PROJECT DEVELOPMENT

PROJECT TALK

Delta Energy Services’ Sven Swenson discusses successful project execution with industry professionals. BY SVEN SWENSON

Whether upgrading plant capacity or outfitting an outdated plant with current technology, the ability to accurately plan, forecast and execute a project is a key component of running a biomass business. With all the project management information, tools and training available, it seems as though that performance would be easier than ever. Yet, problems still arise.

To understand the biggest obstacles to successful project execution, I set out to discover the issues and hot buttons that are most near and dear—perhaps painful—to the hearts of those in the biomass industry with respect to capital projects. I have been engaging with biomass professionals to have that conversation, and will share some key points in this article series in the hopes that some of this insight will result in a better reality for your capital projects.

My first conversation was with Mick Papp, owner and principle of SusEnergy LLC. Mick has many years of successful project management in the nuclear and bioenergy fields, including several years as the regional manager of projects for Enviva. I have extracted some of the most actionable items from our conversation and summarized them below.

The Vital Role of Project Managers

From Papp’s perspective, recognizing the vital role that project managers play is paramount to successful project execution. This, coupled with providing project managers with necessary resources early enough in the project to achieve the level of accuracy in planning and financial forecasting required by the company.

Project managers are not often looked upon as the important change agents that they are, even though they are potentially re-

Swenson

sponsible for losing the company a heck of a lot of money. The choice of project manager is therefore vitally important to ensuring the project will be successful. Finding the right person is only part of the solution, though, as project management is not a one-man show by any stretch of the imagination.

A properly executed project should begin with a number of items in place that are the responsibility of the management team, in support of the project manager. These important elements include not only stakeholder identification and involvement (which cannot be stressed enough), but also an understanding of the financial and regulatory goals and limitations of the project. There are numerous reasons why a capital project may be undertaken, and the project manager must have a keen understanding of goals in order to establish the correct scope and project decision points.

At project initiation, there is always potential for cancellation prior to completion due to changing regulatory or financial situations, new technology or other scenarios. As such, there is always a reluctance to spend “capital” money early, as it may unfortunately end up in the overhead bucket if the project is scrapped. The project financing process may also make it difficult to release funds early, over and above some limited project manager manhours. Papp offers that failing to properly fund a potential capital project early directly contributes to schedule and cost overruns, as well as some project failures.

Today, there all kinds of tools for project management, including some sophisticated software tools to help facilitate the effort. However, tools are just tools. The importance of software tools shouldn’t be downplayed, but if you don’t have reasonable,

competent people involved with the project manager at initiation, you will likely pay for it during project execution, regardless of any fancy tools that are in place. You can have the best P6 schedulers in the world, but you’re not going to get where you need to be unless the foundation work is in place.

Providing Support Early

Management must be prepared to provide support early on, which includes proper stakeholders to provide them with a complete understanding of what is needed, how and when. Early stakeholder engagement and resource allocation provides a foundation for the project to be built upon. The firmer this foundation is at the outset, the less chance there is of an upset down the road.

The foundation should be built upon information that may or may not exist in some form or another. It is the project manager’s responsibility to bring it all together—again, with management support. At this point in the project, the most important resources management can provide are the time and money to allow the project manager to assemble the information.

Consider the adage, “Time is money.” As important as manhours are, in this context, its relevance extends beyond simple manhours for the project manager. At project initiation, there may be a need for outside professional help in determining project direction or parameters, such as design engineering or environmental studies.

Attempting to establish a credible project budget and schedule without the proper leg work up front is next to impossible. Pulling all the pieces together will take some time, so it is important to establish the “schedule to develop the schedule,” with adequate project manager manhours allocated to enable the necessary research. This research may involve third-party studies as previously mentioned, but even before those studies comes the need for all true stakeholders to step up to the plate and get involved. These stakeholders are typically operations and maintenance, but also of vital importance is the involvement of internal environmental, legal, procurement, engineering and financial parties. This may sound like a reference to the project team—which is accurate–but the intention is to emphasize the personal relationships and engaged involvement that is required to develop a true project team.

Do not underestimate the effectiveness of a project kickoff meeting, sponsored and attended by a well-respected senior manager. The team will support what management supports—conversely, they will likely put off requests for support from a project that is viewed as peripheral, simply because we all have more to do than time to do it.

Conclusion

In conclusion, all projects are all different to some degree, so there are no magic bullets. However, there are some guidelines to keep in mind—the following points summarize the above discussion.

Pick the right project manager as

your trusted change agent. Use someone with an established, successful track record.

Support your project manager. This includes three main components, which are as follows. Time: Provide adequate time for legwork up front (the schedule for the schedule). Money: Allow a path for some early funding, in addition to project manager manhours for preliminary engineering studies as required. Stakeholder and management involvement: Make your support of the project evident, and make it “popular” to support the project

The ability to successfully implement capital projects continues to be a worthy and challenging endeavor, and the above has just scratched the surface when it comes to execution items to consider.

Author: Sven Swenson Senior Vice President of Technical Services Delta Energy Services LLC Sven@workdelta.com 352-201-9848