Project Management Institute

The invisible hand

PMI 2008 PROJECT OF THE YEAR
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PHOTOS COURTESY OF QIT

BY TEGAN JONES

IT was one of the most important and complicated orders Hatch had gotten in its half-century of doing business with QIT-Fer et Titane. The Sorel-Tracy, Québec, Canada-based metallurgy company was looking to increase output of a highly sought-after commodity produced at one of its plants—while it was still up and running.

The project left little room for error.

Any drop in production could spell economic disaster for a facility already running at full capacity and still unable to meet customer demand.

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Hatch was keenly aware of the risks—and the opportunities. Over the years, the engineering consulting company had developed an extensive understanding of processes and operations at the QIT facility it helped commission in the late 1990s. And the Mississauga, Ontario-based company would need every speck of that knowledge to meet the goals of the high-stakes project.

Hatch began by crunching numbers. It discovered that in 2004, QIT‘s Sorel-Tracy facility produced roughly 325,000 tonnes of upgraded slag (UGS), a high-grade variety of titanium slag used as a white pigment in products such as paints, plastics and paper.

But QIT was missing out. The company's leaders had determined the market could consume more than 400,000 tonnes per year.

After running capacity simulations, though, the Hatch team determined it couldn't hit that number without disrupting operations. So Hatch proposed a compromise: The team would bring the QIT plant up to a capacity of 375,000 tonnes per year—a 15 percent increase—without interrupting work. And it would complete the project by the end of 2006.

José Domingos, executive director of QIT, knew the company would ultimately need to expand its production further in the future. But he agreed Hatch's plan was the best way to meet QIT‘s immediate business needs.

“In that pre-feasibility phase, we really have to look at options and be wise enough to select the best option for the business case. Sometimes we need to go fast, no risk, sometimes we need to go low-cost, even if we take some risk,” he says. “The main objective here was to deliver it as fast as possible with no risk.”

IN 525,000 HOURS
WORKED ON THE PROJECT, NOT A SINGLE LOST-TIME ACCIDENT OCCURRED.

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To make the project work, Hatch's director for industrial minerals Guy LeClair knew he would need to call on his most experienced talent.

IN THE KNOW

Finding the right people for the job didn't require looking very far. Mr. LeClair was able to pull together a core team of 10 people who had an average of 15 to 20 years at Hatch. Beyond seniority, experience working with QIT‘s operations teams was a primary requirement for working on the upgrade project, as was solid project management experience.

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STAYING
SAFE

Education isn't enough to prevent accidents. So Hatch and QIT designated specific plant personnel who would be responsible for “tagging out” work equipment before any construction work could begin. The process called for depressurizing or de-energizing the machines under maintenance so there was no chance of them being triggered into action.

Also, each worker had a personal lock device so “nobody can turn the machine on or open a valve that will put your life in danger,” says Stephane Renaud, Hatch Ltd.

“We looked for continuity, first and foremost,” Mr. LeClair says. “Of the people on this project, maybe half of them had come off a successful project that had just been completed in the same plant at QIT.”

Mr. LeClair selected Massimo De Davide, global practice director for Hatch's mechanical group, to take the lead as a project manager.

Mr. De Davide was part of the team that worked in developing the original UGS facility in the late 1990s. Going in with a solid understanding of how the plant worked, he knew the best method to determine bottlenecks was to simulate different scenarios.

“As the process flows from one plant to the other, we're able to model the equipment within each of those plants and say, ‘OK, if we add specific equipment in this area, how does it affect the downstream process? How does it affect the upstream process?’” he says.

Through the exercises, the Hatch team identified two plants where total facility production could be increased by the addition of parallel production lines. The target areas included the slag preparation plant, where the slag is crushed, dried, classified and screened to the appropriate size for downstream systems, and the acid leaching plant, where acid is injected into the slag to purify the product.

But safely adding additional production lines in a facility where it's business as usual was going to take a well-thought-out plan. So the team gathered information from the plant's metallurgy department, QIT‘s research center and Hatch's engineering specialists, and worked with QIT‘s leadership to outline the exact parameters of the project.

That precise definition of the scope—right down to the specifics of each job role—helped keep every member of the team within budget and on schedule.

