Defining Capital Efficiency Metrics for Downstream and Chemicals (DCC) Projects

A 2019 Ernst & Young survey identified three primary causes for lack of efficiency in pursuing DCC capital projects:

1. Absence of centralized and reliable data analysis
2. Lack of process coordination
3. Out-of-sync business units and operation functions

Past research has mainly focused on evaluating the cost and schedule performance of a capital project. The primary objective of this research was to identify KPIs and metrics to quantitatively evaluate the efficiency of capital projects in the DCC sector. To that end, RT-399 defined seven KPIs and 56 Metrics that can be used to track capital efficiency for these projects.

RT-399’s research method included three steps:

1. Define Capital Project Selection Effectiveness (CPSE) and Capital Project Efficiency (CPE).
2. Identify KPIs and Metrics (including cost and schedule metrics) to quantitatively measure CPSE and CPE.
3. Determine the feasibility of collecting data with respect to the identified metrics in DCC organizations.

RT-399 identified an initial set of KPIs and metrics through literature review and team meetings. The team then used a survey to refine these KPIs and metrics and to investigate the availability of data in DCC organizations.

Various stakeholders can use the team’s KPIs and metrics to capture the selection effectiveness and efficiency of their capital projects with respect to their unique business objectives. Future research will develop standardized means and methods to collect and process project data, and create a comprehensive tool that DCC organizations can use to assess their capital projects with respect to CPSE, CPE, as well as each stakeholder.