Up Front Engineering is the Key to Successfully Managing Capital Projects

The end of the fiscal year is quickly approaching and capital budget plans for next year are due. Operations, Engineering and Maintenance have ideas of where funds can best be utilized, but day-to-day requirements only allow them to develop rough cost numbers and schedule durations based on “similar” projects from years ago. The project gets approved with high expectations from the department selling the idea to the Board. As it proceeds, budgets are broken, costs and schedule carry over to the following year’s plan and only a minority of the designated projects really have the ROI that were expected. Eliminating upfront engineering proves to be a costly corner to cut.

Justifying the cost of outsourced engineering for a project that may never happen is always difficult. However, if the project does happen, the cost of engineering is generally necessary regardless, the owner now has a more accurate project estimate and schedule, and probably most importantly, the project is justified with an expected ROI.

Venture has every major discipline of engineering from Process and Environmental to Automation and Control to all of the construction engineering disciplines — Civil\Structural, Mechanical and Electrical. Our approach is simple:

We assign a Technical Lead to work with the customer in developing the concept of the project into a feasible plan for integrating. Using internal resources from the necessary disciplines, the Lead presents

• Plan drawings for customer review and approval.

• Milestone dates and projected outages are considered as part of developing an overall schedule.

• The ROI or reason to proceed (such as safety or risk of failure) with the project is developed via questioning and feedback from Operations and other customer resources.

• An estimate based on current prices for materials and manpower with considerations of how it will need to be installed at an operating facility.

The end product is a presentable document and drawings for board review containing project descriptions, justification and a solid plan to implement.

The next step would be receiving project approval or rejection. With approval the discovery and concept part of the project is complete and the detail design can begin. The cost of the up-front engineering is recuperated for the work that would have been needed regardless. A thought-out schedule and budget are in-hand for a Project Manager to follow.

Rejection of the project may actually be determined prior to meeting with the Board or through educated meetings with the Board. Generally, it is attributed to the project cost versus reward not justifying the investment or realizing actual costs are much higher than anticipated. The value in knowing it before the expenses arise for buying and installing equipment plus wasting time and risking adverse operational issues far outweigh the expenditure of the initial engineering study.
The more upfront engineering completed, the better the estimate, the more secure the design and the faster the delivery of a completed project. Venture Engineering is available to help with all capital project needs.