Why end users are selecting Foundation Fieldbus

Transcription

1 Why end users are selecting Foundation Fieldbus Business Climate

2 Contractor s Role Process Design FEED Project Management Owner s Engineer Detailed Engineering Construction and Startup Maintenance 2

3 Range of Services CONCEPTION DESIGN CONSTRUCTION START-UP OPERATIONS MAINTENANCE Technology /Licensor Selection Conceptual Estimates Domain Expertise Environmental Studies Feasibility Studies Project Financing Master Plans Project Risk Assessment 3 Contract Engineering Detailed Engineering Engineering Estimating Centers and Cost Control Planning and Scheduling Procurement Design Management Construction Engineering Contractor Management Low Cost Cost/Schedul Sourcing e Control Quality Control Safety Programs Security Training Engineering Support Maintenance Training Precommissionin g Supervision Systems Checkout Technical Services Validation Services Contract Maintenance Plant Retrofits Process Operator Global to Local Upgrading Support Training Relocation Services Statistical Process Control Reliability Improvement

4 Contractor Issues and Trends Low profitability (typical after-tax IRR 2-6%); many in bankruptcy Excessive risk being passed from owner to contractor Lack of available craft and technician labor Increasingly global competition More selective in project pursuit; increased specialization Emphasis on converting FEED into detail contracts Difficulty keeping pace with technology; little time available for education Continuity and consistency associated with fluctuations in headcount Trend towards LSTK contracts 4

5 What do Contractors Value? Corporate Image Margin, profitability, shareholder value Alignment with their market/client base Safety, health and environmental focus Developing client loyalty For Vendors: Price, Compliance, Speed Total Installed Cost Risk management and mitigation Schedule Understand their business Man-hour efficiency and utilization Work process alignment, process expertise and technology Use of best practices; Repeatability 5

6 6

7 Coaching from the EPC Get on the Clients preferred vendor list Every project is different, READ the scope From an execution point be aware that the project can be executed from various world wide locations Show your added value! Why me? Use the Project specific information given in the pre-bid phase Get the nominated project execution people involved in the bid phase in a timely fashion 7

8 Proposal phase for Automation Contractors Engage in Pre-Qualification with Client and/or EPC based on technical, project management and commercial capabilities Technical capabilities Reference projects Local presence both in engineering phase as in construction phase Financial soundness Resources 8

9 Establish Scope of Supply EPC will provide an overview of the project scope In a succeeding session(s) the Automation Contractor shall: 9 Give a project specific presentation Present the technology and service solution capabilities Present the execution approach and key team members Show project management capabilities Introduce sub-system vendors if required

10 Bid Evaluation (1) Be Compliant!! 10 Read, know and understand the ITB Use approved sub-vendors Quotation should conform to the required structure Do NOT put to much boilerplate material in the Quotation Project execution Demonstrate the understanding of the scope Outline how risks mitigation can be accomplished Present the project organization and execution plan

11 Bid Evaluation (2) People proposed to fill the key functions Are they available at the start of the project Are they mobile (willing to move) Will they be committed throughout the life of the project? Engineering and Maintenance service Location(s) Close to Engineering offices Close to Plant location Value added Give alternatives Reduction of overall cost (CAPEX and OPEX) Proven Technology and design Only market available products No equipment from future Road maps 11

12 Bid Evaluation (3) Change definition and management of change process Prices breakdown of individual items and engineering Terms & Conditions (payment terms, LD s, LOL, indemnification, insurance, etc.).price (will make a difference) 12

13 Perceptions of Automation Company (today) Positives: Excellent Products Quality Front Line People Global Organization Good Quoted Deliveries Negatives: Fragmented Infrastructure Don t understand RFQ requirements T&C responses longer than initial submittal Project management Change management Unreliable delivery commitments Quality of documentation/invoicing Outsource integration 13

14 Generic Value Message Minimal Risk Market and Technology Leadership Global Sales and Service Financial Stability Single Point of Contact Broad Scope of Supply Single P.O. Reduced Project Cycles Work Process Integration Selection and design tools Ease of Integration (open architecture) INtools integration Reduced FAT/SAT Reduced documentation time Possibility of Reproducible Components Easy PEpC Process Lower TIC through Digital Architecture and Solutions 14

15 Supply Chain Automation EPC Wins Project Conceptual Design FEED Detail & Build, Execute Operate commission Order, start-up Advisor Size Online Configurators AMS Suite e-learning, web seminars Intools integration Pre-engineered folders Asset Re-ordering Dimensional Data Tool Round Trip or Shopping Cart Service Dispatch File Comparison Utility Documents Online FEED Order & ship Status Warranty Verification Solution Repository e-invoicing 15

16 High Stakes Construction Calls For A New Capital Project Model 98 CII studied effect of early involvement of strategic suppliers PEpC approach P: Procure strategic suppliers first and early E: Engineer (by contractor partnered with strategic supplier) p: Procure commodity items C: Construct 16

