Industrial Design/Build Blog

Inaccurate Field Reporting and Its Impact on Business Decisions

Contributed by Chad Ingersoll, Director of Project Controls

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Inaccurate Field Reporting and Its Impact on Business Decisions

It is an exciting time right now as an EPC contractor along the Gulf Coast due to a new wave of capital spending throughout our industry. We are also entering an era in which technology is the new norm and where companies are capturing and analyzing data to help drive business decisions, develop strategic growth initiatives, and setup stability plans. These decisions vary and affect a wide range of results whose impacts are both immediate and long-lasting.

The margin for error is low for capital projects. The need for successful project delivery is crucial to stay competitive and support repeat business. Two key factors when managing successful project delivery include accurate progress reporting and accurate timesheet reporting. I don’t know how many times I have seen timesheets submitted where the hours just didn’t add up, the incorrect cost codes were used, the list goes on. Unnecessary business decisions can happen when these inaccuracies occur.

Effects of Inaccurate Progress Reporting

A common example of inaccurate reporting is when crews “sandbag” their progress. “Sandbagging” refers to crews that fail to report progress when productivity is excellent and/or they had a big week in earnable hours and intend to report that progress later, perhaps on a rainy day, when things don’t go as well. This is never acceptable. It creates a culture of deception within the organization. This tactic does not work in the long term, typically resulting in costly progress audits amongst many other issues. This type of behavior and inaccuracy is detrimental to any project and the roots of these problems are far-reaching.

Practices like “sandbagging” and other progress reporting inaccuracies can have immediate impacts for a contractor. Over-reporting progress paints an incorrect picture to management. Oftentimes, a knee jerk reaction to this news can lead to a decision to not to add personnel to finish up a project which can lead to a strain on company resources. Once true progress is realized, the added cost to quickly staff up, train, and execute more work in less time is ineffective and will quickly sink a project. Hidden financial burdens associated are usually unidentified until it’s too late. (i.e. Grossly high progress related billings or cash flow availability). It’s not all about the ballooning cost of the project, but the safety of new personnel, the quality of work, and the availability of trained resources. An overly saturated project team eats into productivity and many processes and procedures can begin to deteriorate.

Another effect to consider from inaccurate progressing is focused around the bid stage. Companies oftentimes choose to strategically bid work with a tight window to de-staff current projects and roll onto another. This leads to a false sense of completion and resource availability, which can now be in jeopardy. The opposite reaction can occur when a company believes the date of completion will not be met and strategically opts to not bid certain projects. This can lead to a delayed backlog of work forcing a company to possibly layoff at the completion of current projects.

Effects of Inaccurate Timesheet Reporting

The detail to which an employee’s time is charged against also affects how a company makes decisions. Most companies typically utilize a standard code of accounts. If employees are not familiar with what the code of accounts represent, they may disregard them which ultimately causes inaccurate timesheet reporting. This may seem like a minor issue and can be adjusted in a review cycle, but these effects run deep in an organization. Most companies use their code of accounts to gauge performance and cost of a task or group of tasks. Over time, if these codes of accounts are incorrectly used the value or unit rate for each code is now misrepresented.
When misrepresentation occurs, it is possible a company will make a strategic decision not to conduct a specific type of business, as historically it’s not been recorded as profitable. Or perhaps a company makes unit rate adjustments for upcoming bids, the primary scope of work for the projects is in line with several code of accounts that have seen a decrease in unit rate due to excellent past performance. This is a positive for a company believing they are more competitive than the next. However, during the execution of the project they quickly find out their unit rates are low, and the project cannot be executed at the price it was contracted at. Like the previous scenario, historical data reported may increase unit rates for a company. Over time the company may find it difficult to be awarded work due to the false rise in cost represented for bids submitted. These are both long-lasting, deep effects for contractors.

Effects of Inaccurate Field Reporting on Owner/Operator Companies

For owner/operator companies, inaccurate field reporting causes its own set of problems. When contractors are unsure of their true numbers there is an increased chance the owner will have to pursue additional funding or deal with a mountain of change orders to start a project. These inaccuracies can also lead to overpayment for incomplete work or even becoming liable for increased labor costs on a reimbursable contract. Owners want a high probability that project completion will be in line with critical schedules and budgets. When that doesn’t happen, they can quickly lose confidence in the contractor for not effectively planning the completion of their work and decisively exclude them from future opportunities.

Ways to Overcome

There are many ways to overcome inaccuracies in timesheet and progress reporting. Not all solutions require costly or complex overhauls. Technological advancements in our industry are growing, with options ranging from mobile software platforms and ecosystems, electronic timesheets, Artificial Intelligence (AI), RFID tagging, to drones 3d mapping.

The use of technology is not the only way to implement adequate solutions, training and education is also very important. Modifying or establishing a new simplified code of accounts structure, development of work processes (Advanced Work Packaging), or launching education programs where cyclical training occurs, are all adequate improvement solutions as well. Each company will experience differing levels of reporting deficiencies but the one thing that must be addressed is the culture. In support of all the work processes, or technological change a company makes, a strong culture of accountability will drive people to demonstrate high levels of ownership on the information reported.

