It is a matter of having the right processes and the right attitude. Those are the keys to the successful completion of a project with today’s tight schedules. There are things that one can do to speed up programmes, such as a greater standardization of parts, but the two most important elements are processes and attitude.

One of the first things that Mitsui Babcock Energy Ltd (MBEL) put into effect when it began to develop its programmes was to draw up an extensive and thorough business operations process. This is intended to highlight all the tasks that need to be done, and to enable swift, logical and accurate control of estimations. These estimations cover several areas, including cost, time, variation effects, the scope of supply, and design.

Where does outsourcing fit?

There was a time when the task of a project manager was to ensure that the company’s factory was busy, and that outsourcing was something that you did when the factory was not able to cope. That situation, however, has long since changed. The situation now is that a company will concentrate on its core activities. The shortening of schedules results in more standardization, with an associated trend for companies to specialize in things that they are very good at.

Specifications are increasingly asking for more and more at a lower and lower price. This places a lot of commercial pressure on manufacturing centres to perform effectively, which again applies pressures leading towards outsourcing.

Outsourcing reduces the direct risk to the company. It does, however, require greater confidence in the company to which supply has been outsourced. The obvious and usual way of building up trust in such an alliance is to start with the outsourcing of smaller projects, and to build up.

IT has made project management a lot easier. The internet means that drawings can be more easily transferred around the world. Increased computing power makes it easier to carry out many analyses, and thus optimize designs. For example, boiler thermal design has become a lot faster and a lot more effective.

There is one potential problem in outsourcing, which is that of core technology. The company has to balance the need to keep its core technology special, and the need to pass out sufficient information to enable outsourcing companies to be able to intelligently interleave its activities.

What causes the biggest problems?

The main problems in projects today result from the shortening of timescales. More and more standardization is the consequence of this trend.

More outsourcing introduces more interfaces, which in turn leads to more documentation. This requires greater standardization of documentation formats. As the supplier base becomes more global, the problems of language and cultural differences become more noticeable.

More outsourcing also results in a greater need to pre-define the total scope of work for all parties.

Alliances are important. Iterations in design are inevitable at some point, and these will require an exchange of information. To achieve this successfully within the constraints of a high pressure time schedule requires a relationship between the involved parties that is focused on joint objectives.

What will happen over the next five years?

Over the next 5 years, there will be even more outsourcing. There will also be a growth in the automation of the engineering process.

Increasingly, project management will become an intrinsic part of everyone’s operations. The word alliance will become increasingly central to successful development of a project. Pressure for greater reductions in time scale, for more reductions in cost, and for improved technologies will continue. To achieve this, greater cooperation will be needed. Hardware suppliers may well become more specialized.

What does this mean to engineers?

By tradition, an engineer needed to have good technical skills, but had no great need for other skills. This is no longer true. A new breed of engineer is required. Engineers still need technical expertise, but they also need management and commercial skills. There is a greater need for engineers to be prepared to travel more than before.

Communication skills are more important than ever. The team concept is increasingly crucial, and interfaces between different companies are becoming fundamentally vital.

How is it done?

The key element is knowing exactly what needs to be done. Good definition of scope of work is crucial. If you don’t know exactly what you need to do, you won’t be able to do it.

Furthermore, it is important for all parties to be aware of the potential bottlenecks and critical paths. Companies need to know what the knock-on effects of a decision are likely to be. They also need to move from a traditional hierarchical structure to objective focused holistic teams.

Outsourcing in action – Pha Lai 2


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