How Efficient Project Engineering & Management Can Make Chemical Projects Successful

Do you know why New Projects are necessary for Chemical Manufacturing Business Success?

In fact, the expansion of existing manufacturing facilities and implementation of new projects are essential for chemical manufacturing business. Why?

Because chemical manufacturing is a business. And if you talk about any business, growth is essential for success.

Especially when you get into the details of chemical manufacturing, you’ll realize why the business growth is essential. And when you talk about the reasons, there’re many.

Let’s list down some of the compelling reasons:

• Increasing Market Demand
• Business Expansion by Forward and Backward Integration
• Utilizing the Business Opportunities

Let’s talk about them one by one.

Increasing Market Demand

With your existing manufacturing facility, you shall implement improvement initiatives to improve the manufacturing capacity. Because then only you’ll be able to compete in the market place and satisfy the market demand. Isn’t it?

But there’s always a limit. Why?

Because you’ll be able to satisfy the market demands to a certain extent. But it becomes an issue when the requirements exceed the manufactiring capacity.?

In that situation, you need to produce more products than what your existing manufacturing facilities can produce. And you’ll be left with no other option than to go for new projects in addition to the expansion of your existing manufacturing facilities.

Business Expansion by Forward and Backward Integration

When you study the business growth strategy of the chemical manufacturing businesses, you’ll find that they expand their business by using forward and backward integration processes. Why?

It’s because most of the times there’re business reasons which compel the manufacturers to think of manufacturing the raw materials they're using in their manufacturing processes. It may be necessary because of the purchase prices of the raw materials or some issue with their availability.

Similarly sometimes they go for downstream processing in order to utilize their products. In fact, it becomes necessary for profitability and sustainability of the business.

Utilizing the Business Opportunities

And sometimes as an industrialist, you come across excellent business opportunities you can’t say no to. When you’re interested in utilizing the business opportunities, you expand your manufacturing business and create new manufacturing facilities.

So, you see, there’re many reasons why you go for new projects. But the important aspect is once you decide in favor of new projects, you must ensure that the manufacturing business initiative is profitable and sustainable.

For that you must handle the issues successfully.

Difficult Issues with New Chemical Projects

Before getting into the details of the difficult issues with chemical projects, let me ask you some important questions:

Do you want Exponential Growth of your Chemical Manufacturing Business?

Are you interested in creating New Manufacturing facilities below budget, before schedule, and hundred percent capacity utilization from the day one?

If your answer is yes, you’re not alone. Most of the manufacturers want that.

But the ground reality is in fact totally opposite. Why?

Very few chemical projects succeed. Because chemical manufacturing projects are complex undertakings which require meticulous planning, execution, and management to ensure success.

That’s why there are challenges with respect to the techno-commercial aspects you need to focus on:

• Cost Overruns and Budget Escalations
• Teething Troubles
• Lack of capacity utilization
• Need for Additional Modifications

Cost Overrun and Budget Escalation

When you talk about the implementation of chemical manufacturing projects, Cost overrun and budget escalation are common challenges.

When the actual project expenses exceed the initially budgeted amount cost overrun occurs. It leads to disruptions in project execution and financial losses.

Equally common issue is budget escalation. It refers to the upward revision of project budgets to accommodate increased costs. Most of the times it results from changes in project scope, specifications, or the requirements.

In short, cost overrun and budget escalation leads to financial strains, project delays, and diminished returns on investment.

The major cause of these issues are faulty cost estimation, unexpected technical challenges, changes in project scope, and fluctuations in costs of material or labor.

Teething Troubles

Another equally challenging issue common in chemical manufacturing projects, refer to initial operational challenges and technical issues.

They arise during the startup and commissioning phase of a new manufacturing facility. They can range from minor problems to more significant operational disruptions.

They impact the productivity, efficiency, safety and environmental aspects significantly.

The major causes include equipment malfunctions, process deviations, inadequate operator training programs, and unexplained interactions between process variables affecting the manufacturing performance.

In most of the cases, they can lead to delays in achieving full production capacity, suboptimal product quality, and increased safety risks and environmental concerns.

Lack of Capacity Utilization

A challenging issue common in chemical manufacturing projects concerns with lack of capacity utilization. It refers to the underutilization of production facilities, process equipment or manufacturing resources.

Often it results in lower production output levels. The production capacity is much lower than the designed capacity or the capacity possible when the plant is utilized efficiently.

The major causes of this issue include fluctuating market demand for your products, manufacturing inefficiencies, equipment breakdowns, downtimes, and constraints with respect to operation.

