2016-02-01-奥纬咨询-Pulling_the_right_levers_for_short-term_financial_improvement_1页_54kb

Operational Insights for Project Recovery

Introduction
Plant engineering companies face profitability challenges due to weak order execution and inadequate planning processes. Rising competition and demanding customers exacerbate these issues. An intensive project recovery process is required to deliver tangible short-term financial improvements.

Project Recovery Approach

• Focuses on optimizing projects across delivery phases (design, engineering, purchasing, on-site installation)
• Aims to identify and mitigate risks at an early stage
• Requires dedicated cross-functional teams
• Involves regular monitoring and reporting to stakeholders

Key Operational Levers

• Design: Limit projects to confirmed budgets; adopt design-to-budget principles during the early stages
• Engineering: Manage work hours and overtime via controls, guidelines, and regular monitoring
• On-site Installation: Leverage local resources, optimize resource dispatch, closely monitor standard solutions
• Purchasing: Secure renegotiation potential, bundle opportunities, mitigate risks through supplier control

Potential Benefits

• Significant improvements in project profitability (up to 10+ percentage points)
• Prevention of cost overruns and claim forfeiture through effective root cause analysis
• Timely detection and mitigation of delays and penalties during engineering phases

Prerequisites

• Project recovery requires focused investment over 2-3 months
• Appropriate resources must be allocated during the process
• No direct correlation between investment in recovery and immediate return on investment

Contact Information
Wolfgang Krenz
Daniel Kronenwett
Oliver Wyman