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Select Topics in Value Engineering:
Modularisation in the Process Industry
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Jurie Steyn & Freek van Heerden
November 2015
Introduction
A module is a transportable pre-assembly of process plant components, designed to
minimise site installation and labour costs. Module construction involves building
part of a complete facility in an off-site location where specialised resources are
readily available and then transporting the module to site for installation. This allows
for much improved construction productivity.
In this article we consider the matter of modularisation in the process industry.
Modularisation has been identified as a significant factor with the potential to
substantially reduce the cost of a plant. Module development has reached the 3rd
generation, which implies totally self-contained process modules.
Some definitions
Value engineering
Value engineering is a systematic, creative and organised approach to provide the
necessary functions in a project at the lowest cost. The requirements of a project are
analysed during value engineering for the purpose of achieving the essential
functions at the lowest total costs (capital, staffing, energy, maintenance) over the life
of the project. It focuses on the functions of various components and materials,
rather than their physical attributes.
This is the third contribution in the series of articles on various aspects of value
engineering and/or value management. Each article will be independent, but linked
by the association with value engineering.
This article deals with modularisation in the process industry. Is this an opportunity
for further savings or does it add cost?
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Modular fabrication
Modular fabrication is the process of building and constructing equipment off-site in a
fabrication facility. The completed product (module) can then be delivered to the
worksite and quickly installed and integrated into new or existing field operations.
This differs from on-site construction in which the equipment or system is fully built at
the worksite.
Modularisation
Modularisation is the process of designing a processing facility in such a manner that
it can be constructed in a number of separate, but logical units or modules at a
distant construction yard and transported to the factory site. Ideally modules should
have as few as possible interfaces with the connecting modules to reduce site work
to a minimum.
Classes of modules
Current situation
Depending on where in the industry one is active, the nomenclature for different
classes of modules also differs. For instance, in the construction industry, those
involved talk of pre-assembled racks (PAR’s), pre-assembled units (PAU’s), vendor
assembled racks and units (VAR’s and VAU’s) and remote instrument buildings
(RIB’S). Effectively, this means three classes of modules, namely racks, units and
buildings, all pre-assembled. Ignoring the buildings for a moment, we thus only have
two types or classes of modules. An example of a PAR is shown in Figure 1.
Figure 1: A PAR being installed
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Fluor has done sterling work in moving more of the field construction work into
modular facility construction workshops. They currently talk of their third generation
modules (Chandler, 2013). However, for those who insure large modules during the
transportation thereof, we’ve seen mention of fourth generation plant modules,
although this seems to refer to very large third generation modules.
Three generations of modules
To achieve a better understanding of Fluor’s three generations of modules, each will
be discussed in turn:
First generation modules have been constructed since the early ‘90s and were limited
to main pipe racks with the main piping pre-installed, or PAR’s.
Second generation modules were built from early 2000. This involved the installation
of piping and main equipment in the modules, primarily all steel equipment. This
approach reduced the field work by approximately 30 to 40%. An example of a
typical second generation module being transported to site is shown in Figure 2.
Figure 2: Second generation module
Third generation modules take the concept further to describe modularised process
blocks. These process blocks contain 95% of steel work, up to 85% of the electrical
installation and up to 95% of the instrumentation. This enables loop checking to be
done in the module yard. Third generation modules effectively relocate 90% of the
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field work to the module yard. The approach is one of minimising the
interconnections between modules. An example of a third generation module is
shown in Figure 3.
Fluor’s Fred Haney and his team patented the concept of the modular processing
facility, their third generation approach, in 2012 (Haney et al, 2012). In 2015, Fluor's
Third Generation Modular Execution approach won the bronze award for innovation
from the distinguished Edison Awards™ organisation (Fluor Corporation, 2015). The
awards, inspired by Thomas Edison's inventiveness, recognise innovation, creativity,
and ingenuity around four criteria: concept, value, delivery, and impact.
Figure 3: Third generation module
When and why to opt for modularisation
When modularisation should be considered
The decision-making process when selecting between conventional stick-build
techniques or modular construction is complex and based on a number of factors.
The modular construction technique is applicable to almost any project. Under
certain conditions, modularisation has specific advantages. These conditions
include:
Severe weather conditions: Extreme heat, cold, rain, snow and frozen ground
can make conventional construction difficult, expensive and slow;
Limited plot space: Space limitations can preclude conventional construction
techniques. Modular construction typically requires less space and does not
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require site construction yards;
Difficult labour conditions: A militant labour force at the plant site can lead to
strikes and sit-ins, resulting in serious delays and possibly even injuries and
equipment damage;
High labour cost: High labour cost at the plant site steers the decision towards
modularisation, especially if the site labour productivity <80% of shop
productivity;
Shortage of skills: A shortage of suitably qualified construction workers at the
site may lead to delays, sub-standard work and low productivity. All these have
cost and schedule impacts;
Repeatability: If there is a high probability that a specific plant design will be
duplicated, at the present site or elsewhere, a repeatable modular design takes
preference;
Extensive acceptance testing: A modular approach is indicated when the
client demands extensive factory acceptance testing and the plant construction
schedule is tight;
Transportation conditions: Do shipping limits allow module transportation?
