BASF - Design Management

BASF ACAI/NASA - WORKSHARE & DESIGN MANAGEMENT

Direct Savings: US$ 3,000,000 (3% EPCM contract value)

Losses Avoided: US$ 5,000,000 (5% EPCM contract value)

Other: + Project Viability

+ Stakeholders Synergy

+ Design Quality

+ Construction Planning

+ Purchase Power

- Interface Problems

+ Budget Adherence

+ Schedule Adherence

THE CHALLENGE:

BASF was founded in 1865 in Germany and today is the largest chemical company in the world, with annual revenues of US$101 Billion, 376 units and more than 112,000 workers around the world.

In August 2011, BASF launched the largest investment program in its 140 years of existence: the creation of 2 large-scale Acrylic complexes with global production capacity, one located in Nanjing-CHINA (NASA) and the other in Camaçari-BRAZIL (ACAI), an investment worth US$1.25 Billion. EPCM general condition were quite challenging, setting first product delivery by December 2014 and a bold bonus/penalty program which would reward WORLEYPARSONS for anticipations and punish for delays.

The complexity of the project demanded a truly global EPCM company, with experience in large scale projects in both CHINA and BRAZIL, and proven WORKSHARE capability. While still on the proposal phase, IATEC Plant Solutions was invited by WORLEYPARSONS to provide technical support to its São Paulo office which were still on its early days.

One of the first challenges was to help WORLEYPARSONS to secure BASF contract award. Supported by its international analysts, WORLEYPARSONS had already reduced software/hardware estimates to US$ 2,150,000 (-10% original one) from US$ 2,400,000, however, this was not enough. Further budget cuts were still necessary.

IATEC Plant Solutions went deep into the study of the necessary software/hardware infrastructure in order to revise down WORLEYPARSONS estimate and give a new breath to its proposal. Project strategies, productivity estimations, licensing amount and mode , training costs and even taxes were all revised. After this process IATEC Plant Solutions presented a new budget of approximately US$ 1,200,000 (-50% original one), only by cutting excesses introduced probably by personnel with little experience in project systems. That is, still in proposal phase IATEC Plant Solutions participation in the project generated gains around +US$ 1,000,000 (1% contract value).

The challenge was not only financial, it was also a technical one. It was necessary help WORLEYPARSONS to show BASF that it was technical able to handle such huge challenge. IATEC Plant Solutions was in charge of all design management in WORLEYPARSONS BRAZIL and its interaction with WORLEYPARSONS CHINA, in order to create a coherent WORKSHARE strategy across offices.

To bring costs down and optimize resources it was defined maximum synergy between São Paulo and Beijing office should be attained. The units common to both projects (SAP and GAA, called "twins") would be designed in CHINA and the rest of the units (BA, CTF and INFRA, called "unique") would be designed in BRAZIL. Reference databases would be under CHINA responsibility due to the larger variety of materials required by "twins" design.

Schedule also demanded maximum compression, and for this both offices needed to work in a synchronized way. There should be constant information exchange and perfect activity sequencing to avoid any waste of resources in the form of hold-ups and delays. For this, IATEC Plant Solutions used just-in-time production techniques to organize the WORKSHARE process.

In November 2011, the success of these and other efforts resulted in the contract award to WORLEYPARSONS. São Paulo office would be in charge of ACAI and Beijing and Nanjing offices in charge of NASA, a contract of approximately US$ 100 million and duration of 3 years.

However, there was no time to celebrate. Bring together approximately 500 professionals to work in a highly coordinated and integrated way across the whole INTERGRAPH SmartPlant Suite (PDS, SmartPlant PID, SmartPlant Instrumentation, SmartPlant Electrical, SmartPlant Review, SmartPlant Foundation and SmartPlant Materials) in an environment under severe IP protection standards, separated by more than 18,000Km, a 11 hour time difference and very different project cultures, required IATEC Plant Solutions to be always one step ahead.

THE WORK:

One of the first measures taken by IATEC was to send a professional to CHINA to follow all the configuration process of the database which would be used in both sites. This measure was taken to ensure that all configurations (coordinates, unit system, materials, properties and naming convention) made by Beijing office would be readily compatible with the work done in São Paulo office, preserving the synergy assumption which were the main guideline of the project.

