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As Infrastructure Spending is Anticipated to Grow, Controlling Engineering and Construction Costs is Mission Critical

By Andrew Athanasian April 07, 2021

With a newfound interest in infrastructure investment and the introduction of a multi-trillion-dollar infrastructure bill by the current Administration into the U.S. Congress, it is reasonable to expect continued growth in the construction and infrastructure industry, which is already worth $2.1 trillion or about 4% of GDP.

Industrial engineering and construction costs are rising despite technological advancements that have led to increased productivity in other industries such as manufacturing. Given that the project execution approach for designing and building new industrial assets has not meaningfully changed in the last 60 years, the time is right for innovators to address better ways to conceptualize, design, engineer, develop, and complete large-scale projects.

According to some analysts, over 80% of large projects go at least 20% over budget and 20% over schedule. Frustration with these serious challenges has driven the industry to develop and adopt a new project execution methodology called Advanced Work Packaging (AWP).

AWP has revolutionized construction with its ability to efficiently plan, design, and execute industrial projects. Compared to the traditional waterfall approach to project management, AWP is more iterative, adaptable, and flexible.

We caught up with Josh Girvin, Chief Executive Officer of O3, a Birmingham, Alabama-based AWP project management solution firm, and developer of a web-based application supporting the use of AWP for the entirety of a project's life cycle from the idea through to operations.

"It has never been more urgent to dramatically improve outcomes in the construction industry," Girvin said, "and with modern tools, we can complete projects faster, avoid the risks of cost overruns, and benefit from transparency in every aspect of the project as it rolls out."

AWP processes create defined "work packages" that contain all the key information needed by a construction team. Construction crews receive an "installation work package," for example, which contains the drawings, materials, equipment, permits, scope, scaffolding, safety analysis, and anything else which would be necessary for completion.

"By organizing the work into these packages, workers are able to stay focused," Girvin explained. "They don't need to figure out what to do next or find materials to do work, as it is all contained in the package."

The optimal sequence for these packages' completion is pre-determined by a planning team to mitigate possibilities of delays, and based on proven results, the Construction Industry Institute (CII) has recognized AWP as a best practice and documented increases in labor productivity of 25% when deployed. Additionally, projects using AWP have been found to be safer as upfront planning helps identify and remove obstacles to the execution of tasks.

Recognizing that AWP was poised to transform the way the industrial construction industry works, Josh Girvin, Mandi Coker, and Jared Elliott came together to form O3 six years ago.

"One of O3's main advantages is the experience of our team," Girvin said. "Between the founders, O3 benefits from over 30 years of experience in the industry."

Girvin also serves as the co-chair of the Construction Industry Institute committee charged with standardizing the category definitions of AWP project maturity, as well as the associated ROI for the varying levels of AWP investment.

Girvin was also awarded the BBJ award for Best Birmingham CEO.

O3 serves clients all over the world on projects ranging from a total cost of $70 billion with some of the world's largest owners of industrial capital assets to small maintenance projects with a cost of $50k at existing operating facilities. The company currently maintains an office in Singapore to facilitate and support its Asian and Pacific partners and clients.

"Construction is one of the few industries which will always be stable even in a constantly changing landscape and economy," Girvin explained. "With growth forecasts changing with the economic recovery and greater public and private partnership, the AWP movement will also advance.

Major public and private investors have begun mandating the use of AWP on their projects across industries including Oil & Gas, Chemical, Power, Mining & Metals, and Infrastructure."

On April 13, Girvin will be moderating a panel at The Frontier Conference 2021, where they will discuss:  Energy Transition: What Technologies are Leading Power Generation and Distribution? Visit www.thefrontier.co/agenda to learn more and register to attend.




Edited by Maurice Nagle
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