Achieving Best Capital Project Systems, 1998 Engineering Conference Proceedings

The practices employed in defining and executing capital projects in the pulp and paper (F&P) and chemical process (CP) industries are compared in this study. The method of comparison is statistical in nature and links project performance with project practices. Project performance is defined based on the actual project cost, schedule, and operability results. Project practices include front-end loading, frequency of major design changes, and effective team integration. This report measures and compares the relationship between project performance and project practices for the P&P and CP industries.

The practices proven to be successful in defining and executing capital projects are not used as extensively in the P&P industry compared to the CP industry. Specifically:

- Improvements in project definition, or front-end loading (FEL), are associated with equal gains in project performance for both industries. P&P projects are not as well defined as CP projects at authorization and the beginning of project execution.

- Project performance improves with fewer major design changes. P&P projects experience more major changes than do CP projects, which is directly related to their lower level of definition.

- Effective, functionally integrated project teams improve performance. P&P projects lag CP projects in key functional representation during FEL, have more variability in their use of integrated teams, and do not use operational representatives to the degree of CP projects.

Is there a difference in practices between P&P and CP projects? The difference is in the frequency of application. CP projects use best practices more often, but the practices are effective in both industries. Better practices lead to better outcomes in P&P projects as well as CP projects.