LCP Management

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LCP Management
Project Excellence
Jos L. Schneiders 7 May 2008
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DSM Business System
DSM Values
Corporate Requirements
Risk Control Assessments
Project management
RTD, Business Dev.
HRM
QESH, Security Regulatory
Demand Supply Chain Management
Monitoring and continuous improvement
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Annex 1
Project Management
Standardized work process for project execution
The Project Management Process
Decision to Scale-up
Phase 3
Phase 4
Phase 5
Final Review
Decision to Develop
Decision to Launch
Initial Screening
Phase 1
Phase 2
Decision 4
Decision 5
Decision 3
Decision 2
Decision 1
Feasibility phase (Market demand / opportunity)
Development phase (Market and Technology developm
ent)
Scale-up and Validation phase (Engineering,
Procure ment and Construction Validation)
Commercializing phase (Commissioning, Market
launch and full scale Production)
Idea Generation phase
LCP work process
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We investment only if

• There are no non-investment options
• The project is financially feasible
• There is a business needs memorandum and a clear
  owner
• The project fits with out strategy (BSD / PSR)
• The project/business strategy follows VBBS
  principles
• The risks are mitigated (Techn., SHE, financial,
  IP, legal,)
• There is a winning project team
• The profit can be demonstrated after project
  execution

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VARs and the Project Management Process
Standardized work process for project execution
the Project Management Process
Decision to Scale-up
Phase 3
Phase 4
Phase 5
Final Review
Phase 1
Phase 2
Decision to Develop
Decision to Launch
Initial Screening
Decision 5
Decision 4
Decision 2
Decision 3
Decision 1
Transfer to Running Business phase (EPC,
Commissioning, Market launch and Full
Scale Production)
Idea Generation phase
Business Feasibility phase (Market
demand /opportunity)
Development phase (Market and Technology developm
ent)
Scale-up and Validation phase (Conceptual/Basic E
ngineering Validation)
VAR 1
VAR 2
Do we understand what we are starting?
VAR 3
Full range of options to make this project a
success identified?
VAR 4
Have we selected the optimal alternative?
VAR 5
Is everything in place to ensure success?
What did we learn?
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VAR (Value Assurance Review)
Purpose of VARs A Value Assurance Review is an
instrument to assess, and to assist in capturing,
the integral (future) value of projects at stage
transitions, by an independent multidisciplinary
team of seasoned and experienced managers.
Reviews result in fact based recommendations. Th
e best possible outcome is that no
recommendations need to be made.
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LCP work process input and output

• The LCP work process has clear in-and output
• Input
• Business Need Memorandum
• Market analysis -plan, product definition,
• IP-, patent- and legal information
• Financial analysis
• Results preliminary SHE-study
• Allocated roles of Project director and Project
  owner
• Output
• Facility that complies with the agreed targets
• Completed files documentation
• Evaluation of the LCP project

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LCP Project procedure DSM
Closure
Definition
Planning
Execution
Idea
Implementation
Approval
Approval
GO/NOGO
Approval
Principal
Project
Assign
owner
Approve
Changes
Project
Director
Assign
Project
Project
Progress
Project
Project
Proposal
Execution
reports
Closure
Evaluation
Plan
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Overview responsibilities
Idea
Closure
Definition
Planning
Execution
Implementation
Project Ideas to achieve goals
Approve scope
(Re-
-
)
Prioritize
Approve
Approves
(Re)
-
allocate
planning
finalization
Principal
resources
resources
Assign
Owners

Managers
Advices on scheduling and resource allocation
Facilitates Tools, training, advices on
corrective actions
Project
Program
coordination
Management
Start
Up
Challenge
Coaches in
Challenge
Project
Owner
planning
execution
scope
Prepare
Execute
the
Close out
Prepare scope
planning
project
report
Project Director
Claim
Report
progress
Handover
resources
to Owner
of the
results
scheduling
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The success of a project is in the front end
loading (FEL)
Identify the project (Scope)
Basic Engineering
Detailed Engineering /Procurement/Contsructi
on
Evaluate project
Commis- sioning / Start-up Closure
Conceptual Engineering
The goal is minimizing changes during project
execution to shorten project cycle time, reduce
costs, and improve early production rates

• Clear objectives from the owner (business needs)
• In depth analysis of the technology and chemistry
• Excellence transfer from RD
• Good and sound conceptual design
• Input and experiences from Manufacturing
• Review of options
• Mitigation plans of risks
• Legal / regulatory / IP

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Leadership skills in Project Management
Scope Management Time Management Cost
Management Quality Management Human resources
Management Communication skills Procurement and
negotiating Integration Team building Planning Est
ablish direction Aligning people Technology Solvin
g problems Safety Management,
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LCP work process key roles
Project Owner
Project Director
RTD Manager
QA / Validation Manager
Marketing Sales
Operations
Project Manager LCP
Sourcing
RTO Manager (Ready to Operate)
PCM Manager (Project Control Manager)
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Differences buildings and plants

• Plant Building
• Business needs clear goals rather vague
• ROI gt 20 ROI lt 10
• Disciplines civil 10 civil 60
• mechanical 60 mech. /instr. /
• instr./elec. 30 elec. 40
• Decision criteria TCO Quality
• Step 3 (conceptual engineering)
  PIDs/layout Preliminary design B-estimate C
  -estimate
• Step 4 (Basic engineering) Detailed
  design Definitive design
• Step 5 (Commissioning) Concurrent
  exp. Traditional approach
• few subcontracts many subcontracts
• focus on safety safety?

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LCP work process lessons learned

• Clearly defined ownership Business must lead
  the decision making, based on bottom line
  Business results. (gt VARs)
• Ensure adequate alignment between the business
  and project team.
• Manage expectations of stakeholders and team. Set
  clear objectives
• Manage competent project staffing. (gt
  Certification..!)
• Ensure sufficient dedicated resources (people and
  financial).
• Clarify project roles and mandate of Project
  Director
• Lowest Investments Operational costs Through
  FEL (Front end Loading) VIPs (Value Improving
  program).
• Identify clarify uncertainties, risks and
  assumptions in every step and define mitigation.
• Use cold eyes reviews.
• Define new realistic targets in time.
• Early input key Contractors and Vendors with
  contracting strategies aiming for sharing
• NO CHANGE culture after Conceptual Engineering