W4_TH_Tuckman Survey on Non Process Engineer Team

Problem Definition

Non Process Engineer Team has been actively working together for the past 1.5 years. This team consists of several disciplines such as mechanical engineer, civil engineer, pipeline engineer, instrument engineer and electrical engineer. The challenge of this team is the increasing and complexity of gas infrastructure projects that will be faced. We now want to determine the leadership skills and styles which the group may benefit from as it enters this next phase of the project.

Develop the Feasible Alternative

In 1965, Tuckman published his Forming Storming Norming Performing model and completed with the fifth stage, Adjourning in 1970s. This model explains that as the team develops maturity and ability, relationships establish, and the leader changes leadership style from Directing (Telling), Coaching, Participative, and Delegating up to Directing (Concluding) [1].

Fig. 1 Tuckman’s Team Development Model[1]

Illustration graph of Tuckman Model Group Development Stages is shown in the next figure[2]:

Fig 2. Tuckman Group Development Stages Model[2]

Develop of the Outcome for Alternative

To determine current Non Process Engineer Team stage, each individual in team fill the excel format of Tuckman Survey Scoring Template[3][4].

Table.1 – Individual responses from the Tuckman Survey Scoring Template.

Selection Criteria

Based on the above individual’s response, PERT analysis was performed to identify team behavior at P90 because these team already join over long time (1.5 years)

Table 2. P90 Delphi Technique Result

Analysis & Comparison of Alternative

Based on Table 2, we can conclude team is in Performing stage (indicated by the rank). During this stage, team members often experience:

  • Constructive self-change;
  • Deep sense of belonging;
  • Understanding of each others strengths and weaknesses;
  • Self-organization of work;

Hints for team leaders:

  • Delegate all work that sensibly can;
  • Focus on developing team members;

Style of leadership this stage is “DELEGATING” mode where some leadership is shared by the team.

Selection of the Preferred Alternative

Non Process Engineer team can achieve more than each team member individually. Being part of a high-performance team can be extremely rewarding, but it requires time and commitment to get to that stage. The team leader job is to help this team reach and sustain high-performance, but there is no quick and easy way to go about it and leader has to adapt behavior and leadership style to the different challenges presented at each stage. Remember that ultimately team leader can’t decree a performance culture upon your team – the team as a whole will have to go through the stages itself. The team leader role is to be aware of the challenges the team will face and support the team throughout this journey.

Performance Monitoring and The Post Evaluation of Result

Team assessment should conduct periodically in six months ahead to capture team phase changing and select appropriate style of leadership, this evaluation can help the team to improve coordination and productivity.

References:

  1. Tuckman, B. (1965). Tuckman’s Team Developmental Model. Retrieved from http://www.focusadventure.com/team-building/gallery/tuckmans-team-developmental-model/
  2. Aurora (2013). Bruce Tuckman’s Team Development Model. Retrieved from http://www.lfhe.ac.uk/download.cfm/docid/3C6230CF-61E8-4C5E-9A0C1C81DCDEDCA2
  3. Barkema and Moran. (2013). Scoring The Tuckman Team Maturity Questionnaire Electronically. Retrieved from http://www.phf.org/resourcestools/Documents/pdf
  4. Barkema and Moran. (2013). Tuckman Survey Scoring Template. Retrieved from http://www.phf.org/resourcestools/Documents/pdf
  5. Hendarto, Tommy (2017). W1_TH_Tuckman Analysis |EMERALD AACE 2017. Retrieved from http://emeraldaace2017.com/2017/08/01/w1_th_tuckman-analysis-assessment/
  6. Michell, Tony (2017). W2_ABM_Folow Up Tuckman|EMERALD AACE 2017. Retrieved from http://emeraldaace2017.com/2017/08/08/w2_abm_follow-up-tuckman-survey-on-spj-offshore-construction-team/
  7. Almeida, José. (2012). Tuckmans Model of Team Development and Dynamics. Retrieved from https://thousandinsights.wordpress.com/articles/on-leadership/tuckmans-model-of-team-development-and-dynamics/
 

W4_OAN_Time Evaluation for Submitting Bidding Proposal

  1. Problem Definition

As function who specialized in project management and procurement, one of our main job is to organize tender for EPC project.  In this week blog posting, Author will running an analysis related to time and cost, to prepare ideal proposal in bid process for contractor.

The result is estimate time for contractor to prepare the bidding. Then we will compare the results with company regulation, which is 3 to 7 working days to submit bidding proposal.

Table 1 shown Project size is measured in the overall investment.

Tabel 1: Project Classification

  1. Development of feasible alternatives

This Matrix provides an estimate classification for process industries.