With tough competition throughout the Gulf Coast, distinguishing yourself as an industry expert is critical. These issues have the potential to harm contractor reputation in the eyes of Owner/Operators. This is where ensuring simple things like accurate reporting can help an organization stand out. It’s imperative that clients do not lose confidence due to inferior decisions being made. The pursuit of reporting perfection is no easy road, but a necessity to maintaining customer relationships, ensuring repeat business, and continually making the right business decisions.

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Chad Ingersoll, Director of Project Controls 

B.S. in Construction Management

Chad has 15+ years of experience with EPC Projects working primarily in the downstream oil and gas industry. His past experience prior to joining H+M was leading multi-billion dollar EPC Projects as a Sr. Project Controls Construction Coordinator/AWP Manager constructing polyethylene units for multiple clients. His current responsibilities include schedule control using Primavera and cost and budget control using advanced progress methods for engineering and construction.

Piping Non-Destructive Testing: Conventional vs. Computed

 

Contributed by Jim Hughes, Director of Construction QA/QC & Welding Technology

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Piping Non-Destructive Testing: Conventional vs. Computed

For over three decades H+M has worked on capital projects of varying sizes and scopes. One common denominator we see is Welding and with pipe welding comes the need for Radiography. Radiography is a way to take a volumetric image (or picture) of the weld to determine its quality. Radiography is one of the oldest, Non-Destructive Testing (NDT) methods used throughout pipe fabrication and maintenance projects. It looks for initial discontinuity and defect detection, corrosion monitoring and product conformity. Two common ways to assess weld quality are Conventional Radiography and Computed Radiography.

Conventional vs Computed

Due to industry norms and what is most commonly requested from clients, we utilize Conventional Radiography most of the time, even with having the ability to do both. Conventional has been challenged as an industry standard by Computed Radiography since it came into play in 1987. This is partly due to how labor-intensive Conventional Radiography can be, but that is not to say that the Computed method does not present its own challenges. Figure 1 shows a standard Conventional Radiography setup.

First used in the medical industry and then the industrial sector, Computed Radiography is becoming more and more prevalent in the Energy and O&G markets. I would say about 80% of NDT companies can perform Computed Radiography. It is just a matter of determining the needs of the industry and what is best for the project in question.

On average, Computed Radiography, over the project lifecycle, can cost as much as 25% less than Conventional and cuts out 50% of the time needed to complete the same process. This is due to a variety of reasons such as shorter shot times, fewer disruptions at the job site, smaller exclusion zones, and faster turnaround. Since Computed records are all digital, it also allows for easier storage and faster transferability. One deterrent from using Computed Radiography is that it tends to have higher price tag right off the bat, and it can be hard to quantify the cost savings due to the intangible benefits it presents.

The most important benefit in my mind is the faster analysis and higher accuracy. NDT companies can now use digitized radiographs created by Computed Radiography. These digitized images have much greater data accuracy than the hard copies we see with Conventional Radiography where the film is much like the X-Ray your doctor shows during an exam. Any profile work done on a pipe by Conventional Radiography can now be performed by Computed Radiography. This work depends on the ability to take in large amounts of information quickly, which is where Computed Radiography steals the shows.

Initially, Conventional might be cheaper but the overall cost savings Computed can achieve due to time saved in the field is something to consider. It is also important to note that using Computed imagery during NDT has many inherent challenges of its own that the seasoned film radiographer must be aware of. If the learning curve is not addressed properly, these conditions can be detrimental to the overall inspection results. The characterization and evaluation of a Computed image requires additional training, over and above current requirements found in ASME Sec. V Article 2, SNT-TC-1A, and CP-189 for the typical industrial radiographer.

Figure 1 – Standard Conventional Radiography Setup

Implementing Computed Radiography

Implementing Computed Radiography begins with a fundamental understanding of the radiographic principles that have been practiced for decades with film radiography and used by the aerospace, automotive, construction, energy, oil and gas, and shipping industries. Certified Level II radiographers are required to understand these principles, along with specific knowledge in the manufacturing and fabrication process to correctly interpret the acquired digital image. Geometric principles attributed to the setup are essential in the evaluation of mechanical or fatigue defects and for assessment of repair work.

Computed Radiography, as defined by ASME and ASTM (photo stimulated luminescence method), is a two-step radiographic imaging process. First, a storage phosphor imaging plate, which replaces standard radiography film, is exposed to ionizing radiation. Second, the luminescence from the plate’s photostimulable luminescent phosphor is detected, digitized and presented on a high-resolution computer screen. See Figure 2.


Figure 2

Managing this process while working to achieve the optimum digital image is the challenge faced by radiographic practitioners. The overall success is based on the digital image acquisition system utilized and variables that are consistent with typical radiographic conditions.

The utilization of the proper Image Quality Indicators ensures technique, contrast sensitivity, and resolution, and is essential to meet industry specifications and code compliance. Development of an operator and company defined QC program is crucial to monitor equipment performance and maintain records of data collected which ensures a stable continuous process. In addition, having a detailed QA auditing program shows compliance with COC and specifications. System and scanner performance tests vary from manufacturer to manufacturer but must include quality control checks specified by the manufacturer and be modeled to meet the technician’s requirements. If, at the time of inspection, significant equipment malfunctions are found, the technician may be required to perform more frequent testing to ensure good image quality.

