATEGY & RISK RELATIONSHIP Some frequently used arrangements include: • Guaranteed maximum price: This variation is essentially reimbursable but puts a ceiling on the total project cost and provides more certainty in critical budget and financing situations. A reasonable scope definition is required. It is usually combined with an incentive plan related to cost savings. • Unit Rates: This variation is preferred where the specifications are well defined but the scope of work and therefore material and labor quantities are subject to variation. The contract quotes unit rates (including labor) per defined quantity and quality of material or item of work. This type of contract requires a labor intensive supervision (quantity surveying) of the contractor. • Fixed Fee: The contractor is reimbursed for his material costs but the profit and some general overheads are included in a fixed fee based on an agreed scope of work.
  23. 23. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com • Fixed Price with Escalation (variation of fixed fee): The contractor’s risk is reduced by means of an indexed adjustment to the initially quoted contract price. This variation may be appropriate in unstable economic conditions. • Omnibus Fee: This approach is a combination of the lump sum and fixed fee type contracts. A portion of the contractor’s cost is fixed, with a percentage fee applied to other reimbursable costs. Strict control procedures should be established to keep the fixed and reimbursable parts of the work separate before using this type of contract. 4.3.2.5 Incentive Plans Irrespective of contract types, the contractor can be stimulated to better performance by means of incentives built into the contract. These incentives are generally based on achieving mutual benefit for client and contractor by means of increased productivity, efficiency or cost effective execution. Incentives are often directly self-funding. Incentive plans are becoming increasingly sophisticated. They can be based on schedule, total project cost, productivity, safety, quality, man-hours, client satisfaction and so forth. Incentives can be unilateral or of the bonus/penalty type. In the first case the contractor is only rewarded for better than target performance, in the latter the contractor will also be penalized if the target performance is not achieved. Penalty clauses, however, may cause the contractor to re-assess his risk and add an allowance to the contract price for the possible imposition of a penalty, or to ’relax’ the targets set for its performance. 4.3.2.6 Contractor Pre-Qualification Contractors often need to be pre-qualified to assess their suitability to carry out the work. Where this is the case, a formal and objective process is used and the results and decisions are recorded. The Project Manager ensures that this is carried out objectively against consistent criteria. There are at least 2 routes depending upon the size and scale of the contract. One is to carry out "bench" surveys based upon existing local intelligence and completion of the questionnaire and the second is a more detailed and rigorous approach based on visits and interviews.
  24. 24. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com The first route can also be used in conjunction with the second to refine a longer list of possible suppliers or contractors down to a short list when the second approach can be used to focus on the likely bidder list. 4.3.2.7 Enquiry Parcel Preliminary engineering or definition is insufficient for instructions to third parties. A bid package or enquiry parcel is required. This must provide sufficient information for the contractor or supplier, based upon the instructions to tender, to bid for the work including the completion of any pre-contract work that may require to support the tender price. The checklists contain help with putting together the contents of an enquiry parcel. 4.3.2.8 Tender Evaluation and Contract Award Tender Evaluation: Following receipt of the bids, strict confidential and consistent procedures need to be followed. The instructions to tender will contain information for the supplier on how the bid is required to be structured and when it must be returned. It is essential that this is maintained so that such things as co-operate governance and commercial professionalism can be maintained at all times. It may well be necessary to clarify detail with the contractors or suppliers concerned following receipt, however it is important that confidentiality and discretion is maintained when providing answers to any questions they might ask. The bids are compared and analyzed consistently against criteria developed prior to enquiry. Perhaps where complex projects or contractual arrangements are concerned, it is sometimes useful to have the bids validated or compared by an independent organization to provide greater objectivity from an industry wide perspective. It is good practice to include a (GBHE) purchasing professional in this process. The outcome of the evaluation process is recorded including reasons for the conclusions and final choice made.
