As you might remember from previous posts, our plant is
nearly brand new. We had the usual
start-up issues but we’ve also had a ton of duh issues owing to a half-assed
project management, both from us and from our design engineering firm. We should have done better but the company
was worried about money; the design firm should have done better but they were
more focused on taking our cash.
I do have some bona fides for this sort of thing. I started life as a design engineer and
quickly determined my interests swayed more toward project management. The nice thing about the switch was that I
had enough design experience that I could divide my time between directing the
design and actually running the project.
I had always thought that design and management were nearly one and the
same but they aren’t. The designer is
the pilot and the PM is the air-traffic controller. If the pilots are flying around on their own
without much direction you soon have something close to chaos; yes, they have
an idea of what they are supposed to be doing, but there’s no coordination and
inevitably you have two planes landing on the same runway before one veers off
cussing the other.
I took the PM experience into maintenance management, but
again they aren’t the same. Projects
have a beginning and an end – maintenance does not. In my experience, the key resource in
projects is time and in maintenance it is people. There are similarities, but projects are a
sprint and maintenance is a marathon.
So you don’t want to take a marathon runner and put him in
the 100M, but that’s exactly what we did.
And it would come as no surprise that the project that completed the last
two parts of our plant was late. Way
late. Like so late that it led to the
financial Armageddon I wrote about a couple posts back. The guy we had running the project had
retired as maintenance manager at a large refinery, so you gotta believe he
knew how to manage a maintenance crew.
But he seemed to be lost. I never
saw a real schedule. There was one, but
it was for show and wasn’t used to manage.
He walked the site maybe once/week and though it wasn’t a huge project
it is improbable that he could compare actual progress with any work breakdown
structure. He relied on the design firm’s
site manager, and that guy was a bucket of warm spit. Camel spit.
An old, malnourished camel suffering from camel leprosy and who smoked
40 packs a day…
Now, I could probably write a book about the failures
involved, so this post might end up longer than usual. Feel free to skim… Maybe I’ll break it into two parts. Hey Bill Simmons – I caught your disease…
As an owner, you must first decide what you want from the
design engineer. In this case we had
already done the process design, but we had no one on staff who could run a
project (this was before I joined up)(and BTW I’m not intending to imply the
whole deal wouldn’t be FUBAR if I had been able to change the course of events
– it would have been less FUBAR, though…).
Therefore it made sense to find a design firm that would also buy all the
machines required by the process design and manage the construction, too. Hence, EPC (engineer, procure,
construct). Solid decision. A+
The next step is deciding the form of the contract. There are many ways to skin this feline and
someone has probably written a book on this so I won’t dive into this
particularly murky pool, but again it hinges on the skills of the people you
have to manage it. Since we didn’t have
such a person, we abdicated much of the responsibility and decided to use cost
plus fee (owner pays all costs, supposedly at zero margin for the EPC, and the
EPC gets a negotiated fee at the end, which is supposed to be their profit, but
they game the system to ensure they make money no matter what). Not bad.
B
As you might imagine, we had suitors lined up around the
razor wire to convince us that they would be the ideal beaus and gulls to take
our money in suitcases from our bank to theirs.
Whoops I mean to design and build our plant. There are many who can do it, and since life
is a bell curve, most are average. The
average sales pitch is WAAAYY better than the average performance, and in my
experience there is little correlation between the pitch and the
performance. As always, it’s who you
know, etc etc, and I suspect someone from the chosen EPC knew our CEO (no
evidence, just idle minds…). This
decision didn’t hurt, but it sure didn’t help.
C
At this point, you as the owner need to find someone to be
your liaison to the EPC. Ideally, their
prior experience would include building the Panama Canal, negotiating peace
between Israel and Syria ,
balancing the federal budget, and substituting for a kindergarten teacher. But since she was busy, we totally
punted. We figured a) too expensive to
bring someone in for this; b) we can use the folks we already have, and c) it
can’t be THAT hard. We put the chief
process engineer in charge of process design (including some procurement) and the
ex-maintenance manager in charge of construction (and the rest of the
procurement). Luckily they were good
friends and they kept it from becoming a total cluster, but it still was a 90%
cluster. Big no-no. D-
At this point you might think I’m foolish for designating
one person to be your go-to for the whole design/build, and I will grant you
that it is way more than a one-person job, even for a smallish project such as
our plant. Since I’m not writing said
book, and I don’t want to wear out my keyboard on a single post, I would
counter by saying it takes a small army to run a project well, but ultimately
you can only have one person setting direction.
Imagine what would happen if you shared management over your department
with someone else. Let’s say you are in
charge of operations until lunch and your partner (who your boss picked) is in
charge after lunch. What do you think
would happen every day at 1:01 PM?
Change! What does everyone hate? Change!
What is the surefire way to put your production in the ditch? You guessed it. How long would you put up with it? How likely is it that you would plant
yourself in the boss’s office and bitch until you’re blue? Did I make my point yet? Are you tired of hypothetical questions?
It all goes back to knowing who you are. In our case we were/are a process-driven
company, with process expertise coming out our eyeballs but only arrogance for
project management know-how. One of the
key things about project management is that everyone thinks they know how to do
it (esp. upper mgmt) but they don’t. Why
else does every major project you have ever heard of go long and over
budget? Think about it. Boston Big Dig? Freedom (Trade Center) Tower? Most people who build their own homes?
Ultimately the process design was finalized and the design
engineering completed. There were
mistakes made, but it’s a new process and those are excusable. Then we got out the shovels, and the company
liaison changed hands. And then the
carriage turned back into a pumpkin…
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