Final acceptance of the image is the same as film radiography and is the responsibility of the certified Level II technician, and Manufacturer. Most industries are updating reference radiographs for defect severity and comparisons are being updated to digital formats for ease of interpretation. Preserving the raw image is critical and maintaining its origin is a requirement by most industry codes, specifications, and end-users. It is the operator’s responsibility to maintain this data set to ensure recall in the native format as needed. Another benefit of having digital images is that the shelf life is forever. This enhances our ability to turn over information digitally instead of hard copy. Hard film takes up space, can be lost and deteriorates over time and that deterioration can be accelerated by improper storage.

A New Industry Standard?

Despite a higher initial price tag and some additional training needed, Computed Radiography takes most of the disadvantages of Conventional Radiography out of the equation. Shot times are essentially cut in half, there are no chemicals needed to process film, and interpretation can be done on a computer screen instead of having to review the conventional film on a film viewer as seen in Figure1.

As an example, a 20” Sch. 40 weld has 6 views or pieces of film. To review properly it would take a Radiographer around 20 minutes to review that film using conventional tools, such as a viewer, and densitometer. Using Computed Radiography and reviewing film on a computer screen (see Figure 2) you can see all 6 images at one time. Then, by just clicking on each one you can see the image, the Image Quality Indicators, (which takes out the need for a densitometer) and all other information, such as line number, weld number, welder I.D and client information. The time of review now takes about 7 to 10 minutes.

Conventional Radiography is not going away any time soon, but it is important to identify other technologies that are possibly more effective in determining volumetric weld quality. As the industry adapts and changes to the Digital Age, adding Computed Radiography to the discussion is important to present the best options to clients.

References, ASME Sec. V Article 2, SNT-TC-1A, ASNT CP189.

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Jim Hughes, Director of Construction QA/QC & Welding Technology

CWI, ACCP, SNT-TC-1A Level III VT & RT-F

Jim has 27 years of experience working in the Power Market, OGC, LNG, and Midstream, acting as Sr. Quality Manager and Welding SME, on projects ranging from $30 million to $850 million. His last assignment before joining H+M was Corporate Welding Technical Services Manager. His current responsibilities are as Director of QA/QC and overseeing Welding Technology.

 

MIDSTREAM – Licenses to Operate

 

Contributed by Tuan Tran – Senior Project Manager

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MIDSTREAM – Licenses to Operate

My career has included various roles at the Vopak and Kinder Morgan terminals over the past +20 years. As someone who has worked on both sides of the coin, I ended up having “lightbulb” moments about a variety of things but one, often forgotten, project aspect really stuck with me. This piece is one that I truly believe can make or break a project. What is it, you ask? One word. Permitting.

After working for these Owner/Operator companies for almost 2 decades, I realized that their focus is on much more than just storage tanks and logistics. The real service these midstream terminal companies provide their clients is the GUARANTEE that their products are stored, handled, and transferred meeting regulatory permit requirements. Put in place by state and federal agencies, the key permits they must maintain are air and water operating permits which are considered ‘licenses to operate’.

Even though permitting is usually the responsibility of the client company, as a Project Manager it is still something I consciously think about throughout the entire project lifecycle. It is important to always know what is required for a project. By knowing the ends and outs, you will be able to assist the client in the process if needed. Keeping things like this in mind from the get go can keep the project moving forward in the right direction.

How do air and water permits affect a project?  Risks?

Air permit related projects correspond to the control of emissions generated from the transfer of product into tanks, vessels, trucks, and railcars.  Depending on the type of product and regulatory requirements under the EPA’s Clean Air Act (CAA), emissions can be controlled by using internal/external floating roofs (for tanks) for flammables, vapor scrubbing for acids/caustics, balancing, combustion, and/or carbon adsorption.

Storm-water related projects correspond to the control of rain water from storm events that falls within the terminal that must be managed prior to discharge into local waterways.  Projects relating to storm-water drainage systems, lift station upgrades, storm-water storage tanks or pond maintenance, biological waste water treatment system upgrades, etc. must be budgeted into the project to remain compliant with EPA’s National Pollutant Discharge Elimination System (NPDES) permits.

During one of my past experiences I was able to impart guidance relating to storm-water management for a Canadian project.  The client requested to expand tank storage in the only available space, one that would affect an adjacent storm-water collection pond system. After voicing my concerns, the engineering of the new tanks’ footprint was evaluated to avoid disturbance of the storm-water drainage, lift stations, and piping to treatment systems.  The risk of project failure would have been very high if the storm-water system was not considered.

The influence and risks associated with proper permitting can vary drastically. During the project evaluation stage make sure to understand the air and water permits of the local terminal as they may cause potential issues. Understanding and pointing out these ‘licenses to operate’ permit risks are critical in the early stage of project development. Such risks may add unexpected costs which could make the project less financially viable.