  25. 25. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com • Contract Award: Contract award is the final step in the process leading to execution of the works and management of the ongoing contract. Care is required to ensure that the award of the contract is a formal step including the issue of all necessary paperwork, and contract related activities are not inadvertently entered into which might prejudice or jeopardize the eventual ongoing contract. Negotiation is a key activity at this stage and merits a complete manual in its own right. The negotiation might be related to: • A contract issue; • The process of agreeing the contract; • or, following award, other post contract negotiations. Negotiating is a critical and specialist task and requires professional assistance and training. Preparation and formulation of strategy and a plan is key to a successful outcome. 4.3.3 Design Strategy This concerns not only how the design will be handled in terms of the organizations best equipped to do it, proportions of the work they will handle, consideration of the skill balance needed, the resource levels required but also consideration of the tools and techniques to be used to support the design process. Resources like IT are often key to the successful outcome of design and particularly for projects where people are dispersed over a wide area. Communication is a key element of the design strategy; poor communication processes add considerable inefficiencies to the design process and overall success of the project. Contributions required from the client, roles of external specialists are also key items to be considered when formulating and establishing the design strategy.
  26. 26. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com 4.3.4 Construction Strategy The strategy for construction (including its management) is developed as early as possible during project definition as a key part of the overall project strategy. In addition, it needs to be formally recorded and communicated within the project team. The construction strategy also plays a key part in developing contracting and purchasing strategies and is likely to be refined and developed during the time these are being considered and when detail design is being carried out. Some key aspects of this strategy will include considerations for site establishment, resourcing, contracts, construction SHE, off-site assemblies, construction risk and arrangements during the hand-over to operations. Additional items for consideration are included within the checklists. The Project Manager, in conjunction with construction, formulates and establishes the appropriate construction strategy. 4.3.5 Commissioning Strategy This covers not only the events after completion of the construction, but also the role commissioning plays in the development of the overall project process. Resourcing, the extent of interface with operating plant, batch trials, hand-over sequence, availability of raw materials for start-up, production windows are some examples of the things to consider. The Project Manager in conjunction with commissioning formulates and establishes the commissioning strategy. For a project to be successful, an effective communication strategy is essential. The objective of this is to make certain that all those involved in the project are regularly and effectively informed on the state of the project. Small projects often have teams whose members work very closely to each other and therefore the strategy for projects of this sort will be very different than where the project team is dispersed over great distances. However, considering the following good practice improves any communications process: • The communication process is established at the start of the project and reviewed thereafter at regular intervals to make certain that any new communication requirements are incorporated. • The following is typical of the organizations who may need to be kept regularly informed: • Business; • Production works;
  27. 27. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com • Project Team; • Other GBHE management; • Contractors and subcontractors; • Suppliers. • The amount of information communicated to each individual needs to be established carefully to make certain that relevant messages are communicated and individuals are not overwhelmed with data. • The presentation of information needs to be carefully designed to make certain that it can be effectively absorbed. Use of graphical presentation gets the best results and should be considered. • The means of transferring information, either electronic, paper or combinations of both is important and needs to be established as part of the strategy. • Circulation of the routine project status report (or a summary of it) is a very good way of communicating project status formally. • Regular project team meetings, formal or informal can also used to keep the team informed. • Regular presentations on the status of the project at the following: • Steering group meetings; • Appropriate meetings of works personnel, particularly works management; • Routine review meetings with contractors, subcontractors and suppliers. A regular project newsletter is another very effective way of communicating.
  28. 28. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com 4.4 The Project Organization 4.4.1 Introduction The project organization and its roles and responsibilities are a key ingredient for the success a project. The organization and certain of the roles and responsibilities vary from project to project depending on such things as complexity and size. Smaller and less complex projects are less likely to require as many of the roles needed by larger and more complex projects. Multi- discipline projects, for example, will have matrix organizations, whereas single discipline projects may not. The organizational model chosen will reflect such considerations whilst avoiding the need for overly complex interfaces roles and responsibilities. Studies show that team integration is an important characteristic of particularly successful smaller projects. Projects with truly integrated teams cost less than projects without and implement the project around 20% faster. Project Managers often find themselves responsible for multiple smaller projects, and studies show that for each additional project managed the schedule grows longer by 4% and definition worsens. However, setting pacesetter targets, achieving business buy- in and support and communicating effectively the importance of the project on the project team improves cost performance. In addition, results also show that defining the business and project objectives (and communicating these effectively within the project team) clearly and resisting changes can double cost performance. These are key considerations to take on board when building and developing your project team. 4.4.2 Roles & Responsibilities For any project to be successful there needs to be clarity with regard to who is carrying out what role, and what the individual responsibilities are. This needs to be agreed and understood by the key individuals involved with the project, and communicated effectively to all who are in any way connected with the venture as early as possible. Everyone involved in the project should be fully aware of the individuals (by name) assigned to the various projects roles, the extent of their respective accountabilities and the tasks that fall within each person’s remit. It is generally more effective to have one person only accountable for each given task (committee responsibility can result in some tasks not being attended to).
