Program Success through Program Success through ExecutionExecution

John RigbyJohn Rigby

JBEKJBEK

Case StudyCase Study2000 CII Annual Conference2000 CII Annual Conference

Nashville, TennesseeNashville, Tennessee

Vic KleinfelterVic Kleinfelter

DuPontDuPont

A Case StudyA Case Study

DuPont Fluoroproducts DuPont Fluoroproducts

Expansion ProgramsExpansion Programs

Washington Works FacilityWashington Works Facility

Parkersburg, West VirginiaParkersburg, West Virginia

Owner’s SiteOwner’s Site

Owner’s SiteOwner’s Site

Washington Works SiteWashington Works Site

•Eight major manufacturing Eight major manufacturing areasareas

•2,000 acres2,000 acres

•200 employees in 1948; over 200 employees in 1948; over 2,300 now2,300 now

Site Capital WorkSite Capital Work

PeriodPeriod WorkWork Projects Projects ValueValue

1994-19951994-1995 MiscellaneousMiscellaneous 66 $50 MM$50 MM

1995-19971995-1997 FPFP** Expansion Expansion 55 $180 MM$180 MM (EPC I) (EPC I)

1997-20001997-2000 FPFP** Improvements Improvements 77 $80 MM$80 MM (EPC II) (EPC II)

*Fluoropolymers*Fluoropolymers

Alliance Contractors for Alliance Contractors for ProgramProgram

JBEK JBEK (Joint venture: BE&K and Kvaerner)(Joint venture: BE&K and Kvaerner)

– Contractor EPC Program ManagerContractor EPC Program Manager

– Engineering-procurement responsibilityEngineering-procurement responsibility

MK MK (Joint venture partner with JBEK for (Joint venture partner with JBEK for

EPC)EPC)

– Construction responsibilityConstruction responsibility

HistoryHistory

• Low levels of workLow levels of work

• Contractors working independently Contractors working independently for DuPontfor DuPont

• No state-of-the-art engineering toolsNo state-of-the-art engineering tools

• Craft resource pool oriented toward Craft resource pool oriented toward small capital work, supplemental small capital work, supplemental maintenancemaintenance

HistoryHistory(continued)(continued)

•Major cost overrunsMajor cost overruns

•Late completionsLate completions

•Rework and change Rework and change combined - in excess of 20 combined - in excess of 20 percentpercent

•No team orientationNo team orientation

The ChallengeThe Challenge

• Safety-health-environment is a Safety-health-environment is a requirement.requirement.

• Leadership and teamwork Leadership and teamwork essential to success.essential to success.

• Use EPC principles for execution.Use EPC principles for execution.

EPC Principles of EPC Principles of ExecutionExecution

• Total project focusTotal project focus

• Single-point responsibilitySingle-point responsibility

• Open communicationsOpen communications

• Performance-driven executionPerformance-driven execution

• Truly integrated systemsTruly integrated systems

• Flexibility to meet the business needsFlexibility to meet the business needs

TenantsTenants

• Safety-Health-EnvironmentSafety-Health-Environment

• ScheduleSchedule

• CostCost

• QualityQuality

• RelationshipsRelationships

• SystemsSystems

• Work processesWork processes

• People relationshipsPeople relationships

Program SuccessProgram Success

BarriersBarriers

Critical Success Factors

Critical Success Factors

The EvolutionThe Evolution

• Two alliance contractors Two alliance contractors individually serving DuPontindividually serving DuPont

• Two alliance contractors Two alliance contractors working together — EPC working together — EPC contractorscontractors

• EPC contractors integrated with EPC contractors integrated with DuPont businesses — EPC TeamDuPont businesses — EPC Team

The Program’s Improvement The Program’s Improvement AreasAreas

•SafetySafety

•Work force productivityWork force productivity

•Labor relationsLabor relations

•Construction innovationConstruction innovation

•Engineering design tools and Engineering design tools and deliverablesdeliverables

