Three powerful new strategies to support the predictable delivery of gas power plants
We know how to construct natural gas power plants. They are largely proven, fast to build, and they capitalize on a shale gas boom that has transformed the global energy landscape. Taken together, these factors present Owners and Developers with an unrivaled opportunity to leverage predictability as a competitive advantage in a crowded field.
What does it mean to ensure the predictable delivery of natural gas power plants? The concept of predictable delivery is simple enough: we’re referring to the on-time, on-budget delivery of the project, followed by an issue-free startup. Because the technology involved in gas power plant construction is so well-developed, we have an excellent opportunity to reduce costs through the application of Predictability Thinking™.
In this article, we’ll share three strategies that can help you achieve predictability on your next gas power plant construction project. These three predictability drivers are not exhaustive — each business case is different, and the work of achieving predictability is complex. That said, these three strategies will get you thinking about predictability in your organization, which is half the battle.
PREDICTABILITY DRIVER #1
Begin with the end in mind
If you’re building a natural gas-powered plant, your goal is a simple one: To achieve an issue-free startup, on-time, and on-budget. This holds whether you’re an Owner or a Developer, and it should guide all your actions, starting in the opportunity-shaping stage and continuing all the way to startup. You must keep your eye on the prize.
Unfortunately, the prevailing wisdom in our industry is that these plants are quick and cheap to build, and so the entire process inadvertently becomes cost-driven. Managers develop a scarcity mentality and corners get cut. The way your team works is a function of your key business drivers, so if the unspoken goal is to deliver a project cheaply, you get a cheap project — and you are more likely to encounter problems at startup and beyond. At this point, the issue is often blamed on technical failures, but the real cause is a business failure. This is a trap, and many gas power plant developers fall into it due to a lack of project delivery maturity.
The reality is that your success in achieving full operability at startup is as much a result of your business efforts as it is a result of your technical efforts — and perhaps even more so. If your stated aim is to predictably deliver an operational plant, on-time, and on-budget, that goal will inform how you staff your team and how you design the flow of operations information. Most importantly, it will also drive critical business decisions, starting with discussions around scope, continuing through the development of contracting strategies and finally in the selection and application of project delivery systems and management methods.
In short, if you apply Predictability Thinking™ to your hiring, procurement and execution decisions, you’ll not only improve your construction process but also help to ensure full operability at startup and beyond.
PREDICTABILITY DRIVER #2
Constraint-Driven Scope Creation
Here at Concord, we believe that scoping should be an exercise in constraints analysis. One of our most effective innovations has been a Project Predictability Package™ which is adopted by the Owner or Developer and applies a systematic constraint analysis to all facets of the organization.
We believe Owners should start with a foundational review of financial, labor, safety and procurement constraints. Then, we move into a highly refined analysis of constraints unique to your organization and your project, which further helps to define your execution and construction strategy and shape your work areas. Together, these constraints inform the way your gas power plant is scoped and packaged for execution. It can be transformational.
Capital project organizations have a tendency to skip the constraint analysis, and we view this as a red flag. When we see this happening, we coach project sponsors and executives in understanding the effect of constraints on early scoping and opportunity shaping, and then we walk them through the execution. It works.
PREDICTABILITY DRIVER #3
Executive-Supported AWP Implementation
One of the most damaging myths in modern capital project management is that Advanced Work Packaging is just a fancy new name for workface planning or field planning.
We routinely encounter organizations that believe that implementing Advanced Work Packaging is a simple matter of creating work packages to organize construction. Service providers also focus on that, but in most cases, engineering issues have already occurred and predictability is already long gone when you start getting ready to organize and conduct field planning. Field planning is an important step in the adoption of AWP, to be sure, but it is only one step. Effective AWP implementation demands the creation of sophisticated business structures and work processes that align business drivers and organize the flow of information from scoping and engineering, through procurement and on to construction and startup.
Poor or incomplete AWP implementation carries serious risks, particularly if you’re building a one-off project, though organizations that have multiple gas-powered plants under construction will feel the impacts, too.
Concord is one of just a few service companies in the process industry that has applied Advanced Work Packaging on an industrial construction project from early definition. One of the most important things we have learned is that it is absolutely critical for the Owner and Developer to understand the role that sponsors and executives have in the implementation of Advanced Work Packaging. If there is a gap there, and it is not addressed, you’ve got a weak link because AWP is not just about project management and construction, it is also about the business. In some applications, it is primarily about the business.
Everything that impacts cost and schedule predictability should concern the project’s sponsor.