Don’t Flub Front-End Loading

Dec. 22, 2014
Ignoring the early phases of front-end loading can imperil project success

An operating company asked an engineering firm to develop a thermal oxidizer/scrubber system with triple redundancy. The firm reported back that the system would cost about $30 million. “That’s way too expensive,” the company responded. Finally, after three attempts, the company thanked the firm for its time, paid for the design, and said it had $10 million in mind. Now, here’s a company sorely in need of better front-end loading (FEL).
This project was probably dead on arrival, or should have been in FEL-1 or, perhaps, FEL-0. Let’s talk about FEL-0. (By the way, an executive at the company told me there’s no such thing as FEL-0.)

FEL-0 defines how much a project is worth. When the Andrew Jergens Co. did an expansion, they spent years collecting and categorizing reliability problems that the expansion was to address. They knew their walkaway price, i.e., the tab the project couldn’t exceed. A company should identify that limit, based on a reasonable return on revenue (ROR) and product life, so it has a realistic basis early on for deciding whether a project is go or no-go.

I once presented a manager with two choices: replace the broken-down boiler we had or go out of business; the drums were done. However, determining the worth of a project often is far less clear. FEL-0 is when you decide whether to pursue several paths to select the best process and the rough scale of the project. You may choose to use a test kitchen approach to develop the project on a bench scale. The stakeholders must approve this plan.

After this stage, you should produce block and workflow diagrams to guide you through the next step, FEL-1, which defines the scope of a project. FEL-1 also could explore options. However, if that’s the case, don’t limit the engineering hours. I’ve seen some companies insist that FEL-1 be held to less than 100 hrs. In one project, I was asked to complete a statistical analysis of four years of desalter injection data. So, instead of developing a process flow diagram, a major equipment list and a simple control scheme, I was doing the FEL-0 work.

The next step, FEL-2, should provide a simple process and instrumentation drawing, a general arrangement and a ±50% budget estimate based on bid estimates of major equipment. You should define physical properties and materials of construction, simulate major equipment and prepare rough hydraulic models. Stakeholder buy-in is essential. You also should complete a process hazard analysis (PHA) at the end of this step as well as perform a constructability review. Seriously look at the schedule; tie-ins could take years and delay project completion. Many projects die at FEL-2 because of cost and scheduling issues.

FEL-3 is a continuation of FEL-2 — with attention focused on acquiring preliminary quotations for minor equipment. The goal of FEL-3 is to estimate the budget to within 80%. Evaluate the robustness of the design at the close of FEL-3: prepare a punch list of concerns such as instrument reliability and corrosion that must be addressed. FEL-3 is where cost savings are evaluated. Develop procedures for operating, startup and shutdown during this phase. FEL-3 also is when to bring in other disciplines; a common mistake is delaying this until the beginning of detailed engineering in FEL-4.

FEL-4 involves mostly electrical, civil, instrumentation and other engineers. Process engineering assumes a caretaker role: protecting the goals of the project and avoiding the pitfalls learned during the previous phases. A crucial point is to invest engineering hours to circle back to modify the process if development shows a better way; not doing this is another common cause of project failure. The final PHA takes place in the middle of FEL-4. The FEL-4 budget estimate should have ±10% accuracy. This is the final chance to kill a project.

One note on ROR: projects involving old technology tend to see their RORs drop during the design process while those using innovative technology tend to see RORs grow slightly. The reason is simple: people are comfortable with the old technology and, so, initially give it a higher-than-realistic ROR. If you’re modifying a plant, a ROR of only 25% in FEL-1 may drop in FEL-4 to a level at which the project no longer is viable.

The remaining phases involve constructability, commissioning, documentation, training and quality control. It’s important to bring the production, quality, maintenance and other groups into the project as stakeholders and eventual owners of the process. One of the most common difficulties is lack of engagement by these departments. When this is a problem, the project team must have a direct line to company management or all could be lost.

DIRK WILLARD is a Chemical Processing contributing editor. He recently won recognition for his Field Notes column from theASBPE. Chemical Processing is proud to have him on board. You can e-mail him at [email protected]
About the Author

Dirk Willard | Contributing Editor

DIRK WILLARD is a Chemical Processing Contributing Editor.

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