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- Written by: Carlos Delgado
What has made the human being what it is? We are not the strongest and we are not the fastest; we do believe to be the most intelligent, but to take advantage of that intelligence it has been necessary that we act in a coordinated way.
Thus were made the pyramids and empires, so came man to the moon and has launched ships that have landed on Mars. It is the ability to act in coordination what allows that intelligence, which the human being considers as its main asset, to transform ideas scattered in multiple individuals into concrete products and services that improve the situation of society.
“… the information industry has been the initial cause of the acceleration of technological change over the past two hundred years”. - Daniel Headrick
It is the speed and precision of human communication that has allowed the exchange and enrichment of knowledge and the coordination of actions. This is why Daniel Headrick points out: "Knowledge is the cause and effect of economic growth, and the information industry has been the initial cause of the acceleration of technological change over the past two hundred years"
The engineering and construction industry is not an exception, but rather a clear example of how proper communication allows the achievement of truly extraordinary endeavors, from the aforementioned Egyptian pyramids to the Panama Canal.
Thus, we have to recognize that the construction industry is highly dependent on communications between customer, supplier and various stakeholders, including civil associations, therefore the design of clear, timely and effective communications systems is the fundamental basis of any project to be executed.
Too often, as projects are implemented through multinational teams and in multicultural environments, communication problems increase and are no longer unique to the customer-supplier relationship or among diverse and heterogeneous stakeholder groups, moving into the internal structure of the project team.
Evidently, the project team and its leader are the focal point of all communications, therefore it is essential that the design of the communications plan should consider ways to mitigate any potential source of distortion generated by the natural dynamics of construction projects, the distance between the headquarters and the work site, the technical language, the cultural and organizational background, the native languages of the team members and other particular factors.
The project’s Communications Plan, therefore, becomes an indispensable tool and must consider, with particular importance, the contractual documents that usually include: the contract, the general and special conditions, the design documents and any other referenced documentation with specific requirements for records and reports.
The language of the project must be defined, as well as any specific need for official translation and, in case of discrepancy, which version prevails. While this may, and should, be defined in the contract, it is possible that in international projects the project team might include members native in languages not considered in the contract, therefore the Communications Plan should resolve language-related issues taking into consideration also the native languages of the team members.
Given the enormous amount and variety of information that is generated and managed during the execution of a project, it is essential to ensure that each team member and any stakeholder receive the specific information they require and no more. Otherwise, the overabundance of information will impede efficient work, slowing it down and preventing appropriate and timely decision-making.
In addition, it is necessary to recognize that the construction industry has specific documentation requirements related to labor, the environment, social responsibility and social issues that must be addressed.
For these issues, communication matrices and checklists are often very helpful.
The ability and communication skills of the project leader are essential. It is necessary to deploy effective communication, with varying degrees of depth and adjusted to the audience, with a project team often diverse and multicultural.
It should be recognized when there is a lack of communication skills in order to take corrective measures in a timely manner. The use of specialized translation staff, as well as the professional services of public and community relations consultants, are often very helpful.
Within the management of communications, meetings cannot be disregarded. Defining the types of meetings needed, their frequency, attendees and the use of agendas and schedules are of vital importance for achieving efficiency and protecting the productivity of team members.
One of the most sensitive issues within the communications planning of an engineering project is the definition of the construction communications workflow, from requests for information (RFI) to change orders. The exchange of information between the design office, project management, construction contractor, suppliers and the owner may affect not only the scope of the work contracted, but also the deadlines committed, with the risk of claims and conflicts. Contractual documents usually define much of the mechanics for the communications workflow and special care should be taken with respect to notification and response times.
In that communications workflow, daily reports are especially useful. These documents are daily records of site conditions on various topics: weather conditions, resources on site, work in progress and progress achieved, tests, instructions received, etc. They are generally of great value when separating responsibilities, quantifying claims and supporting causes of changes in scope and schedule modifications.
Another issue of particular importance are early warnings. In Latin American countries there is often a tendency not to give bad news and to wait until the last moment to report a risk, despite there are contracts that explicitly require early warning. This raises serious problems.
An early warning is actually very helpful, as it allows other stakeholders to take their own mitigation measures in a timely manner or at least assess their potential implementation. This is part of the concept of "one team": The success of a project is a success shared by all stakeholders, while failure will surely have serious consequences for most, if not all, of the parties involved.