Tabel 2: Cost Estimate Classification

  1. Possible Solution / Alternative

Based on Table 2, cost estimate can be classified as follow :

  • Class 5 estimates are generally prepared base on very limited information.
  • Class 4 estimates are typically used for project screening, determination of feasibility, concept evaluation, and preliminary budget approval.
  • Class 3 estimates are used as the project budget until replaced by more detailed estimates.
  • Class 2 estimates are often used as the “bid” estimate to establish contract value for contractors.
  • Class 1 estimates are typically prepared to form a current control estimate to be used as the final control baseline.
  1. Selection of Criteria

Level 2 estimate are ideal for contractor to use in tender. Based on table 1, level 2 estimate effort ranges from 0.025% to 0.1% of project cost.

  1. Analysis and Comparison of the Alternatives

We use rate for cost estimator $ 29.71/hour for bachelor’s degree and work time productivity chart as shown in table 3. For ideal condition 100% productivity (5 days a week, 8 hours per day), and for worst condition productivity 72% (7 days a week, 12 hours per day).

Tabel 3 : Work Time Productivity Chart

Table 4 describe preparation effort based on the project value.

Tabel 4: Estimate Bid Effort

  1. Selection and Preferred Alternatives

Since most of our project cost more than $5.000.000, then project in this range will be considered as normal project. Based on company regulation, contractor should submit their proposal 3 to 7 working days in normal project, instead of 11 days to 43 days and 15 days to 59 days for 72% productivity as shown at table 4. Therefore, company should revised their bidding rule.

By using range from 11 to 43 days, contractor will have better estimate and minimize possibility of change order during project execution. This is win-win solution for both parties, company will get competitive bidding and lower the risk for change order or breach in the middle of project, while contractor have more time to prepare their proposal and avoid “buying” the project.

  1. Performance Monitoring and the Post Evaluation of Result

The cost and time to prepare bidding document should be monitor not exceed the budget range and time allowance, or contractor will at risk of bankruptcy.

 

References

  1. Module 08-4 Creating the Owners Cost Estimate (Top Down) (2015).
    Retrieved from http://www.planningplanet.com/guild/gpccar/creating-the-owners-cost-estimate
  2. AACE International Recommended Practice No. 17R-97
    Retrieved from http://www.anvari.net/Risk%20Analysis/17r-97.pdf
  3. Occupational Outlook Handbook – Cost Estimator (2015)
    Retrieved from https://www.bls.gov/ooh/business-and-financial/cost-estimators.htm
  4. W20_RM_Estimate Preparation Effort for a bid
    Retrieved from h https://goldenaace2015.wordpress.com/2016/05/24/w20_rm_estimate-preparation-effort-for-a-bid/
  5. Effects of Extended Work Time on Productivity (2017)
    Retrived from https://www.conest.com/wp-content/uploads/EffectsOfExtendedWorkTime.pdf
  6. Project Classification (Jan, 2008)
    Retrived from https://www.softed.com/assets/Uploads/Resources/Business-Analysis/Project-classification.pdf

 

 

 

W4_A_Selection Oil Pump Using Present Worth Method

  1. Problem Definition

The decline in world oil prices resulted in the need for an efficiency program, one of which is efficiency in investing. In 2014 the price of oil is at USD 89 / barrel, but it has been more than 2 years the position of oil price has not moved from USD 47 / barrel, in 2015 the company conducts efficiency program in terms of investment by pressing Capital Expenditure, in Marketing Directorate one of routine investment on Oil Transfering Facility. High level management want to reduce cost by selection on Pump Investment.

  1. Develop the Feasible Alternative

Management purpose 2 alternative, among others:

1.Using API Pump

2.Using Non-API Pump.

Compare Value from Present Worth Method approaching will be use  will be use to select. 

  1. Development of The Outcome for Alternative

Calculate all variable including Capital Expenditure/Capex, net income, operating cost, maintenance cost, and salvage value from internal company data.

  1. Selection Criteria

The acceptance criteria when the present worth value or PV ≥ 0 or the large value.

5. Analysis & Comparison of Alternative

Regarding to company data, that we summarize on Tabel-1 which represent for using API Pump.

Tabel-1 API Pump Cash Flow (in IDR)

Refer to Bank Indonesia Rate at 2017 is 7%, now we can drag Future Value/FV from 10th year to zero (initial) to calculate Present Value/PV, a summarize calculation represent on Tabel-2.

Table-2 PV for all cash flow API Pump (in IDR)

Regarding to Tabel-1 and Tabel-2 now we can total Cash Flow in and out IDR. 2.133.894.555 + IDR. (900.000.000) = IDR. 1.233.894.555 (API Pump is economically justified because PW ≥ 0 ) but we not finished yet, we have to calculate for NON-API Pump.

next step we calculate for NON-API Pump, the cash flow show on tabel-3.

