How to minimize costs at the procurement stage to prevent budget overruns before they happen
Swiss Water Decaffeinated Coffee Company Inc. (Swiss Water) currently operates a water-based, ecologically-friendly, chemical-free decaffeination plant in Burnaby, British Columbia. They are a wholly owned subsidiary of Ten Peaks, a publicly-traded company.
BUSINESS PROBLEM SOLVED
Upon our involvement in the project, Temec revamped the procurement strategy and introduced strong project controls, and was thereby was able to stave off the projected 35-40% budget overrun, shepherding the project to completion – on time and on budget.
TECHNICAL PROBLEM SOLVED
The plant consisted of one decaffeination production line built in 1987. To fulfill the production capacity shortfall, a complete new Coffee Decaffeination Production Line that doubled the overall plant production output was required. The expansion was required to remain within the existing building footprint. The new facility is 60,000 square feet over three levels.
WHAT WE DID
Swiss Water completed the preliminary engineering and capital planning phases in early 2004 for the addition of a second decaffeination process line. Swiss Water then retained Temec personnel for project and construction management services through the detailed engineering and construction phases. Temec conducted a re-assessment of the scope, budget, and schedule, revealing that the project was headed for a 35-40% budget overrun. By changing the procurement strategy from turn-key packages to distinct engineering, procurement, and construction contracts, we shepherded the project to completion on time and on budget. The change to the project execution plan was made possible by introducing strong project controls processes for scope changes, procurement, budget forecasting, QA/QC, and system start-up.
PROJECT LIFECYCLE SERVICES USED
| √ | Opportunity |
|
| √ | Definition |
|
| √ | Design |
|
| Fabrication | ||
| √ | Construction |
|
| √ | Start Up |
|
| √ | In Service |
|