  29. 29. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com Roles and responsibilities should be clear at all levels of the project organization, with those in leadership positions setting these out for their respective teams. The Project Manager plays a key role at Business and Project levels, and should ensure that these roles and responsibilities are clear, agreed and documented. Note that one individual may adopt more than one of the roles outlined below. It is, however, important that where an individual carries out more than one role, these roles should be complementary and do not create potential areas of conflict. At the Business level, the following roles/persons should be identified: (For larger and/or more complex projects, they should meet regularly as a steering committee, to ensure that the project work is directed towards and functions to meet Business requirements): • The person who holds the active ownership for the delivery and success of the project; the project’s customer; the person who will champion the project, who is responsible for gaining and retaining the Business support and who seeks the requisite funding and resources. • The person who sets the technical and SHE standards for the project. • The person accountable for Business Planning who can evaluate the project against this background. • The person who co-ordinates the various Business functions involved in the project, ensures that the project is in the Capital program and who prepares the Expenditure Proposal. • The person who will accept and operate the assets delivered by the project. • The person responsible for ensuring that the products manufactured on the new asset will be marketed and sold. • The person responsible for managing the execution phase of the project. • The person for ensuring that SHE performance of the new asset is acceptable.
  30. 30. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com • The person responsible for overall project finance and ensuring that there is a Business case for the project. • The person managing the R & T effort which affects the project. • The person accountable for closing the project and preparing the closure report. At Project level, the following persons need to be identified. They will need to meet regularly to focus on the delivery of the project and to drive it forward. • (as above) the person who co-ordinates the various Business functions involved in the project, ensures that the project is in the Capital program and who prepares the Expenditure Proposal. • (as above) the person responsible for managing the execution phase of the project. • The person responsible for preparing and maintaining the project plan, and communicating and agreeing it with all interested parties. • The person responsible for estimating, preparing and maintaining cost reports, tracking costs and communicating these as required. • The Chemical Engineer who specifies the process requirements for the project and who underwrites the process engineering. • Engineers with the knowledge and experience to lead the design work and who underwrite the engineering in their respective disciplines. • The people from the Works which will receive the asset, who ensures that operational and Works needs are incorporated into the project design and execution, and who communicates project information to the Works. • The person who develops the procurement strategy with the Project Manager and assists with its execution. • The person responsible for site work aspects of the project.
  31. 31. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com • The person responsible for managing the commissioning of the new asset and its hand-over to the Works. In addition to the above, the Engineering Project Manager needs to appoint the following: • Design Authorities. • Design Verification Authorities. • Hazard Study Leader. All of these are defined in the GBHE Engineering Procedures. 4.4.3 The Organization Projects are initiated for a wide variety of reasons and against varying environments. Further, project teams are made up of individual persons, each of whom have their own unique blend of skills and experience. Consequently, projects are set up and organized in different ways, in part to respond to the requirements and constraints laid upon the project and in part to reflect the balance of ability and skill within the team. It is essential that the Project Manager take full account of these issues when determining the project strategy and organization. Likewise, it is rare for a project to be handled completely in-house, and thus the project team is likely to include contractors, consultants, vendors and/or other service providers. The Project Manager needs to consider how each party can best contribute to the success of the project and then create and sustain the working environment that will enable this. The organizational model selected to deliver it is likely to vary from project to project depending upon characteristics such as size, technology, complexity, degree of contractor involvement, role of external authorities, joint venture considerations and many more. Good practice will involve making sure that the organization has clear and unambiguous lines of accountability and reporting, avoids duplication and has uncomplicated interfaces as far as is practicable.
