![March 2009Bill Meyer
Cost Upside
Move labor cost offsite to cheaper labor supply
Reduce indirect costs (construction supervision, consumables etc)
Improved productivity (weather, flexible workforce, site accessability etc)
Reduced schedule reduces construction indirects
[Positive impact to NPV if revenue stream begins earlier]
Modularization Economics](https://image.slidesharecdn.com/modularization-fw03-2009-170323114621/85/Modularization-45-320.jpg)
Modularization
- 1. March 2009Bill Meyer William (Bill) Meyer - B.E. (Civil) Hons., MBA. Modularization Director Project Execution Development Foster Wheeler USA Corporation Houston, Texas. Ph. +1 713 929 8089
- 2. March 2009Bill Meyer Project Costs Factors we can influence / manage Engineering Procurement Construction Factors driven by market forces ~10% ~45% ~45% Manhour Cost $ Manhours Material Quantities Manhours Material Prices Manhour Cost $ Total EPC Cost $
- 3. March 2009Bill Meyer THERE ARE MANY WAYS TO MOVE MANHOURS OFFSITE: MODULARIZATION Module is defined as Minor or major section of a plant Modularization
- 4. March 2009Bill Meyer Defintion of a MODULE Minor or major section of a plant Fabricated and assembled offsite Modularization
- 5. March 2009Bill Meyer Defintion of a MODULE Minor or major section of a plant Fabricated and assembled offsite Comprised of complete or partial systems Modularization
- 6. March 2009Bill Meyer Defintion of a MODULE Minor or major section of a plant Fabricated and assembled offsite Comprised of complete or partial systems Complete (within practical limitations) inside module boundaries Modularization
- 7. March 2009Bill Meyer Other Methods of Moving Manhours Offsite or to a More Productive Environment Preassembly –partial assembly of typically multi-craft components into an assembly Modularization
- 8. March 2009Bill Meyer Other Methods of Moving Manhours Offsite or to a More Productive Environment Prefabrication – fabrication of typically single-craft components into a fabricated item. Modularization
- 9. March 2009Bill Meyer Modularization 1. Decision making process for modular execution 2. Economic evaluation 3. Optimizing proportion of man-hours to move offsite 4. Engineering and Procurement implications 5. Module Fabrication 6. Critical success factors
- 10. March 2009Bill Meyer Decision Timing for Modularization Modularization Project Phase FEL 1 Conceptual FEL 2 Assess FEL 3 Define Execution FEL 5 Evaluation FEL 4 Evaluate Module Options Modular Execution Decision
- 11. March 2009Bill Meyer e.g. OSBL piping in existing racks Major storage tanks Modularization Decision
- 12. March 2009Bill Meyer Modularization Decision
- 13. March 2009Bill Meyer Modularization Decision
- 14. March 2009Bill Meyer Modularization Decision
- 15. March 2009Bill Meyer Site Survey includes • Labor availability, productivity, quality, craft availability, cost, other projects in area, union impacts, regional / political issues Modularization Decision
- 16. March 2009Bill Meyer Site Survey includes • Labor • Weather impacts Modularization Decision
- 17. March 2009Bill Meyer Site Survey includes • Labor • Weather impacts • Logistics on site and to site, from fabrication yard, cost and technical capabilities, laydown areas Modularization Decision
- 18. March 2009Bill Meyer Site access restrictions can limit size of modules that can be delivered to site Modularization Decision
- 19. March 2009Bill Meyer Logistics is project specific – Some sites have their own ports Modularization Decision
- 20. March 2009Bill Meyer Site Survey includes • Labor • Weather impacts • Logistics • Environmental impact Modularization Decision
- 21. March 2009Bill Meyer Site Survey includes • Labor • Weather impacts • Logistics • Environmental impact • Safety Modularization Decision