Tabel-3 NON API Pump Cash Flow (in IDR)

Regarding to tabel-3, now we can calculate PV for all year cash flow, it shown on tabel-4

Tabel-4. PV for all cash flow NON-API Pump (in IDR)

Regarding to Tabel-3 and Tabel-4 now we can total Cash Flow in and out IDR. 1.897.707.948 + IDR. (600.000.000) = IDR. 1.297.707.948 (NON-API Pump is economically justified because PW ≥ 0 )

Now we can compare each PW from API and NON-API Pump, it shown on tabel-5

Tabel-5 Comparasion API and NON-API Present Worth Value (in IDR)

6. Selection of the Preferred Alternative

Regarding to tabel-5 it shown that Non-API Pump has PW Value higher than API Pump, gap value between them is IDR.63.813.394, it can conclude that NON-API Pump in economically point of view can justified to selected. But we prefer select API Pump as our Pump Selection, the reason is API Pump a best practice use in Oil and Gas Industry and has high reliability record. If economy GAP only IDR.63.813.394 management can accept it as cost, cause PW ≥ 0 and investment decision can select API Pump.

7.Performance Monitoring and The Post Evaluation of Result

Management must monitor maintenance cost, because maintenance cost has give effect to select better decision.

Reference :

  1. Sullivan, G. W., Wicks, M. E., & Koelling, C. P.(2014). Engineering economy 16th Edition. Chapter 5 – Evaluating a Single Project., pp.213-215.
  2. BI Rate and Primary Reserve Requirement Lowered Again (February, 2016) Retrieved from http://www.bi.go.id/en/ruang-media/siaran-pers/Pages/sp_181416.aspx
  3. Module 06-5 – Acquiring Equipment for The Project (2016)
    Retrieved from http://www.planningplanet.com/guild/gpccar/acquiring-equipment-for-the-project
  4. Berrado, Abdelaziz Dr. Present Worth Analysis (2016) Retrieved from : www.aui.ma/personal/~A.Berrado/EGR2302/EGR2302_Ch05.pdf

 

 

 

 

 

 

 

 

 

 

 

 

W4_AI_Selecting The Best Gas Supply Scheme for X Project Using Compensatory Models

  1. Problem Definition

Since the last week the gas supply scheme already define by using non-compensatory model, then for this week compensatory models will be used to select the best gas supply scheme. By using and compare both of multi attribute decision making models, the best model can be chosen. The compensatory models divided into 2 (two) approach which is non-dimensional scaling and the additive weighting technique.

 

  1. Identify the Possible Alternative

3 (three) alternative gas supply facility to fulfill gas needed of x area, as follow:

  1. Offshore regasification facility
  2. Gas pipeline
  3. Landbase regasification facility

Table 1. Alternative Value

  1. Development of The Outcome for Alternative

Compensatory model using weighted score with the range 0 to 1 with the purpose is identifying dimensionless value for each attribute.

  1. Non-dimensional Scaling

Table 2. Dimensionless Scoring model

The table above, show the scoring 1 means the highest/optimum value of attribute (preference decision), meanwhile the scoring 0 means the minimum value (avoided decision). Quantitative comparison for each alternative describe in table 2 above, after that the total score is required to represent the rank of alternative.

Table 3. Dimensionless Relative Weighting

Using non-dimensional scaling, the highest rank is offshore regasification facility with total score 6.11 (1.5 times better than pipeline)

2. The Additive Weighting Technique

Table 4. Additive Weighting Score

Table 4 (above) describe the highest rank is offshore regasification facility with total score 0.91 (1.7 times better than pipeline).

 

  1. Selection Criteria

The highest alternative rank of gas supply scheme was defined using both of compensatory models.

 

  1. Analysis & Comparison of Alternative

Both of compensatory models have the same result with offshore regasification facility as the highest rank, it shown on:

Table 5. Compensatory Model

The difference between these two techniques is the weighting factors, the additive weighting using weighting factor because each attribute might be have different level of importance. Therefore, the recommendation chosen by additive weighting model, has been concern the alternate values and the attribute importance also.

 

  1. Selection of the Preferred Alternative

The compensatory model using quantitative data to being calculate, meanwhile the non-compensatory (last week) model using qualitative judgment to being analyze. Since the quantitative approach give more clear comprehension, so the preferred model to present to director is compensatory model.

Both models, compensatory and non-compensatory model show that Offshore Regasification facility was the best alternative to choose.

 

  1. Performance Monitoring and The Post Evaluation of Result

The alternative value could be change based on the project characteristic (every project is unique), so it is importance to really understand about the alternative to be compared.

