PIP: PIP: Working in Harmony Working in Harmony to Change Industryto Change Industry
www.pip.orgwww.pip.org
Steve FrankeSteve Franke
Shell Chemical CompanyShell Chemical Company
Process Industry Process Industry PracticesPractices2000 CII Annual Conference2000 CII Annual Conference
Nashville, TennesseeNashville, Tennessee
ObjectivesObjectives
• Broaden understanding of PIP initiative.Broaden understanding of PIP initiative.
• Raise awareness of PIP “value proposition.” Raise awareness of PIP “value proposition.”
• Validate PIP harmonization process. Validate PIP harmonization process.
• Publicize spin-off opportunities for Publicize spin-off opportunities for harmonization process.harmonization process.
• Relate PIP readiness and electronic Relate PIP readiness and electronic availability.availability.
• Advocate use of PIP “best practices.” Advocate use of PIP “best practices.”
A Ladder Is A Ladder?A Ladder Is A Ladder?
VisionVision
• PIP is “universal language” in U.S. process PIP is “universal language” in U.S. process industry for EPC industry practices. industry for EPC industry practices.
• PIPs are widely recognized and available PIPs are widely recognized and available electronically.electronically.
• PIPs are up to date, of high quality, and PIPs are up to date, of high quality, and can be used “essentially as is.”can be used “essentially as is.”
• A preponderance of owner and contractor A preponderance of owner and contractor companies voluntarily adopt and use PIPs.companies voluntarily adopt and use PIPs.
MissionMission• Increase EPC work process value globally.Increase EPC work process value globally.
• Enhance compliance with safety, health, and Enhance compliance with safety, health, and environmental objectives. environmental objectives.
• Have PIP represent preponderance of industry.Have PIP represent preponderance of industry.
• Create and use EPC “industry practices” Create and use EPC “industry practices” (PIPs).(PIPs).
• Establish IT collaborative and distribution Establish IT collaborative and distribution
tools to facilitate PIP development and usage.tools to facilitate PIP development and usage.
PIP Member ConsortiumPIP Member Consortium
•Chartered in 1993 and affiliated Chartered in 1993 and affiliated with CII.with CII.
•33 U.S. process industry 33 U.S. process industry companies (24 owners; nine EPC companies (24 owners; nine EPC contractors)contractors)
PIP Member ConsortiumPIP Member Consortium
CategoryCategory 20002000 2002 goal2002 goal
OwnersOwners 50+%50+% 70-75%70-75%
EPC ContractorsEPC Contractors 70+%70+% 75-80%75-80%
PIP Members’ PIP Members’ U.S. U.S. Market Share Market Share (Revenue)(Revenue)
PIP Value Proposition PIP Value Proposition ObjectiveObjective
Perform an engineering-Perform an engineering-
style estimate in order to style estimate in order to
quantify the value of PIP.quantify the value of PIP.
Value Proposition Study Value Proposition Study ApproachApproach
•Base estimate on actual EPC project.Base estimate on actual EPC project.
•Use study team of experienced Use study team of experienced owner, contractor, and supplier owner, contractor, and supplier members.members.
•Estimate standardization impact.Estimate standardization impact.
•Focus on work process impact (before Focus on work process impact (before and after).and after).
PIP: Where Is the Value?PIP: Where Is the Value?
• More efficient communication with EPC. More efficient communication with EPC.
• Reduced specifications conflicts and errors; Reduced specifications conflicts and errors; less rework and redesign.less rework and redesign.
• Reduced inspection and testing.Reduced inspection and testing.
• Improved automation and productivity of Improved automation and productivity of engineering, construction, fabrication. engineering, construction, fabrication.
• Reduced standards maintenance and Reduced standards maintenance and training. training.
• Reduced materials and equipment Reduced materials and equipment inventories.inventories.
