Prefabrication & Modular Construction Congress · A.Sanchez: Prefabrication & Modular Construction...

Prefabrication & Modular Construction Congress Overcoming Schedule Challenges by Using Modular Construction

Alberto Sanchez – Project Execution Manager Shanghai, China March 26, 2013

Prefabrication & Modular Construction Congress

A.Sanchez: Prefabrication & Modular Construction Congress, Shanghai - China

Modularisation Overview

Case Study: Small-Scale Chemical Plant

Advantages and Disadvantages of Modular Construction

A Different Way to Deliver Projects

Quick Selection Criteria for Modularisation

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Agenda

Q & A


What is Modular Construction?

Modular construction is a method for building parts of a project (modules) remote from the permanent project site

The module(s) is built off site usually to the maximum economical and manageable size

The assembled module(s) is transported to the final permanent site by either one or a combination of road, rail, waterways and air modes for installation (integration)


Why Modular Construction?

Challenging Market Conditions

• Adverse site and local area conditions

• Difficult permitting and regulatory compliance

• Limited plot space • Labour availability

and quality • Difficult labour

conditions and high labour costs

• Productivity issues

• Extreme weather conditions

Demanding Project Drivers

• Competitive conditions (market share)

• More demanding schedules (requirements to get product to market rapidly)

• Improved safety, quality

• Cost savings • Project feasibility

and risk

Alternative Construction Methods

• Prefabrication (e.g. prefabricated buildings

• Preassembly (e.g. pre-assembled racks)

• Modularisation (e.g. skid-mounted units)







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Agenda

Q & A



Concept Design &

Construction Pre-Planning

Modules Fabrication &

Pre-Commissioning

Delivery & Integration

Identify Modularisation Opportunities &

Limitations Balance of

Plant Design

Selection of Balance of

Plant Contractor

Site Preparation & Infrastructure Construction

Modules Design

Selection of Modular Fabrication Contractor

Parallel activities • Compress schedule (civil work while pre-assembling) • Improve critical path







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Agenda

Q & A


Case Study: Chemical Plant

Project Value: 80 MM US$ Location: Confidential Start Date: Jan 2007 Target Date: May 2008 Contract Type: EPCM +

incentive 60 pieces of equipment 10,000 LM of piping 1,200 ton of structural steel 50,000 LM electrical cables


Case Study: Major Challenges

Demanding schedule, time to market requirements

Permitting and regulatory requirements

Limited plot space and laydown Limited local labour Political unrest Risks from high elevations works Extreme weather conditions Volatile material and local labour

costs

https://brandcentral.worleyparsons.com/sites/pxpress_archiving/People/HSE/ICA-harness.jpg


Stick-Built Modular What’s the right construction strategy for the Project?


Case Study: Stick-Built Option

TARGET DATE

6 MONTHS OF LATE

PRODUCTION


Data

Finish Date of:

000023 - INITIAL PRODUCTION

Analysis

Iterations:

1000

Statistics

Bar Width:

week

Highlighters

P10 - Best Case

03/12/2008

P50 - Most Likely

25/12/2008

P90 - Worst Case

14/01/2009

14/11/2008

04/12/2008

24/12/2008

13/01/2009

02/02/2009

Distribution (start of interval)

0

20

40

60

80

100

120

140

160

180

H

its

0% 06/11/2008

5% 27/11/2008

10% 03/12/2008

15% 05/12/2008

20% 09/12/2008

25% 12/12/2008

30% 16/12/2008

35% 18/12/2008

40% 19/12/2008

45% 23/12/2008

50% 25/12/2008

55% 26/12/2008

60% 29/12/2008

65% 31/12/2008

70% 01/01/2009

75% 06/01/2009

80% 07/01/2009

85% 12/01/2009

90% 14/01/2009

95% 19/01/2009

100% 12/02/2009

Cum

ulat

ive

Freq

uenc

y

000023 - INITIAL PRODUCTION : Finish Date

Schedule Risk Analysis: Stick-Built

The stick-built option shows a potential delay of 6 to 8 months from the production target date of May 2008


1%

2%

3%

8%

10%

15%

20%

24%

26%

64%

001 - Long permitting and regulatory requirements

009 - Unforseen ground conditions

008 - Late mobilisation to site

005 - Extreme weather conditions at the site

002 - Limited plot space and laydown

010 - Local labour demonstrations

004 - Risks from high elevations works

007 - Low site productivity

003 - Limited local labour

011 - Late equipment deliveries

The result of the schedule risk analysis shows that the main causes of delays are particular to local or site risks, which are more difficult to manage

Schedule Risk Analysis: Stick-Built


Client’s Questions: Why does construction take so long? How can schedule be reduced?

