The successful execution of capital projects in chemical processing requires a well-orchestrated effort across an entire organization. Everyone, from the CEO to the project manager to the construction workers on site, must be on the same page to keep a project under budget and on time.
When it comes to capital expenditures at chemical processing companies, the large-scale projects attract most of the time and attention from executives and top-level decision makers. Whether it be building a new plant or a mass-scale maintenance project, large projects undoubtedly have the potential to significantly improve operations, and deserve the level of attention they receive.
Smaller capital projects; however, are often overlooked and fail to attract the same attention and care, despite representing a significant portion of a company’s overall capital spending. A recent McKinsey report found that roughly 50 percent of the chemical industry’s $400 million in annual capital spend is allocated to smaller
projects. By number, these projects typically account for as many as 80 percent of all capital projects.
Improving the execution of small projects in aggregate represents a large opportunity for chemical processing companies to increase their organization’s overall capital effectiveness. It has been estimated that improving the overall execution and selection of these projects can save companies up to 30 percent in costs.
By focusing more on the execution of smaller projects, chemical processing plants can vastly improve their capital effectiveness. Doing so will require business leaders to adopt new mindsets, while also borrowing from established strategies and techniques.
We’ve boiled down our approach to improving capital effectiveness on smaller projects
into the following six keys: Click here to download the e-book