  32. 32. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com 4.5 Project Estimating and Planning/Work Breakdown 4.5.1 Introduction Planning typically involves deciding what needs to be done, how it should be done and who’s responsible. Estimating and planning involves deciding how long it is going to take and when it is best to do it. Monitoring provides the feedback loop required for effecting control by checking whether plans and schedules are being achieved and, if they are not, what forecasts can be made and what re-planning is needed for the future to take corrective action. Good planning relies upon the establishment of project strategy, definition, deliverables, and allocation of responsibilities and subsequent management of the overall project process. The Work Breakdown Structure (WBS) is a key tool for identifying and displaying the basic elements of the project deliverables. The plan and the WBS often develop simultaneously. 4.5.2 Developing the WBS • Breaking down the project scope into clear accountabilities for delivery and control will help bring about effective project control. The time to do this is when there is reasonable understanding of the project scope. Work Breakdown Structure (WBS) is a technique that can be used to achieve this. Producing a WBS will also provide a framework for the project budget and a structure for progress reporting. • In order to develop the WBS it is essential that the Project Objectives are clearly defined in terms of what the Project Team expect to have produced by the end of the project. • The development of the WBS takes place by identifying the project deliverables and then sub deliverables which are required to complete the main deliverables. This sub-dividing of deliverables continues to the point where a clearly quantifiable final element is identified. • A final element sub-deliverable does not need to be a single function task but must be capable of being assigned as a single accountability. In some cases this may mean assignment of a whole work package to a specific contractor, in other cases an individual may be responsible for the provision of a particular element of the design.
  33. 33. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com • The completed WBS can be displayed either as a hierarchical listing or in the organization chart format. • When completed, the WBS can be used to help with: • Identifying resource requirements; • Developing the estimate (from Order of Cost to Grade ’B’); • Assigning Responsibilities; • Resource Identification; • Sequencing and Scheduling the Project; • Monitoring and Controlling Change. 4.5.3 Estimating • It may seem a statement of the obvious, but the key to accurate estimating is to ensure that everything that is required from the project has been considered. The best opportunity for this is within the WBS. • Where possible, the production of the estimate should be a team effort with production of various sections in line with accountabilities within the WBS. In some cases, particularly when developing very early order of cost estimates, the Project Manager/Engineer may have to rely on their own experience to produce the estimate; in such cases the value of a comprehensive WBS will become apparent. • The first stage in producing the estimate is the identification of the individual resources needed to complete the deliverables as displayed in the final elements of the WBS. The typical resource types which may be required include: • Human - designers, planners, construction management; • Facilities - buildings, furniture, team accommodation; • Equipment - types, hire/purchase; • Materials - bulk, one-off, specialist, MPI. • Having identified the types of resources needed, the next step is to identify the unit rate of each resource and how much of each resource is needed. • Use of Value Analysis allows for future decision making against Change Requests to be based on sound cost information.
  34. 34. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com • At the earliest stage of project definition, identification of resource requirements will facilitate ’ball-park’ or ’Order of Cost’ estimates to be produced. As the definition develops, the same process can be used to produce grade 'B'(±10%) estimates for sanction. Though this level of estimate will normally be produced within a functional group such as piping, vessels etc. it may be expected that each function has considered its own WBS for its contribution. • As definition improves, uncertainty and risk will, in general, reduce. However, it is very important that the potential impact of individual risks is assessed when considering the level of contingency required within a sanction estimate. It is entirely legitimate to have a general level of contingency below 10% and in addition to have a specifically defined contingency for an individual risk. 4.5.4 Planning This involves deciding and recording what needs to be done, how it should be done, how long it will take, who should do it and how many resources are needed. The purpose of planning is to organize the delivery of the project and the resources required for delivery in order to avoid future problems. The WBS is the tool which shows WHAT must be done to complete a project; however, in order to plan WHEN it must be done, it is necessary to combine both availability of resources (WHO) required to achieve the task and the logical sequencing of those tasks. • Deciding project strategy is an essential element of planning, and establishing this as early as possible is good practice, providing a firm basis for detailed planning, scheduling and subsequent project control. • Establishing appropriate measures of project performance as early as possible (and agreeing these with the project owner), likely based upon critical success factors, will help in benchmarking the delivery of benefit at completion. • Deciding and establishing as early as possible, systems for managing hand- overs will help the effective and efficient hand-over of design packages to construction, equipment and process system packages to commissioning, operating asset to operating management.
