It is becoming more common for factories to purchase turnkey bulk material handling systems for large process upgrades. These bulk material system designs typically are dense or dilute phase convey systems traveling large distances around plants or large and complicated conveyor systems. The upfront cost of a turnkey system can sometimes inflict a sense of sticker shock when compared to the purchase price of the bare equipment. However, there are many additional services in a turnkey system.
A turnkey system means that a single provider supplies the process design, equipment and controls design, perform all testing, supervise or perform system installation, and provide field start up support and validation. The capital investment of purchasing a turnkey bulk material handling system often appears prohibitive, but the benefits of investing in a turnkey bulk material handling system can far outweigh the increased pricing as long the project is well defined and planned. Having a standard checklist for planning a turnkey bulk material handling project is great way to ensure proper execution and to help maximize the project ROI.
Step 1: Define the Project Parameters
No matter what type of project is being planned, defining the project parameters should always be the first step in the process. Each client has their own unique way of defining a project and determining how to move forward, but experience tells us that there are basic questions always included in this project step.
Step 2: Choosing a project design partner
Project owners often find it beneficial to bring in outside help. Determining who will assist with the project is just as important as defining the project parameters. A good partner will execute the project within contractual parameters as seamlessly as possible while a poor performing partner could lead to a stressful project experience. For companies with a material handling SME on staff, utilizing an experienced bulk material handling supplier is very logical. For the companies not lucky enough to have a material handling SME on staff, using the expertise of an EPCM with extensive material handling experience yields positive project results.
Step 3: Specify your System
Based on the answers provided in Step 1, a good EPCM and/or a good bulk material handling system provider can assist with the specification of the system. For turnkey bulk material handling projects there are multiple types of specifications to be developed: process and performance, equipment and layout, controls, electrical, ventilation, CSA, quality control, and construction.
Step 4: Price your Project
The pricing of the project can be divided into three buckets: capital costs, engineering costs, and construction and startup costs. For turnkey projects, a single cost is usually provided because the bulk of the project scope falls within the responsibility of the bulk material handling system provider. An allowance needs to be included by the project owner for indirect costs for items not covered by the system provider. Examples of indirect costs are permitting, geotechnical studies, and relocation of existing equipment or systems to make room for the new system. An estimate of all project costs should be performed at various milestones throughout the project to ensure costs and scope are controlled. Some questions to ask during this step include:
Step 5: Design Development
Turnkey bulk material handling projects may be broken down into scheduled items similar to any other EPCM project. Design development covers the design, integration, fabrication and testing of the system within the capabilities of the provider. During this phase, the system design is regularly reviewed within the design team and with the project owner. If a project is going to deviate from the business plan, this is the phase in which it typically occurs. Scope creep or fluid business needs can easily increase the project costs while extending the schedule. During the design development project phase keep in mind these questions:
Step 6: Preconstruction
Preconstruction activities are often performed in parallel, near the end of the design development phase of the project. Preconstruction activities may include many include permitting, site studies, relocation of existing equipment, adding utility tie-ins, upgrading electrical panels for incorporation of the new system. It is common for a plant to take on the responsibility for these items, but they are tracked via the project schedule. A good maintenance team can effectively perform or manage the preconstruction activities while keeping project costs down. If a plant does not have the resources to provide preconstruction activities, EPCMs commonly provide the necessary project support as part of the turnkey project contract.
Step 7: Construction
Communication and organization are key during the construction phase. The project is on budget and schedule, but if the construction is not well planned and executed then everything stalls. Some turnkey bulk material handling system suppliers only provide construction supervision of their equipment while others can provide everything.
Step 8: System Startup and Validation
For turnkey bulk material handling projects, the system startup and validation phase may start during the construction phase. For turnkey projects, this is typically led by the bulk material system supplier but supported by the end users.
Now that all project steps have been planned out and followed, the project owner may be questioning, “Have all the steps been followed? Have all questions been regularly evaluated throughout the project at each critical project step?” Following a short check list for the planning and execution of such a project is a great way to ensure successful project execution. Turnkey bulk material handling projects may be a wonderful and rewarding method for performing a plant expansion project. No matter who assists with the turnkey system, ensure everyone follows the checklist provided to start all project communication and ensure project success.
Contact us to learn more about how Day & Zimmermann can help with your turnkey bulk materials handling projects.
ABOUT THE AUTHOR
Audrey Hooper is a lead mechanical engineer and material handling subject matter expert for Day & Zimmermann’s Process & Industrial Group. She holds Professional Engineer’s licenses in multiple states, and she is the qualifying agent for D&Z’s Construction Manager and Commercial General Contractor licenses in multiple states. Mrs. Hooper has 20 years of experience developing Material Handling and Process Equipment designs from initial concepts through the detail design and construction phases to successful field operation. She has experience in Power, Refining, Chemicals, Plastics, Fibers, Spinning, Aerospace, Nuclear, Metals, Bio-Pharma, and Alternative Fuels industries.