Finally, the use Information and communication technologies in the engineering and construction market covers the entire spectrum of work from design and construction to facility operation. The use of BIM (building information modeling) technology to integrate the design and its application for VDM (virtual design and construction), as well as virtual reality applications and software for planning and control, risk management and information management are only the most recent stage in humanity improving its ability to act in a coordinated manner to achieve goals.
In times of change, when agility and economy are needed at all levels, the use of specialized services provides that precise mix of capacity, effectiveness and efficiency that organizations need to succeed.
At DC&R we are able to meet these requirements with professional solvency and the experience of more than 25 years in complex engineering and construction environments for heavy industrial markets of high demand such as mining, gas & oil, or energy, as well as for infrastructure and commerce.
DC&R also offers technical assistance services to businesses that need to interact with engineering and construction companies, from tender and project management to contract administration.
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- Written by: Carlos Delgado
In the dynamic landscape of industrial project management, efficiency and coordination are paramount for success. Advanced Work Packaging (AWP) has emerged as a strategic approach to optimize project execution by meticulously planning and packaging work activities. This article explores the principles, benefits, and implementation of AWP in modern engineering and construction projects.
Understanding Advanced Work Packaging (AWP)
AWP is a comprehensive methodology that integrates various project management techniques to enhance productivity, mitigate risks, and streamline project delivery. At its core, AWP focuses on breaking down complex projects into manageable work packages, aligning engineering, procurement, and construction activities, and fostering collaboration among stakeholders.
Key Components of AWP
“AWP integrates various project management techniques to enhance productivity, mitigate risks, and streamline project delivery”
1. Work Breakdown Structure (WBS):
AWP begins with the development of a detailed Work Breakdown Structure, which decomposes the project scope into smaller, actionable tasks. Each work package is defined based on specific criteria such as discipline, location, and schedule.
2. Work Packaging and Sequencing:
Once the WBS is established, work packages are grouped and sequenced logically to optimize resource utilization and minimize dependencies. This step ensures that activities can be executed in parallel whenever possible, accelerating project timelines.
3. Interface Management:
A critical aspect of AWP is managing interfaces between different work packages and project stakeholders. By proactively identifying and resolving interface conflicts, AWP reduces rework, delays, and cost overruns associated with coordination issues.
4. Integrated Execution Planning:
AWP emphasizes integrated planning across all project phases, from conceptual design to commissioning. This holistic approach enables early identification of constraints, resource requirements, and risks, facilitating informed decision- making and proactive mitigation strategies.
5. Performance Measurement and Control:
Throughout the project lifecycle, AWP relies on robust performance metrics and KPIs to monitor progress, identify deviations from the plan, and implement corrective actions promptly. Real-time visibility into project performance enables stakeholders to address challenges proactively and optimize project outcomes.
Benefits of AWP Implementation
1. Enhanced Schedule Certainty:
By meticulously planning and sequencing work activities, AWP minimizes schedule disruptions and improves predictability. This leads to more reliable project schedules and enables stakeholders to meet critical milestones consistently.
2. Improved Cost Control:
AWP enables proactive management of project costs by optimizing resource allocation, minimizing rework, and reducing schedule delays. The streamlined workflow and enhanced coordination result in cost savings throughout the project lifecycle.
3. Enhanced Collaboration:
AWP fosters collaboration and alignment among project stakeholders, including owners, contractors, engineers, and suppliers. By promoting transparency and communication, AWP cultivates a collaborative project environment conducive to innovation and problem-solving.
4. Risk Mitigation:
Through proactive interface management and integrated planning, AWP mitigates project risks associated with coordination failures, scope changes, and resource constraints. Early identification of risks allows stakeholders to implement risk mitigation strategies effectively.
5. Quality Improvement:
AWP emphasizes adherence to quality standards and specifications throughout the project lifecycle. By integrating quality assurance processes into work packaging and execution planning, AWP enhances the overall quality of deliverables and reduces rework.
Implementing AWP in Practice
Successful implementation of AWP requires a structured approach and commitment from all project stakeholders. Key steps include:
1. Executive Sponsorship:
Securing executive buy-in and leadership support is essential for driving AWP adoption and overcoming organizational barriers.