Meanwhile, another professional was in charge to prepare the whole infrastructure of both engineering (São Paulo) and construction offices (Camaçari) in Brazil. This job included setting up servers, clients, workstations, train personnel, create technical specifications and implement work procedures. All this happening at the very same time that professionals were mobilized sp as to make them productive at day-one.

IATEC Plant Solutions also provided support for the implementation in the Brazilian offices of some WORLEYPARSONS corporate global systems such as SmartPlant Foundation (SPF) and SmartPlant Materials (SPM).

IATEC Plant Solutions participation also enabled WORLEYPARSONS BRAZIL to leverage on the basic engineering work done so far by BASF on SmartPlant P&ID (SPPID) and SmartPlant Instrumentation. The databases developed along basic engineering and FEED phase by BASF were integrally used by WORLEYPARSONS BRAZIL during detailed engineering phase what required constant interaction between IATEC Plant Solutions and BASF personnel in Germany to understand and mobilize the complex customizations created by BASF for both systems.

The quick turnover of project systems by IATEC Plant Solutions made possible to anticipate the beginning of the design work. Right in the first month, 3D model was already in use by planning and construction teams to support the rigging analysis and assembly sequencing. Models were also used to procurement to plan the necessary logistics to transport material coming from CHINA.

All this made possible by another innovation brought by IATEC Plant Solutions: the automatic update every 12 hours of 3D models for ALL project participants in Brazil and China through AUTODESK Navisworks Freedom (basic navigation) and INTERGRAPH SmartPlant Review (more detailed navigation and search). A new technology created by IATEC Plant Solutions allowed user to easily access only the most recent review sessions not only eliminating the risk of outdated models across the project but also bringing everybody to work under the same source of information.

With 3D models at the reach of a click, information requests from support areas, which frequently diverted engineering team´s attention, started being autonomously sourced by themselves. This measure made engineering more productive (5%) once it could now focus on the design work, saving WORLEYPARSONS BRASIL from -US$100,000 loss of non-reimbursable hours. The greatest benefit of this methodology, however, was the higher integration level among all project disciplines which began to communicate through the same "language": the 3D Model, unique and available to all.

Once initiated the design process of the units and construction planning now it was necessary to prepare the materials management system to receive and process the information needed by the procurement team. Beyond all synergy brought by the WORKSHARE, BASF also decided to use WORLEYPARONS global procurement network, which integrated several offices around the world around SmartPlant Materials (SPM). The gigantic supply chain operation involved numbers like:

6000 Ton. Steel Structures;
1500 Ton. Piping Material;
2000 Ton. "break bulk" load;
600 Equipments (18 "heavy-lift" > 300 Ton.);
230 Containers.

IATEC Plant Solutions took part in all SPM specification process in order to bring it closer to project needs in terms of codification, origin, timing and information structure. IATEC Plant Solutions also helped to align expectations, requirements and procedures between engineering disciplines and the client so as to maximize the benefits brought by the use of SPM.

Estimations tell that the use of SPM made possible to the procurement team to enlarge the vendor-list up to 5x traditional ones. Suppliers from countries like Turkey, Israel, Bosnia which combined low cost and high quality entered the radar, reducing material costs up to 20%, what in aggregated value represented savings around +US$ 30,000,000 for the project.

The detailed control of purchasing, inspection, expediting and transportation made possible by the use of SPM helped to detect problems at their very early stage and through immediate action avoid delays, loss of material, and purchase in duplicity which are so common in large-scale entrepreneurships and which brings losses around 10% on material purchases (US$15,000,000 in this case).

By march 2012, "unique" units design were going steady ahead, however, WORLEYPARSONS BRAZIL realized that it could not wait the first "twins" models to be finished by WORLEYPARSONS CHINA to start interconnection studies. Errors in this area could escalate through the lay-out and cause severe damage to design and construction schedules.

