Start Well, End Well

We could cite a dozen tropes about the importance of starting well, from getting off on the right foot to getting up on the wrong side of the bed. And we’ve all heard about (or been involved in) projects that have gone awry because someone failed to plan (and thus, planned to fail). Unfortunately, people mismanage projects regularly. The resulting delays, out-of-control expenses, lost production time and angry contractors are all too familiar. So it goes, when you work with humans. Yet, it is possible to avoid gross mistakes when managing a project. It simply takes good preparation during the project’s development.

First, understand that the earlier missteps occur in a project’s development, the more extensive the damage. A tool for understanding this relationship is the 1-10-100 rule, which states that a dollar’s worth of time spent preparing is worth $10 in time processing change orders and $100 in fixing a problem after equipment has been installed. Such exponential costs are how $150 million greenfield plants end up costing $2 billion by the time the lights turn on, as what happened at the former Katerra CLT plant in Washington state. Getting a project done right, on budget, and on time requires project managers to develop it fully from the outset, a feat that requires good development even before the project starts. This primary development comes in the form of a business case.

Business Case Basics
A business case is a document that lays out a project’s objectives, benefits and costs, explaining why the project should take place and providing an overarching scope. Too many projects go forward without the clear picture a business case provides. While there are many reasons this may happen, it’s usually because those driving the project believe they have a developed case, when in reality, they’re ignorant of critical challenges. For example, someone has an asset like a forest, and they’re trying to monetize the timber coming off the land. They know they can make lumber, so they plan to build a sawmill and move forward with the project. However, they’ve failed to consider how they’ll dispose of the residuals.

For this reason, managers working on front-end endeavors must first help their customers think through the challenges to them to the point of knowing what questions to ask for an accurate picture of what it will take to fulfill their ambition. The landowner, for example, needs to ask, “What will I do with the residuals? Is there a market for green chips in my area? For shavings? What are the consequences of piling up the waste on site?”

Those asking such questions often need help answering them, too, as they tend to think there are too many options or that none exist for their situation. In such cases, the stakeholders must complete more high-level development work before the project can proceed. Of course, many projects revolve around specific problems at brownfield sites, such as poor uptime or too many pellets crumbling into fines. The project is at a particular facility with specific operational challenges that the team there is looking to address. In these scenarios, the business case isn’t the issue; it’s how well the manager organizes the nuts and bolts of the project as it gets underway.

The effort should begin with a process flow diagram (PFD). The PFD is a critical document, as it describes the flow of inputs through a system and the relationships between subsystems. It also ensures there’s an energy balance, and it dictates the size of components like conveyors.

Being such an important document, the manager overseeing the PFD should not base it on guesswork (though informed guesswork must sometimes occur). Yet, this does happen. BE&E recently had a customer provide a PFD for a pellet plant devoid of tenable engineering. The project manager tried to pull together the elements of his customer’s process from a patchwork of information and what he knew about pelleting systems. Fortunately, our team recognized this and was unwilling to perform work until the project manager had gathered accurate data. Any engineering completed using the PFD would have been wasted. Worse, it could have resulted in purchase orders worth tens to hundreds of thousands of dollars for equipment built to incorrect specifications.

Only from an accurate PFD and defined scope can project managers establish dependencies that allow the management team to drive a schedule. Depending on how much the client has done, this step may require managers to start way back in the process. Say the landowner we referenced decides to make pellets from his sawmill residuals. He aims to produce 36,000 tons of white pellets annually, which will require 72,000 tons of fiber. The project manager, in turn, will start by identifying fiber sources, only one of which is the landowner’s sawmill.

Once the project manager has defined the PFD, they can create a work breakdown document, which maps out who is in charge of what tasks and provides a timeline. Completing such a document is yet another critical step that can prove detrimental to the project if mismanaged. For example, the landowner’s project calls for a silo, for which there are mechanical, civil, structural and electrical components. The manager’s breakdown document will divide the responsibilities related to the silo into these manageable pieces, as shown in Figure 1.

Only after the business case is compiled and the project manager has created the PFD and breakdown documents should they specify components and issue purchase orders for equipment. Without these controlling documents, the project will inevitably blunder. Imagine that the project manager overseeing the landowner’s pellet mill forgets to delineate who is responsible for the conveyors’ structural supports. The oversight results in a months-long delay and adds thousands of dollars of costs related to change orders and rush fees. But such blunders aren’t inevitable. Just as people regularly mismanage projects, people regularly manage projects well. Careful planning and well-thought-out documentation are what make it happen.

Author: Joel Dulin
Director of Marketing & Sales Coordinator
Biomass Engineering & Equipment
[email protected]