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Tuan Tran, Senior Project Manager at H+M Industrial EPC 

B.S. in Chemical Engineering, MBA

Tuan has 24 years of industrial engineering experience in operations and project settings. Responsibilities include project management oversight with clients from obtaining functional requirements to scoping, estimating, design, construction, and final commissioning. His past experience includes +3 years within Kinder Morgan’s Major Project Development team, 16 years with Vopak in various roles from terminal manager to logistics manager, and lastly, Engineer Project Manager for Vopak’s two Gulf Coast, TX terminals. Tuan started his work career with Mosaic for +4 years as a Production/Maintenance supervisor in the phosphoric/sulfuric acid production facilities in Tampa, FL.

 

DIY Wind Calculation: It Will Blow You Away…Literally

 

Contributed by Robert Smith, P.E. – Civil/Structural Department Manager

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DIY Wind Calculation:  It Will Blow You Away…Literally

Have you ever wondered what it would feel like to be one of those TV reporters you see standing somewhere out along the Gulf of Mexico while a hurricane is barreling toward the coastline? It usually seems as though they are seconds away from being blown away by strong winds or knocked out by a piece of flying debris.

Curious about how much force they are dealing with? You are in luck! No need to wait for the next hurricane to go see for yourself. Instead, I will help you try to quantify the forces those brave/crazy reporters face while out there amongst the elements.

First, a quick background on wind design. Wind design in our industry is mostly controlled by “ASCE7 Minimum Design Loads and Associated Criteria for Buildings and Other Structures”. In this code you can find a wind speed map that tells you the maximum wind speed required for designs for in your geographic area. For the Texas Gulf Coast, here are the design speeds: [Units: MPH(M/S)]

 

wind calc blog image

 

From those mapped wind speeds, we can calculate what force (in pounds) will be exerted onto an object that we, as engineers, need to account for in our design.  Below, I have simplified the force equation found in ASCE7:

Force = 0.00256*0.6*A*V2*Cd

0.00256=Standard coefficient based on density and gravitational acceleration.

0.6=ASD load factor for wind

A=Surface area the wind is blowing against

V=Wind velocity from map in mph

Cd=Drag coefficient  (Between 2.0 for a flat surface and 0.5 for a rounded, smooth surface)

Now, let’s try to figure out what types of forces are pushing on those reporters in the field.  If you look at the wind speed map, you will see that right along the Texas Gulf Coast. We have a design wind speed of about 155mph.  I can guarantee you that no reporter will be standing out there in 155mph wind. They usually start standing sideways at about 35 to 40 mph, so let’s use 40 mph for our example.  For Surface Area (A), I performed a not-so-scientific calculation, and came up with a surface area of about 7.5ft2 for a person 6ft tall with an average build.  For Cd, our last variable, let’s use 1.25, this assumes our reporter has a body that is somewhere between flat and round.  To summarize:

A=7.5ft2 (body surface area)

V=40mph (wind velocity)

Cd=1.25 (medium body type, not round, not flat)

 

If we plug those variables into our original equation, we come up with:

 

Force = 0.00256*0.6*7.5*402*1.25 = 23lbs

 

That would make the average person stand a little sideways to keep their center of gravity in the right position in order to remain standing on their feet.

The interesting thing about this equation and the results are that since velocity (V) is squared, as the wind speed increases, the resulting force increases at an exponential rate.  So, as you can see from the graph below, an increase in wind speed from 40 mph to 60 mph results in an increase of force from 23 lbs to a force that is almost double, 52 lbs.  If you keep going out to our design wind speed of 155 mph, you will see that the force exerted on that reporter would be almost 350 lbs, and he or she would most likely not be within the view of the camera anymore.

 

 

When it comes to structures, the wind forces we calculate and design for take into consideration a few other items, and the equation looks slightly different, but the one above will get you in the ballpark.  Some other things we account for in a real design are height above ground level, surrounding topographic features, building/structure type, and actual vs. factored load design methods.

Thanks for reading, and now, next time you see a reporter standing sideways you can figure out about how much more wind it will take to literally blow them away!

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Robert Smith, P.E., Civil/Structural Department Manager at H+M Industrial EPC 

B.S. in Civil Engineering

Robert has 17+ years of experience working in the upstream, midstream, and downstream oil and gas industry. Most of his experience has been on the downstream side acting as the Lead Civil/Structural Engineer on projects ranging in TIC from $10 million all the way up to $12 billion. His last assignment before joining H+M was an Engineering Manager role on a multi-billion dollar plant expansion in southwest Louisiana. His current responsibilities include maintaining departmental procedures, assurance of quality deliverables, maintaining proper staffing levels, as well as general oversight of the Civil/Structural Department.

Remote IO Cabinets versus Junction Boxes in Industrial Control Systems

 

 

 

Contributed by Justin Grubbs, P.E. – I&E Department Manager

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Remote IO Cabinets versus Junction Boxes in Industrial Control Systems

With the modern advances in control systems architecture and communications protocols, the technology available to us today is leaps and bounds above what it was in the era of relay and timer logic as well as the first few generations of Programmable Logic Controllers (PLC). Given the tools available to us today, isn’t it time we realign our thinking when it comes to the practical implementation of control systems? The days where we were required to house all of the control systems hardware components in a centralized location are no more. Improvements in the efficiency, reliability, redundancy, and cost of networking components have allowed us the opportunity to provide a more robust, expandable, and cost-effective design.