•Pipe reworkPipe rework

•Project controlsProject controls

•Procurement and material controlProcurement and material control

•RelationshipsRelationships

Business Cost EvaluationBusiness Cost Evaluation

ITCITC

EPC EvaluationEPC Evaluation

’’0000’’9494 ’’9898’’9595

20%20%

’’9797’’9696 ’’9999

(Shown as trend only)(Shown as trend only)

Pre-Pre-PrograProgra

mm

EPCEPCTeamTeam

ProgramProgram

EPC 1EPC 1ProgramProgram

Bu

dg

et/

Cost

Perf

orm

an

ce

Bu

dg

et/

Cost

Perf

orm

an

ce

(Over-

run

)(O

ver-

run

)

00

-20%-20%

(Un

der-

run

)(U

nd

er-

run

)

Total Site Work Sample Total Site Work Sample SummarySummary

Field and Shop CombinedField and Shop Combined

60.460.4

64.764.7

69.169.1

67.167.1

65.865.8

67.967.9

66.766.767.167.1

67.367.3

65.365.365.665.6

67.467.467.867.8

69.369.3

71.771.7

70.170.1707070.170.170.270.2

70.770.7

72.972.972.772.7

73.473.4

71.971.971.571.5

71.171.1

72.372.3

70.770.7

72.572.572.272.2

71.171.171.571.5

71.971.9

72.772.7

72.172.1

73.673.6

60

65

70

75

65.765.7

6767%%

Site Goal = 74Site Goal = 74

1996 1997 1998 1999 2000

Program Carry-Over to Site Program Carry-Over to Site PerformancePerformance

• HistoryHistory

• Initial ConceptInitial Concept– $4.0 MM budget$4.0 MM budget

– Outage of six to eight weeksOutage of six to eight weeks

• Final ProposalFinal Proposal– $2.3 MM budget$2.3 MM budget

– 18-day outage18-day outage

• Construction Innovation through Construction Innovation through EngineeringEngineering

– 650-ton Demag650-ton Demag

– Twin path (fiber optic) slingsTwin path (fiber optic) slings

Delrin Capper Replacement ProjectDelrin Capper Replacement Project

• Final results: $12.125 MM valueFinal results: $12.125 MM value– 15-day outage15-day outage

– Completed under budgetCompleted under budget

• Direct business valueDirect business value– $2.0 MM under original concept$2.0 MM under original concept

– Completed almost six weeks early ($10.125 MM)Completed almost six weeks early ($10.125 MM)

• Added valueAdded value– Reduced maintenance cost ($1.0 MM/yr)Reduced maintenance cost ($1.0 MM/yr)

– Uptime gain ($1.0 MM/yr)Uptime gain ($1.0 MM/yr)

Program Carry-Over to Site Program Carry-Over to Site PerformancePerformance

Delrin Capper Replacement ProjectDelrin Capper Replacement Project

Future StateFuture State

EPC FPEPC FPProgramProgramEPC FPEPC FP

ProgramProgram

EPCEPCFutureFuture

ProgramsPrograms

EPCEPCFutureFuture

ProgramsProgramsCIPCIPCIPCIP

LessonsLessonsLearnedLearnedLessonsLessonsLearnedLearned

SuccessfulSuccessfulAccomplish-Accomplish-

mentsments

SuccessfulSuccessfulAccomplish-Accomplish-

mentsments

EPC TeamEPC Team

A legacyA legacy

for thefor the

futurefuture

Program Success through Program Success through Execution Implementation Execution Implementation

SessionSessionModerator:Moderator: John Rigby (JBEK)John Rigby (JBEK)

Panelists:Panelists: Vic Kleinfelter (DuPont)Vic Kleinfelter (DuPont)J. Peter Ellefson J. Peter Ellefson

(DuPont)(DuPont) David Adams (MK Corp.)David Adams (MK Corp.)

Presentation:Presentation:David AdamsDavid Adams SafetySafety

Labor RelationsLabor RelationsWork Force ProductivityWork Force Productivity

Pete EllefsonPete Ellefson Design ToolsDesign ToolsPipe ReworkPipe ReworkResponsiveness to Responsiveness to

ChangeChange RelationshipsRelationshipsValue-Added Value-Added

ResultsResults