Reference:

  1. Planning Planet (2017). Multi Attribute Decision Making.

Retrieved from http://www.planningplanet.com/guild/gpccar/managing-change-the-owners-perspective

  1. Sullivan, G. W. (2014). Engineering Economy 16th Chapter 14 – Decision Making Considering Multiattributes, pp. 603-608.
  2. Ardi (2017). W3_A_Using Multiattribute Decision Making with Compensatory and Non-Compensatory Model for Supply of Electricity Tanjung Uban

Retrieved from http://emeraldaace2017.com/2017/08/15/w3_a_using-multiattribute-decision-making-with-compensatory-and-non-compensatory-model-for-supply-of-electricity-tanjung-uban/

 

W4_MFO_Contract Risk Mitigation For Topographic Survey

  1. Problem Definition.

We have been conducting bidding for topographic survey of gas pipeline project in North Sumatera. We plan to start this work in August 2017 until December 2017 (5 months duration). This work is very vulnerable to weather conditions because if the weather is rainy then the survey could not be conducted. So that, during negotiation meeting, the prospective winner bidder proposed 2 options for its offer. First option is IDR 4,500,000,000 without condition; or second option is IDR 4,350,000,000 + IDR 10,000,000/day stand by rate if topographic survey could not be conducted due to a bad weather.

  1. Identify the Feasible Alternative.

Facing to this case, we have to decide which proposal option is accepted, IDR 4,500,000,000 without condition (option 1);  or   IDR 4,350,000,000 + IDR 10,000,000/day stand by rate (option 2).

  1. Development of the Outcome for Alternative.

It is clearly that if we accept first option, then contract price will be IDR 4,500,000,000.

But, for the second option, we must to ensure the stand cost that might be happened. For calculating the standby cost, we need to know the number of bad weather days during period of work. This number may be estimated by using historical weather data. The following table contains weather data for past five years from Indonesian Agency for Meteorological, Climatological and Geophysics :

Table 1. Occurance of Bad Weather (In Days)

By using Monte Carlo simulation, it is forecasted the total bad weather days for each month in 2017, at P70 as follows:

Table 2. Occurance of Bad Weather in 2017

Therefore, stand by cost is estimated as 11 days * IDR 10,000,000 = IDR 110,000,000,

so that the price for second option is IDR 4,350,000,000 + IDR 110,000,000 = IDR 4,460,000,000.

  1. Selection of Criteria.

Of course, the main criterion is the lower cost. Another criteria is comes from our bidding procedure, namely the price should be lower than our owner’s estimation (OE) of IDR 5,000,000,000.

  1. Analysis and Comparison of the Alternative.

Below table contains total cost for both options:

Table 3. Total cost for both options

From the table 3, Option 2 is cheaper IDR 40,000,000 than option 1

  1. Selection of the Preferred Alternative.

Based on comparison table above, we decided to proceed with option 2, IDR 4,350,000,000 + IDR 10,000,000/day stand by rate.

  1. Performance Monitoring and the Post Evaluation of Result.

Monitoring and supervision should be conducted strictly during the execution of the work, especially in relation to the determination of whether a day is bad weather or not.

References:

  1. Sullivan, W.G., Wicks, E. M., Koelling, C. P. (2014). Engineering Economy, Chapter 12, page 526 to 562. Pearson. Sixteenth Edition.
  2. Bidding Document. (2017). Topographic survey. PT. ABCD. (Disguised).
  3. Monte Carlo Simulation. Retrieved from http://www.palisade.com/risk/monte_carlo_simulation.asp
  4. W4_YAW_Contract Risk Mitigation. Retrieved from https://kristalaace2014.wordpress.com/2014/03/17/w4_yaw_contract-risk-mitigation/
  5. Weather data. Retrieved from http://dataonline.bmkg.go.id/home
 

W2.1_MFO_Benchmarking Study of Estimation Process

  1. Problem Definition.

Accuracy in project estimating process becomes one of the issues in our project implementation, because sometimes ending over-budgeted or extremely under-budgeted. I will try to re-calculate the estimates for our completed projects with over budget using the twelve steps GAO’s cost estimating process. Then, later on we compare the results with estimates made based on the estimation process applicable in the company. We will compare the results using the multi attribute decision method and we will see which estimation process is better, the company’s estimation process or the twelve steps GAO’s estimating process.

  1. Identify the Feasible Alternative.

Accuracy verification has been done through well established technical methods and procedures. One of them is illustrated in the figure below and that method is adapted from GAO’s “Best Practices in Capital Budgeting”. This process is mainly four stages, initiation and research, assessment, analysis and presentation. I will try to benchmark against this standard process to extract recommendations to improve further on existing procedures.