In earlier iterations of industrial control system solutions, the flexibility of the installation was limited by the type of communications used. In most cases, these used a type of serial communications which is extremely limited in speed and distance in comparison to the modern-day performance of PLCs. With the ever-growing rates of data transfer and speeds at which the data is needed diminishing, the only way for continued growth is to advance to faster, more efficient communications protocols such as Ethernet/IP. Imagine attempting to pull up real-time data on a turbine running at 10,000+ RPM on an RS-232 serial communications interface, or to put it in modern terms, attempting to watch your favorite cat video on the internet via a dial-up internet connection. In one case, you’ll have to wait a very long time to see the cat; in the other case, there could be a catastrophic failure on the order of millions of dollars due to the latency in response time. However, with the speeds and distances which are achievable with modern copper and fiber Ethernet communications, limitations for where PLC hardware is located is no longer an issue.

In a traditional PLC design, a typical implementation for a large industrial facility was to have several locations (junction boxes) scattered throughout the facility where field instrumentation would be wired via individual cables. These junction boxes serve as a splice point to allow for larger multi-pair or multi-conductor (home run) cables to connect back to the central control system cabinet which held the marshaling terminals and PLC hardware. With this method, each cable running to an end device had at least 4 terminations (at the PLC, at the home run side of the junction box, at the field side of the junction box, and at the end device). This means that there are at least two added points of failure or potential for error for every single conductor. With almost any modern PLC, we can now locate IO modules remotely in the field (remote IO or RIO cabinets). Rather than having multiple single points of failure in each cable, we can build redundancy in the communications architecture of the PLC system and almost entirely remove a potential for having a single point of failure. As one can see in figures 1 and 2 below, the traditional junction box design has twice the number of terminations as a RIO cabinet design. Additionally, if any one of the blue cables were cut, there would be a failure on multiple instruments. With a RIO cabinet design, if any of the red cables were to be cut, there is no loss in data as this is a redundant ring type of network. From an expandability standpoint, when a traditional junction box design requires expansion, multiple large cables must be run at potentially long distances to connect the new field IO to the main PLC. In order to bring field IO to the main PLC with a RIO cabinet design, all that need be run is two small communications cables regardless of the size of the expansion.

Blog Image 1

Blog Image 2

As with most design implementations, an ever-present determining factor is cost. On the surface, it may seem that a RIO cabinet design is more costly due the additional networking components required. It is true that additional Ethernet and fiber cards, patch panels, and switches are needed; however once construction is factored in, the overall cost is much less. In the above example figures, the cost of the PLC hardware is very similar, the only significant cost differences being additional communications cards and power supplies. The enclosures required for the RIO cabinets are larger than traditional junction boxes and also typically must be purged with dry air or nitrogen if located in a hazardous (electrically classified) location. When comparing the cost of only the PLC hardware, enclosures, and communications components, the cost for the RIO cabinets will be roughly 10% more depending on the size of the implementation. When comparing the cost of the cabling, conduit, cable tray, bulk construction materials, and labor, there is a cost savings with a RIO implementation on the order of 30-50%. One can see this when comparing the size and magnitude of terminations and cables between Figures 1 and 2 (red versus blue cables). In a junction box implementation, there is a minimum of 4 additional terminations per IO. This cost is magnified when considering all of the additional cabling and raceways it takes to wire between the junction boxes and PLC cabinet. All of these factors result in additional field labor and consumable construction materials.

When comparing all factors of a traditional implementation with a RIO cabinet implementation, there really is no comparison. With the speeds and fault-tolerant construction of modern networking components, the drawbacks of relying on a network are all but gone. The expandability of a networked control system is very flexible and nearly limitless without the worry of needing excessive raceway space. Add these factors to the fact that the total installed cost of a RIO system is much less than that of a junction box design and it is hard to argue why one wouldn’t choose a RIO system.

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Justin Grubbs H+M Industrial EPC

Justin Grubbs, P.E. – I&E Department Manager at H+M Industrial EPC

B.S. in Electrical Engineering

Justin has +8 years of industrial engineering, construction, and commissioning experience. He has experience with design, engineering, and construction including but not limited to: leading I&E construction, developing plant control documents, directing control systems programming personnel, performing factory and site acceptance testing of electrical/process analyzation/control systems equipment, designing power distribution and motor starting systems, stamping and submitting electrical permitting packages, directing commissioning efforts, developing instrumentation specifications, validating engineering data, specifying I&E material, and training operations personnel. With previous EPC experience from Optimized Process Designs, LLC – a subsidiary of Koch Chemical Technology Group – Justin joined H&M in 2014 to lead the I&E department.

Service Companies and the Importance of Repeat Business

 

 

Contributed by Brandon Hogan, P.E., Operations Manager 

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Service Companies and the Importance of Repeat Business

Engineering, Procurement, Construction (EPC) projects are hard and a very difficult field to work in. Every project is unique. Every client is different. Even within a given client company, project managers may have varying preferences with regards to project execution. As contractors, our job is to figure out how to make the client successful, while satisfying the safety, logistical and technical requirements of the job. The client must agree that the project was successful or working for them again won’t come to pass. This is a big deal. Service companies are dependent on repeat business.

Why the dependency on repeat business?

