The modern approach

Dean Edmundson
Primavera Systems Inc.

Some of the greatest challenges facing power generation plants today can be found in the planning and execution of plant modernization programmes. Alongside the basic task of updating the plant itself, serious issues such as continuing power generation during the work period and maintaining the strictest safety standards have to be considered. It’s a complex procedure with little margin for error, so managers are increasingly looking for intelligent tools to help them achieve a successful and timely conclusion.

Tens of thousands of activities usually take place when a plant is being modernized and it is vital that the schedule of activities is planned carefully to expose any potential problems, delays or bottlenecks in the process. As well as the interdependencies between individual tasks, planners must consider whether the plant needs to continue to generate a minimum amount of energy during the period of modernization.


PMS systems help in the management of complex projects
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Stopping power generation altogether, even for a short time, can leave a country with insufficient electricity to fulfil its day-to-day needs. If the plant has to continue generating power, this will restrict the times when specific modernization activities can take place, so planners must build these factors into the schedule. In nuclear power stations, the prime concern is to maintain the highest safety standards.

Cost

Alongside individual concerns, there is the underlying knowledge that costs must be kept as low as possible. Modernization is an extremely expensive business and, increasingly, investment is found from several sources for each project. The current project taking place at the Kozloduy nuclear power plant in Bulgaria, for example, is being funded from four different sources, including the European Union. Each investor has to be kept informed of progress and problems on a regular basis and the responsibility for this lies firmly with the main contractor.


The Kozloduy plant in Bulgaria is benefiting from PMS
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So how does a contractor who’s been tasked with a multi-million dollar project to modernize a major power station overcome these pressures to achieve success? For Kozloduy, the answer was to run the project using a comprehensive project management software (PMS) system.

Kozloduy is one of several plants using a PMS to handle major projects ” in this case modernization of Units 5 and 6 to meet new European safety standards. It’s a five-year programme involving extensive renovations of the units and the projected cost of the entire programme is G212.5 million ($207 million). The project is 42 per cent financed through a European Union Euratom loan; Citibank is funding another 16 per cent through an Eximbank loan; Roseximbank from Russia funds 12 per cent and the rest of the funding is being provided directly from Kozloduy’s own resources. The loans are to be disbursed in instalments as milestones of the programme are completed. This arrangement makes it vital that the project is planned effectively to accomplish critical tasks on time.

The two units being modernized generate over 25 per cent of Bulgaria’s electricity and are therefore important components of the country’s economy in terms of both domestic and export power. While the modernization work must be accomplished as quickly as possible, it is even more crucial that power generation continues. The project managers, both from the client and the contractors’ side, must therefore find the optimal way to use the resources allocated to them in order to finish the modernization work on time without disrupting generation.

In 1998 Kozloduy hired Parsons E&C ” a US-based engineering and management company ” as the project management and control consultant. “The planning and scheduling of the modernisation programme posed a difficult challenge that could not be resolved by using standard low-level planning software,” commented Oscar A. Mignone, Parsons E&C site and project controls manager.

To develop the integrated schedule for this demanding project, Parsons E&C selected Primavera Systems’ project management software packages to create a master and sub-projects scheme. These were structured with a large number of codes to group and select activities and were heavily loaded with resources and costs. This enabled short-term planning, as well as medium and long-term forecasting. The resource loading made it possible for Kozloduy (the client) to accurately verify the workforce requirements for each task. Milestones were also built into the schedule and the projected costs at these points enabled the calculation of cost requirements, which allowed corporate funding to be forecast.

The plan

The work programme comprises 204 modifications, involving the incorporation of new systems and the improvement of existing components. Each modification can be viewed as a mini project and, in most cases, relies on the completion of other modifications before they can begin.

The final element to be considered is that a significant amount of reporting is required from the client in order to monitor the progress, confirm completion of milestones and, finally, close the project. Proper planning relies on the submittal of information from Kozloduy management such as plant design, operating information and regulatory permits.

Scheduling with ease

Between September 1998 and April 2000, Parsons E&C assisted the client during the basic engineering phase of the project. The overall programme was assessed and a target schedule had to be created. Using the project management tool, Parsons E&C carefully planned the entire five-year project, delivering transparency at every stage of the modification.