Figure 1. GAO Cost Estimating Process

A resume after we compare our estimating process with The Twelve Steps of a High-Quality Cost Estimating Process from GAO’s “Best Practices in Capital Budgeting” as shown as below table.

Table 1. The comparison between our estimating process with The Twelve Steps of a High-Quality Cost Estimating Process

The results show that there are some gaps in our estimation process. There are some processes that we don’t do which can affect the accuracy in our estimation process

After find the gap, I will try to re-calculate the estimates for our completed projects with over budget using the twelve steps GAO’s cost estimating process and compare that using four non compensatory models. They are Dominance, Satisficing, Disjunctive, Lexicography

  1. Development of the Outcome for Alternative.

Summary information for each alternative :

Table 2 Estimating Process Data

  1. Selection of Criteria.
  1. Dominance. It is useful screening method for eliminating inferior alternatives from the analysis.
  2. Satisficing. It requires the establishment of minimum or maximum acceptable values for each attribute.
  3. Disjunctive. It relies on comparing the attributes of each alternative to the standard.
  4. Lexicography. By using it, a single attribute is judge to be more important than all other attributes.
  1. Analysis and Comparison of the Alternative.

Non-compensatory model.

Four non-compensatory models, that are (1) dominance, (2) satisficing, (3) disjunctive resolution, and (4) lexicography, will be used.

For evaluation of dominance, pairwise comparison between two alternatives will be done for all attributes, as shown in table 3.

Table 3 Evaluation of Dominance

It is still unclear from above table, which one is dominant with others.

The satisficing model is done by applying acceptable limit, as shown in Table 4, where there are no alternatives that are eliminated.

Table 4 Satisficing Model Evaluation

Table 4 also is used to evaluate the disjunctive resolution, where concluded that all alternatives is acceptable because each has at least one attribute value that meets or exceeds the minimum expectation.

To conduct lexicography, the first should be done is to rank each attribute, as shown in table 4.

Table 5 Attributes Ranking

And then Table 5 shows evaluation using lexicography, where “GAO Cost Estimating Process (A)” has highest rank attribute.

Table 6 Lexicography Evaluation

  1. Selection of the Preferred Alternative.

Based on above alternatives:

  • Dominance. No alternative was selected, because all alternatives did not have dominant attributes than others.
  • Satisficing. It did not produce the best alternative.
  • Disjunctive resolution. All alternatives would be acceptable, because each has at least three attributes that meets the expectation.
  • Lexicography. The final choice would be alternative C because the estimated cost is the top-ranked attribute.

Based on the analysis, the preferred choice is alternative C.

  1. Performance Monitoring and the Post Evaluation of Result.

Monitoring should be conducted during execution of the project to ensure that all requirements are met.

References:

  1. Sullivan, W.G., Wicks, E. M., Koelling, C. P. (2014). Engineering Economy, Chapter 14, page 559 to 617. Pearson. Sixteenth Edition.
  2. W17_YAW_Licensor Selection by Using Multi Attribute Decision. Retrieved from https://kristalaace2014.wordpress.com/2014/06/19/w17_yaw_licensor-selection-by-using-multi-attribute-decision/
  3. W4_Andi_Decision Making Multi Attributes. Retrieved from https://kristalaace2014.wordpress.com/2014/03/21/w4_andi_decision-making-multi-attributes/
  4. 10.3 – module 10-3 – managing change – the owner’s perepctive. Retrieved from http://www.planningplanet.com/guild/gpccar/managing-change-the-owners-perspective
 

W3-ABM-Justifying the adoption of BIM processes during project tender stage using Non Compensatory decision making models

  1. Problem Recognition

THE Introduction of BIM process into Design and Constriction work flows provides both Owners and Contractors with many advantages however during the tender stage, an owner must decide between use of traditional design and documentation methods or investment in more detailed modeling (BIM) which requires highly specialized management systems and software.

2. Development of Feasible Alternatives 

An owners tendering strategy is dependent upon a large number of factors. For this exercise we will consider typical Design-Bid-Construct scenario using either of the following methods;

Alternative 1 – Owner developed 2D design format with typical project information including detailed archi, Structure, and MEP drawings, BoQ, material/equipment specifications, site data, etc

Alternative 2-Fully developed 3D design and BIM model including co ordinated structural, architectual, MEP designs inclusive of materials and element specifications plus model generated BoQ, site data, etc

3. Development of the Outcomes

Typical attributes to be used in the comparison of the above alternatives are outlined below.

