PROJECT MANAGEMENT

CAPTIVE POWER

PLANT PROJECT

Presentation by

Mahesh V. KulkarniVth Term - OperationsManipal University

A Power plant

PROJECT – Turnkey in Nature 2 x 2.5 MW Captive Power Plant spread over 4 acres of

land (free field)

2 x G3612, 11 KV, 1500 RPM Natural Gas Gensets

Customer: Southern Energy Development Corporation Ltd. (SEDCO) – a Carborandum Universal Group

Location: Nallur, Mannargudi (near Tanjavur), Tamilnadu

Consultant: Aquatherm Consulting Engineers, Chennai

Guarantees- Fuel Consumption, Lube oil Consumption, Genset output power

NEED FOR PROJECT MGMT.- WHY DID OUR COMPANY FORM A PROJECT MGT. DEPARTMENT?

• Too many projects running over time and overbudget

Project scope creep Project management

responsibility not clear Too much emphasis on outputs

rather thanoutcomes

Insufficient emphasis on risks

Saves company TIME….MONEY

Triple constraint

Quality

Scope

Time

Cost

Project department - Sandwich

Takeover from Sales

Handover to Service department

Sales Service

Project

Five Phases of Project Management Phases

Developing the Plan

Scoping the Project

Launching thePlan

Monitoring &ControllingClosing Out the

Project

Scoping the project- Primarily it is the definition and control of what IS & IS NOT included in the project

Project Scoping FormProject Name – SEDCO

Project Manager – Mahesh Kulkarni

Team Members – 05 nos.

Opportunity (Why do this project?): To earn profitProject Goal: Smooth executionObjectives: Timely completion within a allotted costsSuccess Criteria (Outcomes): Effective commissioning of all equipment by suppliersAssumptions, Risks, Obstacles: Technological,Environmental, Interpersonal, Cultural, Political

SCOPE Imported supply from USA – Value USD 1.5 Mn

Indigenous supply (Balance of plant) – INR 2.62 Crores

Erection of all supplied items

Time frame – 6 months

Imported scope by Letter of Credit

Indigenous supply payment terms – 50 % advance, 30 % against supply and 20 % after commissioning.

33 KV Substation supply and erection by Bharat Bijlee

Govt. approvals from 1. TNEB, 2. GAIL, 3. CEIG, 4. Pollution control board

Total vendors in the project – 11 nos. (EPC Contractor – mechanical & electrical, manufacturers of air compressors, air receivers, Radiator, NGR Panel, Circuit breaker panel, MCC panel, main and auxiliary transformer, LAVT panel, Control & Relay panel, etc.)

Developing The Plan

Construct/AnalyzeProject Network

Prepare theProject Proposal

Identify ProjectTasks (WBS)

Estimate Task Duration

Determine Resource Requirements

Project Planning Activity• Create a work break

down structure (WBS) for the project you identified in the scoping document. Identify and sequence tasks.

WBS - A WBS is the functional decomposition of a system, it breaks the project into chunks of work at a level of detail that meets planning and scheduling needs

WBS:SEDCO PROJECT

3. CONSTRUCTION2. PROCUREMENT1. DESIGN & ENGINEERING

1.1 Sizing of equipment

1.1.1 Foundation

1.1.2 Piping layout

1.2 Drawings

1.3 Consultant approvals

2.1 Order placement

2.1.1 Long delivery items

2.1.2 Short delivery items

2.2 Inspection

2.3 Clearance & Transportation to site

3.1 Unloading at site & Erection

3.1.1 Erection of equipment on foundation

3.1.2 Piping and cabling

3.2 Pre-commissioning checks

3.3 Plant trial run and handover

Advance

Project Planning: Resources

1. People - skills and value

2. Facilities – Office, AutoCAD, computers and softwares, Vehicles, etc.

3. Equipment – like Crane – hired

General Manager …

DRAFTSMAN …..

ELECTRICAL ENGR.…….

Manager Projects ……..

SITE MANAGER …….

Manager Projects (S. Sridhar)Project Manager ……

Commissioning Engr. …..

Finance Manager ….

Principal …..

Suppliers for indigenous supplies(11 vendors)

Service Manager (Singuttuvan)

Customer - SEDCO(Project Mgr.)

Consultant–Aquatherm ….

4. Time – Six months starting 1st March

Role of a Project Manager Role:

Process Responsibilities

People Responsibilities

• Project issues • Disseminating project information• Mitigating project risk • Quality • Managing scope • Metrics • Managing the overall work plan

• Implementing standard processes• Establishing leadership skills• Setting expectations• Team building• Communicator skills

Duties & Responsibilities of PMI. PLANNING: Breaking down Project into independent

activities or events with the help of Bar Chart.

