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![15 August 2007Bill Meyer
Cost Upside
Move labor cost offsite to cheaper labor supply
Reduce indirect costs (camp, construction supervision, consumables etc
at the site rates)
Improved productivity (weather, flexible workforce, site accessability etc)
Reduced schedule - reduces construction indirects
[Positive impact to NPV if revenue stream begins earlier]
Modularization](https://image.slidesharecdn.com/modularizationpresentationforhbr-12905111549698-phpapp01/75/Modularizationpresentationfor-Hbr-16-2048.jpg)
Uploaded byDeepak Goyal (AMIChemE)
Modularizationpresentationfor Hbr
This document discusses modularization for engineering projects. It covers modularization drivers like cost and schedule reductions. It describes module types like pre-assembled units and racks. Installation methods like cranes and transporters are outlined. Engineering and procurement impacts for modular projects are also covered, such as additional planning needs for piping layout and load considerations.
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Modularizationpresentationfor Hbr
- 1. 15 August 2007BillMeyer Modularization Introduction William (Bill) Meyer - Director Project Execution Development Foster Wheeler USA Corporation Contact: 2020 Dairy Ashford Road, Houston, TX 77077 Ph. 281 597 3000 Direct 713 255 6089
- 2. 15 August 2007BillMeyer 1. Modularization drivers 2. Module types 3. Installation methods 4. Engineering and Procurement impacts 5. Logistics 6. Module Fabrication 7. Critical success factors Modularization Turner Industries
- 3.
- 4. International Engineering Firm(EPC)International Engineering Firm (EPC) with over 100 Years ofwith over 100 Years of Dedicated Services to theDedicated Services to the Process and Energy IndustriesProcess and Energy Industries Foster Wheeler
- 5. A global business:over 10,500 highly skilled people Reading Milan Houston Singapore CLINTON, NJ Helsinki Corporate Center Operating Unit HQs and/or Main Engineering Centers Regional Engineering Centers Sales/Local Service Offices Manufacturing Centers A global network of high-quality resources, enabling us to deliver local service and local content, and to access local labor markets Shanghai Chennai Foster Wheeler Operations
- 6. FOSTER WHEELER LIMITEDFOSTERWHEELER LIMITED FW Energy InternationalFW Energy International FW Energy CorpFW Energy Corp. ENGINEERING AND CONSTRUCTION ENGINEERING AND CONSTRUCTION FW USA Corp.FW USA Corp. FW Energy LimitedFW Energy Limited -- U.K.U.K. FW Continental EuropeFW Continental Europe FW Asia PacificFW Asia Pacific ENERGY EQUIPMENT ENERGY EQUIPMENT 2006 Revenue: $2.8 Billion Backlog: $5.4 Billion2006 Revenue: $2.8 Billion Backlog: $5.4 Billion2006 Revenue: $2.8 Billion Backlog: $5.4 Billion Foster Wheeler Corporate Overview
- 7. Refining Petrochemicals Chemicals Hydrogen / GTL/ Gasification Oil and Gas Power Pharmaceuticals and Fine Chemicals Build Own and Operate Fired Heaters Coke Drum Unheading Systems Steam Generators Boilers Condensers SCR’s ENGINEERINGENGINEERING & CONSTRUCTION& CONSTRUCTION SERVICESSERVICES (EPC or(EPC or EPCmEPCm)) EQUIPMENTEQUIPMENT SUPPLYSUPPLY Foster Wheeler Services & Products
- 8. Leader in RefineryProcess Engineering 200+ Hydroprocessing Units 200+ Crude Units 200+ Vacuum Units 80+ Catalytic Reforming Units 100+ FCC Units 80+ Cokers 40+ Alkylation Units 50+ Deasphalters 20+ Catalytic Polymer Units 30+ Aromatics units 20+ Lube refineries 50+ Hydrogen Plants 80+ Sulfur Plants Reactor Regenerator Assembly with UOP VSS Technology at Premcor FCCU, Memphis, TN
- 9. Sriracha, Thailand Singapore Houston, Texas Milan,Italy Madrid, Spain Perryville, New Jersey Paris, France Reading, U.K. Foster Wheeler E&C Centers North America 1,300 United Kingdom 3,200 Italy 1,200 France 500 Spain 650 Singapore 400 Thailand 600 China 900 Other worldwide 1,750+ Total 10,500+
- 10. FW Houston presencesince 1940s Since 1994, U.S. EPC Center for Oil & Gas, Refining, and Petrochemical Projects Office space in 3 buildings Capacity for over 1200 Engineering and Design Staff Fully Integrated Design Systems (CAD) and Communications Technology Foster Wheeler Houston Operations
- 11. End market diversityof backlog December 29, 2006 Total: $5.4 billion Backlog includes flow-through costs 29.0% 17.2% 32.0% 16.6% 3.2% 2.0% Oil & Gas Refining Chemicals Power Equip. & Services Pharmaceutical Power Plant Ops, Other & Eliminations