In fact, when the production capacity utilization falls below the optimal levels, chemical manufacturing projects may experience several negative consequences like poor manufacturing performance, increased manufacturing costs, decreased profitability and wastage of the resources.

Need for Additional Modifications

Sometimes it becomes difficult to start the plant after project commissioning.

The major causes include design discrepancies, process technology issues, additional requirements with respect to regulatory compliance, and other technical challenges.

Of course, these modifications may be minor adjustments. But sometimes it calls for significant reengineering efforts. In that situation it can impact project timelines, budgets, and overall success of the chemical projects.

Project Engineering and Management

As we’ve discussed earlier, if you’re interested in having exponential business growth, you’ll go on creating new manufacturing facilities one after another.

That’s where project engineering and management function becomes important. It plays an important role in addressing difficult issues effectively and making the chemical manufacturing projects successful.

The function addresses the challenges and ensure the success of chemical projects by incorporating proactive risk management study, robust budget control mechanisms and comprehensive planning.

The role of project engineering and management function starts from the new project concept.

It involves the Product selection, Techno-economic feasibility, technology finalization, coordinating with process development, technology absorption, scale up to the commercial level of production. It’ll include the basic engineering, detailed engineering followed by plant commissioning.

When it comes to building new chemical manufacturing facilities, engineering design becomes the deciding factor.

The design must consider all techno-commercial aspects and arrive at effective solutions to the issues. So integrated design can do justice to the assignment.

Integrated Engineering Design

Integrated Design optimizes the resources availability as well as the constraints. But it’s really a challenge to design a new chemical manufacturing facility. Why?

Because to make the project successful it must accomplish many important business objectives like:

• Minimizing the Capital Investment
• Achieve Excellent Manufacturing Performance
• Smooth Plant Commissioning and Capacity Utilization

Let’s talk about them one by one.

Minimizing the Capital Investment

The major aim is to minimize the capital investment without compromising on other business aspects.

Because when you minimize the capital investment, you help in reducing the manufacturing cost significantly by keeping the financial cost component low.

And designing the facility with an integrated approach can achieve this objective.

Achieve Excellent Manufacturing Performance

If you want to make chemical manufacturing successful, you must achieve excellent manufacturing performance consistently. In fact, performance with respect to Cost, Quality and Capacity must be well above the industry average.

You can only achieve this objective when your manufacturing facility is designed properly. Of course, the plant design must be operation friendly with enough flexibility and scope for expansion.

Smooth Plant Commissioning and Capacity Utilization

When it comes utilizing the manufacturing facility to the fullest, smooth plant commissioning becomes important. And achieving more than hundred percent production capacity from the day one is the goal.

Because in order to succeed in the market place, you must strive for becoming the lowest cost manufacturer. And that’s possible only when all the critical manufacturing aspects were taken care of in the design stage.

Once you’ve designed the manufacturing facility, you must focus on constructing the facility.

Constructing the Manufacturing Facility

The project engineering and management function must concentrate on constructing a world class chemical manufacturing facility.

Because unless you have efficient manufacturing facilities, how can you think of offering your products in the market place at affordable prices as per the quantity requirements consistently.

Of course, it’s challenging. The manufacturing facility must meet important business objectives.

The major two objectives are:

• Plant Construction within Budget
• Complete the Project before Schedule

Let’s talk about them.

Plant Construction within Budget

It’s important to construct the manufacturing facility within the budget. But it’s a challenge. Because you face many constraints and difficult issues while constructing the facility.

That’s why the project cost escalation has become very common in the industrial world. But it’s important to the business. ?

Ensure proper project management practices including implementing budget control mechanisms like regular cost tracking, forecasting, and variance analysis are in place. Then only you can adhere to budgetary constraints.

The constructed facility must meet the requirements of production, maintenance, safety, environment and other critical industrial functions.

Complete the Project before Schedule

It’s important to complete the projects ahead of schedule. Because it is a significant achievement which offers various benefits including cost savings and enhanced business competitiveness.

Elaborate project planning and scheduling ensure optimal resource allocation, task sequencing, timeline management and collaborative approach. In short, you succeed by minimizing the inefficiencies and delays.

In fact, successful projects involve many critical functions like:

• You need to ensure integrated efforts of many engineering functions to construct a successful chemical manufacturing facility.
• Ensure that project safety is take care of along with complying with the statutory requirements. It’s essential to have necessary approvals and permits with respect to the project construction.
• And you can’t ignore project coordination. Because all the functions are interdependent. If all agencies work in coordination with each other for the project achieving success becomes easy.

