Determining the Impact of Process Change on the EPC Process

What’s the Value?

The business world is now interconnected electronically: communication is instantaneous and the need to access vital information is often immediate. In order to maintain global competitiveness and to benefit from the sweeping changes taking place in the business world, the construction industry must develop a proactive approach to these developments. Because many aspects of the design and construction process are “information-intensive,” the industry must be able to implement various information management strategies and technologies effectively. Doing so will contribute toward two key competitiveness goals: reducing overall project costs, and reducing the time required to design and deliver construction projects.

A common practice in the industry is to identify specific project activities that can be eliminated or reduced. Many such activities require the exchange of information both within an organization and between various entities. Expediting or eliminating such activities will likely lead to project cost and time savings. Implementing other information management strategies may also reduce project costs and time.

Unfortunately, too much effort has been placed on information technologies or upon certain activities assumed to be critical to schedule and cost objectives. This may be due to the fact that, to date, no methodology has been developed to examine the contribution of information management in reducing overall project schedule and cost. The inability of the industry to quantify the process improvements resulting from information management strategies is a key barrier to their full implementation.

Information management project strategies are only one of many concepts in the broad issue of improving cost and schedule. Each new management technique, contract execution strategy, or electronic technology has some impact on the time and cost required to design and construct a facility. These impacts must be predicted and quantified. If they are not, owners, contractors and others can only speculate. Given that implementation of these process improvement strategies is often costly, it is important to utilize tools designed for quantifying process impacts.

Objective

The CII Information Management Research Team was formed to measure the potential impacts of information-intensive tasks on the industry’s ability to meet or exceed project performance criteria for schedule and cost. The goal was to examine the design and construction processes holistically, since improving one activity of the project delivery system may have little effect on the overall process. Determining the extent to which information management and data exchange activities actually affect overall project schedule and cost is in itself a major undertaking. The team exceeded this by providing the implementation tools described in this publication.

The key objectives for this publication include:

• Identifying the principal activities that commonly occur in engineer-procure-construct (EPC) projects in an hierarchically structured format
• Documenting the duration (time) and resource (cost) requirements for each activity
• Presenting a network logic of how these activities are commonly related
• Presenting an interactive computer simulation model that enables quantification of time and cost performance
• Providing a methodology for predicting the impact of proposed process changes on project schedule and cost using flow diagramming and a simulation modeling approach
• Providing generic logic diagrams (with associated time and cost data) that illustrate the decomposition of many critical activities of the EPC process into a finer level of detail for process improvement analysis