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FEATURED ARTICLE

PART 1 - Advantages of Single-Source Responsibility For Modular Systems

Part of the trend towards investing in a modular system is single-source responsibility, meaning a source that is selected among others due to specific reasons, e.g. price advantage, quality, support, delivery, etc. Consequently, single-source advantages are realized by a customer when a manufacturer accepts the responsibilities that go with building a modular system. What are the benefits that the customer or end-user realizes when a modular system manufacturer accepts single-source responsibility of a system vs. having the system being ‘stick-built’ at the customer’s facility? In this column, I will discuss seven important advantages of an investment in modular systems.

1. SINGULAR RESPONSIBILITY
One of the biggest advantages of buying a modular system is one company can be held accountable for all aspects of a project. This turnkey approach assumes that the manufacturer also has the ability to design, engineer, fabricate, and properly manage all aspects of a project. Some examples may include working directly with an end-user to provide clean in place (CIP), UF, HTST, decontamination, batch, blending, and other types of processing or utility systems. A recent instance of this was the provision of 14 lab-scale fermenters for a client in North Carolina. In these cases, the supplier must have not only the engineering and design acumen to ask the appropriate questions, but also the expertise to provide solutions to the answers.

2. LOWER ADMINISTRATIVE COSTS
A significant amount of time and effort is spent administrating projects, including soliciting/reviewing bids, placing purchase orders with multiple suppliers, expediting/receiving components, entering invoices, and finally paying for equipment. By placing a single purchase order with one supplier, all of these associated costs and headaches go away. The client now interfaces with one company, concentrating their efforts on the project — rather than managing disparate contracts.

3. MANAGE CASH FLOW
It becomes much easier for a client to manage cash flow if they place an order with one supplier. Most modular system manufacturers are paid per a defined payment schedule, based on a predetermined set of deliverables as defined in a contract. This information, in conjunction with the overall schedule that is developed for the project, will define pay-out dates by the customer. A payment term may include:

Percent upon receipt of purchase order

Percent upon submittal of drawings for approval

Percent upon completion of fabrication

Percent upon submittal of turnover package (TOP)


The overall size or dollar value of the project typically determines the quantity and schedule of payments over the life of the project.

4. REDUCE RISK
Risk reduction is also one of the goals any customer has when implementing a project. These risks can come in the form of schedule delays, cost overruns, misapplication in the design, and many other factors. What can be done to minimize the factors you can’t control? You can decrease the number of people or companies involved in a project, which increases the likelihood that something will not be missed, forgotten, or misinterpreted. Involving one company, and making them the responsible party for the overall success of the project, allows the customer to communicate directly with one entity and apply pressure to ensure the project success — which becomes much more difficult when coordinating efforts with multiple firms.

5. MINIMIZE CONSTRUCTION AND DESIGN DISCREPANCIES
Most projects go through a certain amount of change during the life cycle of the project. Minimizing construction and design discrepancies is an advantage when building a modular system through a single design-build company because any requested changes are seamlessly and quickly transferred from the customer to the supplier — rather than disbursing the information among multiple design, management, and fabrication firms. Reducing the number of companies and individuals involved in the transfer of information will better ensure that changes made to the design are also captured in the construction phase of the project.

6. REDUCE THE DECISION CYCLE
The overall schedule for a project is greatly affected by the number of changes that occur during the life cycle of the project. This is typically due to design changes, which in turn affect material deliveries, etc. One factor that can be better controlled by sole sourcing a modular system is reducing the decision cycle, and consequently better controlling the overall project schedule. Working directly with a client on a recently completed project allowed IPEC to deliver multiple, complex, CE approved CIP Systems to a client in Europe in twenty weeks. In many cases, projects have multiple companies involved, which include engineering/design, construction management (CM), project management (PM), and the different trades working on the project. By reducing the companies involved, decisions can be made more quickly, which allows the overall schedule on a project to be maintained.

7. REDUCTION IN LITIGATION CLAIMS?
Finally, a reduction in litigation claims and overall insurance costs will be realized by fabricating equipment in a controlled shop environment. One reason is worker’s compensation claims due to injuries that occur at an open job site are greater than claims made from closed shops. In addition, requiring each design, engineering, management, and construction firm involved in a project to carry a certain level of insurance has been shown to increase the overall cost of a project. Warranty claims associated with damaged, defective, or lost equipment are also reduced when comparing the costs of building equipment in a controlled shop environment or on a job site.