PIP Value Proposition PIP Value Proposition Study ResultsStudy Results
Value PotentialValue Potential
6.7 percent6.7 percent
(Greater than $1.3 billion annually (Greater than $1.3 billion annually
for U.S. process industry)for U.S. process industry)
HarmonizingHarmonizing
AdoptingAdopting
PIP
Pra
ctic
es
Co
mp
any A
En
gin
eering
Stan
dard
s
Co
mp
any B
En
gin
eering
Stan
dard
s
Co
mp
any C
En
gin
eering
Stan
dard
s
CII ResearchCII Research PIP HarmonizationPIP Harmonization
Data CollectionData Collection Literature and Literature and Existing Company Existing Company Case StudiesCase Studies StandardsStandards
Data AnalysisData Analysis Define CausalDefine Causal Define Similarities Define Similarities RelationshipsRelationships and Differencesand Differences
Model DevelopmentModel Development Rigorous —Rigorous —Align Similarities StatisticalAlign Similarities Statisticaland Harmonize Differencesand Harmonize Differences
Model TestModel Test Industry SurveyIndustry Survey Industry “Experts” Industry “Experts” ReviewReview
Model ApplicationModel Application CII Best PracticeCII Best Practice PIP Industry PracticePIP Industry Practice
Research vs. Research vs. HarmonizationHarmonization
Creation CostsCreation Costs Creation Creation Time Time ($M/guide)($M/guide)(months/guide)(months/guide)
StandardsStandardsDevelopmentDevelopment 500-700500-700 30-4230-42 OrganizationsOrganizations
PIPPIP 370-500370-500 22-3022-30
Standards and Practices:Standards and Practices:Typical Costs and TimingTypical Costs and Timing
OrganizationsOrganizations
00
100100
200200
300300
400400
500500
600600
‘‘9595 ‘‘9696 ‘‘9797 ‘‘9898 ‘‘9999 ‘‘0000 ‘‘0101
Nu
mb
er
of
Pra
cti
ces
Nu
mb
er
of
Pra
cti
ces
Through June 2000Through June 2000
CRITICAL MASSCRITICAL MASS
Practices PublishedPractices Published
EXPECTED EXPECTED TOTALTOTAL
estimatesestimates
Practices by DisciplinePractices by Discipline
2636
1118
54
87
1737 35
85
169
225
1029
0
50
100
150
200
250
C/S/A C&I ELEC MACH PC PI PE VESS
Published
Planned
Nu
mb
er
of
Pra
cti
ces
Nu
mb
er
of
Pra
cti
ces
0
20
40
60
80
100
120
140
1212
1998$31MM
4747
1999$496MM
5656
2000$120MM
115115
2001$436MM
PIP
sPIP Usage:PIP Usage:
Sample Owner CompanySample Owner Company
PIP Impact:PIP Impact:Collaborative and Joint Collaborative and Joint
EffortsEffortsAPIAPI •• Pump InstallationPump Installation
•• WeldingWelding ••Mechanical SealsMechanical Seals
ASMEASME •• Pump Data SheetsPump Data Sheets ••Specialty Vessels/BinsSpecialty Vessels/Bins
ISAISA •• P&IDs P&IDs (Process & (Process & Instrumentation Instrumentation
Diagrams)Diagrams)
PIP Impact: Industry PIP Impact: Industry “Voice”“Voice”
•Successfully petitioned exceptions Successfully petitioned exceptions for industrial equipment platforms for industrial equipment platforms from international group.from international group.
• Led Owner Operator Forum-Led Owner Operator Forum-FIATECH alignment.FIATECH alignment.
•Actively interfacing with other Actively interfacing with other industry groups. industry groups.
PIP Impact: Future PIP Impact: Future PotentialPotential
• Harmonize EPC industry practices for Harmonize EPC industry practices for related industries. related industries.
• Provide input to industry on standards Provide input to industry on standards and code development.and code development.
• Guide technology development and Guide technology development and application.application.
• Help globalization of EPC industry Help globalization of EPC industry practices.practices.
• Other HARMONIZATION opportunities?Other HARMONIZATION opportunities?
To Learn More About PIPTo Learn More About PIP
• Visit Product Display in Conference Visit Product Display in Conference Center.Center.
– Meet PIP representatives. Meet PIP representatives.
– See demo of PIP Web site.See demo of PIP Web site.
– See sample PIPs.See sample PIPs.
– Get “Overview” and “Value Proposition” Get “Overview” and “Value Proposition” papers.papers.
• Visit PIP Web site Visit PIP Web site (www.pip.org)(www.pip.org)..
• Attend PIP workshop at CPI Conference.Attend PIP workshop at CPI Conference.
PIP & HarmonizationPIP & Harmonization
““Over 330 Best Over 330 Best Practices and Still Practices and Still
Growing”Growing”
www.pip.orgwww.pip.org