- 22. March 2009Bill Meyer Site Survey includes • Labor • Weather impacts • Logistics • Environmental impact • Safety • Permit issues Modularization Decision
- 23. March 2009Bill Meyer Site Survey includes • Labor • Weather impacts • Logistics • Environmental impact • Safety • Permit issues • Etc. Modularization Decision
- 24. March 2009Bill Meyer Modularization Decision
- 25. March 2009Bill Meyer Buy materials Fabricate Modules Local suppliers / mod. yards Modularization Decision
- 26. March 2009Bill Meyer Buy materials Fabricate Modules World wide suppliers / mod. yards Modularization Decision
- 27. March 2009Bill Meyer Modularization Decision
- 28. March 2009Bill Meyer Modularization Decision
- 29. March 2009Bill Meyer Modularization Decision
- 30. March 2009Bill Meyer Modularization Will impact possible module sizes Type of plant Scale of plant
- 31. March 2009Bill Meyer Modularization Will impact possible module sizes Type of plant Scale of plant
- 32. March 2009Bill Meyer Modularization Decision
- 33. March 2009Bill Meyer Modularization Economics 1. Decision making process for modular execution 2. Economic evaluation 3. Optimizing proportion of man-hours to move offsite 4. Engineering and Procurement implications 5. Module Fabrication 6. Critical success factors
- 34. March 2009Bill Meyer Modularization Execution Benefits: 1. Cost reductions (detailed shortly) Modularization Economics
- 35. March 2009Bill Meyer Modularization Execution Benefits: 1. Cost reductions 2. Schedule reductions Modularization Economics
- 36. March 2009Bill Meyer Modularization Execution Benefits: 1. Cost reductions 2. Schedule reductions 3. Risk reductions – 2 shifts possible, less impact on local craft, quality enhancements, etc Modularization Economics
- 37. March 2009Bill Meyer Modularization Execution Benefits: 1. Cost reductions 2. Schedule reductions 3. Risk reductions – 2 shifts possible, less impact on local craft, quality enhancements, etc 4. Safety – shop conditions, less working at height, less congestion, less plant traffic Modularization Economics
- 38. March 2009Bill Meyer Modularization Execution Benefits: 1. Cost reductions 2. Schedule reductions 3. Risk reductions – 2 shifts possible, less impact on local craft, quality enhancements, etc 4. Safety – shop conditions, less working at height, less congestion, less plant traffic 5. Quality – controlled conditions, permanent established workforce and skilled workers Modularization Economics
- 39. March 2009Bill Meyer Modularization Execution Benefits: 1. Cost reductions 2. Schedule reductions 3. Risk reductions – 2 shifts possible, less impact on local craft, quality enhancements, etc 4. Safety – shop conditions, less working at height, less congestion, less plant traffic 5. Quality – controlled conditions, permanent established workforce and skilled workers 6. Reduced manpower on site Modularization Economics
- 40. March 2009Bill Meyer Modularization Execution Benefits: 1. Cost reductions 2. Schedule reductions 3. Risk reductions – 2 shifts possible, less impact on local craft, quality enhancements, etc 4. Safety – shop conditions, less working at height, less congestion, less plant traffic 5. Quality – controlled conditions, permanent established workforce and skilled workers 6. Reduced manpower on site 7. Higher productivity – Nomex, Permits Modularization Economics
- 41. March 2009Bill Meyer Modularization Execution Benefits: 1. Cost reductions 2. Schedule reductions 3. Risk reductions – 2 shifts possible, less impact on local craft, quality enhancements, etc 4. Safety – shop conditions, less working at height, less congestion, less plant traffic 5. Quality – controlled conditions, permanent established workforce and skilled workers 6. Reduced manpower on site 7. Higher productivity – Nomex, Permits 8. Etc. Modularization Economics