- 12. 15 August 2007BillMeyer 1. Modularization drivers 2. Module types 3. Installation methods 4. Engineering and Procurement impacts Modularization
- 13. 15 August 2007BillMeyer Modularization execution benefits: 1. Cost reductions 2. Schedule reductions 3. Risk reductions Modularization
- 14. 15 August 2007BillMeyer Cost Downside Increased cost of steel Increased cost of shipping Potentially - increased cost of transport and installation Modularization
- 15. 15 August 2007BillMeyer Cost Downside Increased cost of steel Increased cost of shipping Potentially - increased cost of transport and installation Increased cost of engineering Modularization
- 16. 15 August 2007BillMeyer Cost Upside Move labor cost offsite to cheaper labor supply Reduce indirect costs (camp, construction supervision, consumables etc at the site rates) Improved productivity (weather, flexible workforce, site accessability etc) Reduced schedule - reduces construction indirects [Positive impact to NPV if revenue stream begins earlier] Modularization
- 17. 15 August 2007BillMeyer Cost Benefits Economic Productivity Factor On-site Off-site Labour Productivity 1.70 1.2 Composite Manhour cost $105.00 $55.00 Relative manhour cost c/w Gulf Coast $178.50 $66.00 Economic productivity ratio 2.70 : 1 Modularization
- 18. 15 August 2007BillMeyer Cost Benefits Economic Productivity Factor using Far East Yards On-site Off-site Labour Productivity 1.70 3.5 Composite Manhour cost $105.00 $12.10 Relative manhour cost c/w Gulf Coast $178.50 $42.35 Economic productivity ratio 4.21 : 1 Modularization
- 19. 15 August 2007BillMeyer MODULE vs STICK COST DIFFERENTIALS Modular versus Stick built costs $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 $100.0 Modular Cost Stick built Cost Installation cost Δ Shipping cost Δ Const. Mngmt cost Δ Foundation cost Δ Steel cost Δ Engineering cost Δ Camp cost Δ labor cost Savings Millions$ Modularization Existing Project Data (Note – All projects have different cost drivers )
- 20. 15 August 2007BillMeyer Modular versus Stick built costs $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 Modular Cost Stick built Cost Installation cost Δ Shipping cost Δ Steel cost Δ Engineering cost Δ Camp cost Δ Labour cost Modular versus Stick built costs Modular Cost Stick built Cost Installation cost Δ Shipping cost Δ Steel cost Δ Engineering cost Δ Camp cost Δ Labour cost Modular versus Stick built costs Modular Cost Stick built Cost Installation cost Δ Shipping cost Δ Steel cost Δ Engineering cost Δ Camp cost Δ Labour cost COST DRIVEN MODULAR PROJECT SCHEDULE DRIVEN MODULAR PROJECT COST DRIVEN STICK BUILT PROJECT Modularization
- 21. 15 August 2007BillMeyer Schedule benefits Schedule benefits Modularization
- 22. 15 August 2007BillMeyer Modular Stick Built Schedule Comparison – Modular vs Stick Built 0 10 20 30 40 50 60 70 80 90 100 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 Duration - Months Progress% Order Placement Engineering Construction Order Placement Engineering Construction Return Modularization
- 23. 15 August 2007BillMeyer 1. Modularization drivers 2. Module types 3. Installation methods 4. Engineering and Procurement impacts Modularization
- 24. 15 August 2007BillMeyer Module Types 1. Pre – Assembled Units (PAU’s) Multi disciplined modules including: - tagged and non tagged items, steel, piping, electrical, instrumentation, fireproofing, insulation
- 25. 15 August 2007BillMeyer Module Types 1. Pre – Assembled Units (PAU’s)
- 26. 15 August 2007BillMeyer Module Types 1. Pre – Assembled Units (PAU’s)
- 27. 15 August 2007BillMeyer Module Types 1. Pre – Assembled Units (PAU’s)
- 28. 15 August 2007BillMeyer Module Types 2. Pre – Assembled Racks (PAR’s) Piping modules including: - steel, piping, electrical cable tray, fireproofing, insulation Site built steel or concrete columns
- 29. 15 August 2007BillMeyer Module Types 2. Pre – Assembled Racks (PAR’s)
- 30. 15 August 2007BillMeyer Module Types 2. Pre – Assembled Racks (PAR’s)
- 31. 15 August 2007BillMeyer BHPBilliton – Module Types 3. Vendor Assembled Units (VAU’s) PAU’s assembled by a vendor
- 32. 15 August 2007BillMeyer BHPBilliton – Module Types 3. Vendor Assembled Units (VAU’s)