2. Training and Education:
Providing comprehensive training and education to project teams on AWP principles, tools, and best practices fosters a culture of continuous improvement and alignment.
3. Technology Enablement:
Leveraging advanced project management tools and technologies, such as integrated project delivery platforms and digital collaboration solutions, enhances AWP effectiveness and efficiency.
4. Continuous Improvement:
Regularly evaluating and refining AWP processes based on lessons learned and feedback ensures ongoing optimization and sustainability.
Conclusion
In an era characterized by increasing project complexity and competitiveness, Advanced Work Packaging (AWP) offers a strategic framework for optimizing project execution and delivering superior outcomes. By embracing AWP principles and practices, organizations can enhance schedule certainty, cost control, collaboration, and risk mitigation, ultimately driving project success in today's dynamic industrial landscape.
In times of change, when agility and economy are needed at all levels, the use of specialized services provides that precise mix of capacity, effectiveness and efficiency that organizations need to succeed.
At DC&R we are able to meet these requirements with professional solvency and the experience of more than 25 years in complex engineering and construction environments for heavy industrial markets of high demand such as mining, gas & oil, or energy, as well as for infrastructure and commerce.
DC&R also offers technical assistance services to businesses that need to interact with engineering and construction companies, from tender and project management to contract administration
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- Written by: Carlos Delgado
Artificial intelligence (AI) has become a hot topic in the last months and today is available to everybody. So, can it be really useful in our daily life? What about our work? And, if some businesses start using AI to perform some or all their core tasks, have those business a real advantage?
My company’s work is focussed in consultancy for the engineering and construction market. Consultancy is a business highly dependent of know-how and experience. Our products are documents based on facts that are analyzed using best-practices and world- recognized standards, using that know-how and experience.
What's the best way to use an artificial intelligence assistant in a consultancy business in the engineering and construction field?
A couple of days ago I downloaded an AI assistant software and asked the following question: What's the best way to use an artificial intelligence assistant in a consultancy business in the engineering and construction field?
Here comes its answer:
“An artificial intelligence assistant can be extremely beneficial in a consultancy business in the engineering and construction field. Here are some ways it can be used:
1. Data analysis: An AI assistant can analyze large amounts of data quickly, which can help you identify patterns, trends, and insights.
2. Predictive modeling: With the help of an AI assistant, you can create models that can predict future scenarios based on past data, which can help you make better decisions.
3. Automated reporting: An AI assistant can automatically generate reports based on data it has analyzed, saving you time and effort.
4. Virtual assistants: You can use AI-powered virtual assistants to provide guidance to clients 24/7. This can also help you increase your customer satisfaction rate.
5. Chatbots: Chatbots can be used to provide quick answers to customer queries and to direct them to specific resources on your website.
6. Safety monitoring: An AI assistant can monitor safety data in real-time, identifying potential hazards before they become accidents.
Overall, an AI assistant can help you streamline your operations, reduce costs, and improve your decision-making process.”
All right, just to be fair, that answer seems pretty reasonable, but so far reflects the AI assistants’ capacity to deal with large amounts of data and extract tendencies and forecasts, as well as answer typical questions from customers. The key being “so far”.
Can AI have the equivalent to a “professional opinion” or an “expert opinion”? Putting aside the moral component of this issue, it seems pretty obvious that sooner or later (probably sooner rather than later), AI systems will be able to provide technical opinions indistinguishable from professional opinions from human experts. With one important difference: AI systems are able to take into consideration all data available form any valid source and therefore AI expert opinions (there is no way here to use the “professional” label) have the potential of being more reliable than human expert opinions.
What that does mean for businesses like consultancy in any field? We are here talking about lawyers and tax advisors also, mathematicians, researchers, etc. The main challenge to use AI assistants is to ask the right questions, to load all the relevant data, the facts, since the AI assistant will have (actually, it already has) the capacity of selecting all the relevant standards, regulations, laws, precedents, best practices and the professional opinion of human experts that dealt with similar cases before.
How can we, the consultants, compete with that? I believe that we can not. AI is here to stay and it will thrive.
