Front-End Loading (FEL), also known as Front-End Planning (FEP), is an important part of the project management process in the engineering, procurement, and construction (EPC) industry. Conducting extensive FEL can help to ensure that capital projects are completed successfully, on time, and within budget.
This article will go into detail about Front-End Loading project management and what is necessary for each phase to be able to plan for success.
- What is Front-End Loading Project Management?
- The Stages of Front-End Loading
- Benefits and Challenges of Front-End Loading Project Management
- H+M Industrial: Experienced Front-End Loading Project Management
Front-End Loading is an approach to project management and project planning that is used to ensure that all critical decisions and preparations are made at the beginning of the project, which helps to minimize risk, reduce costs, and ensure the project is completed on time and within budget.
Front-End Loading is meant to set a path for the execution of detailed engineering, procurement and construction. The primary goal of Front-End Loading is to establish a thorough scope for the project to enable an accurate cost estimate, which will be used to determine if the full project is funded or not. The scope definition will determine specific equipment requirements, discipline specific quantity and labor estimates, layout and configuration, and will consider constructability and path to construction.
In the EPC industry, FEL typically involves several key stages, including opportunity assessment, conceptual design, feasibility studies, execution planning and basic engineering. During each of these stages, the project team conducts detailed analyses, makes critical decisions, and completes necessary preparations to ensure the project is on track.
The stages of Front-End Loading are meant to be used as a systematic process for developing budgetary numbers. The most important components that FEL tries to define are:
- Project feasibility
- Budget
- Labor needs
- Schedule
- Deliverables
- Client Options for Execution
FEL 1: Feasibility
During the feasibility stage of Front-End Loading, the project is typically loosely scoped. The purpose of the stage is to test the project idea against the investment criteria at a 50% cost estimate. This stage starts the process of drawing and sketching the project requirements. The deliverables at this stage are to help facilitate getting budgetary estimates.
FEL 1 should provide enough information to create the bones of a project. As Front-End Loading continues, deliverables become more developed and more complex.
While navigating through the feasibility stage, it’s important to consider the major equipment necessary and the prices for each piece of equipment. Utility evaluations can help contractors assess sites with pre-existing infrastructure to make sure that there are enough utilities for the heating, cooling, and electrical needs.
FEL 2: Concept
FEL 2 is the conceptual stage. This stage focuses on developing the scope further than just the bare bones. Larger projects will typically transfer from the feasibility phase to the conceptual phase, while smaller projects can often skip this stage if possible.
The transition from FEL 1 to FEL 2 is usually made over a discussion with the client. So while these stages are meant to ensure a thorough scope of work is fulfilled, if enough of the scope is developed where FEL 2 can be skipped and still provide thorough accurate results, the step will sometimes be skipped. This all depends on if the stakeholders believe enough has been identified to move forward. Communication across all involved is critical here to ensure success.
At the end of FEL 2, the goal is to have the budget within the range of plus or minus 30%. If the budget is too far out of the range, a conversation with the client will take place to determine whether the project will need to be cancelled or reevaluated, scaled back, or modified.
FEL 3: FEED
Once the client approves the continuation, FEL 3, or Front-End Engineering and Design (FEED), will begin. The goal here is to develop budgetary estimates are .+/- 10% to 15% Three major deliverables are meant to be accomplished during FEL 3:
- The P&IDs need to be ready for the detailed design phase.
- The equipment layout must be completed and approved. This will help contractors know where all the pieces of equipment are going to be set up and laid out. The second part of this deliverable is to try and lock down the locations.
- All equipment must be quoted and ready for purchase. The equipment pieces come with drawings that the different engineering disciplines need to have to complete their own deliverables.
At the end of FEL 3, clients can either move directly into design-build or detail design work. If everything's been correctly assessed during the FEL stages, an EPC proposal can be provided. These proposals include detailed engineering design, procurement, and construction.
Benefits
Implementing Front-End Loading project management gives contractors an organized way to develop the project scope. A thorough understanding of budgetary estimates and equipment needs can help contractors identify risks within the project. It can also help clients do ROI calculations. If something is not defined and priced properly, this could cause rework later on in the project.
There are several benefits to conducting extensive Front-End Loading for a capital project in the EPC industry. We’ve listed them below for further consideration.
Challenges
It can be a challenge to get all of the right stakeholders involved. However, it’s incredibly important that everyone’s voices are heard and their various expertise is involved. This diversity of professinal expertise can help with risk management and prevention.
For example, if the contractor in charge of maintenance is not involved early on, there may be missing information necessary to maintain the project that isn’t taken into consideration when implementing new infrastructure. This can mess up schedules, budgets, and more. The further into the FEL stages, the harder it is to mitigate those changes.
H+M Industrial EPC understands that Front-End Loading project management is necessary for the development of scope and for mitigating change orders later in the project. At H+M, we get all necessary personnel involved in the FEL process so we can incorporate versatile perspectives and expertise into the scope creation for more accurate results. H+M has a full team that can support any level of development and budgetary estimates. Contact us today!