  1. Simplification of design process
  2. Reduced Cost to prepare Tender documentation
  3. Reduce time to prepare Tender documentation
  4. Accurate representation of Project scope and requirements
  5. Flexibility to evaluate possible design options during tender stage
  6. Reduce risk of variations from Contractor

Within this example, there are no monetary or time figures available for the evaluation the alternatives.The following Non compensatory models will be used as the method of comparison;

  • Dominance
  • Lexicograph

Perceived strengths and weaknesses of each alternative shall be used in the assessment.  Some of the advantages BIM is considered to offer over traditional design and documentation processes include;

4. Selection Criteria

The alternative which is considered dominant will be considered as the preferred alternative however if a dominant alternative cannot be determined, a Lexicograph model based on a ranking of attributes will be used.

The ranking shall be based on the preferences / criteria listed in table 1 (Paired Comparison)

In the above example, the owners priorities are to minimise costs for the development of the Detailed design as well as ensuring that the information provided during tender is accurate and represents the project scope. Based on the rankings, second is the Owners desire to reduce risk of unknowns and variations from the Contractor.

5. Analysis and Comparison of the Alternatives

An Assessment of Dominance among alternatives is outlined in below table based on perceived advantages and disadvantages of BIM process.

A dominant alternative cannot be identified with BIM considered to be superior in only 4 of the 6 attributes.

Under the lexicograph model and the ranking of attributes traditional design processs are determined to

From the ranking of attributes, Cost to develop tender design and Accurate representation of Project scope / Owner requirements are considered priorities to the Owners tender process. This is followed by Owners priority for a reduction in risk of variations (due to poor scope definition).

Whilst tradition tender and 2D design process is considered better in achieving the clients objective of simplifying the design process, BIM can offer a more accurate representation of the project scope and owners requirements through 3D visualization as well as coordinated design process. Given both of these alternatives satisfy each of the top ranked priorities, final selection may be based upon secondary rankings such as  reduction in risk of variation from Contractor due to poor scope definition.

6. Selection of the Preferred alternative

Alternative 2 (BIM Process) is considered the preferred alternative on results above.

Whilst the BIM model development process during tender stages is considered more complicated and costly (Attribute 1 & 2) with a heavy / early reliance upon specialized BIM management skills, BIM will greatly increase the chance of the Owners design and project objectives being satisfied through through better visualization of requirements. The Owners desire to reduce variations though poorly detailed or communication of Work scope is also more likely to be realised with a BIM process.

7. Performance Monitoring and Post evaluation of results

In order to truly evaluate the effectiveness of BIM during the tender stage, the following information would need to be established at the end of the project;

  • Quantity / Value of variations claimed due to scope omission/errors
  • Number NCR’s or rework required by contractor due to non conformance with Specification
  • Compliance with Owners tender design
  • Redesign costs and time lost due to changes
  1. What is Building information Modelling and what are its advantages and Disadvantages (Krigh Bachman) retrieved from www.quora.com
  2. The Benefits Of BIM For Structural Engineers (Venu Gopal) retrieved from www.leevenspark.com/2015/01/the-benefits-of-bim-for-structural.html
  3. 15 advantages of using BIM (Francesc Salla) retrieved from    http://blog.visualarq.com/2014/03/12/15-advantages-of-using-bim/
  4. Sullivan, William G., Wicks, Elin M. & Koelling, C. Patrick. (2014). Engineering Economy 16th edition page 600 -607, England: Pearson Education Limited.
 

W3_TH_ Gas Station Prime Mover Selection by Using Multi Attribute Decision

  1. Problem Definition.

There are three types of prime mover commonly used on gas station project: gas engine, electric motor and diesel engine. This prime mover used to driven CNG compressor. By using multi attribute decision, we can choose the best option for gas station project.

  1. Identify the Feasible Alternative.

Summary data of three prime mover types:

Table 1 Prime Mover Data

There are six criteria of evaluation known as attribute. Selection of prime mover types will use both methods of multi-attribute decision: non-compensatory model and compensatory model.

  1. Development of the Outcome for Alternative.

3.1.    Non-compensatory model.

Four non-compensatory models that will be used: (1) dominance, (2) satisficing, (3) disjunctive resolution, and (4) lexicography.

To check for dominance in Table 1, pairwise comparison of each prime mover`s set of attributes must be inspected, as shown in Table 2.

Table 2 Evaluation of Dominance

Based on Table 2, we know that no prime mover is dominant than others.

To illustrate the satisficing model, acceptable limits must be established for each attributes.

Table 3 Evaluation of Satisficing Model

No alternatives that are eliminated on this models, shown by Table 3.

Table 3 also is used to evaluate the disjunctive resolution, where concluded that all alternatives is acceptable because each has at least one attribute value that meets or exceeds the minimum expectation.