Providing progress reporting at regular intervals to the Customer, Consultant and Caterpillar with a copy to Service department.

Reallocation / rearranging money/resources to improve schedule.

III. INSPECTIONS & DESPATCHES: Witnessing the equipment inspection at

suppliers place. coordinating with Customer for allotting safe

equipment unloading and storage area at site.

IV. SITE CO-ORDINATION : Visiting site for checking Civil developments. Guiding mechanical contractor and Customer

at site for flushing of piping, welding & surface preparation, pre-commissioning checks to suit Caterpillar standards.

II. TECHNICAL ACTIVITIES: Preparation of Specification of material for

mechanical bought out items like Pipes, Elbows, Valves, Flexible hoses required for Cooling system, Starting air system.

Preparation of Material specification for fabricated items like Chimney, Exhaust & Intake duct, etc.

Preparation of Mechanical Drawings – As built P & I drawings and Isometric drawings for Natural Gas system, Air start system, Cooling Water system, etc

V. COMMERCIAL: Evaluation of the offers from vendors techno–

commercially. Negotiating with suppliers effectively to avoid

cost over run & make maximum profit margins. Planning cash flow (in & out) with the help of

Finance department for smooth project operation.

Coordinating with Finance Department for releasing the payment to suppliers after checking proper attached documents.

Collecting payment for additional supply of material other than Purchase order.

Calculating the profit earned in the project

Gantt Chart (Microsoft Office Project Professional 2003)

Visual scheduling tool Graphical representation

of information in WBS

Show dependencies between tasks, personnel, and other resources allocations

Track progress towards completion

Gantt Chart – Example

Estimated time to complete a task

Task

s

Bars indicate time requirement

Arrows indicate task dependencies: Predecessor task Successor task

Look Out for the Creepers! Scope Creep - Change is constant – must be

accommodated (Comes from the customer)

Civil design – due to change in civil structure by Customer

Power plant logic - Frequent changes in the electrical logic by Customer’s site manager

Accommodated and completed the project on time

Project communication - Absolutely critical to the success of projects!

Project meetings with suppliers - Meets weekly to resolve short-term conflicts, look ahead to the remaining development cycle. Attended by project manager, project engineers, projects manager (if required).

Planning meetings – Inter-organizational - review progress on goals, resolution of cross division functional conflicts, perform mid-course corrections, review cash flow, etc. Attended by division heads, project manager, GM (if reqd.)

Fortnight coordination meetings with Customer and Consultants – Meets for reviewing the progress, approvals, set milestones for future weeks, commissioning schedule, etc. Attended by project manager, project engineers, projects manager (if required).

Quality Management Quality Management is the process that

insure the project will meet the needs via: Quality Planning, Quality Assurance, and Quality

Control. Quality is ensured by Clearly Defined Quality Performance Standards Stage inspection of equipment to verify

conformity / adherence to specifications, Testing and Quality Assurance Processes will

ensure standards are satisfied Continuous ongoing quality control

Project Financial Management Divide and conquer

To make a better estimate, divided the project into individual subsystems.

Then divided each subsystem further into the activities that will be required to develop it.

Next, made a series of detailed estimates for each individual activity.

And sum the results to arrive at the grand total estimate for the project.

Tight control of costs by supervising any changes in the scope.

Preparation of cash inflow and outflow statement

Budget

SUCCESSES

Customer Requirements satisfied

Completed within allocated time frame +

2 extra months with prior notification (out of 2 months, 1 month

recorded as Force majeure)

Completed within allocated budget

Accepted by the customer

Difficulties and Risks in Project Management Road Transport strike lasted for 2 weeks,

Difficulty in transporting the heavy equipment to the rural area due to lots of curves,

Communist area – additional amount to Comrades for each truck,

Language barrier – interior people speaks Tamil only,

Slowing of erection activities due to heavy Monsoon,

Erection contractor – Inexperienced junior engr. appointed at site,

Delays due to short fall of material at site,

Finance Manager transferring the project funds to other projects or emergency without the consent of project manager. Thereby, delay the payment to the Suppliers

Food at site

LESSONS

Planning and Engineering – most important, Contingency in Time need to be considered, PESTEL Analysis (Environment scanning) shall be done, Project management Training to the individuals, Getting the scale of the project management in

proportion to the size and impact of the project, Better monitoring of milestones (and remedial action

when milestones are not being met) Project team shall be micro-managing

Rewards – Direct & Indirect SEDCO admired our team efforts and gifted

a Silver Peacock Monument in a ceremony

Our company announced a bonus of INR 30,000 to project team,

Recognition in the company,

New doors of opportunities opened.