In the business world, when one considers how to accomplish a project to implement a capital investment or improvement, the series of interrelated activities, people, and resources that need to be organized and managed to accomplish the goal can be quite daunting. It is probably safe to say that few of us could keep all of the needed steps clear in our minds. The challenge is only compounded when we strive to complete a project that involves many disciplines, spans a significant length of time, and involves large sums of money. How can the ambitious business investor achieve the advantages of completing a successful project in a way that is controlled and doesn’t put his or her investment at risk?
At Optimation, we are not intimidated by the organizational challenges of projects where we have a variety of people, tools, and materials that need to be meshed together to keep a project on track. But, we have to confess, we got a peek at the rule book on how this effort should be organized. We found the answers in a volume called “Phases and Gates: How to Get and Keep your Project Under Control,” and we especially liked the chapter titled “Front End Loading.” With your indulgence, let’s talk about the Front End Loading section.
Front End Loading Project Management
Front End Loading is a phrase we use to describe an approach to establishing a project cause (meaning a business case and User Requirements), a concept design phase (selecting an appropriate technology platform to answer the User Requirements), and a Preliminary Engineering phase where we better define the Scope of Work and perform our first bottoms up estimate for cost and project schedule. The beauty of Front End Loading (FEL) as a project methodology is that invests in the creative side of the project, and seeks to build a knowledge base to describe the project work, before any spending is done on the actual project execution (purchased materials, construction work, etc.). The intent is to provide information to validate the goals of the project (and the ability of the project to meet the client’s business case) without a large cost outlay.
The phase of FEL that I would like to further expand on today is the Preliminary Engineering phase. Let’s assume that we have an example project that has had a business case and User Requirements document published to establish the need for a capital investment, and that a team has taken the User Requirements (URS), done a technology evaluation, and selected the best qualified equipment platform(s) to meet them. At each of these steps, a review session has been held to go over the work product, and validate that the project goal is still achievable, and that the project work should progress. The customer, at the completion of the Concept Design phase, is certain to ask, “OK, now what do we do next?” Our answer would be to provide a Proposal to fund Preliminary Engineering.
So, here’s what we need to accomplish when our client decides to proceed with Preliminary Engineering. We want to define the major elements of the project scope, as discovered during the Concept Phase, so that they can be quantified for a bottom’s up estimate. “Hmm …,” I can hear you thinking, “That sounds a bit risqué.” But wait, let me explain…part of our Concept Phase was to also provide a budgetary estimate, and a ROM schedule duration. When we did this, our basis was by factoring the cost and schedule of similar projects, but we knew at the time we did this that our numbers were only accurate (or trustworthy) within a specific range.
Concept Design versus Preliminary Engineering
When we do Concept Design, we do not have enough definition to provide hard quotes. So, our customer may find this data sufficient to use for funding requests, but not for actual spending. Now, when we execute the Preliminary Engineering phase, each discipline will work to define their portion in a way that provides equipment capability, size, space and utilities needs, horsepower, etc. Specifications are generated, and quotes can thus be solicited. A detailed project estimate is constructed, based on an equipment list (or Bill of Materials) that accounts for the majority of the hardware that will be required, along with their quoted costs. Suppliers of the project components are also asked to input delivery durations.
The project controls system is also defined, based on an operating description with a resulting Functional Specification. This drives electrical equipment specifications to be input to our estimate spreadsheet. From this data we are now able to calculate the engineering and design level of effort to complete the technical side of the project, plus we can take the input from vendor quotes and provide it to our trade planners so they can likewise calculate their level of effort to install the project hardware. The final step is to assess our need for technical resources and budget hours to perform debug and start up at the client’s site.
The end goal of the Preliminary Engineering phase is a thorough project estimate for both cost and schedule that is to the control level of detail. That means that we now expect that the budget for both the cost and timing can be managed and controlled within 10% of the limits articulated. Now our customer can take the numbers “to the bank,” as it were.