I am not talking here about the small and repetitive tasks such as find tendencies and develop forecast from large amount of data or answer typical questions from customers, which is already being done (like the chatbots, that now almost every bank, insurance company and medical service supplier seem to have). Those task must be delegated to AI systems or the costs battle will destroy the “late adopters”.
I am talking about the core of the consultancy services: the expert opinion. Our best chance is to assimilate AI in our businesses and use it as our own “expert consultant”. The human consultant focus must be in selecting and loading the right data, developing the right questions and assess the "AI-assistant´s expert opinion" obtained. Speed and accuracy will leave no alternative to human consultancy services. The “early adopters” will have a real advantage.
As it seems pretty obvious, right now I am exploring how to incorporate AI into my own business. There is no time to lose.
In times of change, when agility and economy are needed at all levels, the use of specialized services provides that precise mix of capacity, effectiveness and efficiency that organizations need to succeed.
At DC&R we are able to meet these requirements with professional solvency and the experience of more than 25 years in complex engineering and construction environments for heavy industrial markets of high demand such as mining, gas & oil, or energy, as well as for infrastructure and commerce.
DC&R also offers technical assistance services to businesses that need to interact with engineering and construction companies, from tender and project management to contract administration.
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- Written by: Carlos Delgado
It is a tricky issue, I have found many clients who from the first meeting said, clearly and directly, "we do not want any extra costs." Furthermore, a client sent a model contract in which it was intended that my employer, at that time the winning contractor of the award, declare that he "waived any request for extra costs or time extensions for any and all concept".
I have also been on the other side, representing the owner and seeing how the entire contractual system was prepared in order to avoid as much as possible the increase in the amount and the term of the contract. Moreover, on some occasion our legal advisor - partner of a well-known law firm -, since we were the owner and his agent, expressly told the contractor with whom we negotiated: “construction is classified in the same category as the games of chance”. No one told me that story, I was there, and it remained indelibly engraved on me. I never investigated if something like this could be true or was simply a negotiating position, but what struck me was the ease with which the lawyer blurted it out to the contractor. Having been a contractor for much of my career, the expression hit me. I really felt pain inside my chest.
I started my career in a technical department, designing and budgeting. It is a generally arduous task. If the project is fully designed, the important thing is to properly calculate the quantities and get good prices, in addition to properly estimating the labor and equipment. When the project is not well developed and the client wants the bidder to include the design and assume the risk of errors (all within the contest term), the issue gets really dangerous. These are the famous EPC (Engineering, Procurement and Construction) projects and, especially when the client asks for a Lump Sum, the idea is that the bidder's price and term include everything and there is no possibility of presenting extra costs.
Now, is it really possible to run a project that does not have any extra costs? I find myself in the need to state that it is not impossible, but it is really highly unlikely, and I will go on to explain the reason.
The only way that a project does not have extra costs (I include here the concept of time extensions) is if some conditions are met: (i) the design is complete and perfect, it does not have any flaws or deficiencies and it everything has been planned, (ii) the owner does not introduce any changes during the execution, (iii) the owner is capable of, and manages to, fulfill perfectly all his obligations, from the delivery of the site and information, to the acquittal of any query or procedure within the deadlines, as well as the provision, timely and on the spot, of any supply under its responsibility; and (iv) there are no unforeseen events or technical conditions, usually uncontrollable, on the ground, weather or with neighbors. There may be a few more, but these are the most important.
Note that none of the conditions mentioned are related to the executor. That has a simple explanation, no matter what difficulties or problems the executor has, they are part of his responsibility, which is why none of them will entitle him to an extra cost. I make this clarification because it has been a common denominator that clients respond to the contractor that they do not understand how claims and requests for extra costs or extensions of time never mention the problems of the contractor.
As is easy to see, hardly all conditions will be met, even in an EPC contract. There is more to discuss about EPC contracts, but that will be the subject of another article.
The bottom line here is to discuss whether the extra costs are positive or not. In fact, if the need for an extra cost arises, it is because said work was necessary and positive for the project. However, it is often the case that the owner is reluctant to spend more than he originally supposed and prefers to find some way for the contractor to carry that extra cost, in addition to considering that the additional cost requested by the contractor is greater than necessary.