The world is small. Especially the world of oil, gas and chemicals. It seems as though this market is huge, and it is, in terms of capital. However, in terms of numbers, it is small. There are a relatively small number of owner/operating companies that support a large number of service companies. The only way to sustain a healthy client base is to ensure a strong foundation of strong core/repeat customers.

Necessary components for repeat business:

1) Safety
2) The perception from all stakeholders that the project went well
3) A finished product that meets quality expectations
4) A product that meets budget expectations
5) A product that meets schedule expectations

This business is about partnerships.

For EPC companies, the goal is to be a client’s go-to company for years to come, not just for one project. Decisions should be made that are in the best interest of the partnership long term, as opposed to short sighted ones. Organizations must take into account the value of projected future income instead of looking at a project in a silo. Every project taken on or site accessed should be viewed with pride. The intent should be to continue to work there indefinitely. The way to get this done is to be the best at what you do, and to serve your client in a way that makes them successful.

It takes a long time to acquire a new client in our business, sometimes a year or more. There is a significant cost in this, both in real dollars and time, but also in opportunity cost that could have been spent pursuing other business. Once a client is obtained, the relationship should be nurtured and not taken for granted. The easiest way to do this is with responsiveness and respect. When a client calls, call them back. Answer their questions and take ownership in the relationship. Always get them the help they need. Be respectful and nice. The clients pay the bills.

It is not just the client that needs attention. All project stakeholders should be identified at the beginning of a project, and their satisfaction should also be maintained throughout. For example, the 3rd party inspector is also a stakeholder and deserves to be satisfied.

Work safe, smart, hard, and never be idle. A large part of what a client thinks is in the hands of its employees. Good client/employee interaction is a big part of maintaining a long-term relationship. The importance of this should be emphasized from upper management. Everyone who interacts with a client, whether it be by email, in person, or by phone, should think of themselves as a salesperson for their organization.

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Brandon Hogan, P.E. – Operations Manager at H+M Industrial EPC

B.S. in Chemical Engineering, MBA

Brandon has more than 14 years of industrial engineering experience in operations and project settings. Responsibilities included managing the operations of the Engineering, Procurement and Construction divisions. His past experience includes over 10 years of engineering with The Lubrizol Corporation in Deer Park including process design, capital project management and engineering optimization.

The Business Case for Safety

 

 

Contributed by Matt McQuinn – Director of Construction

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The Business Case for Safety

H+M Industrial - The Business Case for Safety

In our industry there are several measures of success used to evaluate a project upon completion. Some of these measures include:

  • Meeting the customer’s objective
  • Turning over a quality product
  • Completing the project within the approved schedule and budget
  • And many more…

Undoubtedly, the single most important measure of success, from both the customer and contractor, is completing the job without someone getting hurt.  Why is it always about HSE?  The goal, first and foremost, is to get each employee back home to their family each night. However, for all organizations alike, there are many added layers from a business perspective that make HSE excellence imperative to their success.

Customer Perception

When stepping into a new situation, we use our own perspective to immediately form first impressions. It’s human nature. What is the first thing that you take note of when you step into a plant? General plant condition? Cleanliness? Operations interest in your activities? Although you can’t tell from the surface whether or not the plant meets all of its operational goals, EPA requirements, or OSHA targets, you will leave with your first impression. These are not soon forgotten.

Now consider a customer stepping onto a construction site for the first time, what are they taking note of? Barricades well maintained? Everyone wearing gloves to handle material? Working scaffolds clear from tools and debris? Accessible locations for water and trash? All these things define how we manage and operate our projects. If we are getting the basics right, confidence is instilled that the less visible components are also being handled appropriately. All team members may be doing exactly what they need to be doing but for a customer who may only spend 5-10 minutes on-site, they will form their first impression from what’s on the surface (i.e. general housekeeping and PPE usage). Good housekeeping is integral to a safe job-site. It shows a level of respect to the customer that we care about the opportunity to work together with them at their facility.

Business Model & Why It Matters

For example, as an EPC Contractor serving the Gulf Coast region, there is a finite number of industrial facilities which have the project types that we execute, many of which owned by the same company. We currently provide services to a large number of these customers and our business model is dependent on repeat business. Projects with repeat customers are generally more profitable because you are familiar with their requirements which allow you to work more efficiently. This, in turn, allows contractors to optimize their bid which also results in greater cost savings for the customer. It’s a win-win. If the perception exists that a contractor cannot work safely, repeat customers will turn into previous customers.

Most customers have a distribution network that automatically emails out incident reports from a project site to various levels of management. In cases where a contractor has continued events or incidents on-site, a customer’s upper management team receiving these notifications of HSE incidents will form their perception that contractor, likely without even meeting their team. Unfortunately, these perceptions are almost impossible to revert and will negatively affect the ability to work at their facilities.

Business Development teams work extremely hard to build relationships with new customers. Since building confidence and trust can take 1-2 years before quality projects start rolling through the door, it is increasingly difficult to replace valued customers. Part of the pre-qualification process for new customers is a review of HSE statistics, hence the importance to work safely to keep numbers such as EMR and TRIR down. It is important to continue to consistently demonstrate to customers that creating an atmosphere that fosters safe work is simply how business in this industry is done.

