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7/28/2019 Cost Engineering_Analyse Your Projects Through Estimating Life Cycle
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Analysing your Projects through your Estimating Life CycleRaymond Hagedoorn (CCE)
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Projectinitiation
note
40%
Screening
estimate
Economics
Step 1
Feasibilitystudy
25%Study
estimate
Economics
Step 2
Developmentplan
25%
Budgetestimate
Economics
Step 3
initial
execution
plan
Initial
commit.plan
Basis fordesign
Projectspecification
10%Control
estimate
commit.plan
Economics
Step 4
Operationsreference
plan
Projectexecution
plan
Detaileddesign
Materialsprocurement
ConstructionCommission.
start-uphandover
Approval Approval
Review
Approval
Review
Approval
Identicalto
Executionphase
Abandon
project
Commit. &cost control
Contractcontrol
Purchaseorder control
Reporting
Operationsreferenceplan
Close out
Projectdebrief
Change
control
5%Counter
estimate
Step 5
Identification phase Definition phase Execution phaseOperational
phase
Abandon
phase
Step 6 Step 7
Identicalto
Executionphase
Project Life Cycle
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AACE Cost Estimate Classification System - Process Industries
Primary
Characteristic
Secondary Characteristic
ESTIMATECLASS
LEVEL OFPROJECT
DEFINITION
ENDUSAGE
METHODOLOGY EXPECTEDACCURACY
RANGE
PREPARATIONEFFORT
5 0% to 2% concept
screening
capacity factored,
parametricmodels, judgment,
or analogy
L: -20% to -50%
H: +30% to + 100%
1
4 1% to 15% study or
feasibility
equipment
factored orparametric models
L: -15% to -30%
H: +20% to + 50%
2 to 4
3 10% to 40% budget,
authorization orcontrol
semi-detailed unit
cost withassembly level line
items
L: -10% to -20%
H: +10% to + 30%
3 to 10
2 30% to 70% control or bid /tender
detailed unit costwith forced
detailed take-off
L: -5% to -15%
H: +5% to + 20%
4 to 20
1 50% to 100% check estimate or
bid / tender
detailed unit cost
with detailed take-off
L: -3% to -10%
H: +3% to + 15%
5 to 100
How much time is spent?
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Estimating cycle: the ideal scenario
INITIATION UP TO CLOSE-OUT PHASE
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> Learn from your estimates in previous phase
> Compare class 4 -> class 3 -> class 2
> Learn from your past projects
> Compare similar projects and historical data
> Classification required!
> Analyze scope development
> Perform health checks to be more confident
> Time analysis and cash flow trending
> Determine key metrics to benchmark your organization
> Business intelligence through regression analysis, pivottables, or other methods of data mining
Analyse your Projects through the Life Cycle
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> Estimate your whole project life cycle (design, build, maintain) in one system;
> Class 4 (40%), Class 3 (20%), Class 2 (10%) in one package
> Gradual increase of accuracy (Class 3, Class 2)
> Closing the loop: analyze benchmarks in class 2 estimates as input for class 4
estimates.> Enhance your business intelligence through transparency:
> Knowing your exact cost(direct, allowances, indirect, escalation, contingency)
> Knowing the effects on cost of
scope changes> Keep an overview in complex projects
Estimating with Cleopatra
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Breakdown structures
How to compare various levels of granularity?
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Breakdown structures: multi-dimensional view
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Show case:
Example project Estimating through
the project life cycle
Analyse the variousphases
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> Scope> Distillate process: raw product to middle distillate> By products: top and bottom> 28 pieces of equipment (columns, heat exchangers,
tanks, pumps, vessels)
> Executed in Western-Europe> Price level date 2011> Finish date: November 2012> Project life cycle: from feed to execution
> Plant design
> 3D model> Process flow diagram> Equipment list
Show case: Example Plant
http://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(Animation).avihttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(PFD).jpghttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(Equipment_list).xlshttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(Equipment_list).xlshttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(PFD).jpghttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(Animation).avi7/28/2019 Cost Engineering_Analyse Your Projects Through Estimating Life Cycle
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> Class 4 estimate (40% accuracy):> Based on Factors> Parametric Equipment Models> Applying Hand methodology> Distribution of disciplines
> Class 3 estimate (20% accuracy):> Object re-use (Engineering Standards)> Tuning for more accuracy> Include allowance, indirect, escalation and contingency> Disciplines: piping, mechanical, E&I, civil, etc.> Parts to be estimated
> Class 2 estimate (10% accuracy)
> Detailed Unit-Cost> Bill of Quantity / Material take off input> Equipment Parameters
Show case: Example Plant
http://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(PFD)-Estimate.jpghttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(BOQ-Estimate).xlshttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(BOQ-Estimate).xlshttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(BOQ-Estimate).xlshttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(BOQ-Estimate).xlshttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(PFD)-Estimate.jpghttp://localhost/var/www/apps/conversion/tmp/scratch_8/Typical_Plant_(PFD)-Estimate.jpg7/28/2019 Cost Engineering_Analyse Your Projects Through Estimating Life Cycle
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> Learn from estimates in previous phases> Compare Class 4 with Class 3 Estimate> Compare Class 3 with Class 2 Estimate> Compare Class 2 (industry norm) with Class 1 (vendor norm)
> Metrics & Benchmarking> Analyze metrics using pivot tables> View Key Quantities> Closing the loop: class 1 ratios for factor estimating
> Business intelligence
> Regression analysis> Create What-if scenario
> Cash Flow Analysis> Show cash flow and schedule
Show case: Example Plant
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Questions ?
Cost Engineering
E-mail: info@costengineering.euwww.costengineering.eu