Mitigating Risks for Large Scale Projects Involving Multinational Collaborations

Speaker : Pankaj Shah

March 26, 2013 | Author Confidential | Copyright L&T IES

Agenda

About L&T - IES Modularization Risk Management MNC Engagement Challenges, Risks & Mitigation Plans

Confidential | Copyright L&T IES

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About L&T - IES

Has been in Business over Seven (7) decades
#1 Integrated Engineering Service Provider ESO Black Book 2008 Asias Fabulous 50 Award Forbes 2008 Asias Leading Engineering and Construction Company
Heavy Engineering IT & Technology Services

LARSEN & TOUBRO LIMITED

US$ 13.7 Billion Engineering & Technology Conglomerate

Organizing 6 Business Groups

E&C Projects

Amongst Indias Top 5 companies in the private sector

Electrical & Electronics

Indias Best Managed Company BT Preferred Engineering Partners for 15 of our Top 20 Global clients 153 Strategic relationships and 12 JVs with global leaders Confidential | Copyright L&T IES
Machinery & Industrial Products

Construction

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About L&T - IES

Chairman and Managing Director
Electrical & Electronics Heavy Engg.
Process plant equipment business units Defense, Nuclear & Aerospace equipment Ship-Building Industrial Projects & utilities Sector Hydrocarbons & power Sector Power Transmission & Distribution Sector Electrical Standard Products Electrical Systems & Equipment Medical Equipment & Systems Metering & Protection systems Control & Automation Petroleum Dispensing pumps & Systems Industrial Machinery for Paper, Steel, Bulk Material Industrial Valves Larsen & Toubro Infotech Limited - Manufacturing - Banking & Securities - Insurance - Communications - Utilities

Engineering & Construction

Machinery & Industrial Products

IT & Engineering Services Finance & HR

Construction
Buildings and factories sector Transportation & Infrastructure Sector Hydel & Nuclear Power Sector

E&C Projects
Hydrocarbon sector Power Sector Cement & Mineral Projects

Rubber Processing Machinery

Welding Consumables Industrial Products Construction equipment

Integrated Engineering Services (IES) Mechanical Design Engg. Solutions Embedded Systems & Solutions

Process Cluster

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L&T Integrated Engineering Services : a snap shot

INDUSTRY SEGMENTS

Process Vertical CPG, Chemical, Metal & Minerals, etc.

Industrial Products & Machines

Aerospace & Automotive

Truck & Off Highway

Consumer Electronics & Medical Devices

SERVICE OFFERINGS Process Engineering Other Services

Product Engineering

Mechanical Engineering Electrical/Electronics Engineering Engineering Analysis (FEA/CFD) CAD Automation & Customization Application Software Development Software Testing & Test Automation

Manufacturing Engineering Plant Engineering (Process, Mechanical, Utility, Packaging, CSA, PCIS)

Sourcing & Costing Engineering Technical Publication Engineering Process Outsourcing

Asset Information Management Construction Engineering

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Agenda

About L&T - IES Modularization Risk Management MNC Engagement Challenges, Risks & Mitigation Plans

Confidential | Copyright L&T IES

March 26, 2013 | 6

Imperatives of Modularization

Project Type
Off-Shore (Oil & Gas) On-Shore (Oil & Gas)

Implementation
Mandatory Optional Preferred

When
Always Cost Savings Shorter Schedule Global Roll Out Common Engineering Standards Re-Application Advantage Time to Market Cost Quality Time to Market

On-Shore (CPG)

Large Process Plants

Optional

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Agenda

About L&T - IES Modularization Risk Management MNC Engagement Challenges, Risks & Mitigation Plans

Confidential | Copyright L&T IES

March 26, 2013 | 8

Risk Management
Prepare for Risk Management Determine Risk Sources and Categories Establish a Risk Management Strategy Identify and Analyze Risks

Define Risk Parameters

Identify Risks

Budget/cost risk Schedule Risk Performance Risk

Mitigate Risks Implement Risk Mitigation Plans Evaluate, Categorize, and Prioritize Risks

Develop Risk Mitigation Plans

Severity Determination Negligible (1) to Catastrophic (4)

Risk Probability Frequent (A) to Almost Impossible (F)
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Strategies for Mitigation

Changing or lowering the requirements while still meeting the users needs Minimize the risks by insurance/ forward cover etc.