Can large modules be transported over the access roads? Is crane capacity
available and economical?
Fabrication capacity: The availability of suitable fabrication houses for the
modules must be confirmed. Non availability means that schedule benefits will
not be obtained by using a modular approach, and;
Site permits: Permits, environmental or other, required for starting site
construction work may be late or difficult to obtain. Modularisation allows the
early start of construction work in supplier workshops;
Benefits of modularisation
Modularisation in the process industry offers numerous benefits which can be
grouped under three categories, namely cost reduction, schedule reduction and risk
reduction, as follows:
Cost reduction
o Possible to reuse existing engineering designs during basic engineering
and FEED, detail engineering, manufacturing and construction;
o For multi-unit projects, maximum capital efficiency is achieved by designing
once and building exact duplicates;
o Lower capital and labour costs are achieved through efficient use of
material and a smaller field crew. Requires less material than traditional
stick-built operations due to shorter pipe runs;
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o Highly trained and experienced assembly and fabrication technicians are
already employed by the modular system provider, ensuring consistent
work and worker availability;
o High quality module assembly & fabrication reduces rework and saves time
and money, as well as reducing start-up risks, and;
o No extra construction yard space is required on-site as the modules are
constructed off-site. Site construction infrastructure and housing is also
much reduced.
Schedule reduction
o Modular skid mounted systems construction occurs in parallel with site civil
and facilities work in-plant;
o Weather delays are eliminated during fabrication as modules are
completed inside the module construction yards;
o Start-up time is minimised since modules are shipped fully assembled and
pre-checked;
o Highly trained and experienced fabrication technicians operate at
significantly higher productivity, with schedule and cost benefits, and;
o Module construction companies need to get involved early on. Long-term
partnering with engineering and supply companies is recommended to
ensure involvement during the front-end loading phase.
Risk reduction
o Off-site construction of modular systems does not interrupt or shut-down
pre-existing operations;
o Welding, pipe-fitting and other fabrication processes are performed under
ideal conditions, resulting in a better quality product;
o Systems undergo full process system testing and checkout prior to
shipment providing faster and safer start-up;
o Safety risks are reduced for plant personnel with fewer onsite OSHA
exposure hours and smaller crew sizes;
o Safety risks are reduced because process module construction happens in
ideal plant conditions, and;
o Proprietary process technology is better protected as module fabrication
typically occurs behind closed doors.
Should the business needs change to such an extent that relocation of the facility is
considered, process modules provide for relatively easy relocation. For instance,
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product transportation costs can be lowered by placing modules in locations that are
closer to end-users.
Disadvantages of modularisation
Although there are some disadvantages to modularisation, these are normally
overshadowed by the benefits. The disadvantages include:
Early decision on level of modularisation: The decision regarding the level
of modularisation that is desired has to be taken during the basic engineering
phase of front-end loading. The owner company may not be ready to make
such a decision because of unfamiliarity with modular plants.
Higher engineering cost: It is estimated that the additional engineering
required for a modular design accounts for an increase of 10 to 15% for
engineering. When a modular and standardised design is duplicated, the
engineering cost drops significantly.
Need for additional steel: Additional steel is typically required for larger and
more structural members and bracing for transport. A more compact plant
layout and shorter pipe runs compensate for this.
Reduced adaptability to design changes: Modular construction increases the
interdependency of construction activities. Any design changes can thus disrupt
a wide variety of inter-related process and construction activities.
Closing remarks
Modularisation is considered to be a practical and economical construction technique
for process systems in the chemical, petrochemical, gas processing, and oil refining
industry.
Modularisation saves cost by removing labour off site to lower cost, more productive,
module manufacturing yards. This will decrease site interference delays, reduce
safety risks and lead to a more harmonious labour environment. Modularisation
savings are realised from the first plant onwards.
References
Chandler, G., 2013, Smaller, better, faster – Fred Haney’s vision turns modern
construction theory on its head, Oilsands Review.
Fluor Corporation, 2015, 3rd gen modular executionsm, Available from
http://www.fluor.com/about_fluor/corporate_information/technologies/Pages/technolo
gy-info.aspx?tid=9&bsl=Construction. Accessed on 18 October 2015