- 42. March 2009Bill Meyer Cost Downside Increased cost of steel Increased cost of shipping Potentially - increased cost of transport and installation Modularization Economics
- 43. March 2009Bill Meyer Cost Downside Increased cost of steel Increased cost of shipping Potentially - increased cost of transport and installation Modularization Economics
- 44. March 2009Bill Meyer Cost Downside Increased cost of steel Increased cost of shipping Potentially - increased cost of transport and installation Increased cost of engineering Modularization Economics
- 45. March 2009Bill Meyer Cost Upside Move labor cost offsite to cheaper labor supply Reduce indirect costs (construction supervision, consumables etc) Improved productivity (weather, flexible workforce, site accessability etc) Reduced schedule reduces construction indirects [Positive impact to NPV if revenue stream begins earlier] Modularization Economics
- 46. March 2009Bill Meyer 33 Month Schedule 3 million man hour - 20,000 40,000 60,000 80,000 100,000 120,000 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 months Site Prep Civil Structural / Mech / Equip Piping E & I Indirects Modularization Economics Stickbuilt manhous
- 47. March 2009Bill Meyer Modularization Economics 33 Month Schedule 3 million man hour Module manhours removed offsite - 20,000 40,000 60,000 80,000 100,000 120,000 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 months Site Prep Civil Structural / Mech / Equip Piping E & I Indirects Residual manhous after module manhours moved offsite
- 48. March 2009Bill Meyer 33 Month Schedule 3 million man hour - 20,000 40,000 60,000 80,000 100,000 120,000 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 months Site Prep Civil Structural / Mech / Equip Piping E & I Indirects Estimate of % of ME&I hours that can be moved offsite in modules subtracted from site hours 33 Month Schedule 3 million man hour Module manhours removed offsite - 20,000 40,000 60,000 80,000 100,000 120,000 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 months Site Prep Civil Structural / Mech / Equip Piping E & I Indirects Modularization Economics
- 49. March 2009Bill Meyer Cost Benefits Economic Productivity Factor On-site Off-site Labour Productivity 2.20 1.2 Composite Manhour cost $105.00 $55.00 Relative manhour cost c/w Gulf Coast $231.00 $66.00 Economic productivity ratio 3.50 : 1 Modularization Economics
- 50. March 2009Bill Meyer Cost Benefits Economic Productivity Factor using Far East Yards On-site Off-site Labour Productivity 2.20 3.5 Composite Manhour cost $105.00 $12.10 Relative manhour cost c/w Gulf Coast $231.00 $42.35 Economic productivity ratio 5.45 : 1 Modularization Economics
- 51. March 2009Bill Meyer MODULE vs STICK COST DIFFERENTIALS Modular versus Stick built costs $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 $100.0 Modular Cost Stick built Cost Installation cost Δ Shipping cost Δ Const. Mngmt cost Δ Foundation cost Δ Steel cost Δ Engineering cost Δ Camp cost Δ labor cost Savings Millions$ Existing Project Data (Note – All projects have different cost drivers ) Modularization Economics
- 52. March 2009Bill Meyer Modular versus Stick built costs $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 Modular Cost Stick built Cost Installation cost Δ Shipping cost Δ Steel cost Δ Engineering cost Δ Camp cost Δ Labour cost Modular versus Stick built costs Modular Cost Stick built Cost Installation cost Δ Shipping cost Δ Steel cost Δ Engineering cost Δ Camp cost Δ Labour cost Modular versus Stick built costs Modular Cost Stick built Cost Installation cost Δ Shipping cost Δ Steel cost Δ Engineering cost Δ Camp cost Δ Labour cost COST DRIVEN MODULAR PROJECT SCHEDULE DRIVEN MODULAR PROJECT COST DRIVEN STICK BUILT PROJECT Modularization Economics
- 53. March 2009Bill Meyer Modularization 1. Decision making process for modular execution 2. Economic evaluation 3. Optimizing proportion of man-hours to move offsite 4. Engineering and Procurement implications 5. Module Fabrication 6. Critical success factors