To conduct lexicography, the first step is to rank each attribute, as shown in Table 4.

Table 4 Attributes Ranking

Table 5 shows evaluation using lexicography, where “Electric Motor (A)” has highest rank attribute.

Table 5 Lexicography Evaluation

 3.2.     Compensatory model.

In this evaluation, two compensatory models, that are the non-dimensional scaling and the additive weighting technique will be used.

Ranking attribute by using non-dimensional scaling as shown in Table 6.

Table 6 Non-dimensional scaling (NDS)

As shown in Table 6, alternative “Electric Motor (B)” has highest rank

After set relative rank for each attribute, further is to conduct additive weighting for all alternatives as shown in table 7.

Table 7 Additive weighting evaluation (AWE)

Note: Column Relative Rank is taken from Table 5.

As shown in Table 7, alternative “Gas Engine (A)” has highest rank.

  1. Selection of Criteria.

A selection criterion for prime mover selection is the highest rank.

  1. Analysis and Comparison of the Alternative.

Table 8 shows ranking of prime mover that resulted from both non-compensatory model and compensatory model.

Table 8 Ranking of Prime Mover

As shown in Table 8, it is interesting to see that both methods result the different rank order, where on Non-compensatory model and Compensatory model NDS: “Electric Motor (B)” has rank number I (highest) followed by Gas Engine (A), and Diesel Engine (C). Different with Compensatory model AWE result: “Gas Engine (A)” has rank number I (highest) followed by Diesel Engine (C) and Electric Motor (B).

  1. Selection of the Preferred Alternative.

Electric Motor will be decided as prime mover type for the gas station project. But if the delivery time and OPEX (as shown by rank Table 7) be the main concern, the best choice is Gas Engine.

  1. Performance Monitoring and the Post Evaluation of Result.

To ensure that all requirements are met, monitoring should be conducted during execution of the project.

References:

  1. Sullivan, W.G., Wicks, E. M., Koelling, C. P. (2014). Engineering Economy, Chapter 14, page 559 to 617. Pearson. Sixteenth Edition.
  2. Planning Planet (2017). Multi Attribute Decision Making. Retrieved from https://www.planningplanet.com/guild/gpccar/managing-change-the-owners-perspective
  3. W3_MFO_Gas Meter Selection by Using Multi Attribute Decision. Retrieved from https://emeraldaace2017.com/2017/08/15/w3_mfo_-gas-meter-selection-by-using-multi-attribute-decision/
  4. W17_YAW_Licensor Selection by Using Multi Attribute Decision. Retrieved from https://kristalaace2014.wordpress.com/2014/06/19/w17_yaw_licensor-selection-by-using-multi-attribute-decision/
  5. W4_Andi_Decision Making Multi Attributes. Retrieved from https://kristalaace2014.wordpress.com/2014/03/21/w4_andi_decision-making-multi-attributes/
 

W3_OAN_Investing vs Renting vs Leasing Studies

  1. Problem Definition

Reliability of equipment in oil and gas industry has been main concern in our company, storage tank to be specific. As main equipment it needs special attention, since we are taking care hydrocarbon product, which is highly flammable. Our goals are to asses reliability of storage tank such as corrosion rate and remaining plate thickness. To achieve our goals, it is important to determine the most economical method to asses reliability or conduct inspection of storage tank.

  1. Development of feasible alternatives

As commented in the blog for Week 2, to asses corrosion rate and remaining plate thickness alternatives :

  1. Investing an Ultrasonic Thickness (UT) Crawler as inspection tools
  2. Hire third party specialize on storage tank inspection
  3. Leasing UT Crawler as inspection tools

It is important to choose which most efficient way to conduct inspection, especially with numerous number of storage tank.

  1. Possible Solution / Alternative

Calculation of investment, maintenance cost, operating cost and rent cost based on inquiry from UT Crawler Vendor for new equipment or leasing and Third Party specialize in this field.

  1. Selection of Criteria

The Acceptance criteria is the option with lowest total net worth.

  1. Analysis and Comparison of the Alternatives

Table 1: Summary result of investing, renting, and leasing (Operating Lease Scenario) data

The scenario for leasing is “Operating Lease”, with lease rental payment is 75% of investment price.

Table 2: Useful life and Total Number of Inspection in 1 year

Table 3: Book Value at the end of life time, using Straight Line Depreciation

Calculation summary :

Table 4 : Present Worth for Purchasing

Table 5 : Present Worth for Renting

Table 6 : Present Worth for Leasing

Table 6 : Calculation Net Worth Purchase, With i : 7% (Bank Indonesia Rate – 2016)

  1. Selection and Preferred Alternatives

Table 6 show that total cost of leasing UT Crawler is the lowest. For long term inspection with numerous number of tank, leasing UT Crawler is the most efficient way.