Acknowledgement of the risk but not taking any action

Avoidance Acceptance Reduce

Transfer
Watching & periodically transfer the risk To stake other holders

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Agenda

About L&T - IES Modularization Risk Management MNC Engagement Challenges, Risks & Mitigation Plans

Confidential | Copyright L&T IES

March 26, 2013 | 11

MNC Engagement Model

Supplier - 1 Supplier - 2

Technology Supplier

Engineering Service Provider

Supplier - 3

Skid Manufacturer

End Users (EU)

EU - 1 Global Roll Out Leader EU - 3
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EU - 4

EU - 2
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MNC Engagement Model

Common Services
Supplier - 2 Supplier - 1 Supplier - 3 Supplier - 1 Supplier - 2 Supplier - 3 Supplier - 1 Supplier - 2 Supplier - 3

Module 1 Fabricator

Module 2 Fabricator

Module 3 Fabricator

Technology Supplier

Engineering Service Provider

End User (EU)

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MNC Engagement Model

Client
Europe

End User

PMC

DEC

NA

APAC

ASIA

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Agenda

About L&T - IES Modularization Risk Management MNC Engagement Challenges, Risks & Mitigation Plans

Confidential | Copyright L&T IES

March 26, 2013 | 15

Challenges, Risks & Mitigation Plans

Concurrent Engineering

Project Management & Procurement Schedule & Cost Control

Large Scale Projects Involving Multi National Collaboration

Effective Communication

Expectation Management Cultural Shocks/ Building Trust

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Challenges, Risks & Mitigation Plans

Concurrent Engineering
Potential & Feasibility Study Civil & Structural Piping Engineering Job-site Erection & Installation Plan

Job-site Logistics Survey

MODULAR ENGINEERING

Module Handling & Shipping Plan

Constructability Studies

Equipment Design

Electrical & Instrum. Plot - Plan & Layout Engineering

Fabrication Plan

Module Design Basis

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Micro - Level Engineering Detailing & Documentation

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Criticality of Procurement in Modularization Projects

Order Placement Material Requisition and Offer Review

Supplier Drawing Review Manufacturing

Layout requirements & constraints Vendor inputs and constructability Study Supplier Selection and Ordering
Inspection

Ty p i c a l Procurement Cycle
Installation Logistics Dispatch

Vendor interface and module layout finalization Early Manufacture and supply of equipment to Module yard Installation of equipment in module

Need to finalize equipment specifications and design at early stage of the project Impact of equipment design change on module layout and constructability Impact of equipment delivery on schedule of module assembly, module supply and site installation
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Subsequent Module Assembly work

Critical Procurement Aspects

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Effective Communication Amongst Multi-National Collaborators

Project Execution -Enabling

Specific construction standards pertaining to a region Value-Chain Enhancing Stamp of authentication on construction drawings Services
Detail Engineering
Periodic Project Progress Meetings

DCRs, NCRs

As-built

Kick-Off Meeting

Project Review Stage Gates

Review at Fabrication Stage

Testing Assly. Validation

Project Close Out

Specialized Engineering

Weekly update/review meetings Change management issues Coordination with plant schedules Identify plant representatives Design review process Design checking process Communication flow Conflict resolution Resource management

Re-visit Engineering post order placement

Logistics

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Logistics Related
Upto Site

Route Survey
Inside Plant Road Rail

Selection of Mode of Transportation

Sea / Inland Water

Air

Alternative solutions for Transportation

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Delivery of Equipment in Single Piece/ Sections

Clubbing of Equipment

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