A Global Chemical Company Uses Lean, Predictive Analytics, and Capital Best Practices to Accelerate Schedule and Cost Improvement

Client Context

• A global pure play, integrated lithium company with annual revenues of ~$440 million, producing battery grade lithium hydroxide for Energy Storage & Battery Systems serving the Aerospace Pharmaceutical and Agrochemicals industries.
• The company required accelerating and optimizing an ambitious > $300 million Capex program to double the size of operations.

Key Challenges

Compounding the challenge of the investment program was a complex multi-country execution plan with Engineering taking place in Thailand, Procurement and Module Fabrication centered in China and Construction and Production located in South America. Key Challenges were:

• Lack of understanding of size and complexity of the project and the need for the entire company to come together to support from HR to Site Leadership.
• Lack of processes to bring a global team together to make decisions, resolve issues, and escalation.
• Lack of an integrated analytics platform to track real time progress and performance along the value chain
• Poor visibility and understanding of delays on each process as well as respective impact on program schedule and cost
• Weak vendor and interface management practice with interactions between key stakeholders and decisions made without data support and analysis

Approach & Key Success Factors

ARGO-EFESO and client leadership initiated a global leadership multi-day meeting to rapidly develop organization roles, responsibilities, and expectations; learned Lean Construction techniques; and completed pull planning for all major construction milestones.  Implementation was across three continents and six countries.  The following are the key solutions that were implemented:

• Developed global command center with Visual Management cadence on critical path milestones, Engineering and Design, Procurement, Financial Funding, Manufacturing Interface Management, Logistics Critical Path Analytics, Project Controls, and Construction Management.
• Implemented weekly and daily stand-up meetings at all levels including construction sites.
• Reviewed and optimized master schedule to reduce schedule by 12% and costs by 3%.
• Developed project control dashboards from corporate board level to construction vendor level.
• Implemented Critical Path Analytics Strategy & Model aligned to start up sequence which minimized schedule delays substantially. Included engineering, procurement, module manufacturing, shipping, customs, construction, and commissioning.  The improved overall program predictability significantly.
• Implemented Interface Management between Engineering and Manufacturing, Manufacturing and Shipping, Shipping and Customs, Customs and Trucking, and Construction and Commissioning.

Results

8%

Improvement in schedule from original baseline

$27M

Savings in costs from procurement negotiations

60-70%

Schedule variation reduction

30%

Procure to pay lead time reduction

20%

Reduction PO days of delay

167

Number of critical path barriers mitigated or eliminated