The project schedule was finalised using a critical path method (CPM) by creating a logical network for each modification. This allowed the schedule to be adjusted quickly if there was a change to key dates, if input was delayed or if permits were not received on time.

“The Primavera software manages the allocation of numerous resources across concurrent and interdependent projects, enabling managers to view hypothetical allocations (‘what ifs’) before deciding on an optimal course of action,” explains Mignone. “It helps managers to plan, monitor and check individual modifications without losing sight of how resource allocation affects other time critical projects and always having the entire contractors’ scope under control.”

When delays occur, the flexibility of the software allows immediate assessment of the implications of such delays and re-scheduling of all relevant resources. This versatility means that priorities can be re-defined and resources reassigned to other modifications while the constraints impacting the schedule can be resolved and recovery actions put in place. With so many interdependencies in this 5000-activities programme, only a professional PMS package is sufficiently sophisticated to handle this type of immediate re-scheduling. As Mignone said, “To handle all of this data in such a short time and obtain accurate results for management decisions and actions is like driving a Formula One race car. The software behaves wonderfully ” even in the most challenging situations.”

The true results of the careful planning and scheduling process will not be known until the programme reaches completion in 2005. However, at present the signs are that this vast modernization project is being expertly managed strictly within its allocated timeframe and budget. Mignone is pleased with the way the software is performing and sums up the value of using a PMS on a project of this nature: “The modernization programme is large and complex, involving many different parties in its progression. To keep it on track, it is vital that everyone has access to project data and that the system is sufficiently flexible to help us to find a new optimal path when we experience delays. Working in a nuclear power station leaves no room for mistakes and we are pleased with the way the project is going so far.”

Enterprise management

While organizations such as Kozloduy in the project-rich utility sector have benefited considerably from traditional project management software tools, the huge scale and scope of these modern operations means many are now turning to a revolutionary type of project management software called enterprise project management, or EPM.

EPM makes it possible for a contractor to plan the best order of activities, taking into account the many and varied pressures on the project such as continued power generation, safety, availability of resources, investment milestones and objectives. It distributes information in a personalised format to every single person involved with the project ” from the most senior investor right down to the smallest subcontractor ” at any minute of the day. Timely information is always available and reports are compiled at the touch of a button. The result is a tool that equips all personnel with the information they require to make the best and quickest decisions.

EPM recognizes the needs of different roles within an organization and displays only the specific information that is relevant to that user. It also overcomes the complexities of resource levelling by using sophisticated algorithms to evaluate billions of different alternatives across a pool of qualified resources.

Answering the ‘what ifs?’

Almost every project experiences an unforeseen delay at some point. Whatever the cause, the project schedule tool must be sufficiently versatile to adapt the plan in the most advantageous way possible. There may be several hundred possible ways of changing the plan and EPM provides the information needed to decide which route would bring the most benefits. This is called creating ‘what if’ scenarios.

EPM shows users how changes they are considering making to the schedule will impact every other facet of the project: the shifting of day-to-day work for individual contractors; the changes to periods when the plant will be able to function; switching of dates that contractors will be required and, importantly, whether the milestones which release further funding are going to take longer to achieve. To a large extent, profitability depends on being able to plan and utilize an organization’s resources in the most efficient manner possible. EPM provides all the information that the decision makers need, whenever they need it.

The enterprise-wide view establishes a central command centre for co-ordinating activities, making it possible to identify resource imbalances before they occur. If needed, resources can be re-assigned from one activity to another, ensuring potentially damaging delays are averted.

Organization-wide views

The value of EPM can be realized at all levels in an organization, particularly right at the top. On appointment to a modernization project of this sort, a contractor must assess the resources required to complete the task. This contractor is likely to have several sizeable projects taking place at different sites at the same time as the modernization project and must be confident that resource levels are sufficiently high to fulfil requirements. EPM allows them to assess the resources needed to have available several years ahead. Further, EPM enables them to see where delays will affect payment and, therefore, their bottom line.

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