Digitalization often focuses on engineering and design. But how can digitalization open up opportunities in EPC project performance beyond engineering? This presentation reviews the potential benefits Southern Company has found in procurement, construction, project controls, and commissioning. It also covers the implementation plan at Southern Company and how it ties into their larger Advanced Work Packaging and Materials Management initiatives.

1. © 2017 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
Presentation Overview
Digitalization often focuses on engineering and design. But how
can digitalization open up opportunities in EPC project
performance beyond engineering?
This presentation reviews the potential benefits Southern
Company has found in procurement, construction, project
controls, and commissioning. He will also discuss his
implementation plan at Southern Company and how it ties into
their larger Advanced Work Packaging and Materials
Management initiatives.

2. Unlocking Digitalization in
Procurement, Construction, Project
Controls, and Startup
Justin Weaver – Project Manager
2018 AVEVA World Conference – North America
February 14, 2018

3. 3
About Me
17 years with Southern
Company
Positions in Engineering,
Construction Management,
Project Management on
Power Plant EPC Projects
Currently: Project Manager,
Performance Improvement
Team
Focus: AWP
Implementation, Project
Automation

4. 4
Total Installed Cost
3%
3% 4%
Eng Proc Const
Cut engineering
budget by a third
Cut materials
budget by 11%
Cut labor budget
by 10%
10%

5. 5
What do we know? Where could we go?
Procurement
Materials:
28% of capex
Construction
Management
Contracted
labor:
40% of capex
Project
Controls
Earned Value
Startup
Turnover
Packages
ERM
IE&D
Net
Engage
Engineering
2016: IE&D,
Net,
Engage
Object-centric
data model
3%
?
?% ?%

6. 6
What Does ERM Do?
Supports processes
downstream of design
• Procurement
• Construction Management
• Project Controls
Passes structured data
between systems
• Systems have common
understanding of an object
• Eliminates spreadsheet
exporting and re-keying
AVEVA
IE&D
AVEVA Net
ES
Maximo
P6
AVEVA
ERM
Structured
Data SPC
Maximo

7. Procurement Digitalization

8. 8
Current State vs. Future Vision
Where are we now?
• 3 bids and a buy
• Ordering by description
• Manual requisitioning
• 30-60 day turnaround on
invoice payment
• No real good idea of what
we have on site
Where do we want to go?
• Release against a master
contract
• Req is a data transfer
• Ordering by catalog item
• <Net10 payment
• Knowing what we have received
and where it is on site

9. 9
Procurement Digitalization in ERM
Benefits
• Efficient requisition creation from
3D/2D design data
• Alignment between PO, Receipt,
and Invoice
• Mobile receipt inspection
• Integrates with Maximo catalog
• Reduces ordering based on
estimated quantities
Reduced effort in invoice reconciliation
Category contracts across fleet
Ecommerce savings
Automatic payment discounts
Reduces excess materials

10. 10
Procurement – Automated Requisition Creation

11. Construction Management Digitalization

12. 12
Current State vs. Future Vision
Where are we now?
• AWP with Spreadsheets and
Word docs on some sites
• CWP is a set of documents
with a scope
• Decisions made on
assumptions, not data
• Inability to accurately track
progress
Where do we want to go?
• Object-based packages
• Quantity and manhour roll-up
• Data-driven decision making
• Mobile progress tracking

13. 13
AWP Using a Spreadsheet and Word Docs

14. 14
Construction Digitalization in ERM
Benefits
• Links engineering and material data
to construction schedule activities
for a truer picture of constraints
• Improves decision making
• Object-based CWPs with automatic
quantities, hours, BOMs
• Long-term: improved Productivity
Factors
Reduced overtime and second shift
work
Further improved pricing from
contractors
Better estimates, better bids, more
projects

15. 15
Object-based CWP Assembly in ERM

16. 16
Construction Management: CWP Progress Monitoring
CWP Progress Monitoring
in ERM Mobile

17. Earned Value Digitalization

18. 18
Current State vs. Future Vision
Where are we now?
• Earned value for engineering
is calculated using
spreadsheets and a database
• Construction relies on
monthly reporting from
contractors
• No Procurement or Startup
earned value
• Weeks-old at time of report
Where do we want to go?
• Total-project earned value (EPCS)
• Calculated on a common platform
• Fact-checking our contractors
• Real-time

