Always ready to meet the challenges of innovation, Eastman Chemical Company wanted to position themselves to win new business while building on their successful track record. So, to accelerate growth and improve revenue, Eastman is building a path of continuous capital project improvements. They decided to work with Emerson to take the next step.
Eastman was founded in 1920 in Kingsport, Tennessee, USA and has grown to include over 14,500 employees at over 50 sites worldwide serving over 35 markets.
To leverage innovation and create a competitive market advantage, Eastman is investing selectively with targeted return on invested capital. Eastman’s plan includes managing and reducing costs so that margin growth goes to the bottom line.
Six years ago, Eastman completed a project with Emerson that many project managers would have dreamed of. Under budget by 17%. Payback period of seven months. And the project was completed four days before goal — with no injuries.
But was the project as successful as it could have been? Research showed that it was not. Although the project bested financial and timeline criteria, the timeline could have been tighter and some of the engineering was deemed repetitive.
“For this new project, we adjusted our plans so we could squeeze every bit of value from project management to get even stronger returns,” says Steve Hansen, instrumentation expert at Eastman. “By choosing the Emerson’s Project Management Organization (PMO) again as our collaborator for automation, we planned to reduce engineering iterations and ultimately improve the schedule.”
Reducing engineering iterations reduces modifications to the overall system, coding, and project execution. It also naturally reduces engineering hours, which has a financial impact throughout the project.
Eastman and Emerson found ways to use personnel efficiently in their areas of expertise. Steve Moore of Emerson explains, “Some of the seasoned experts were specialized in process data. Others were skilled in application data. Using the experts in their specialized areas led to fewer engineering missteps and iterations because they knew what worked well.”
The results of the expertise change also affected the bottom line. With focused attention on using expert resources effectively, the project team dedicated specialists and generalists to their areas of expertise. In doing so, PMO specialists’ time was more focused on higher-level issues. And the lower-cost-per-hour generalists could be used more broadly.
The team reviewed the traditional and actual timelines of previous projects and found unexpected costs when technologies were not considered early enough. Savings were found when Eastman collaborated early on with the primary providers and vendors. The past successes of Emerson’s PMO with other customers guided the timeline discussions.
PMO engagement was important in the streamlined project schedule. Best practices in working with any PMO include communication with respect to timing, communication methods, and resource location. Barriers between Eastman and Emerson’s PMO were removed or reduced at each project stage. In addition, more time was spent upfront in planning and with the PMO reviewing requirements and technologies.
In the six years since the last project, internal and contract resources naturally have changed. Ed Hicks, Engineering Manager at Eastman, notes that, “Although retirements and promotions moved some talent out of our reach, we saw the change as bringing fresh eyes, ears, and enthusiasm. By more effectively using Eastman and Emerson PMO resources, we knew we could improve efficiency.”
The resulting shorter project timeline significantly impacted the financial targets, not only in the lower cost of the project but in the ability to begin reaching the market earlier with products.
The engineering and schedule management changes were significant to the bottom line.
Monthly and total savings of EPC and client instrumentation hours started earlier than in the previous project, increased faster, and resulted in larger savings overall. In fact, Eastman saved approximately 5% in EPC and client instrumentation hours. Eastman believes they can continue improving and hit 25% on future projects.
Hicks sums up, “Analysis showed that the strong business results came in part thanks to more frequent and effective communication up front early in the project. And with early-buy in from all stakeholders —Emerson, PMO, EPC, and Eastman — hours were saved all around.”
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