PART 2 - Ways Modular Systems Cut Costs

A primary goal of any customer, when building new or adding equipment to an existing facility, is the ability to source equipment at the lowest and most economical cost possible while maintaining a high level of quality. Modular system suppliers, who provide turn-key systems, have the necessary design, engineering, management, and fabrication capabilities to properly do so. Internal engineering and construction procedures are developed to expedite the design, fabrication, and management aspects of a project, and are constantly refined to minimize the overall time from project kick-off to start-up and commissioning. Saving time equates to saving money when sourcing and building equipment. A reduction in the overall length of a schedule consequently reduces the cost of the project. In this installment, we will review some of the many ways in which cost savings can be realized when building a modular system.

LABOR AND FACILITIES
Stick-built systems by definition are built piece by piece at the customer’s site, while modular systems are constructed in a controlled shop environment. Savings associated with construction practices include:


Travel and living expenses associated with outside contractors going to and from a job-site each day are eliminated.

No wasted time is spent each day on handling, unlocking, and locking up tools at the beginning and end of each day, which commonly occurs at an open job-site.

Delivery and storage of materials and equipment provided for fabrication are readily available and better controlled in a closed shop environment. Consequently, labor efficiencies are much higher, reducing the overall time required to fabricate the equipment.

Construction delays and costs associated with them, i.e. loss of power, weather, labor strikes, equipment and material deliveries, are minimized when fabricating a modular system in a controlled shop environment.

All materials shipped to an open site must be received and transported to either storage or final assembly. Coordination costs and the risk of damaging or losing the materials are greatly increased.


SAFETY
Safety at an open job-site and eliminating any accidents that can commonly occur when having multiple, independent trades working there, is an important goal that all customers strive to achieve. Many man hours are dedicated toward safety at an open job-site, coming in the form of periodic safety meetings and safety over-site by dedicated individual(s) on the project. A new or different tradesman that comes to site typically has to go through safety training, resulting in wasted man hours by the trainer and trainee. Safety at a modular system supplier is equally important, but many less man hours are spent, since the workforce is stable and does not require the constant training of new employees that occurs at an open job-site.

CONSISTENCY
Since Henry Ford installed the first assembly line in 1913, it has been proven that repetitive actions allow for an increase in efficiency. Modular system manufacturers utilize repetitive procedures and construction practices in designing and fabricating systems. Engineering and design procedures developed for each task on a project are utilized from one project to the next. Fabrication practices and ‘tricks of the trade’ are also utilized from one project to the next. These efficiencies are passed on to a customer in the form of cost savings because of the reduced time required to complete the disparate activities. These same efficiencies are not realized when stick building a system onsite, since the players, design methods, and management procedures involved vary from one project to the next.

FIXED PRICE VS. T&E
Cost increases associated with changes in scope or because one of the groups involved in building a system onsite ‘didn’t receive the correct information’ are reduced. Stick-built systems involve many different groups to complete a project, such that it becomes very difficult to actually capture the cost of a system, while modular system manufacturers very typically provide a ‘firm bid’ for a project, based on a defined set of deliverables. In IPEC’s case, if a process flow diagram is not provided as part of the Request for Quote (RFQ), one is developed, along with preliminary Bills of Materials (BOMs) to ensure the customer/end-user has a complete understanding of what is being provided in terms of equipment and services. Cost increases or overruns are greatly reduced because the scope of the project is clearly defined at the start. Any changes from that point forward are compared to the original agreed upon scope.

PART 3 - Save Time & Money On Turn-Over Packages, Pre-Validation, and FAT

Documentation developed, information collected, and labor expended to create a turn-over package (TOP) for a biopharm modular system represents a significant cost to any project. So much so, that when working with a client, we jokingly say “we sell documentation and you get the system for free.” To properly validate a system, you have to make the investment in documentation, but you can realize significant labor and cost advantages when developing TOP documentation and pre-validating your modular system via Factory Acceptance Testing in a closed-shop environment.

PUTTING TOGETHER YOUR TURN-OVER PACKAGE (TOP)
Stick-built systems by definition are built piece by piece at the customer’s site, while modular systems are constructed in a controlled shop environment. Savings associated with construction practices include:


Calibration Certificates

Material Certificates

P&ID Schematics

Dimensional Assembly Drawings

Mechanical and Electrical Bills of Materials (BOMs)

Weld Log, Weld Map, Rejected Weld Log

Electrical Control Drawings

Incoming Material Inspection Reports

Boroscope Inspection Reports

IQ/OQ Check-Out Report

GAMP Documentation

Component Catalog Cut Sheets for all equipment

Passivation, Drain, and Riboflavin Test Reports


SAFETY
Safety at an open job-site and eliminating any accidents that can commonly occur when having multiple, independent trades working there, is an important goal that all customers strive to achieve. Many man hours are dedicated toward safety at an open job-site, coming in the form of periodic safety meetings and safety over-site by dedicated individual(s) on the project. A new or different tradesman that comes to site typically has to go through safety training, resulting in wasted man hours by the trainer and trainee. Safety at a modular system supplier is equally important, but many less man hours are spent, since the workforce is stable and does not require the constant training of new employees that occurs at an open job-site.

