Standardization: Achieving Higher Levels in the Upstream, Midstream, and Mining (UMM) Commodity Market

RT-UMM-01 Topic Summary
RT UMM 01

Overview

Research Team UMM-01 (RT-UMM-01) defined standardization as the development and use of consistent designs to align project stakeholders, objectives, and scope to capture and optimize schedule, cost, and value. Previous CII research recognized the shipbuilding industry for accomplishing high levels of both facility standardization and modularization very successfully, and reaping considerable benefits (CII 2007, CII 2011). RT-283 concluded that to maximize modularization benefits on capital projects, levels of facility standardization must also be substantially increased (CII 2012). However, the levels of facility standardization in the Upstream, Midstream, and Mining Commodity Market (UMM) fall short of the desired criteria.

RT-UMM-01 addressed the question of how the UMM sector could achieve higher levels of facility standardization. To reap maximum benefits from standardization on capital projects, the industry must better understand the economic values dependent on facility standardization and approaches. Also, the industry needs to learn when and how to analyze and justify standardization, and how to exploit its benefits to achieve higher levels of facility standardization in the UMM sector.

To successfully implement standardization in the UMM sector, the industry must pay heed to the critical success factors that depend on standardization, along with their enablers. Moreover, the industry must have a fundamental understanding of the benefits and tradeoffs associated with facility standardization, as well as the optimal timing for achieving these benefits and tradeoffs. To aid in this process, RT-UMM-01 presented six solution pieces for facility standardization (see figure below) for the industry use to increase standardization, thereby increasing industry predictability, agility, and cost-effectiveness:

  1. Economics of Standardization
  2. Decision-making Model
  3. Business Case Analysis
  4. Work Process
  5. Critical Success Factors
  6. Innovative Technologies and Approaches

 

Related Academic Publications (not published by CII)

Choi, J., Shrestha, B.K., Shane, J. S., Kwak, Y. H. (2020). “Facility Design Standardization Decision-Making Model for Industrial Facilities.” Journal of Management in Engineering (36)6.

Choi, J., Shrestha, B.K., Shane, J. S., Kwak, Y. H. (2020). “Critical Success Factors and Enablers for Facility Design Standardization of Capital Projects.” Journal of Management in Engineering (36)5.

Choi, J., Shrestha, B.K., Shane, J. S., Kwak, Y. H. (2020). “Innovative Technologies and Management Approaches for Facility Design Standardization and Modularization of Capital Projects.” Journal of Management in Engineering (36)5.

Shrestha, B.K., Choi, J., Shane, J. S., Kwak, Y. H. (2020). “How Design Standardization CSFs Can Impact Project Performance of Capital Projects.” Journal of Management in Engineering (36)4.

Choi, J., Kwak, Y. H., Shane, J. S., Shrestha, B.K. (2019). “ Identifying Potential Innovative Technologies and Management Approaches for Design Standardization.” In Computing in Civil Engineering 2019 (p. 8). Reston, VA: 2019 ASCE International Conference on Computing in Civil Engineering (i3CE).

Choi, J., Shane, J. S., Kwak, Y. H., Shrestha, B.K. (2018). “ Achieving Higher Levels of Facility Design Standardization in the Upstream, Midstream, and Mining Commodity Sector: Barriers and Challenges.” (pp. 10). Reston, VA: ASCE Construction Research Congress 2018.

 

Key Findings and Implementation Tools

1 : Economics of Standardization

The economics of standardization provide an understanding of the fundamental benefits and tradeoffs with facility standardization. Implementation of standardization techniques shows that performance levels met or exceeded for all performance metrics, including cost effectiveness, agility, predictability, safety, and quality. Overall, eight standardization programs saved 10% of the total installed cost, 25% of the life cycle cost, and 15% of the schedule.
Reference: (FR-UMM-01)

2 : Standardization Decision-making Model

The Standardization Decision-making Model is a user-friendly tool that provides an early, high-level, systematic review of key issues in standardization. Its objective is to help practitioners determine the feasibility of standardization by identifying benefits, business drivers, impediments, and risks. The model also facilitates alignment and education in facility standardization.
Reference: (FR-UMM-01)

3 : Standardization Business Case Analysis

RT-UMM-01 developed a Standardization Business Case Analysis Model that can help practitioners become familiar with pertinent standardization factors and analyze, as well as justify, facility standardization by estimating overall program costs and schedule savings, utilizing the facility standardization approach. RT-UMM-01 further developed a standardization business case analysis tool from the model in Excel to provide a user-friendly tool that is designed to be iterative and flexible. This tool can be used in conjunction with the standardization decision-making model.

Reference: (FR-UMM-01)

4 : Standardization Work Process

RT-UMM-01 developed a standardization work process that provided a user-friendly tool to support the development of a program of standardized projects; guides practitioners on how to effectively exploit standardization benefits; and lays out the major considerations throughout project phases. The work process identifies individual tasks for each project phase and provides guidance on each task, along with the parties responsible for executing each task.

Reference: (FR-UMM-01)

5 : Standardization Critical Success Factors (CSF) and Enablers

RT-UMM-01 identified 15 critical success factors (CSFs) and enablers, along with the responsible parties and the optimal timing of implementation. RT-UMM-01 combined all of this information into the figure below to illustrate the complex nature of making standardization successful. Early implementation and teamwork are especially essential to make standardization successful.