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Matt McQuinn H+M Industrial EPC

Matt McQuinn – Director of Construction at H+M Industrial EPC

B.S. in Mechanical Engineering

Matt has more than 10 years of industrial engineering, construction, and commissioning experience in both domestic and foreign project settings. Responsibilities include: engineering drawing and specification interpretation; resource planning and allocation; project schedule analysis; constructability reviews; contracting strategies and management. With previous EPC contracting experience for CB&I, Matt joined H+M in 2014 to lead the construction efforts.

Triple Constraint: Fast, Good, Cheap (Speed, High Quality, Low Cost)

 

 

Contributed by Kevin Bautz, Senior Project Manager

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Triple Constraint: Fast, Good, Cheap (Speed, High Quality, Low Cost)

Kevin Bautz H+M Industrial EPC

Speed.  High quality.  Low cost.  However you phrase it, we live within these parameters every day both in our personal and professional lives.  The goal for most is to have all three together. But when you step back and look at what you are actually requesting, it can be explained by the cliché:  You want to have your cake and eat it too…and not get fat.

Fast, good, cheap. Speed, high quality, low cost. These terms combined are known by a variety of names often referred to as the “Project Management Triangle”, “Triple Constraint”, or “The Iron Triangle”. I definitely do not know everything there is about this topic, I can just speak to my personal experiences.  What I want to do is help give an awareness and present something for you to think about that will hopefully drive you to perform some research of your own.

 

triple constraint

 

Take a quick look and you will see there is tons of information on the subject.  Many argue that you can completely have all three, while others think that is unattainable. Both sides of the argument are defendable. I tend to side with the argument that you cannot have all three in perfect harmony, there is always some type of tradeoff.  Even though you can have a project that is perceived as fast, good, and cheap, I interpret the triangle to say you cannot MAXIMIZE all three together. There is always a compromise between the constraints.

What do you notice about the terms fast, good, and cheap?  Are they concrete?  What/who defines fast?  How do we know if something is cheap?  If it is good, can it be better?  The terms are relative and can be subjective.  Each requires an established benchmark to determine if the goal has been met or exceeded.  Once you have that benchmark in place, it is oftentimes difficult to determine if the parameter has been truly maximized.  My experiences in production and projects have opened my eyes to the different constraint combinations. This experience has helped me determine which to maximize, because there is always a tradeoff, for each application.

In production, we wanted all three but would often tradeoff quality for the other two.  This was common because we had a higher tolerance for quality than for cost and speed.  The quality tolerance allowed for saleable products with some variation.  The main goal was to be efficient: high speed with low cost.  This was true for the production environments I experienced, but I do understand it can be quite different in other industries.

In the business of projects and project management quality is rarely, if ever, intentionally sacrificed.  Quality outlives the project life cycle.  Speed and cost are “here and now” parameters, while quality is present for the entire post-project existence.  Days to years after the completion of an EPC project, people will continue to either criticize or complement what they see in the field.  Operators who use the results of the project will curse those who made the operability difficult. They will praise those who provided a clean, understandable, sound design and installation.

Quality is a given.  So where does that leave speed and cost?  I have found these are the two constraints that are most commonly discussed at the start of a project.  We always want to know:  What is more important, speed or cost?  From this exchange, proper decision making can take place and a project can meet (or exceed) the expectations of its stakeholders.

We live in a world of constant balance, always trying to do things better, faster, smarter, and stronger.  When working for or with a company, the ability to understand and accept constraints as reality is crucial.  By listening to clients to figure out the right mix, the chances of successfully completing a project and building lasting relationships increases.

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KevinBautz

Kevin Bautz – Senior Project Manager at H+M Industrial EPC

B.S. in Chemical Engineering

Kevin has more than 13 years of industrial engineering experience in operations and project settings. His past experience ranges from process and equipment engineering in semiconductors, process simulation engineer for the oil & gas and chemical industries, and key management roles in engineering and operations for The Sun Products Corporation in Pasadena, TX and Bowling Green, KY. Kevin joined H+M in 2014.

The Big Picture – Taking a step back to get a big picture perspective.

 

 

Contributed by Chris Chandler – Design Coordinator

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The Big Picture – Taking a step back to get a big picture perspective.

Engineering projects are comprised of multiple parts, basically, just many components intertwined together. Projects include any possible combination of disciplines such as process, civil, structural, mechanical, piping, instrument, and electrical.  Each has their own segments that include calculations, design, drafting, and so on. On top of that, each department must keep track of documents, the latest revisions and the most current design of the other disciplines. There is an enormous amount of items to keep track of. Taking a step back and making sure you have a clear understanding of the big picture will increase the success of the project completion.

Steps to see the big picture:

  • Support Communication – Keep the team on the same page.
  • Set Clear Project Parameters – Steer the team in the right direction.
  • Develop a Strong Project Team – Align the skills of team members to match the project.
  • Encourage Self-Motivation – Make sure the team is engaged.
  • Schedule Milestones for Project Checking – Be reactive throughout the project.
  • Be Flexible – Expect the unexpected.