Client’s Position: Long time for local approvals and regulatory

requirements increase risks of delays Strong requirements to get product to market

on time

Strategic Decision

Client’s Requirement: Essential change is required to deliver project faster Relocate work to offsite locations with a more controlled working

environment (modular construction approach)







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Agenda

Q & A


Field labor productivity is much less than shop productivity Field labor costs are higher than shop labor costs Weather may affect the construction phase Plant process/system allow modularisation Local labor requirements do not restrict use of modular

construction Transport envelope allows transportation of economical

modules size / weight Site permits and regulatory approvals are not readily available Lifting and transportation available, economical Fabrication capacity is available Schedule is important or critical



Strategic Decision Framework


Case Study: Modular Option

TARGET DATE

PRO

DU

CTI

ON

PO

TEN

TIA

LLY

AH

EAD

OF

TAR

GET

DA

TE


Data

Finish Date of:

000020 - INITIAL PRODUCTION

Analysis

Iterations:

1000

Statistics

Bar Width:

week

Highlighters

P10 - Best Case

08/05/2008

P50 - Most Likely

26/05/2008

P90 - Worst Case

11/06/2008

28/04/2008

18/05/2008

07/06/2008

27/06/2008

17/07/2008

Distribution (start of interval)

0

20

40

60

80

100

120

140

160

180

200

220

240

H

its

0% 16/04/2008

5% 06/05/2008

10% 08/05/2008

15% 12/05/2008

20% 14/05/2008

25% 16/05/2008

30% 19/05/2008

35% 20/05/2008

40% 22/05/2008

45% 23/05/2008

50% 26/05/2008

55% 27/05/2008

60% 28/05/2008

65% 29/05/2008

70% 30/05/2008

75% 03/06/2008

80% 04/06/2008

85% 06/06/2008

90% 11/06/2008

95% 18/06/2008

100% 21/07/2008

Cum

ulat

ive

Freq

uenc

y

000020 - INITIAL PRODUCTION : Finish Date

Schedule Risk Analysis: Modular

The modular option shows a high probability to meet the production target date of May 2008


5%

6%

8%

10%

12%

23%

23%

25%

26%

32%

015 - System(s) not completed in the fabrication yard

001 - Long permitting and regulatory requirements

013 - Key constructability aspects of the modularization not captured in the design

012 - Late design changes (low tolerance modularised plant)

011 - Late equipment deliveries

008 - Late mobilisation to site

002 - Limited plot space and laydown

009 - Unforseen ground conditions

004 - Risks from high elevations works

010 - Local labour demonstrations

Schedule Risk Analysis: Modular

The result of the schedule risk analysis shows that the main causes of delays are now particular to offsite risks, which are easier to manage


Cost Analysis

(*) Excludes costs associated with losses in production or market shares due to late production date using stick-built

Modular Stick-Built Delta Construction Construction Mod-SB Project Management Cost $5,411,533 $5,614,557 $203,025 Engineering & Design Cost $7,305,791 $6,977,790 $328,001 Major Equipment Cost $5,997,570 $5,997,570 $0 Bulk Materials Cost $8,397,044 $7,921,740 $475,304 Site Preparation Cost $2,687,054 $2,851,826 $164,772 Fabrication Shop Labour Cost $4,535,610 $3,372,180 $1,163,430 Transportation & Lifting Cost $1,626,990 $1,182,960 $444,030 Construction Management Cost $1,713,940 $2,489,750 $775,810 Field Subcontract Cost $12,006,760 $13,927,680 $1,920,920 Direct Field Labour Cost $21,673,400 $25,462,470 $3,789,070

Total Estimated Cost = $71,355,692 (*) $75,798,524 $4,442,831


What? Small-Scale Chemical Facility How? Modules built offsite Final assembly / alignment on site Why? Strong requirements to get product to

market on time (business needs) Local or site risks reduction Results? 6-month schedule reduction 4.4 MM USD cost savings Project risks reduction

Conclusions







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Agenda

Q & A


► Improved safety ►Schedule compressed (civil work while pre-assembling) ►Shorter onsite duration ►Less field labour required (lower work density) ►Cost of housing the field labour at site is reduced ►Higher shop productivity ►Weather related delays are minimized ►Benefit from cheaper labour in low wage area or country ►Lower overall project costs ►Quality is improved (controlled work area) ►Permitting advantages ►Reduce plant footprint ►Simplified foundation requirements ►Decreased site risks

What are the benefits?


►Additional front-end planning ►Early decision whether to modularise or not ►Additional engineering & design considerations ►Additional transportation logistic considerations and costs ►Additional interface considerations ►Less flexibility for design changes ► Increased structural steel required ►Estimating & cost control are much more complex ► Insurance costs more than conventional ►Layout of plant critical for access ►Rejection to take work outside the country

What are the impediments?


THANK YOU!

Prefabrication & Modular Construction

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