Cost Management at turnarounds

Some of you might already be familiar with it. If not; Cleopatra Enterprise also includes a Cost Management module. This allows our users and ourselves to “close the loop” from high level estimating to detail estimating to cost management, all stored in one central database. A closed loop provides the opportunity for continuous improvement by extraction of benchmarks and KPIs, visualized below. 

At our event I already noticed a lot of interest in our cost management module: the room was so packed, people had to stand for lack of a chair. A month later I was at a client near Rotterdam to assess their needs during an upcoming turnaround: the plant will be shut down completely for a month and will be fully cleaned and repaired. For this turnaround, we proposed to use both the estimating and cost management modules to provide a smooth integration between estimating and cost control. The client agreed to our proposition and a few months later I found myself stationed at the production site. 

One of the big advantages of working as a cost engineering consultant is being able to see many different companies and projects. This being my first turnaround, I was very excited to commence. My colleagues had already told me about the dynamic and sometimes stressful environment a turnaround can provide. As an extra challenge, we were going to do my first implementation of the cost management module. What more can you wish for in a project?

We started off with the cost estimations: about 1100 work packages needed to be estimated, anything from control valve overhaul to bundle pulling of heat exchangers. After 80% of the estimating was done, I shifted my focus to cost management. When setting up the budget and cost management document, a lot of things need to be taken into account: contract types, contractors, level of control, progress management, change management. 

Closing the loop

With Cleopatra Enterprise we often make use of import scripts to transfer the client’s data into a system. In the case of a cost management system, the proper costs have to be assigned to the correct control components. Easy as it may sound, there were different ways of finding the correct control components for different cost types. Indirect and direct costs for example, could not be assigned in the same way. Another challenge was that the finance system would lag behind about 4 weeks on the timesheets. To prevent duplicates in the system, we developed a plugin that would automatically delete those duplicates. 

In close cooperation with our software engineering department we provided the client with the scripts and the plugin to run the weekly imports. Updating the cost management information in this way is reduced to importing several Excel files, once a week.

One of the more important next steps is the definition of the metrics: what will be used to assess the status of the project? SPI? CPI? Will we use a special metric during the turnaround itself? 
Another step is the integration of all contractor information into the final estimate. 

In the next update, somewhere around May, I will focus on the lessons learned during our first implementation.

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