17 Findings Of the CII Study In both theoretical and field implementations, the results indicated that PEpC could produce savings in excess of 10% to 15% of the time and 4% to 8% percent of the cost of the traditional EPC process Edward M Ruane Head of CII Research Team J. A. Jones Construction Co. Quote 17 from CII Research Summary 130-1; Page 5

18 How We Reduce Time to Commercial Operation Typical Plant EPC Project I&C Process Cycle GenCo Define Approve Select Major Equip AE Recommended Process GenCo Define Approve Select Order Define I&C Develop Bid Spec I&C Review & Bid Review Bids Select I&C Design I&C Build & Test Install Startup Major Equip AE I&C Order Define I&C Support AE Design I&C Design I&C Build & Test Install Startup GenCo Define Approve Select 18 Major Equip AE I&C Order Design I&C Design I&C Build & Test Install Startup First Standardized Unit Next Standardized Unit

19 Best Practices fit for purpose 19 High Services Low Number 4+ of Products FIV = Field Instrument Vendor ICSS = Integrated Control and Safety System MIV = Main Instrument Vendor MAC = Main Automation Contractor Product Order Measurement, valves, etc 2 Engineered Product 3 FIV 4 ICSS 5 MIV 6 MAC Including sizing & selection Could be multiple products Multi sizing/procurement Engineered DCS, IPS + FGS Multi Product Agreement with DCS under direction of EPC Full Automation Scope, early involved in FEED work

20 MAC Scope (Typical of Migration MAC) Process Analyzers Environmental Fabrication Electrical & Instrument Engineering Power Systems Commission / Startup Process Engineering Process Control Process Automation Safety Instrumented Systems Mechanical Civil / Structural Project Management 20

21 Exxon MAC Concept Definition (Typical of new capital MAC) Main Instrument & Control Contractor (MICC) Aliases: MAC, MAV, MIV, MICS A highly qualified, well resourced control systems specialist contracted to engineer, supply / procure and manage instrumentation, control systems, safety instrumented systems and associated interfaces for all Project components and facilities. MICC responsibilities limited to those the MICC is best qualified to handle. Some responsibilities are best managed by the EPC s. This is consistent with the MICC concept principles. 21

22 Typical Exxon MAC Scope Services Project Management Cost & Schedule Control Front End Engineering (FEED) Detail Engineering Procurement Support Vendor Package Interfaces System Integration & Programming Construction Support Commissioning Support Training Operation s Support Project specific scope determined uniquely for each project. Results will vary. 22 Goods Process Control Systems Process Shutdown Systems Emergency Shutdown Systems Fire & Gas Detection Information Systems Communication Systems Selected Instrumentation Transmitters Control Valves Level Instruments Selected Packages Metering Skids Instrument Buildings Training Simulator Historian Capital Spare Parts

23 MICC Scope and Contract Compensation Training Commissioning & Startup Support Operation s Support (Lifecycle) Construction Supervision MICC Scope Detailed Design & Hardware Supply FEED Engineering TRAINING START-UP CONSTRUCTION DETAIL DESIGN & HARDWARE SUPPLY FEED Compensation Reimbursable Rates Difficult to define total requirements and/or Contractor not in control of schedule, sequence & highly dependent on other contractor activities Lump Sum Provisional lump sum for major portion of contract Contractors will bid on a model system configuration as defined in ITT Model approach keeps all bidders on equal and competitive basis Model will be adjusted to actual system configuration at end of FEED; there will be additions and deletions as technical definition improves Additions and deletions will be incorporated into lump sum based on firm-bid schedule of rates and unit costs Reimbursable Rates Difficult to define total requirements before FEED MICC must work with multiple contractors without control over interfaces, response time, and changing requirements 23

24 MAC Value Proposition 4 Cost Profit $ 1 Lower CAPEX Reduced automation project costs by 20-30% Time 2 3 Increased Profit Quicker time to profitability Superior manageabilit y 24

25 Project Process 1 Consulting The selling process is multi-tiered 1. Consulting Create the project 2. Solutions 3. Product / Service 4. MRO MAC SCOPE Tune Phase 1 APPRAISE Phase 2 SELECT Phase 3 DEFINE (Design) Phase 4 EXECUTE (Implement) Phase 5 OPERATE 25 CONSULTING (Study) 2 Solutions Work processes FEED PHASE MAC SCOPE Segment Design Traditional Product Engagement - Bid hardware / services to end user / contractor 3 4 MRO

26 Large Foundation Fieldbus Project Examples (automation scope) Projects Services $ M Total $ M FF Devices Segments Shell DeerPark SECCO NOVO Nordisk Genzyme

27 The 4 Factors to Balance Domain/Design Expertise, and Project Management Application know-how, and project leadership Selection of the right technology Low Cost Implementation Low cost labor, standards, tools Local-ness to customer Site work and customer intimacy Billable hours (utilization) The critical lever in profitability 27