Hydrocarbon Processing - October 2021 - 67

Engineering and Construction
take much imagination to see the large impact and cost that this
simple but poorly thought-out engineering decision incurred.
Passive management of pipe spool fabrication. Of the
four basic categories of materials (major equipment, fabricated
systems, standard components and consumables), fabricated
systems require the highest level of collaboration and they suffer
the most when the EPC contractor passively manages the process.
Fabricated systems can take many forms, but the two most
prevalent in a process plant are pipe spools and structural steel.
With the piping design, the supply, fabrication and erection
processes are almost always on a secondary critical path, if not
the primary path-and EPC contractors who actively engage
with pipe spool fabricators reap a smoother construction path,
particularly where the materials management team takes the lead.
In another example, two projects were being executed in
parallel for the same client. Each project had similar scopes
and logistical challenges, but were managed by two different
project teams. Both projects awarded the fabrication PO to the
same fabricator, and, due to their compressed schedules and
logistical challenges, both chose to free-issue spool materials
for fabrication as opposed to relying on the fabricator to supply
the spool materials.
Project A took a passive approach, with the procurement
organization managing the spool fabricator. While its procurement
team shared high-level priorities with the fabricator, assuming
that the spool component materials would be received
upon shipment, it did not integrate systems with the fabricator.
Instead, this team relied on the fabricator to work according to
project priorities by using the fabricator's standard cascade allocation
execution. Unsatisfactories, overs, shorts and deficiencies
(UOS&Ds) were not addressed upon shipment receipt. The
project team produced delivery curves from its sophisticated materials
management tool, but only at the ISO level, as that was the
finest granularity that the project engineering team could deliver.
Project B had its materials manager manage the spool fabricator,
proactively coordinating engineering and construction aspects,
as well as procurement aspects, of the PO. High-level priorities
were shared with the fabricator, but, in contrast to Project A,
project systems were integrated with the fabricator. The project
team was able to deliver priorities at the spool level directly into
the fabricator's system. Project B received the finer granularity of
takeoff at the spool level (which the project's engineering team
was unable to do) and included the fabricator's receipt data, capturing
UOS&Ds in the project materials management system. As
a result, instead of being forced to rely on the fabricator's cascade
allocation system to release spools into fabrication, Project B utilized
the project's sophisticated construction priorities materials
management tool and specifically directed the fabrication of each
spool. As a result, not only did Project B's spool fabrication go
smoother, but so did its downstream piping erection program.
Fabricators generally utilize a cascade allocation system, designed
to get as many spools as possible into fabrication. While
this approach can achieve the intended goal, it does so to the detriment
of individual spool delivery priorities.
TABLE 1 depicts the differing delivery sequence for two identical
spools. The first path is via a cascade system, which does
not hold inventory for otherwise non-releasable spools if that
inventory can be used to put a lower-priority spool into fabrication.
The second path is through a priorities system that reserves
10
15
20
25
30
35
40
45
50
55
5
Area Priorities (10) -
Earliest to Latest (left to right)
90% delivered
70% delivered
50% delivered
Erectability Trend Line
10 weeks
10
15
20
25
30
35
40
45
50
55
5
Area Priorities (57) -
Earliest to Latest (left to right)
FIG. 3. Pipe spool delivery curves: Project A (left) vs. Project B (right).
inventory for spools by priority, even if the spool has other materials
not available. The cascade system will get more spools
delivered sooner; however, these spools tend to be the wrong
ones. TABLE 1 shows that, for the two spools in question, while
the cascade system has an enhanced delivery curve, it gets one
spool to the jobsite too early, and the other spool arrives there
too late. In contrast, while the priorities system has a delayed
delivery curve relative to the cascade system, this system gets
the spools to the jobsite when they are needed. The cascade system
not only negatively impacts erection, but it also requires the
jobsite's warehousing team to unnecessarily store and manage
spools. Multiply this by 10,000 for a project with 20,000 spools
and the ensuing chaos is obvious.
Project A's early delivery curves were not grounded in hard
data, but on the fabricator working to project priorities. Spools
were cannibalized by the fabricator's cascade system as the fabrication
process proceeded, causing the curves to slip more than
6 mos to the right. Project B's curves were initially less optimistic,
but, as they were grounded on hard data from the integration,
they proved to be more accurate. Project B's actual delivery
curve never slipped outside of a +/- 10% delivery time frame.
FIG. 3 shows flat spool delivery on Project A, relative to actual
construction priorities, as opposed to the far steeper and more
desirable curve on Project B.
Project A communicated only 10 priorities to the fabricator
and allowed the fabricator to release spools into fabrication,
utilizing the fabricator's cascade allocation process. The net effect
was that the first priority area achieved erectability (i.e., the
level of spool deliveries at the jobsite necessary to support the
start of erection) 30 wk after deliveries began. The last priority
area achieved erectability at 40 wk-only 10 wk after the first
priority. This delayed the start of pipe spool erection at the jobsite
and created an undesirable peak in resource staffing.
Project B communicated 57 priorities to the fabricator, integrated
the fabricator's enterprise resource planning system with
Project B's materials management tool, and directed the fabricator
to release spools into fabrication on an individual spool basis
by using Project B's materials management tool. The net effect
was that the first priority area achieved erectability 15 wk after
deliveries began. The last priority achieved erectability at 48
wk, a 33-wk difference. This facilitated an early pipe spool erecHydrocarbon
Processing | OCTOBER 2021 67
90% delivered
70% delivered
50% delivered
Erectability Trend Line
33 weeks
Weeks
Weeks
Hydrocarbon Processing - October 2021

Table of Contents for the Digital Edition of Hydrocarbon Processing - October 2021