- 33. 15 August 2007BillMeyer 4. Vendor Package Units (VPU’s) Complete packages purchased from a vendor Module Types
- 34. 15 August 2007BillMeyer 5. Remote Instrument Buildings (RIB’s) Sub-stations etc Module Types
- 35. 15 August 2007BillMeyer 5. Remote Instrument Buildings (RIB’s) Sub-stations etc Module Types
- 36. 15 August 2007BillMeyer 1. Modularization drivers 2. Module types 3. Installation methods 4. Engineering and Procurement impacts Modularization
- 37. 15 August 2007BillMeyer Installation Methods Crane Installation
- 38. 15 August 2007BillMeyer Installation Methods Strand Jack Installation
- 39. 15 August 2007BillMeyer Installation Methods Transporter Installation
- 40. 15 August 2007BillMeyer Installation Methods Transporter Installation
- 41. 15 August 2007BillMeyer Installation Methods Transporter Installation
- 42. 15 August 2007BillMeyer Installation Methods Jack-down Installation
- 43. 15 August 2007BillMeyer 1. Modularization drivers 2. Module types 3. Installation methods 4. Engineering and Procurement impacts Modularization
- 44. 15 August 2007BillMeyer E & P Impacts Planning is Critical for Modular Projects
- 45. 15 August 2007BillMeyer Differences can include Location of pumps PAR 02/03 PAR 04/05 PAU 01 PAU 02 PAU 03 PAU 05 VAU 02 etail above Modular Stick built E & P Impacts
- 46. 15 August 2007BillMeyer Differences can include Pipe track to pipe rack E & P Impacts
- 47. 15 August 2007BillMeyer Differences can include Pipe track to pipe rack Easy Install Easy Ship E & P Impacts
- 48. 15 August 2007BillMeyer Differences can include Pipe track to pipe rack Additional clearance can be provided where required E & P Impacts
- 49. 15 August 2007BillMeyer E & P Impacts Piping design file layout Link files for pipe stressing Split files for quantity takeoff and procurement
- 50. 15 August 2007BillMeyer E & P Impacts Site based Loads, Clearances and Critical Dimensions Crane loads Module clearances Crane clearances Foundations to leave low etc
- 51. 15 August 2007BillMeyer Installation Methods Transporter Installation
- 52. 15 August 2007BillMeyer E & P Impacts Loads applied to Modules Fabrication yard supports
- 53. 15 August 2007BillMeyer E & P Impacts Loads applied to Modules Transporting in the Module yard
- 54. 15 August 2007BillMeyer Module yards
- 55. 15 August 2007BillMeyer E & P Impacts Loads applied to Modules Sea acceleration forces during shipment
- 56. 15 August 2007BillMeyer E & P Impacts Loads applied to Modules Sea acceleration forces during shipment
- 57. 15 August 2007BillMeyer Type of ship – RO-RO, LO-LO, H/L E & P Impacts
- 58. 15 August 2007BillMeyer E & P Impacts Loads applied to Modules Transporting on site
- 59. 15 August 2007BillMeyer 1. Pre – Assembled Units (PAU’s) E & P Impacts
- 60. 15 August 2007BillMeyer Logistics and therefore loads imposed is project specific E & P Impacts
- 61. 15 August 2007BillMeyer E & P Impacts Loads applied to Modules Installing on site
- 62. 15 August 2007BillMeyer E & P Impacts Loads applied to Modules In-situ on foundations
- 63. 15 August 2007BillMeyer E & P Impacts Procurement Complexity Number of delivery locations impact ordering and material tracking Equipment Deliveries Material Logistics for the Stick-Built Project Install Dock Truck
- 64. 15 August 2007BillMeyer E & P Impacts Procurement Complexity Truck Material yard Dock Transport Install Material Logistics for the modularized Project Truck Truck Install Module Fabrication Yard Equipment Deliveries Port Module Deliveries Loadout to ship Bulk Materials and minor equipment Modules and major equipment
- 65. 15 August 2007BillMeyer – Potential to ship stick built materials in “dead space” on HL ships E & P Impacts
- 66. 15 August 2007BillMeyer E & P Impacts
- 67. 15 August 2007BillMeyer E & P Impacts Loads applied to Modules
- 68. 15 August 2007BillMeyer 1. Modularization drivers 2. Module types 3. Installation methods 4. Engineering and Procurement impacts Modularization
- 69. 15 August 2007BillMeyer Critical Success Factors include: Experienced team with tried and proven systems Modularization CSF’s Client / Project # Modules Goro Nickel Project 625 Singapore Aromatics 213 TARP, Thailand (2X strategy) 65 Celanese, Singapore 25 ExxonMobil LSADO Altona (FEL) 13 SINCOR (FWUSA Shop) 10 Clark/Premcor, Texas 12 Shell, Deer Park, Texas 14 Mobil Coryton, UK 53 Statoil, Norway (1980s) 205