Project Management Institute

Scope management through a WBS

key to success for the Logan Expansion Project

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Project Management in Action

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The heart of the Logan Expansion Project-the new three stand tandem cold mill

The heart of the Logan Expansion Project-the new three stand tandem cold mill

INTRODUCTION

The first production coil of rigid container sheet for the beverage industry will be delivered by an automatic guided vehicle to Logan Aluminum's new three stand tandem cold mill later this year. The coil will be rolled to the customer's specifications at 6000 feet per minute (fpm) and then delivered to an automatic storage and retrieval bay. From there it will be automatically placed on the entry conveyor of the new Slitting Line where it will be trimmed and lubricated at 4000 feet per minute before being transferred to the new Packing Line where it will be placed on a pallet and wrapped to be shipped.

This process began in the fall of 1989 when conceptual engineering started with a small team of engineers. They came together with Alcan Aluminum's business objectives in mind and developed the Project Mission Statement (see sidebar). The total time from project approval to first strip in the mill was only two years and eight months.

Alcan's objective is to increase the output of aluminum can sheet at the Logan Aluminum facility. The Logan Expansion Project included engineering, design, procurement, installation and start-up services of the equipment and utilities required to meet this increase.

The heart of this expansion is the addition of a 6000 fpm three stand cold mill with industry leading process automation systems, coolant system and environmental systems to meet the increasingly stringent can sheet market requirements for product quality, sheet flatness, profile, gauge uniformity and sheet cleanliness. One coil from this mill will make over 1,200,000 beverage cans for the soft drink or beer industries.

Other major pieces of process equipment include a 4000 fpm slitter, computerized roll grinders, and a dedicated packing line capable of wrapping finished coils vertically or horizontally. Material handling equipment consists of building cranes and dedicated process center cranes, an automated storage and retrieval system, and automated guided vehicles. This was installed in a 243,450 square foot expansion to the manufacturing building.

THE WORK PROCESS

The project was accomplished with a dedicated team of Alcan Aluminum and Fluor Daniel engineers. This team relationship started years before with a partnering arrangement between Alcan Rolled Products Co. and Fluor Daniel's Mining and Metals Business Unit.

One of the accomplishments of this arrangement was the development of a work breakdown structure (WBS) that uses a numerical system of cost codes covering all of the process centers that Logan has, from raw material through finished product.

An industrial project that is based on manufacturing centers does not use the normal type of documents to control the typical process project. Process Flow Diagrams (PFDs) and Piping and Instrument Diagrams (P&IDs), which are the core of a chemical or hydrocarbon project, are not suitable for this type of process. They are mainly used for plant utilities that support the manufacturing centers. Therefore a Scope of Work using the Alcan work breakdown structure was developed. This framework was set in place at the beginning of conceptual engineering when the team began to assemble a scope that would satisfy the project mission statement.

Logan Expansion Project Mission Statement

To expand Logan with advanced manufacturing technologies, quality equipment, and efficient facilities meeting the specified performance, maintainability, and scope objectives in a safe, timely, cost effective manner without negatively impacting current operations. The project will also provide for efficient training and assimilation of the expansion into operations.

The expansion will be adaptable to changing market opportunities; environmentally the leader in the aluminum industry; accomplished by utilizing the team concept, securing operations ownership; and building community standing, thus creating an unequaled…LOGAN.

Alcan Rolled Products Company

Alcan Rolled Products Company (Alcan) is the largest fabricating unit in North America of Alcan Aluminum Limited, Montreal, Quebec, Canada, an international aluminum producer. Alcan produces aluminum sheet, plate, and foil products at eight plants in the United States and Canada.

Principal applications for Alcan rolled products are sheet for beverage cans, foil for household and commercial packaging, fin stock for heat exchangers, automotive sheet, and common alloy sold to distributors and building products customers.

The company, with headquarters in Cleveland, Ohio, and Toronto, Ontario, Canada, has approximately 2500 employees and annual sales approaching $2 billion.