  35. 35. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com • Typically, one integrated project master plan is needed covering all project stages. From this a hierarchy of plans can be produced of increasing levels of detail to meet the requirements for effective project control (Critical path analysis for planning and Gantt bar charts for scheduling, monitoring and control, are good practice planning techniques). • Resource management is an essential part of planning. People are the most common type of resource for whom resource planning is carried out. However, it may be necessary sometimes to look also at other critical resources like equipment. (Resource planning techniques are often embodied in computer software planning packages and can be usefully used to provide indications of resource requirements). • Agreeing and recording responsibilities and requirements for planning and control (particularly with a contractor), is important to do and record as early as possible. • Having the plan formally approved by the Project Owner and Project Manager will engender joint ownership, commitment and provide a firm basis for effective control. • When a contractor is employed, it is essential that a contract master schedule is produced identifying key contract milestones (payment or critical interface milestones, for example). Detailed planning and scheduling is the responsibility of the contractor down to whatever level is appropriate for effective control. • In order to be able to organize resources, it is necessary to ensure that responsibility for completing final element tasks is clear. It is essential that only one person is given the prime responsibility for completing a final element deliverable in order to avoid confusion amongst team members and ensure delivery. • In assigning responsibility it is important to consider the skills and knowledge that may be required to complete the task. If resources are not available within the immediate project team, the Project Manager ensures an external supply is made available.
  36. 36. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com • There are many different scheduling techniques such as Program Evaluation and Review Technique (PERT)) and Critical Path Method (CPM). Choice of technique will depend on project complexity and personal choice; however, project scheduling is now almost universally carried out on PC based planning tools. All planning techniques and tools require knowledge of: (a) the dependencies and precedence of each task (i.e. what other activities have to happen before a particular task can start/finish); (b) the duration of each task; (c) the resources involved in each task. • It is common practice to display the output from the planning tool in the form of Gantt (or bar chart) which shows activities organized against a calendar timeline. In order to interpret and use the plan it is important to know whether Earliest or Latest Start and Completion dates are being used and therefore where float exists. • Having established a plan it is then useful to review the output for potential Threats and Opportunities. For example, if a single specialist resource or piece of equipment is on the Critical Path or several other key activities depend upon it, the project team might wish to take specific Preventative action to ensure availability. Where appropriate, Contingency action may also be put in place. • In such cases the project team must remember to include the activity in the WBS and incorporate its cost within the estimate. 4.5.5 Computer Software The use of computer planning/scheduling software at an appropriate level enhances planning and scheduling and is highly recommended. However, it does not follow that control will be achieved. Achieving control is a direct function of professional and effective Project Management. • Avoiding changing the contractor’s system will normally avoid cost implications and impediments to the planning/scheduling capability.
  37. 37. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com • The decision on the choice of software should be taken at project strategy stage. Bearing in mind that where contractors are being used, a PC based system such as Microsoft Project will probably adequately cope with the demands of GBHE's planning and scheduling needs. (If something more sophisticated is thought appropriate there are numerous other proprietary systems on the market, but they are normally more expensive, need higher specification hardware and more training to use them without offering greater guarantees of achieving control). 5 PROJECT MANAGEMENT PRACTICES - PROJECT IMPLEMENTATION 5.1 Team Building and Team Management Project Managers have long known that building a cohesive, motivated and focused project team is a key step towards achieving a successful outcome. Sadly, however, effective groups or teams do not just coalesce as soon as people are brought together. Effective means working together towards common objectives, without interpersonal or intergroup conflict and with satisfied members. Thus it takes time and leadership to develop an effective group; but time, of course, is something which a dynamic group such as a project team, likely doesn’t have. The Project Manager therefore must be a leader who commands the respect of the team and can effectively bring and hold it together through the probable conflicts that a change management organization will face. An open and participative management style is important to building an effective project team culture. The development of mutual acceptance, trust, co-operation and open communication style can be hampered by the project management style. However, one essential factor is the perceptive capabilities of the Project Manager and their ability to recognize early and resolve conflict within the team. The Project Manager can’t however perform all the leadership roles all the time and leadership responsibilities must be delegated, often within the team. A common feature of successful projects is that the team members have enjoyed working together. This is especially so when they have experienced challenges together and still won through. In essence, they have faced adversity and bonded together as a real team. Another feature is that teams must be built that have a high degree of confidence in their individual and collective abilities. This in itself establishes high self-esteem, mutual respect and collaboration. These are the common requirements of a group of individuals who need to work successfully together towards a common objective.