CONSISTENCY
Since Henry Ford installed the first assembly line in 1913, it has been proven that repetitive actions allow for an increase in efficiency. Modular system manufacturers utilize repetitive procedures and construction practices in designing and fabricating systems. Engineering and design procedures developed for each task on a project are utilized from one project to the next. Fabrication practices and ‘tricks of the trade’ are also utilized from one project to the next. These efficiencies are passed on to a customer in the form of cost savings because of the reduced time required to complete the disparate activities. These same efficiencies are not realized when stick building a system onsite, since the players, design methods, and management procedures involved vary from one project to the next.

FIXED PRICE VS. T&E
Cost increases associated with changes in scope or because one of the groups involved in building a system onsite ‘didn’t receive the correct information’ are reduced. Stick-built systems involve many different groups to complete a project, such that it becomes very difficult to actually capture the cost of a system, while modular system manufacturers very typically provide a ‘firm bid’ for a project, based on a defined set of deliverables. In IPEC’s case, if a process flow diagram is not provided as part of the Request for Quote (RFQ), one is developed, along with preliminary Bills of Materials (BOMs) to ensure the customer/end-user has a complete understanding of what is being provided in terms of equipment and services. Cost increases or overruns are greatly reduced because the scope of the project is clearly defined at the start. Any changes from that point forward are compared to the original agreed upon scope.

PART 4 - Quicker to Market

Equipment installation is typically the ‘tail wagging the dog’ on green field and retro-fit projects. In other words, installation of equipment starts after the building has been completed. Besides cost savings, single source responsibility, preliminary testing and documentation advantages already discussed in the three previous installments, the ability to bring equipment on-line faster is equally important, when using a ‘Modular System’ approach to installing equipment.

FACTORS THAT ALLOW MODULAR SYSTEMS TO BRING A PRODUCT ‘QUICKER TO MARKET’ INCLUDE:
Modular systems are built in parallel with the facility or work space in which the equipment will reside. How many times have you been involved in a project where installation can’t begin until the walls, ceilings, and floors are finished? Building the system in a modular form allows it to be assembled off-site, while the building is being readied for equipment. Proper management of the overall project schedule will allow for completion of the equipment to coincide with completion of the building. The building design allows for removal of a wall panel or completion of an access wall to move equipment into the building.

Delays quite often factor into the overall schedule when constructing a building. This in turn affects the ability of contractors to fabricate equipment on-site. This problem doesn’t exist when building modular systems in a closed shop environment. In fact, we have seen many cases where we have had to hold or store equipment because the job-site isn’t ready to accept it due to delays in construction. Quite often, this results in weeks of time being saved when bringing the equipment on-line.

A significant amount of time on any project is spent performing Installation Qualification – Operation Qualification (IQ/OQ) Testing, Site Acceptance Testing (SAT) and/or Factory Acceptance Testing (FAT). All these activities can only occur at the completion of fabrication. Modular system construction allows for IQ/OQ and Factory Acceptance Tests to be performed prior to shipment of the equipment. These represent a significant amount of the overall tests required to validate a process. Completing these tests off-site, prior to a building being readied to accept the equipment, reduces the amount of time that will be spent on site commissioning the equipment.

Regardless of how minor, Factory and Site Acceptance Testing reveals mistakes made in the fabrication process and also allow the customer to make modifications to an approved design after completion of fabrication. These corrections and changes result in additional time being spent on the project prior to final product tests. There is a twofold savings realized when building a modular system and performing Factory Acceptance Tests. First, any changes are made prior to shipment and are included in the overall production schedule of the modular system. In other words, if history shows the schedule should allow for (x) days of customer changes or factory corrections, this amount of time is included in the overall production schedule. The second time-saver is the reduced amount of time that is spent making the changes in a closed shop environment vs. performing these same activities in the field. Along with the physical changes, the time it takes to document any modifications when building a modular system vs. documenting similar changes in the field is reduced.

Modular systems are movable. Quite often a system is built with the intent it will be used in one location, but later moved to a different location. This is impossible to do with a ‘stick built’ system. Modular systems are typically assembled on a frame support with all interconnecting process, utility, pneumatic and hydraulic lines completed within the boundaries of the system. Control panels, to which all devices are terminated, are included on the system. The system is set in place when it gets to site, with the external process utility and electrical services connected to tie points on the system. While it is pretty easy to make the final connections, it is just as easy to disconnect them and relocate the system to a different facility, saving valuable time in bringing the same process ‘Quicker to Market’ at a different location.

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