  1. Performance Monitoring and the Post Evaluation of Result

It is recommended to review feasible leasing alternatives, and conduct performance equipment monitoring. For example Net lease scenario, where the payment not include maintenance and insurance, or Capital Lease scenario, where we can buy the asset at the end of lease term. Regard, the maintenance cost is very low and almost need no maintenance, also we can calibrate UT Crawler by our self.

 

References

  1. Sullivan, William G., Wicks, Elin M. & Koelling, C. Patrick. (2014). Engineering Economy 16th edition page 71-73, page 213 – 215, and page 332 – 337, England: Pearson Education Limited.
  2. Module 10-3 Managing Change The Owner’s Perspective (2015).
    Retrieved from http://www.planningplanet.com/guild/gpccar/managing-change-the-owners-perspective
  3. Module 06-5 – Acquiring Equipment for The Project (2016)
    Retrieved from http://www.planningplanet.com/guild/gpccar/acquiring-equipment-for-the-project
  4. Press Release (2016)
    Retrieved from http://www.bi.go.id/en/ruang-media/siaran-pers/Pages/sp_181416.aspx
 

W3_UDS_Terminal Operating Cost Evaluation

  1. Problem Evaluation

Kediri Fuel Terminal was closed on 2009 because it is inefficient. Now this area is distributed from Surabaya, Malang and Madiun Fuel Terminal. Best on future demand estimation, fuel volume of this area will be raising and we need more storage of new product. Those are the reasons why we want to reopen Kediri Fuel Terminal again.

So we need to evaluate Operating cost of Kediri Fuel Terminal quotation from our subsidiary is IDR 130/Liter. Is the quotation appropriate? If it is not, how much is operating cost of Kediri Fuel Terminal?

  1. Development of feasible alternatives

There are three options approach in evaluate Operating cost of Kediri Fuel Terminal :

  • Accept the quotation, as price as IDR 130/liter (Alternative A).
  • Using cost approach estimation. Historically in 2009, Kediri Fuel Terminal cost/liter was about IDR 108 (Alternative B).
  • Using comparison with other Fuel Terminal cost that operated by ourselves. The cost/liter is IDR 157 (Alternative C).
  1. Development the outcome for each alternative

In this evaluation I am using Benefit – Cost ratio method in Evaluating all alternative. This method is very useful to select alternative in economical approach with a simple way, because it compare positive (cash in) and negative (cash out) cash flow of each alternatives.

  1. Selection of criteria

The Rule of thumb in Benefit – Cost ratio method is Alternative will be feasible if B-C ratio greater than one. So in this evaluation we will eliminate alternative with B-C Ratio less than one, because it not economically feasible (their cash out higher than their cash in).

  1. Analysis and comparison of the alternative

This calculation using data as below:

  • discount rate 10.5% (as a Pertamina Hurdle Rate of Investment)
  • Investment Cost (I) = IDR 19,854,221,656
  • Benefit (B) per/year = IDR 100,937,362,800
  • Operation & Maintenance (O&M) /year :
    1. Alternative A = IDR 54,674,404,850
    2. Alternative B = IDR 45,421,813,260
    3. Alternative C = IDR 66,029,858,165
  • There is no market value because we use it until the end of the life cycle (20 years)

Conventional B-C ratio with PW:

Modified B-C ratio with PW:

B-C ratio each alternatives:

Table 1. B-C Ratio Result

All the alternatives are shows B-C Ratio’s calculation greater than one. So all alternative is economically acceptable.

  1. Alternative selection

Base on B-C Ratio Alternative B is preferred to be used because it gives the highest value than other but it use historical data of year 2009. As we know 8 years is a long time and everything has changed, so it would be better if we use Alternative A. This alternative is a second highest value and also more efficient than operating cost that operated by ourselves.

  1. Performance monitoring & Post Evaluation Result

Different alternatives only affect the amount of the B-C ratio, no effect on project tolerability. Extra analysis needs to be done to present input in order to acquire a better conclusion.

References

  1. Sullivan, G. W., Wicks, M. E., & Koelling, C. P.(2014). Engineering economy 16th Edition. Chapter 10 – Evaluating Project with the Benefit – Cost Ratio Method., pp.467-491. Prentice Hall.
  1. Planning Planet. (2017). Benefit Cost Analysis. Retrieved from http://www.planningplanet.com/guild/gpccar/managing-change-the-owners-perspective
  2. Mind Tools. (2017). Cost-Benefit Analysis. Retrieved from https://www.mindtools.com/pages/article/newTED_08.htm