The process of pulling together an engineering project is much easier if you are able to step back and view the project as a whole. Communication between all disciplines is key to this. It is sometimes easy for that to fall through the cracks. If we cannot foresee the needs of other project members, we may be shooting ourselves in the foot. Without clear and supported communication, other members of our team could be backed into a corner which could lead to costly rework.

When working on an interdepartmental team, it is important to be clear about goals. It is also vital to clearly understand each part of the project, consider flexibility with the project plan, and take into account the other members on the team and what your decision means for them. When you are trying to charge forward to meet your particular schedule and budget, taking a step back may not be possible. In reality, though, it can help the effectiveness of the project team. While setting parameters and goals, take time to develop the right team to get the job done as efficiently as possible. Once the appropriate team is established, team engagement is an important next step. Encourage the team to speak up, reward the team for a job well done, focus on collaboration and clarify responsibilities.

A lot of seasoned designers like me want to do a big part of the designing and drafting on projects ourselves because we are comfortable knowing that “we did it” and feel less back checking will be needed. By actively looking at the project as a whole, we can keep the composite rate of design minimized if we utilize less costly drafters where appropriate. Project milestones are important to, in a way, force the group to check back with other parts of the team. It is better to be reactive and catch something now, rather than later. When things come up, flexibility can save the project and the team morale. Team members must be held accountable but changes should still be an option if applicable.

This write-up focuses on engineering projects but the importance of looking at the “big picture” is as equally true for EPC projects. If the engineers and designers cannot see the desired final product and foresee the needs of the fabrication shop or field installation crew, then costly downtime or rework is probable.  Using these steps and maintaining the ability to look at the overall project from a high level will save time and money, on any size project, in the end.

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Chris Chandler H+M Industrial EPC

Chris Chandler – Design Coordinator at H+M Industrial EPC 

Chris has more than 30 years experience in piping design, coordination, and project management in industrial settings. His project design and supervision responsibilities have ranged from small capital projects to multimillion dollar projects. Chris has worked at H&M for ten years, with previous work experience at Jacobs, CDI, Enterprise Products and Mustang Engineering.

Pre-Task Planning: Building a Proactive Safety Culture

 

 

Contributed by Jay Bice – HSE Manager

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Pre-Task Planning: Building a Proactive Safety Culture

Many things have changed over the last 20 years in the industrial industry, however, the belief that “it will never happen to me” is not one of them. I repeatedly hear employees say, “I never could have imagined I would smash my finger” or “I never thought I would trip and break my leg on the extension cord that is always laying out.” Truthfully, we all assume this idea at some point in our lives.

The false belief that experience makes you invulnerable is a key contributor to accidents. Complacency can be the most dangerous mindset and claims countless victims every day. How do people get complacent enough that they will do something that they know contributes to making an error, such as texting while driving or not using proper fall protection while working at height? Everyone gets complacent with things they have done repeatedly however, there are methods to change this behavior, such as pre-task planning.

Pre-task planning, such as a JSA or JHA, allows for the safety culture to be transformed from a reactive “fix what caused the accident” culture to a proactive “find and fix hazards before the accident happens” one. Companies should not be simply reacting after something dangerous happens. They should strive to identify and eliminate hazards before an accident occurs. If a company can discover hazards when they are in an early stage and eliminate them, it improves system reliability and minimizes risk of an incident occurring. This, in turn, avoids system shutdowns and saves money.  For example, if a large leak is detected, a plant may need to shut down for a number of days to remedy the situation. Being able to predict the failure and fix it before it fails will result in significant financial savings.

Some basic steps to pre-task planning include:

  1. Defining the work assignment
    • What is the task at hand?
    • What written procedures, policies, and specifications need to be reviewed?
  2.  Identifying all job hazards
    • What could go wrong?
    • What is the worst thing that could happen if something does go wrong?
  3. Devising hazard controls
    • Do I have all the necessary training and knowledge to do this job properly?
    • Do I have all the proper tools and PPE?
  4. Performing work with new hazard controls
    • How will task be performed within the identified hazard controls?
    • How will this change the basic approach to performing the task at hand?
  5. Reviewing controls and providing feedback
    • What changes to the scope of work or hazard control measures occur?
    • What work processes need to be reviewed?

Effective pre-task planning will transform your safety culture from reactive to proactive by encouraging all levels of employees to actively participate in identifying and solving problems, reducing complacency and embodying the spirit of continuous improvement, and increasing overall safety awareness. The challenge is to engage your employees in a manner where they become empowered to complete and communicate a quality JSA or be an active participant in the company behavior-based safety process. The basics of hazard identification are a critical component to creating a safe workplace. As Benjamin Franklin said, “If you fail to plan, you are planning to fail.”

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Jay Bice H+M Industrial EPC

Jay Bice – HSE Manager at H+M Industrial EPC

Certificate of Technology in Occupational Health and Safety 

Jay has more than 20 years of industrial health and safety, experience in construction, pipeline environmental services and petrochemical facilities. He is responsible for developing and executing safety and health policy and objectives for H+M, as well as any sub-contractor workforce all of which represents exposure of a high risk nature. Jay provides management oversight to various safety and occupational health related programs. These programs include injury prevention, fire and emergency services, behavior safety, drug and alcohol prevention, training and occupational health. Jay is a member of the American Society of Safety Engineers.