- 54. March 2009Bill Meyer Manhour Density is Key Offsite Manhours Optimization
- 55. March 2009Bill Meyer Manhour Density is Key Process Unit Modules Pipe Rack Modules Offsite Manhours Optimization
- 56. March 2009Bill Meyer MARGINAL COST FOR ADDITIONAL PAU Based on a manhour density of 12.9 manhours / m3 PAU Modularisation Drivers 24% 3% 2% 6% 2% 63% Manhour Steel Foundations Shipping Installation Delta Breakeven @ 2.4 manhours / m3 Offsite Manhours Optimization
- 57. March 2009Bill Meyer Manhour Density is Key Offsite Manhours Optimization
- 58. March 2009Bill Meyer Identify the labour intensive sections on the site… (highlighted red) Offsite Manhours Optimization
- 59. March 2009Bill Meyer Aggregate where feasible… Offsite Manhours Optimization
- 60. March 2009Bill Meyer Construct off-site Offsite Manhours Optimization
- 61. March 2009Bill Meyer Steam turbine generators already manufactured but VPU’s anticipated around machines and lube oil skids. Otherwise powergen area predominately ‘stick built’. Switch Room modularised as PAB. Current piperack could be adapted to suit modularisation. Currently envisaged as 29 PAR’s as marked. Deaerator structure to be supplied as complete PAU. Option to include pumps on module or in hook-up scope. Boiler manufactured and understood to contain some preassembly. Potential to modularise burner and economiser area. Liquor tank could be modularised to include extensive piping and pumping duties. Potential to combine demin and injection areas into a single VPU or PAU module. Piperack along water pumps currently marked-up as PAR modules. Could possibly be combined with pumps and supplied as 2-3 PAU modules Unit 350 - Steam and Power Plant Proposal for Modularisation with Minimum Re-engineering Stack / steelwork supplied as a preassembled VPU with lower level PAS support. Unexposed stack lifted and welded after. Potential to modularise diesel / HFO areas. Scrubbers pre-dressed as VPU’s or prior to lift if already manufactured.
- 62. March 2009Bill Meyer Unit 350 - Steam and Power Plant As now being Engineered by Oracle
- 63. March 2009Bill Meyer Offsite Manhours Optimization
- 64. March 2009Bill Meyer Modularization 1. Decision making process for modular execution 2. Economic evaluation 3. Optimizing proportion of man-hours to move offsite 4. Engineering and Procurement implications 5. Module Fabrication 6. Critical success factors
- 65. March 2009Bill Meyer E & P Impacts Planning is Critical for Modular Projects
- 66. March 2009Bill Meyer Modular Stick Built Schedule Comparison – Modular vs Stick Built 0 10 20 30 40 50 60 70 80 90 100 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 Duration - Months Progress% Order Placement Engineering Construction Order Placement Engineering Construction E & P Impacts
- 67. March 2009Bill Meyer Module size constraints Smaller modules require careful design for operator access PDS modelling of modules enhances operator review and is powerful tool for module fabrication E & P Impacts
- 68. March 2009Bill Meyer Modularization Access needs to be provided outside smaller modules
- 69. March 2009Bill Meyer Module Types 1. Pre – Assembled Units (PAU’s) Multi disciplined modules including: - tagged and non tagged items, steel, piping, electrical, instrumentation, fireproofing, insulation
- 70. March 2009Bill Meyer Module Types 1. Pre – Assembled Units (PAU’s)
- 71. March 2009Bill Meyer Module Types 1. Pre – Assembled Units (PAU’s)
- 72. March 2009Bill Meyer Module Types 1. Pre – Assembled Units (PAU’s)
- 73. March 2009Bill Meyer Module Types 2. Pre – Assembled Racks (PAR’s) Piping modules including: - steel, piping, electrical cable tray, fireproofing, insulation Site built steel or concrete columns
