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

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:      

Economics of Standardization     

Decision-making Model     

Business Case Analysis     

Work Process     

Critical Success Factors     

Innovative Technologies and Approaches