  38. 38. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com Conflict both within and without, is a key thing which undermines the success of a project team and rapid resolution is always important. The Project Manager, as well as being the leader, is the mentor and psychologist all rolled into one! Interpersonal skills such as this will play a key part in the selection of the right man for the job. Larger projects where staffs are working fulltime on that project are usually set up for that project and as such develop a culture of their own often heavily influenced by the Project Manager and his supporting senior staff. Where project staff are resident in a more stable project group (e.g. manufacturing site) the culture is driven by the local site management. Not all project teams are successful. So how do we ensure we work in the successful team mode? By taking example from successful teams we can identify behaviors to encourage Characteristic Behaviors: • Mutual respect for each other as people and workers. • Good communications across the team. • Project Goals are known, understood and supported. • Project Goals remain consistent and steady. Occasionally they do need to change for business or other reasons. In this case, the changes are communicated throughout the team with the reason why. • A Management structure that is understood by all and behaves in a firm yet fair manner. • The team is involved in decision making on local and project issues wherever practicable. • Roles for each member of the team are understood by all. • Skills within the team are appropriate to the task in hand. • Skill levels of individuals are recognized by management and colleagues. • Rewards for good performance are team rather than individually based. • Personal and team development is valued by management and staff.
  39. 39. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com 5.2 Risk Management 5.2.1 Introduction Risk Management is a structured approach to improve the likelihood of having a successful Project. Risk is any area of uncertainty with the potential to have significant impact on the achievement of the project objectives. These can generally be grouped into: • Business or Strategic Risk: Probably with 5/10 years perspective; and would address such questions as "Are we in the right business, region or technology"? • Investment Risk: Probably 3/5 years perspective; and would address whether the investment was likely to be successful, (e.g. IRR or RONA). • Project Risk: Will address the project period only; and will raise issues like capital cost, time to beneficial operation and plant capacity. SHE is usually a feature. 5.2.2 The Risk Process The Risk Management Process is shown in Figure 3: FIGURE 3 GBHE RISK MANAGEMENT PROCESS
  40. 40. Refinery Process Stream Purification Refinery Process Catalysts Troubleshooting Refinery Process Catalyst Start-Up / Shutdown Activation Reduction In-situ Ex-situ Sulfiding Specializing in Refinery Process Catalyst Performance Evaluation Heat & Mass Balance Analysis Catalyst Remaining Life Determination Catalyst Deactivation Assessment Catalyst Performance Characterization Refining & Gas Processing & Petrochemical Industries Catalysts / Process Technology - Hydrogen Catalysts / Process Technology – Ammonia Catalyst Process Technology - Methanol Catalysts / process Technology – Petrochemicals Specializing in the Development & Commercialization of New Technology in the Refining & Petrochemical Industries Web Site: www.GBHEnterprises.com 5.2.3 Identify Risks A team based process: Agree level of scope of review, consider appropriate range of risks. 5.2.4 Quantify Risks Develop a risk register: Assess probability and impact, allocate responsibility, explore risk options, and evaluate residual risks. 5.2.5 Model Impact Impact of risks on main project success criteria: Capital cost, time to beneficial operation, production cost, impact on IRR/NPV 5.2.6 Benefits to Your Business • Clearer comparison of investment opportunities. • Early identification of potential traps and pitfalls. • Builds team trust and confidence. • Ensures that risks are properly managed through the life of the investment. • Identifies opportunities as well as risks. 5.3 Design Management Effective management of the design process is an essential part of successful project implementation. The design process is characterized by the decisions made and the deliverables produced, right through to information required for operating and maintaining the asset. The main objective for managing the process is to ensure that correct design information of adequate quality and in the appropriate form is produced at the right moment. If this happens effectively, then the success of subsequent procurement, construction and commissioning activities is more likely. • Responsibilities at every phase of the design process are defined as early as possible during definition as part of the project strategy. It is essential where contractors are being used, that responsibilities between GBHE and the contractors are clearly defined, recorded and communicated within the project team.

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