Once you’ve constructed the manufacturing facility, you must commission the plant successfully.

Successful Plant Commissioning

The objective of new chemical project is not only to design and construct the manufacturing facility. In fact, the main purpose is to manufacture the products. Why?

Because you want to start operating the newly constructed manufacturing facility to manufacture your products at the fullest capacity from the day one.

That’s why before the manufacturing facility is handed over to the operation team the project engineering and management team must ensure that it serves the purpose – meeting the manufacturing requirements.

That’s why all parts of the plant must be checked thoroughly to ensure that the facility design and construction is as per the requirements.

You need a system based on good engineering practice. Of course you must follow the statutory guidelines.

Plant commissioning involves pre-commissioning activities, plant start-up, and commissioning.

It’s important to ensure that the project engineering and management team along with the research and development team must show that the manufacturing facility is performing perfectly.

That’s how the facility will be handed over to the production function.

Successful plant commissioning results in achieving important business objectives:

• Achieving Production Performance
• Complying with Environmental and Safety requirements
• Plant Capacity Utilization

Let’s talk about them.

Achieving Production Performance

You must be able to manufacture your products efficiently. So, the manufacturing consistency is of utmost importance.

It’s essential to achieve excellent product yield along with energy efficiency. Because you must keep the manufacturing costs under control.

In order to retain your leadership position in the market place, you must offer high quality products at low prices. That’ll help you in expanding your market.

Complying with Environmental and Safety requirements

You must comply with the environmental requirements effectively. And equally important is to keep the waste treatment cost under control by making the manufacturing process steps efficient.

More important is to ensure that effective safety management system is in place. The design and operation of the manufacturing facility must be inherently safe. When you focus on the safety aspects from the beginning, it because easier to construct a safer manufacturing facility.

In fact, the plant operations must be inherently safe and environment friendly. Of course, strictly following all statutory guidelines is equally important.

Plant Capacity Utilization

Efficient Project Engineering and Management function is essential to achieve hundred percent production capacity utilization from the day one along with excellent manufacturing performance.

If you focus on the techno-commercial aspects from the beginning, it becomes easier to construct an efficient manufacturing facility.

It’s important to capture the market by meeting the customer requirement of high quality products at low prices effectively. Because it’s necessary to justify the increased production capacity due to the new project implementation.

In fact, a system driven approach along with close cooperation between the team members are essential to make the plant commissioning successful.

Let’s Conclude

New Projects are necessary for Chemical Manufacturing Business to be Successful.

The expansion of existing manufacturing facilities and implementation of new projects become essential for several compelling reasons:

• Increasing Market Demand
• Business Expansion by Forward and Backward Integration
• Utilizing the Business Opportunities

Chemical Project Issues

But in order to make you business expansion successful you must handle the difficult issues associated with chemical projects effectively.

Some of the challenges are:

• Cost Overruns and Budget Escalations
• Teething Troubles
• Lack of capacity utilization
• Need for Additional Modifications

Because chemical manufacturing projects are complex undertakings which require meticulous planning, execution, and management to ensure success.

As you’re interested in having exponential business growth, you’ll go on creating new manufacturing facilities one after another.

And that’s where project engineering and management function becomes important.

Efficient Project Engineering and Management function plays an important role in addressing difficult issues effectively and making the Chemical Manufacturing Projects Successful.

Integrated Design

Integrated Design optimizes the resources availability as well as the constraints. It helps you achieve the business objectives:

• Minimizing the Capital Investment
• Achieve Excellent Manufacturing Performance
• Smooth Plant Commissioning and Capacity Utilization

Constructing the Manufacturing Facility

The project engineering and management function must concentrate on constructing a world class chemical manufacturing facility.

The major two objectives are:

• Plant Construction within Budget
• Complete the Project before Schedule

Plant Commissioning

The objective of new chemical project is not only to design and construct the manufacturing facility.

In fact, the main purpose is to start operating the newly constructed manufacturing facility to manufacture your products at the fullest capacity from the day one.

Successful plant commissioning results in achieving important business objectives:

• Achieving Production Performance
• Complying with Environmental and Safety requirements
• Plant Capacity Utilization

In today's competitive business environment, Efficient Project Engineering and Management function is not an Option. It's a Must.

Let’s join hands in using innovations in Project Engineering and Management and developing them further to make the Chemical Projects Profitable and Sustainable.

What is your experience of Project Engineering and Management function in making Chemical Manufacturing Projects Successful?

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