logistics perspective
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logistics perspective
Spoljaric, who wears the dual hats of traffic and logistics manager and procurement innovation lead for Bechtel’s oil, gas and chemicals global business unit, couldn’t be more enthusiastic. Spoljaric readily recognizes that, as he puts it, “a project can go in the wrong direction quite quickly.” However, if a potential issue is predicted ahead of time, measures – perhaps as simple as modifying a pipe rack system or adding a ship to the shipping program – can be put in place before a domino effect leads to expensive consequences. “A one-day arrival delay for a ship to a construction site could be 10 times what the cost for a ship is,” Spoljaric said. “By our getting smarter and more predictive, clients will have a better sense of what to expect, and so will the carriers, so it takes away surprises.”
ADVANCING TRADITION
PREDICTABLY INNOVATIVE Bechtel Aims to Increase Certainty in Project Logistics
P
BY PAUL SCOTT ABBOTT
roject cargo logistics will always entail its share of surprises, but an innovationencouraging initiative under way at construction industry giant Bechtel is taking aim at significantly reducing the probability – and cost – of unexpected occurrences. Bechtel’s Engineered Logistics approach deploys such leading-edge tools as 4-D simulation and virtual
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Bechtel, certainly no stranger to innovation, has a company catchphrase of “engineering the extraordinary,” and its forward-thinking approach has clearly paid off over the course of more than a century. Founded in 1898, San Franciscobased Bechtel, which in 2015 reaped revenue of more than US$32 billion, has been the top-revenue U.S. construction and civil engineering company for 18 consecutive years, according to an Engineering News-Record ranking.
reality to further improve the certainty in managing project cargo logistics. “Everyone knows it’s been a tough go for the industry with recent market conditions,” said Stephen R. Spoljaric, who is at the forefront of the Bechtel initiative. “Anywhere we can take out contingency and pin down real probability of risk and pin down schedules helps carriers, Bechtel and clients.”
means to retain expert knowledge and record historical data for future use. “This effort,” he said, “is timely, especially for the current business climate of low profit margins, increasing modularization, remote jobsites, dependence on global supply chain and limited transportation resources.”
‘INTRAPRENEURIAL INNOVATION’ Dr. Neil N. Eldin
David Wilson
University of Houston
Bechtel
But to stay at the top of the engineering, procurement and construction industry heap, Bechtel, particularly in challenging times, isn’t satisfied with the status quo. Thus Bechtel’s Engineered Logistics approach, which since early 2016 has been moving forward through a funded research project with the University of Houston’s College of Technology, is slated to begin implementation with clients in early 2017. Neil N. Eldin, dean of the college, said he sees practical application of the quantitative, risk-based approach as highly beneficial. “Expert judgment along with the simulation-based planning can improve on-time deliveries and thus offers tremendous savings to clients,” said Eldin, who holds a doctorate in civil engineering. “This approach provides a systematic
David Wilson, Bechtel’s deputy chief innovation officer, termed the program “intrapreneurial innovation,” noting that any of the company’s more than 50,000 employees worldwide may submit concepts that are preliminarily evaluated by a small team that includes Wilson and two or three colleagues. Wilson said more than 1,000 concepts have been received and put through a litmus test of whether they are truly disruptive, expandable to broader application, translatable to prototype, testable “in the sandbox” and aligned with corporate strategic objectives. After an idea is green-lighted for initial pursuit, it may be advanced in collaboration with an existing Bechtel team already working on a similar concept, or, if it’s all-new, the originator may take it to the proverbial sandbox. That high-tech “sandbox” is the Bechtel Innovation Center in Houston, a lab outfitted with 4-D modeling software, 360-degree cameras, drones and a host of other virtual reality and augmented reality technologies. “If folks have an idea that can help us deliver in a better, faster, leaner manner,” Wilson said, “we provide the space for prototyping and then, if successful, go to small scale pilots which can then expand across the enterprise.”
