Keeping a capital project on schedule and within budget is often easier said than done. With so many moving parts, risk management is critical. However, many industrial construction companies fail to successfully incorporate project controls, which are important for gathering and analyzing data to monitor project costs and schedules while minimizing the potential for risks.
According to an analysis by the Construction Industry Institute, only 5.4% of 975 capital projects evaluated met stakeholder goals for cost and schedule. The primary risk to a project is a lack of scope definition. Without a properly defined project scope, adequate project controls cannot be established. Project controls and risk management strategies are critical in identifying and mitigating potential risks such as schedule delays and limiting change orders to ensure the best results.
Below, we detail early-stage and execution-stage project controls to incorporate the benefits of using an engineering, procurement, and construction (EPC) delivery “mindset” to ensure capital project success
Project Controls in Front-End Planning and Execution
Project controls are defined for each stage in the capital project life cycle. The earliest project phases include front-end planning, which is important for detailing project objectives and defining the project scope. During this planning, the project owner works with the contractor to establish a strong scope and reduce the potential for future change orders or other costly plan modifications.
This is important because even at this stage, a successful project relies on management teams that can assess cash flow accrual and expenditures through each phase of the project. Being able to incorporate these estimates alongside schedule requirements and risk management procedures creates project controls that can identify and mitigate issues such as cost overruns before they happen.
It’s also important to implement project controls during the execution stage of the project to ensure that work is being completed according to plan. Having these controls in place helps mitigate any risks that might arise due to changes or delays that occur during detail design or construction.
Benefits of EPC for Project Controls and Risk Management
With proper planning, any project can be a success, but the EPC method provides another level of structure and certainty to project execution. The EPC structure helps establish a fully integrated project schedule from the start. Since there is overlap and consistent communication between the engineering, procurement, and construction teams, the contractor and the project owner can establish and evaluate cash flow projections and potential risks from the earliest stages.
Using the EPC delivery structure also creates a higher level of constructability in the project. Designers and engineers who focus on construction execution help minimize safety concerns and, therefore, risk factors for delays. There is also significant prior data regarding procurement and construction team performance. Schedules are developed based on prior work successes, and the execution planning team is the same from front-end planning to construction.
EPC management also helps eliminate density issues where too many people are working at one physical point on the construction site. This improves risk management by avoiding safety and execution issues that can cause delays due to manpower buildup.
H+M Industrial EPC: Your Partner in Capital Project Management
At H+M Industrial EPC, our collaborative teamwork, superior work processes, and quality management system allow us to incorporate the most effective and efficient project controls and risk management processes to help reduce timeline delays and cost overruns.
We are dedicated to providing trust, experience, and efficiency through all stages of engineering, procurement, and construction through our proven strategic EPC approach. Our comprehensive services, including detail engineering and design, procurement, fabrication, and construction, allow us to take your project from conception to completion, tailoring engineering and design solutions to meet your unique needs.