19. 19
Earned Value Digitalization in ERM
Benefits
• Reduces time and effort in
aggregating data and creating
reports
• Common Platform for
Engineering, Procurement,
Construction, and Startup
performance tracking
• Real-time visibility instead of
historical reports
Fewer work hours
Better reporting
Better decision making

20. Startup Digitalization

21. 21
Current State vs. Future Vision
Where are we now?
• A turnover package (TOP) is:
• Equipment lists on multiple
spreadsheets
• Printed
• Inserted into 3-ring binders
Where do we want to go?
• Object-based packages
• Paperless
• 3D-visualized

22. Value of Digitalization

23. 23
New Capabilities and Benefits
ERM Capability
Integrates with Maximo catalog
Line-item PR creation from design
Ordering exact quantities
Alignment: PO, Receipt, and Invoice
Materials tied to construction schedule
CWPs with BOMs, quantities, hours
Total-project EV on common platform
Benefit
Leverage category contracts
Fast payment discounts
Reduced excess materials
Less overtime and second shift work
Better CWP pricing from contractors
Less effort calculating EV
Better reporting, decision making
$4.6M / yr
(2.3% of $200M capex)
PR
$7.9M / yr
(3.9% of $200M capex)
CM
$600k / yr
(0.3% of $200M capex) EV
$13.1M / yr
(6.5% of $200M capex)
PR
CM
EV

24. 24
$(10,000,000)
$-
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
2018 2019 2020 2021 2022 2023 2024 2025
Cumulative Cost/Benefit
Cumulative Benefit Cumulative Cost Total
$(5,000,000)
$-
$5,000,000
$10,000,000
$15,000,000
2018 2019 2020 2021 2022 2023 2024 2025
Cost/Benefit Cash Flow
Benefits - aPR Benefits - aEV
Benefits - aCM AVEVA Cap Depreciated
Other Cap Depreciated Non-Depreciated
Return On Investment
NPV = $50.8M (7.57% discount rate, 8 years)
$13.1M/yr
2018 – 2025: Cost: $4.7M Benefit: $55.6M
Break Even
Q1 2019
Ramping benefit
Steady-state
benefits

25. 25
Implementation Plan
Mar – Dec 2018
• Scoping, installation,
configuration,
integration, testing
Jan 2019
• Go live in production
2020-2023
• Add successive
projects
• Growing in maturity
2024
• Steady-state maturity
• Continuous
improvement

26. 26
WolfPack
How Do We Make This Happen Technically?
AVEVA IE&D
AVEVA Net
Documentum
Doc-to-Pkg
Attribution
AVEVA
Engage
AVEVA ERM
P6
Maximo
Package Planning
Visualization
Pay
Sched Receive
Doc Repository
Data Backbone
Docs
Docs
PkgLists
Pkg
Lists
POs
EV
Object-to-
Package
Assembly
Object-based CWPs to Contractors
Reporting
Deliverable
Production
Object-to-Package
Assembly
(1D/2D/3D)
Pkg
Contents
PkgContents
Pkg
Contents
Pkg
Lists
Req Bid Payments
Package Workflow
Req MM
Pkg
Status
Pkg Statusing

27. 27
Different Ideas That Need Cultural Change Management
Comfort with technology PM CM E&P SCM
Process and workflow PM CM E&P
Feed the systems PM CM E&P SCM
Building CWPs PM CM
Building EWPs and PWPs PM E&P
Centralize buying into engineering PM E&P SCM
PO structure PM E&P SCM
Master Service Agreement model PM E&P SCM
PMs that are change agents PM

28. 28
Digitalization of EPC Projects
3%
3% 4%
Eng Proc Const Digitalization can facilitate 10% TIC reduction.
Improvement of downstream processes requires
object-centric design.
Requires new approaches to procurement and
construction management.
Requires a culture comfortable with doing things
differently.
Requires an understanding that the maturity
curve is a long one.
Digitalization is a win for Southern Company.
10%