- 74. March 2009Bill Meyer Module Types 2. Pre – Assembled Racks (PAR’s)
- 75. March 2009Bill Meyer Module Types 2. Pre – Assembled Racks (PAR’s)
- 76. March 2009Bill Meyer Module Types 3. Vendor Assembled Units (VAU’s) PAU’s assembled by a vendor
- 77. March 2009Bill Meyer Module Types 3. Vendor Assembled Units (VAU’s)
- 78. March 2009Bill Meyer 4. Vendor Package Units (VPU’s) Complete packages purchased from a vendor Module Types
- 79. March 2009Bill Meyer 5. Remote Instrument Buildings (RIB’s) Sub-stations etc Module Types
- 80. March 2009Bill Meyer 5. Remote Instrument Buildings (RIB’s) Sub-stations etc Module Types
- 81. March 2009Bill Meyer E & P Impacts Piping design file layout Link files for pipe stressing Split files for quantity takeoff and procurement
- 82. March 2009Bill Meyer Differences can include Location of pumps PAR 02/03 PAR 04/05 PAU 01 PAU 02 PAU 03 PAU 05 VAU 02 etail above Modular Stick built E & P Impacts
- 83. March 2009Bill Meyer Differences can include Pipe track to pipe rack E & P Impacts
- 84. March 2009Bill Meyer Differences can include Pipe track to pipe rack Easy Install Easy Ship E & P Impacts
- 85. March 2009Bill Meyer Differences can include Pipe track to pipe rack Additional clearance can be provided where required E & P Impacts
- 86. March 2009Bill Meyer E & P Impacts Site based Loads, Clearances and Critical Dimensions Crane loads Module clearances Crane clearances Foundations to leave low etc
- 87. March 2009Bill Meyer Clearance between piperacks critical E & P Impacts
- 88. March 2009Bill Meyer E & P Impacts Loads applied to Modules Fabrication yard supports
- 89. March 2009Bill Meyer E & P Impacts Loads applied to Modules Transporting in the Module yard
- 90. March 2009Bill Meyer E & P Impacts Loads applied to Modules Sea acceleration forces during shipment
- 91. March 2009Bill Meyer E & P Impacts Loads applied to Modules Sea acceleration forces during shipment
- 92. March 2009Bill Meyer E & P Impacts Loads applied to Modules
- 93. March 2009Bill Meyer E & P Impacts Loads applied to Modules Transporting on site
- 94. March 2009Bill Meyer E & P Impacts Loads applied to Modules Installing on site
- 95. March 2009Bill Meyer Installation Methods Crane Installation
- 96. March 2009Bill Meyer Installation Methods Transporter Installation
- 97. March 2009Bill Meyer Installation Methods Transporter Installation
- 98. March 2009Bill Meyer Installation Methods Transporter Installation
- 99. March 2009Bill Meyer Installation Methods Jack-down Installation
- 100. March 2009Bill Meyer E & P Impacts Loads applied to Modules In-situ on foundations
- 101. March 2009Bill Meyer E & P Impacts Procurement Complexity Number of delivery locations impact ordering and material tracking Equipment Deliveries Material Logistics for the Stick-Built Project Install Dock Truck
- 102. March 2009Bill Meyer E & P Impacts Procurement Complexity Truck Material yard Dock Transport Install Material Logistics for the modularized Project Truck Truck Install Module Fabrication Yard Equipment Deliveries Port Module Deliveries Loadout to ship Bulk Materials and minor equipment Modules and major equipment
- 103. March 2009Bill Meyer Logistics is project specific Logistics
- 104. March 2009Bill Meyer Logistics is project specific Logistics
- 105. March 2009Bill Meyer Logistics is project specific Logistics
- 107. March 2009Bill Meyer Type of ship – RO-RO, LO-LO, H/L E & P Impacts
- 108. March 2009Bill Meyer – Potential to ship stick built materials in “dead space” on HL ships E & P Impacts
- 109. March 2009Bill Meyer E & P Impacts
- 110. March 2009Bill Meyer E & P Impacts Larger Modules on weather deck
- 111. March 2009Bill Meyer Barges could also be viable E & P Impacts
- 112. March 2009Bill Meyer Barges could also be viable – and are sometimes essential due to module size and RORO requirements E & P Impacts