FEED phase models designed by BASF could work as an initial input, however, they have been done in Germany using AVEVA PDMS, a system completely incompatible with INTERGRAPH Suite. Wait interconnection models from CHINA (1 to 2 months), redesign in PDS parts of the FEED model that could help in the interconnection studies (-US$20,000), or hiring a specialized firm to "convert" PDMS models into PDS (-US$ 75.000), all did not seem reasonable alternatives, besides they brought about the risk of information loss of integrity.

That´s when IATEC Plant Solutions came up with a quite simple solution to reference PDMS models in PDS via MICROSTATION through a tool know as AVEVA ExPLANT-I. This work was very quickly performed by a fraction of the cost (US$180) compared to alternatives, enabling WORLEYPARSONS BRAZIL to promptly initiate the interconnections design and anticipate eventual lay-out problems under its scope.

One of the main worries of WORLEYPARSONS regarded the fact that the plot upon which ACAI complex was to be built had been previously occupied by a decommissioned BASF unit, and thus, there was the risk of existing underground structures interfering with new ones under design. Removing all these old structures could cost around -US$2,000,000 and would take a hard to calculate time, potentially compromising the earthworks and foundations schedule.

To tackle this problem created a multidisciplinary UNDERGROUND modeling strategy involving the CIVIL, ELECTRICAL and PIPING disciplines. Existing structures were modeled in 3D based on field surveys allowing designers to identify and eliminate interferences and minimize removal operations. This work represented a very small additional cost (US$20,000) compared to proposed alternatives. In the end, UNDERGROUND design was accomplished without any old structure removal saving more than half initially forecasted value for the task (+US$ 1,000,000).

Under BASF and WORLEYPARSONS requirement, IATEC also design two important project procedures: Model Progress Execution Plan and Model Review Execution Plan.

The Model Progress Execution Plan was created to attend to the fine-grained project information standards demanded by BASF and used a unique measurement methodology created by IATEC Plant Solutions.

Information stating the model progress of each element was reported directly into the database by designers themselves, and became available through a color-coded 3D model or 4D animations.

On a weekly basis, this information was extracted from the database and aggregated into a series of progress reports simultaneously sent to WORLEYPARSONS and BASF, allowing for a precise control of the deviations and anticipate possible project bottlenecks (personnel/information/resources) that could affect the overall schedule.

The creation of the Model Review Execution Plan joined the best practices enhanced by IATEC Plant Solutions expertise to the technical rigor demanded by BASF. This document defined step-by-step how design review meeting should be approached at each level (30%, 60%, 90%) in order to avoid comments to fall on low importance or still not ready for inspection.

With the help of the methodology created by IATEC Plant Solutions, review meetings became high-level technical forums where WORLEYPARSONS discipline leaders could share their solutions and answer their doubts with BASF specialists from all over the world.

At the end of the Model Review Meetings a tracking document (Model Review Tracking Index) was created listing all points that should receive attention and checked at the next review meeting.

RESULTS:

The importance of IATEC Plant Solutions participation on the project become evident when comparing planned and execution curves at the most critical part of the project which is the first-half. Errors and mistakes at the initial phase frequently escalate along the project and result in heavy losses during the second-half and construction.

The synergy among WORLEYPARSONS offices in Brazil and China was another great success. IATEC Plant Solutions made easy something previously thought to be highly complex (and risky). The two teams which initially seemed so different and distant ended working as if they were only one.

Once again, IATEC Plant Solutions demonstrated that deep project knowledge results in well configured tools and precise work methodologies, essential elements to extract the most out of any technology investment.

Overall, IATEC Plant Solutions resulted in direct economies around US$3,000,000 (3% contract value) to the entrepreneurship by means of optimized resources, higher productivity and intelligent solutions. IATEC Plant Solutions effectively helped WORLEYPARSONS to attain the performance bonus which comprised of an important part of the desired project operational margin. More, IATEC Plant Solutions prevented problems that could have cost WORLEYPARSONS up to -US$5,000,000 (5 % contract value) in lost bonuses (-3%) and contractual fines (-2%).

ACAI Complex is in final phase of construction and is expected to start commissioning in December 2016 without delays.

BACK TO CASES