Efficiency challenges in EPC project management
Eliminating blind spots
Written by Gian Mario Tagliaretti
Posted on March 31, 2023
Efficiency is critical for EPC companies, but it is not always easy to achieve. Many EPC firms face difficulties managing schedules and budgets and hitting targets consistently. Poor project management can result in delays, cost overruns, and rework, all of which have a negative impact on the bottom line.
To address these issues, EPC companies rely on project management software such as Oracle Primavera P6 and Microsoft Project. The sheer volume of EPC projects that are nevertheless delayed or completed over budget indicates that these excellent project management solutions have limitations or blind spots. This means that suboptimal decisions are taken and that human resources are not always applied where they can best advance the attainment of project goals. So, what are these blind spots, and what can we do about them?
Some of the most limiting aspects are that these tools cannot accurately calculate and support project progress or provide an immediate comparative analysis with the project baseline. They also cannot show the methodology for calculating project progress at all levels in a transparent and verifiable way, especially with projects involving thousands of activities. And, last but not least, they lack easily understandable visual interfaces with focused, selective, and user-definable views of project progress.
Construction professionals only use 65% of their time for optimal activities!
A 2018 report by PlanGrid and FMI Corporation in US construction projects revealed that poor data and miscommunication account for 52% of all global rework. Construction professionals also devote 35% of their time to non-optimal activities, leaving only 65% for optimal activities. Furthermore, 14+ working hours per week are lost per employee that could be spent on priority activities.
One can ponder whether the situation has improved somewhat in the five years since the report was published, and all inefficiencies naturally cannot be attributed to the construction phase. Recent evidence from the oil and gas sector, however, shows that 40% of all mega projects go over budget by 10% or more. Despite advances in digital transformation, EPC companies are still losing money on inefficiencies like poor communication or access to the right information at the right time. In short, there is still room for improvement.
Critical considerations for EPC companies are how they can stay within budget, exactly how far they have strayed from the budget at any given time, and how much the total cost of a project will be. For timely delivery, they need to know what needs to be done for projects to be delivered on time and precisely how early or late they are at any given time. They also require reliable estimations of project completion dates.
Shedding light on project management blind spots
In view of the above challenges faced by EPC companies, Cadmatic has launched a new solution called CADMATIC Projects™ for EPC companies. It augments traditional project management software by improving visibility and eliminating blind spots. When integrated with Oracle Primavera P6 and Microsoft Project, CADMATIC Projects visualizes, analyzes, estimates, and reports on project progress using the 3D model of the industrial asset.
There are several significant benefits to this kind of project control software solution.
For starters, it establishes a framework for measuring and comparing progress to the project baseline. This assists project managers in identifying critical paths and potential bottlenecks and taking corrective action as needed to keep the project on track.
Second, it gives project managers early warning signs of potential problems, allowing them to intervene quickly and proactively to keep the project on track.
Third, it provides clear and transparent metrics for holding stakeholders accountable for their actions and ensuring everyone is working toward the same goals. This increased visibility encourages collaboration and a sense of shared ownership in the project.
Finally, by using the 3D model, it provides insights into the big picture, allowing project managers to make informed decisions based on the overall health of the project and ensure that resources are allocated effectively.
Example of percentage of piping completion visualized in CADMATIC eShare.
It’s clear that efficiency challenges are common in EPC projects and effective project management is a critical factor in improving project success. While Oracle Primavera P6 and Microsoft Project are both excellent and useful tools, they are not without limitations.
Used together with Oracle Primavera P6 and Microsoft Project, CADMATIC Projects can assist our EPC customers to improve project management efficiency, transparency, and collaboration, and most importantly, assist them in finishing more projects on time and within budget.