“The better you capture everything in the early stage, the better the project is defined,” says Stephane Renaud, Hatch's area manager for the slag preparation plant expansion. “Then you have a plan and you can actually just work the plan, as opposed to always going through with changes, which is a very demanding process.”

But the team also knew that even the best-laid plans must sometimes shift. So a change-management system was put in place under which all project participants were required to submit any changes to the project scope for review and approval prior to beginning any work. Any potential changes were logged in a trend register and reviewed on a weekly basis by the project management team to determine whether the change should be explored further, accepted or rejected.

“All the changes are welcome,” says Mr. Renaud. “But obviously, there are cost and schedule implications. The client can decide not to proceed with the change or they can agree to proceed, but that needs to be discussed.”

With team members across Hatch's technology groups and around the world working concurrently on project tasks, setting up uniform processes was particularly important. Although much of the work was done in Mississauga and Sorel-Tracy, the company's structural design group was producing the steel design and detailing deliverables from South Africa.

To ensure everyone stayed up to date, Mr. De Davide spoke with each team almost daily by phone, scheduled regular video and Web conferences, and implemented a document-management system so all team members could access the latest updates for their work.

And that information could change rapidly, given the tight timeline.

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                    Initial project budget

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The amount the project came in under budget

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The better you capture everything in the early stage, the better the project is defined.

—STEPHANE RENAUD, HATCH LTD., MISSISSAUGA, ONTARIO, CANADA

IN THE LOOP

The Hatch team began by designing upgraded versions of the QIT equipment they would add to the plant. From the first drawing onward, consistent reporting helped the team stay on schedule.

Advancement of engineering was monitored and recorded every two weeks and the number of hours engineers spent on each activity was recorded weekly. Based on the budget allocated for each deliverable, Mr. De Davide could then compare those results to the engineers’ hours to make sure both the cost and schedule were under control. If any numbers seemed off, he could address the delays from the very first sign of trouble. That process continued in all project phases and in certain circumstances—such as in preparation of planned shutdowns— on a weekly basis. “It really helped us enable the project leadership to make almost real-time decisions,” Mr. LeClair says.

The team also moved the project forward by developing an aggressive procurement schedule that let Hatch release jobs to the contractor teams ahead of schedule.

“As we bettered the procurement schedule, we would try to pull forward all subsequent downstream engineering and construction activities,” Mr. De Davide says.

But that trick was only possible because of Hatch's in-depth knowledge of the manufacturing complex and its close ties to the operations team. Armed with an understanding of the facility's workflow, the team knew when it was possible to approach the operations crew and ask for some activities to be started earlier than planned.

The team also picked up some time by concurrently executing separate jobs in the same areas, pre-assembling materials and deploying a second shift of construction workers when the budget would allow.

Despite the focus on a speedy execution, the team never put the schedule ahead of worker safety.

In addition to the hazards of working in any operating plant, the hydrochloric acid injectors and crushing mechanisms at the site posed significant safety threats. To prevent accidents, the team introduced strict safety protocols that all contractors, workers and plant personnel were required to follow. Mr. De Davide and the upper-management team would also walk the site weekly to verify work was being done according to safety standards.

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As we bettered the procurement schedule, we would try to pull forward all subsequent downstream engineering and construction activities.

—MASSIMO DE DAVIDE, HATCH

And the effort paid off. In 525,000 hours worked on the project, not a single lost-time accident occurred.

A WINNING COMBINATION

Without one unplanned shutdown, the project closed in November 2006 over a month early and CAD$15 million under the initial budget of CAD$145 million.

But the biggest surprise was yet to come.

In 2007, the plant produced more than 400,000 tonnes of UGS— 25,000 tonnes more than originally estimated. The team met QIT‘s target and the initiative would go on to earn PMI‘s 2008 Project of the Year.

For Mr. Domingos, the pleasure was two-fold. At the beginning of the project, he had challenged the Hatch team members to outdo their own record. He considered a previous effluent treatment plant project the best the company had ever run. The team had overcome technology and financial challenges to serve up a facility that slashed costs by 20 percent.

That was good. But he told the team, “I trust that you can do better.”

And he turned out to be right. PM

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK JANUARY 2009 WWW.PMI.ORG

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