Getting The Best Estimates

 OP COMMERCIALBy Ron Beck

Today’s generation of estimators and engineers are under pressure to do more with less resources and adapt quickly to change. To do this, it is vital that engineering and construction companies (E&Cs) embrace methodologies to meet customer requirements and cope with new economic conditions.

Estimators with cutting-edge technology – such as integrated economic evaluation software with built-in engineering and cost content – are empowered to rapidly and confidently evaluate capital investment projects early in the design process, understand all the economic implications of engineering decisions and manage projects more effectively.

The Engineer Inside the Computer

With the advanced model-based estimating systems available today, users have access to a complete knowledge base engineering design tool that produces cost based on first principles. It is an opportunity to design a plant using the application and this can be benchmarked against the process engineer’s design to ensure accuracy and consistency.

This type of model-based estimating tool is like having an experienced engineer inside the computer. It can instruct how to develop single line diagrams as well as teach how to organize and put together an electrical system. Alternatively, it is like a structural engineer that will show best practices for the design of structures and similarly in piping. The years of embedded knowledge within the tool help E&Cs to accurately and quickly reduce estimating uncertainty in bidding costs for design/build of a plant.

However, this technology is not just for the bidding process. One of the leading global producers of industrial gasses, Linde Engineering North America Inc. (LENA) was in need of a way to reduce cost overruns by achieving consistency in estimating methods and applications. The company made the decision to standardize on an advanced model-based estimating system throughout the organization. As a result, LENA now has the ability to keep projects on schedule and within budget, improve safety performance and achieve the highest standards of operational excellence.

Effective Communication

The alignment between the E&C and the owner-operator is vital to ensure estimates are accurate and meet project specifications. An advanced model-based estimating solution allows both parties to use the same common database and language. Accuracy comes from the communication of what is entered into the economic evaluation software.

With complete transparency, the E&C can demonstrate detailed estimates on a project to customers. Additionally, with a high level of accuracy, estimators provide the owner-operators confidence that the estimate meets their needs and that they are working with a partner that can fulfil the engineering on time and to budget. When changes occur, these estimation tools can cope with adjustments to the estimate at a click of a button and within minutes deliver a new estimate (versus days or weeks when using traditional spreadsheets).

By using advanced economic evaluation tools, E&Cs can increase their incomes by up to 50 percent more than using traditional tools because the functionalities can perform the work of five people and be considerably more accurate throughout the project estimating lifecycle. Whether the project is for greenfield or brownfield projects, model-based estimating systems are ideal for revamps and patching to gain more out of existing plants. These powerful tools are able to easily break down capital expenses, generating reports very quickly.

Additionally, once the estimate is set up properly inside the model-based software, the estimator can make changes within minutes for every option instructed by the client. This would not be possible using traditional spreadsheets.

Built-in knowledge delivers enormous benefits. Advanced economic evaluation system empowers estimators to do more and achieve more timely and accurate estimates in collaboration with process engineering design. The templates and databases that are generated from these solutions provide the next generation of estimators a powerful platform that adds immediate and measurable value.

Ron Beck is director of industry marketing for engineering and construction at AspenTech. During nine years at the company, he has been responsible for engineering product marketing, economic evaluation and basic engineering. He has more than 20 years’ experience in providing software solutions to the process industries and 10 years’ experience in chemical engineering technology commercialization. Beck has authored papers on key industry topics and presented at several public industry events. Beck is a graduate of Princeton University in New Jersey.

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