Coolant pit piping in the mill area

Coolant pit piping in the mill area

The final product-aluminum coils on the mill entry conveyor

The final product-aluminum coils on the mill entry conveyor

The Scope of Work was divided into 16 sections. Section 1 consists of a short executive summary. Section 2 is the project and process description, the section that the project management team concentrated on and developed throughout conceptual and preliminary engineering while the estimate was being fine-tuned. It describes by WBS number each of the project elements. Based on this section, each engineering discipline developed their scope of work using the same numbering system. The following 12 sections covered the discipline scopes for civil, structural, architectural, equipment, HVAC, piping, fire protection, electrical, automation, manufacturing information systems, environmental and material handling. The last two sections covered the scope of services, including engineering, procurement, controls and construction. An example of the work breakdown structure, which consisted of 325 elements summarized into 25 major categories, is shown in Table 1.

Using the WBS, the Manufacturing Building expansion with its required utilities was integrated into the existing infrastructure along with the new process centers. References and responsibilities could easily be established for each item of the WBS.

Table 1. Example Items in the Work Breakdown Structure (WBS)
(The complete WBS consisted of 325 elements
summarized into 25 major categories.)
Project Element WBS Number
Manufacturing Building 061
Building Foundations 06101
Floor Slabs 06102
Elevated Slabs 06103
Building Structural Steel 06104
Crane Support Steel 06105
Compressed Air Headers 06134
Bridge Cranes 06143
Etc.
Cold Mill No. 3 325
Cold Mill Entry Coil Lift 32501
Cold Mill Unwind Reel and Drive 32502
Cold Mill Entry Bridle 32505
Cold Mill Sleeve Transfer 32507
Cold Mill Stands 32508
Etc.
Pack Line No. 2 645
Pack Line Entry Transfer 64501
Pack Line Weigh Station 64505
Pack Line Stretch Wrapper 64507
Etc.

Since this numbering system is based on the plant cost codes representing area classification numbers, all documents produced carried the same identification numbering system. With the Scope of Work, drawing numbers, the cost system for both home office and construction, along with the estimate on the same numerical basis, risk management and change management systems were easily implemented. This may have been the first time in project management history that the engineers, craft workers and accountants all spoke a common language.

As typical with most projects, the first Scope of Work contained non-essential items that could be trimmed. With theWBS in place, the scope and cost estimate could be easily analyzed to determine areas for cost and scope reduction. Once the scope and cost estimates were approved for the project, the WBS system became the basis for change management.

Sample Estimate Deviation Notice

Figure 1. Sample Estimate Deviation Notice

The use of a common WBS structure for all disciplines allowed deviations from scope, schedule or cost estimate to be easily identified and tracked. Once a deviation was identified, a Potential Deviation Notice (PDN) was issued for review using the WBS area number. If the PDN was justified, it was listed as an Estimate Deviation Notice (EDN) (see Figure 1). This EDN was then estimated and approved by the Logan/Fluor Daniel team and then the scope, schedule or cost estimate was adjusted accordingly. PDNs and EDNs covered both increases in scope or cost as well as decreases in scope or cost. Decreases were transferred from a Value Added Program that tracked cost savings, cost avoidance and quality improvement (see Figure 2).

Summary of EDN Log

Figure 2. Summary of EDN Log

Exterior of the Logan Mill, with the expansion area under construction

Exterior of the Logan Mill, with the expansion area under construction

Using this common WBS contributed to successfully managing a very complex project with an approved total installed cost in the range of $255 million. The project was successfully completed ahead of schedule and under budget.

