Held in Anaheim, California, AACE International brought together more than 800 cost management professionals from more than 30 countries including the U.S. and Canada. Our paper, Lessons learned in engineering development for Major Projects (PDF, 1.06MB), examines the challenges faced by major projects during the front end (FEED) and detailed engineering phases.
The decisions to execute major projects are typically based on the competitive analysis, scope definition and execution planning performed during the feed stage. The FEED is the most critical stage where it’s easy to influence the design at a relatively low cost. Unfortunately, projects that are under time constraints often shorten the timing of the FEED to meet their respective schedule and this undermines the importance of this stage and weaken detailed engineering.
Because detailed engineering defines project performance and operability in major projects, a weak detailed engineering phase results in budget overrun, field problems, and start up delays.
Our paper presents metrics and analysis on five major refinery projects that were executed over the last ten years. The projects showed an average detailed engineering budget overrun of 16%.
Because owners are continuously seeking best practices to improve their capital programs and projects through detailed Front End Loading (FEL) assessments, technology advancements and effective project management. The paper outlines a lessons learned map to help develop a successful detailed engineering function and as a result effectively execute a project.
The lessons learned map focuses on:
- FEED development and engineering definition
- Project execution planning
- Owner’s organizational capability and stakeholder’s requirements
- Project controls management and assurance