In this scenario, especially when the work is essential to continue the execution of the work, the contractor seeks a quick approval because a delay will impact his general expenses
and generally presumes that the client, whatever the number presented, will accept only one fraction of it - if any at all - no matter how good and clear the support information is; which is why the contractor will feel compelled to submit a larger number than is strictly necessary.
We see here a "self-fulfilling prophecy", the client thinks that he will receive an excessive number or time and will be tempted not to recognize it or reduce it to the minimum possible; while the contractor, waiting for that reaction, will actually present overestimated values, time or both.
The roots of extra costs are generally in the failure of one or more of the four aforementioned hypotheses: (i) the designs are not complete or perfect, (ii) the owner makes changes, (iii) the owner has a problem with one or more than their responsibilities or (iv) something unforeseen appears on the ground (unexpected rock, for example), weather, etc.
None of this is necessarily "bad" or deserves a "culprit." Methodologies such as VDC (Virtual Design and Construction) improve designs, but perfection does not exist. It is also natural and often positive for the client to introduce changes that improve some aspect of the project and that, although they generate an increase in construction costs, will probably allow significant savings during the investment life cycle, seen as a whole.
The issue here, as in everything, is who pays the bill, who bears the cost of variations in construction. The reality is that, as in any field, the client pays everything, unless it is an error of the executor. The errors or delays of the executor or of any of its suppliers do not generate the right to request extra costs or time extensions.
If something was missing in the design, and that fault would have been timely corrected, the project would have had a higher cost from the beginning. The extra cost would have "arisen prior" to the selection of the contractor.
An error in the design is something more complex. If it is timely detected and does not generate rework on site, the cost of modifying the design can and should be borne by the designer and the change on site (no rework), if any, must be borne by the owner. Now, that change can even be a cost reduction. But if the error is not caught in time and causes rework in the field, the problem is that rarely would a designer have the capacity to bear those costs. There may be, and most likely will be, some type of penalty towards the designer, but the balance of cost, which will be the largest part, will end up being covered by the client, simply due to economic capacity.
The case of changes introduced by the owner is usually the clearest. The concept of the extra cost is hardly discussed, and it all comes down to negotiating the impacts value, considering the “self-fulfilling prophecy” of recognizing only a fraction because the claimed effect is presumed overvalued.
Finally, there are the site conditions, including ground, weather, neighbors, and the like. I have seen unnecessary discussions because rock appeared when excavating that was not detected in the soil study, but the contractor made a site visit before issuing the proposal and it is understood that there he became familiar, or should have done it, with the construction site.
For some years now, a new family of construction contracts has been introduced, which are managed under a concept of collaboration between the owner and the executor.
The general concept is that the work is performed with "open books", the client covers all costs and the executor earns a fee. The design is developed with the best available tools, including VDC, the early works are carried out with flexible systems allowing time to complete the design, and any additional costs are analyzed as a team. The client covers all costs, and there is a system of prizes and penalties towards the executor, but only against his fee. This means that the executor, in the extreme, may lose his fee, but all costs are covered, so he has no risk of loss. For their part, the owner sees the real costs and stops incurring the risk of overvalued costs for any change.
I am convinced that this is the way: the owner has a need and hires a specialist to solve it in a technical way and with the real costs shown, in exchange for a reasonable fee, but it is the owner who covers all costs. The parties divide the tasks and risks based on who is in the best position to afford them.In short, the problem is not and never has been the appearance of extra costs, the problem has traditionally been the antagonistic way of the relationship between owner and client;the secrecy in costs that forces one party to overload them and the other to cut them, both blind to what happens at the other side of the table; and the fear of both of the parties: the owner is afraid of exceeding his budget and the contractor is afraid of losing.
The extras costs are not angels nor demons, they just “are”. The secret is to migrate to a way of working that considers both parties as single team: the owner who knows what he wants, the “what”, and the executor who knows how to do it, the “how”.
In times of change, when agility and economy are needed at all levels, the use of specialized services provides that precise mix of capacity, effectiveness and efficiency that organizations need to succeed.
At DC&R we are able to meet these requirements with professional solvency and the experience of more than 25 years in complex engineering and construction environments for heavy industrial markets of high demand such as mining, gas & oil, or energy, as well as for infrastructure and commerce.
DC&R also offers technical assistance services to businesses that need to interact with engineering and construction companies, from tender and project management to contract administration.