Optimizing Engineering Value in Projects

Decisions made in the earliest phases of a project have the highest potential to exercise the greatest influence on a project as a whole. As depicted in the Cost-Influence curve below, influence starts to decrease rapidly after the Basic Engineering phase. 

Sixty-four engineering strategies were identified and defined by Research Team 245, in collaboration with the strategies previously identified by Research Team 233. Sixteen are considered fundamental and should be implemented on most, if not all, projects. Below are 2 examples of these 16 fundamental engineering strategies. Detail explanations for each strategy is found in the research summary and research report. (RR245-11, p. 24): 

 

• A 4 – Appropriate Allocation of Design-Related Risks & Rewards
• A 14 – Integration of Lessons Learned into Design

The remaining optional engineering strategies have been categorized into 6 different groupings: 

1. Alternative design delivery strategies
2. Assistance to owner services
3. Management of design interfaces
4. Strategic design decisions
5. Design approaches
6. Opportunity capture/Design for X

A more detailed list of the optional engineering strategies is included in the research summary.

Engineering Strategy Tradeoff’s –
Although all engineering strategies are important, some can involve tradeoffs or negative impacts to one or more project value objectives (PVO). It is important that the engineering strategies selected be properly aligned with the Owner’s relative prioritization of project objectives. Schedule reduction, capital cost reduction, and design/construction quality are the objectives most frequently supported by the strategies, while capital cost reduction is also the most commonly sacrificed objective (or tradeoff) among the strategies. A complete tabular presentation of objectives supported by each strategy is presented in Appendix B of the Research Report. 

Implementation for the 64 strategies will range from easy to difficult, depending on the resources and skills available as well as implementation history or experience. For example, Risk-Based Design, IT Integration with Key Vendors, and Building Information Modeling (BMI) are among the more difficult strategies to implement, requiring specialists. (RS245-1, p. 13)

Many of the engineering strategies create value by having an influence on phases prior to or subsequent to engineering, as depicted in the figure below. In all, 50 of the 64 strategies essentially represent linkages to other phases. This underscores the breadth of influence that engineering can have on the different project phases, along with the importance of the engineering manager’s role in understanding and promoting a broader view of engineering’s full potential. A complete tabular presentation showing the phase/phases supported by each strategy is presented in Appendix H of Research Report 245-11. 

Common Barriers to Engineering Value – the research included an industry survey to better understand the frequency and severity of barriers to engineering value. The 10 most severe and frequent barriers to engineering value are listed below. Strategies to prevent overcome these barriers are outlined on the research summary. 

• Inaccurate understanding of owner project priorities and objective preferences
• Suboptimal allocation of contract risks to contracting parties
• Lack of detailed definition of project work scope
• Lack of timely input to design process from all key stakeholders
• Lack of knowledge of critical owner-fabricator-contractor driven design package completion need dates
• Lack of knowledge of owner’s planned shutdown dates or of operations requirements near phased construction work
• Insufficiently detailed Project Execution Plan that is not understood or committed to by design team
• Insufficient resources that are not provided in a way to enable efficient deployment
• Lack of awareness of or misapplication of relevant Lessons Learned from previous projects
• Ineffective design QA/QC

The purpose of this selection tool is to provide guidance on which strategies will likely offer the most value for a project. Judgment from the project team is still required. The results are intended to initiate a team dialog regarding which strategies should be given serious consideration for implementation. Additional information and a detailed description of the Project Value Objectives involved for each strategy is included in Appendix G of Research Report 245-11. Included under Implementation Tools below as well. (RR245-11, p. 41)

IR245-2, Maximizing Engineering Value and Design Effectiveness Toolkit

An implementation model for maximizing engineering value and design effectiveness, along with an engineering strategies catalog and a software tool for determining appropriate engineering strategies for individual projects.

IR245-3, Design Effectiveness Evaluation Tool

A tool to evaluate design effectiveness and improve MEV/DE (Maximize Engineering Value/Design Effectiveness) implementation at both the project and corporate levels. Permits design evaluation from the perspective of the owner, the designer, the construction team, or any combination of these parties by means of weighted criteria and sub criteria.

RR245-11, Engineering Strategy Selection Tool (Excel)

Developed to facilitate the selection of optional engineering strategies for implementation based on most value for your project. (RR 245-11, Appendix G – page 92)