Equipment overhaul and modernization is vital for the longevity of any facility. As we discussed in part 1 of this blog series, when it comes to overhauling or replacing critical equipment, the level of customer involvement can have significant impacts. I have been involved with major equipment overhauls from the customer, designer, and contractor side of projects. This series will cover how customer engagement affects the customer, the designer, and the contractor during the four stages of a typical project: development, design, procurement and execution. This blog will focus on the design project stage.
This stage is led by the designer with feedback from the customer to develop performance work statements, statements of work, plans and specifications, procurement plans, etc. This stage will typically have numerous intermediate design reviews as set checkpoints to get the customer’s buy-in before expending more time and resources to proceed to the next level of design completion. These intermediate design documents are also used to perform “Value Engineering,” which is the evaluation of options that can reduce costs and increase ROI to provide the best value for the customer.
The customer will usually act in the Project Manager role or engage a representative to act in this role. This role supports the designer with finding and providing pertinent, legacy project documentation and reviews and approves project documents by:
- Holding regular status meetings;
- Getting requested information/documents to the designer quickly;
- Participating in intermediate design reviews;
- Asking questions of the designer when confusion arises.
Benefits of customer engagement: Participation in the process results in a better understanding of the technical and submittal requirements, as well as the scope of supply. This gives the customer more opportunities to steer the project to meet their needs and objectives, so the final result is more in line with their expectations. The customer, through the Project Manager, has more insight into the progress of the project and basis for tradeoffs by the designer. This insight allows the customer to convey the project status accurately to other stakeholders.
Impacts of a lack of customer engagement: The design and subsequent procurement may not match performance priorities or future operation adaptability. The designer may not provide a solution tailored to the project and their cost and schedule might be too expansive for the customer’s project objectives.
The designer is most heavily engaged in this stage of the project, developing specifications, plans, engineer’s cost estimates, project schedule milestones, etc. At this stage, the designer should also be working to enhance customer involvement and keep them up to date on the project status by:
- Participating in status meetings;
- Explaining the rationale of engineering decisions;
- Educating the customer (as necessary) about auxiliary systems that will be affected by the overhaul/replacement;
- Maintaining awareness of the project schedule and notifying the customer of potential impacts as soon as they become apparent.
Benefits of customer involvement: The designer will receive ample feedback from the customer early in the process instead of having to make tradeoff decisions in a vacuum. They can then educate the customer as necessary to get a quality outcome from the project. The designer will be able to build a better team dynamic with the customer for future phases of the project by fostering lines of communication and receiving information and decisions in a timely manner.
Impacts of a lack of customer involvement: The customer’s scope may be unrealistic, meaning the designer may have to expend more resources than initially planned due to redesigns and modifications at the end, instead of the beginning of the design stage. The designer might assume that the technical requirements are what the customer wants and needs because they haven’t provided feedback to the contrary.
At this stage, the contractor will still be one of multiple potential bidders, but they can still support the designer by:
- Informing them of current industry practices;
- Providing feedback on whether requirements can be met and their relative costs.
Benefits of customer involvement: The customer has a stronger negotiating position during the procurement stage due to their better understanding of the technical requirements in the solicitation and specifications. Customer involvement here also prevents large quantities of added or changed work during the execution stage resulting from customer discovering unexpected work during inspections. When they are involved at this stage, customer responses and decisions during the execution stage tend to be quicker and more congruent with the flow of the project due to their broader understanding of the project as it is solicited, bid, and awarded.
Impacts of a lack of customer involvement: If the customer is not involved at this stage, the technical requirements may not account for all components necessary for the proper operation or future adaptability of this equipment. The contractor will likely bid as designed with the expectation that once the customer sees the delivered product or services, they will initiate a change order and try to compel the contractor to provide the correct one as part of the original contract requirements.
Based on my own observations, I have seen how each stakeholder benefits significantly from customer engagement and involvement during the design stage, and the consequences for a lack of customer involvement are not ideal for anyone involved. Next up: the procurement stage.