The Bechtel Innovation Center in Houston. From left, seated, are Andrew Young, critical equipment transport subject matter expert; and Stephen R. Spoljaric, procurement innovation lead and oil, gas and chemicals global business unit traffic and logistics manager. Standing, from left, are Nick Crow, chartering manager; Jorge Reyes, senior transportation and logistics estimator; and Trent Legendre, transportation and logistics technologist. Credit: Bechtel Corp. ISSUE 5 / 2016
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ISSUE 5 / 2016
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ANADA
logistics perspective
TED STATES
Memphis
Tenn-Tom Waterway ATLANTIC OCEAN
Port of Port of New Mobile Orleans
MEXICO
CEAN
GULF OF MEXICO
CUBA HAITI
BELIZE
DOMINICAN REPUBLIC PUERTO RICO
JAMAICA
GUATEMALA HONDURAS EL SALVADOR
NICARAGUA COSTA RICA
PANAMA
Panama Canal
VENEZUELA COLUMBIA
EQUADOR PERU
BRAZIL
4-D MODELING
Spoljaric pointed to fourdimensional, or 4-D, modeling as a particularly helpful tool, with real data, not averages, applied in creating a visual portrayal of a sequence of events for project shipments that can give customers and carriers alike a superior view of what to anticipate. “We’re not just dealing with drawings on a piece of paper,” he said. “We’re dealing with something that’s a bit futuristic and that’s cool, too.” The 4-D modeling software enables Bechtel to accurately evaluate risk, cost and schedule in a module shipping program, allowing clients to see probabilities of how the shipping program will operate. For example, with further evaluation of upstream activities, Bechtel can determine the accuracy of readiness dates from the module construction yard. This can go a long way to reduce or even eliminate the need for contingencies that are frequently included in a project in a not-very-scientific manner to cover “what-if” scenarios. “The predictive nature of this 30 BREAKBULK MAGAZINE www.breakbulk.com
A screen shot of a 4-D simulation model shows how Bechtel’s engineered logistics initiative aids in visualization of a complex project cargo move. Credit: University of Houston
innovation will also allow carriers to properly plan to provide transport services without adding unnecessary contingency,” Spoljaric said. “If the simulation model identifies concerns, these can be addressed far in advance by Bechtel and our carriers to develop efficient solutions. “For the size of these giga-projects, the freight spend on modules can be in the hundreds of millions of dollars,” he said. “We need to be as accurate and predictable as possible.”
VIEWING HOLOGRAMS
Meanwhile, 360-degree cameras, drones, self-contained holographic computers and other advanced visual technologies can be used to view modules as holograms during preconstruction and then in real time
throughout construction and transport. “Again, this innovation increases certainty in the plan,” Spoljaric said, adding that it may alleviate unneeded travel by carrier port captains, project managers and Bechtel staff during the fabrication phase. “Dimensions can be taken virtually and the files will be shared with the carriers – and insurance – far in advance of vessel arrival so that there are no surprises during loading,” he said. “Improved safety and avoiding wasted time will be the biggest benefits.” Wilson said an initial advantage is likely to come in, speeding the ability to respond to potential concerns before they become costly problems. “Sometimes, getting from here to there isn’t necessarily different,” he said, “but how quickly we do it may be.” Spoljaric emphasized that the Engineered Logistics approach is applicable not just to ocean transport, but can be integrated across the full spectrum of modes. This includes trucking, with which he has extensive professional experience from his work prior to joining Bechtel in 2012. “It’s not going to solve every problem,” Spoljaric said, “but I think it’s going to make things more predictable.” Indeed, the objective is to reach 95 percent to 97 percent predictability – not quite perfect but considerably better than the current industry-accepted standard. “Innovation is definitely not a destination,” Spoljaric said. “This is the opportunity to challenge one another in what we’re doing, to get things more standard so we get more creative. “The traditional way is still there, but now there’s this other way,” he said, “I think we’re just scratching the surface of the potential for some of these things.” BB A veteran transportation writer for the past 40 years, U.S.-based Paul Scott Abbott specializes in maritime topics. ISSUE 5 / 2016
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For additional information contact Bobby Keel, Manager of Pricing and Logistics at (912) 965-6369, bkeel@gaports.com. gaports.com/breakbulk