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2017 Master Brewers Conference
41. Four ways to better manage small capital projects

Rob Bailey, Day & Zimmermann, Greenville, SC, U.S.A.

Friday, October 13
1:45–3:30 p.m.
Imperial Salon B

Most manufacturing companies focus considerable planning and management attention on the largest projects in their capital portfolios. This makes logical sense since the dollars at stake and the associated risks are large and highly visible. Getting these projects funded and executed on time and within budget is often subject to both corporate and public scrutiny. Projects under $10 million typically garner less attention, since the numbers are smaller and the stakes are lower. However, there is mounting evidence that the cumulative cost of small to mid-sized capital projects can be significant. A recent report from McKinsey found that in the chemical industry, small capital projects (those defined as less than $50 million and often less than $10 million) actually make up 80% of all capital projects in number and 50% in spending value. When cost overruns or delays occur on multiple small projects, companies see potentially serious negative impacts on their bottom line, most significantly through unplanned production interruptions or delays in getting new product to market. The numbers indicate a need for manufacturing plants to purposefully invest in overall capital portfolio management, with added scrutiny on the management of smaller capital projects. But doing so is not as simple as copying the processes and procedures that make larger capital projects successful. That’s neither practical nor cost effective. Instead, companies need a fit-for-purpose framework for managing smaller capital projects that considers how they are different and what makes them run smoothly. The following are four concepts for consideration: 1) collaboration first, 2) be real about risks, 3) choose the right project partners, and 4) Review and recalibrate regularly.

Robert Bailey, P.E., is the operations director of Day & Zimmermann’s Process & Industrial group; this group is based in Greenville, South Carolina, with regional offices in the northeast and southeast United States. The Process & Industrial group provides full-service engineering, construction and construction management, plant and brewery maintenance expertise, and resources to the food and beverage, chemical, petroleum refining, and fiber submarkets. Rob has more than 26 years of experience in project management, engineering management, and operations account management. He has an outstanding record in completion of successful projects by achieving safety targets, financial targets, and overall client satisfaction. He has experience in all project life cycle phases including: feasibility, project development, engineering design phases, project execution, construction management, safety, quality, prime and subcontract development and management, and people management. As director of operations, Rob’s team has been responsible for supporting breweries across the United States, where Day & Zimmermann has completed projects including bottling line support, fermentation installations, can line support, grain elevator installation, substation work, material handling services, chillers and boiler work, kettle replacement work, hop storage, pint line support, and brewhouse upgrades and modifications. Rob received his B.S. degree in mechanical engineering from the University of Tennessee at Knoxville and is a registered Professional Engineer in the state of Tennessee.

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