THE PROJECT TEAM

The team consisted of a project manager for Alcan/Logan and for Fluor Daniel. They were assisted by an engineering design manager, construction manager, procurement manager, and a controls manager. With this support function in place, Area Manager Teams consisting of an Alcan/Logan and a Fluor Daniel counterpart were responsible for areas as defined by the WBS. Three Area Manager Teams were identified: Building Area, including support utilities and material handling; Cold Mill Area; and the Finishing/Roll Shop Area, which included the Slitter and Pack Line. The Area Managers had full responsibility for their areas, including equipment selection and purchase, coordination with Logan Operations, design and installation coordination, and cost control. This concept was enhanced by a WBS that allowed cost reports and projections to be managed by area.

Some Interesting Facts About the Logan Plant

We Started This Way:

  • 800,000 Engineering Labor-Hours (400 Labor-Years)—if ten engineers were assigned to start work on the project at age 25, they would be 65 years old when finished.
  • 600,000 Cubic Yards Rock—would cover the 350-car parking lot to a height of over 120 feet.
  • 460,000 Feet of Process/Utility Pipa-plant piping and Spa Lake supply pipe hold enough water to provide sufficient needs for the typical American home for over 30 years.
  • 6,000,000 Feet Wire/Cable-enough wire to provide construction needs for 8,000 typical homes.
  • 17,000,000 Tons of Steel-enough to build 13,600,000 midsize American automobiles.
  • 140,000 Cubic Yards Concrete-enough to pave a two-lane road from Russellville, Kentucky, to Evansville, Indiana (over 100 miles).

We Have Now Added This:

  • 21,500 Cubic Yards Concrete-enough to build a two-lane highway 15 miles long.
  • 1,467,000 Feet of Electrical Wire-enough to build about 2,000 typical American homes.
  • 136,000 Feet of Pipe-hold as much water as a typical American home would use in 9 years.
  • 243,450 Square Feet of Building Expansion-could house more than five football fields.

As each area progressed through design and construction, Logan Operations Centers were established with machine operators and technicians assigned. These personnel joined the project team and became involved with operator station layout and maintenance accessibility. This team from Logan Operations phased into the responsibility for mechanical, electrical and automation system check-out and testing along with the major equipment suppliers.

Using the Area Manager concept with a Scope of Work based on a common WBS made transfer of ownership from the project team to Logan Operations a smooth transition.

LOGAN ALUMINUM

Logan Aluminum, in Russellville, Kentucky, is recognized as one of the world's most modem and low-cost production aluminum rolling mills. The plant has melting, casting, rolling, finishing and coating operations to convert aluminum ingot into coils of various alloys, thicknesses, sizes and widths. Some of the plant's unique capabilities include state-of-the-art rolling technology with sophisticated process control for automatic gauge control, computerized shape control, hydraulic gap control and on-line statistical process control (SPC). They use large ingots—up to 60,000 pounds-and can produce coils approximately 9 feet in diameter and 7 feet wide. These are some of the largest coils produced in the world.

Construction on the original plant began in early 1981 with engineering, procurement and construction being handled by Fluor Daniel. This was the first new aluminum rolling mill with a hotline to be built in the U.S. in nearly two decades. Initial commercial production began in early 1984.

SUMMARY

It always feels good to work with a repeat client on a site that your company originally built. The Logan Expansion Project Team was assembled utilizing many of the engineers who worked on the initial plant design in the early 1980s. Most of the project management staff were discipline lead engineers on the original project. This is an excellent example of what can be accomplished using a partnering arrangement between owner and contractor on a total engineering, procurement and construction project.

The Logan expansion was constructed on a self-perform basis with over 1,000,000 craft labor-hours expended with only one lost-time accident. For 1992, this was an OSHA-recordable lost workday incident rate of .19 as compared to a national average of 6.5 for the same period.

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Wayne Halli is a principle project engineer with Fluor Daniel. He is a registered Professional Engineer and is certified as a Project Management Professional. He has earned degrees in both mechanical engineering and business management. His prior experience includes manager of piping and mechanical engineering for Fluor Daniel, Greenville, SC. He has managed a number of diverse industry projects. Mr. Halli was the area project manager for the finishing and cold mill areas of the Logan Aluminum Expansion Project.

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.

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