Sudden and Unexpected Changes in the EPC Market
Good things seldom last and one great example is the disastrous effect of COVID19 on the EPC industry. 2019 was a great year for the EPC industry, that saw continuous and sustained growth across all sectors. Most market forecasts portended an even better 2020. Midyear 2020 looks very different now. Project timelines have begun to shift unreliably, resulting in uncertainty and fear. Cost overruns on LSTK projects is a given, considering the weaknesses in the supply chain due to COVID induced disruption and the challenges posed by a labor force that is reluctant to work onsite or forced to shut down due to Government intervention. What can one do in the short term and long term to plan for this?
A Wakeup Call for EPC Companies
For an industry that has traditionally been underserved by technology, this is a wakeup call. Gone are perhaps, the days when engineers had the luxury to spend precious engineering hours on tasks like evaluating bids or chasing down vendors. EPC companies have begun recognizing the pivotal role that technology can play in alleviating cost pressures by exponentially increasing productivity and efficiency in the EPC process without sacrificing quality.
Recovery Through Digital Transformation
Could EPC companies emerge stronger and more competitive from the aftermath of this crisis? The answer is an emphatic yes. Can they plan for a work environment that is perhaps less than certain and likely to be impacted by other unforeseen events? Again, the answer is yes, for those companies that can quickly adopt modern technology and embrace new ways of doing things. The challenges, of continuous cost pressures, gut based decision making, low information pricing, labor shortages, reduced budgets and a move towards fixed bid projects can best be met with proper planning, resource optimization and digital transformation.
We Can Sell Our Time, But We Can't Buy it Back
The P in the EPC process dominates the complex cost outlay in most large projects. Given the time it takes and the multiple complex disciplines it inhabits, the sheer amount of engineering hours that are spent in this process are disproportionate to the end outcome. Any savings that can be made here in time and money can impact project margins significantly. Our in-depth study of this part of the EPC saga, opened our minds to one fundamental need, the necessity to support an engineer in making procurement decisions quicker, more effectively and with less demands on the engineering hours that are so invaluable.
Digital Assistants for Engineers
Artificial Intelligence that could be taught many different tasks was ripe for an entry here. Time saved here, could be put to good effect in altering sagging project timelines and controlling cost overruns. Our digital AI assistant’s newest skill was a by-product of this extensive research and collaborative engineering effort. Rudy for Sourcing from Mintmesh, is something that our team is passionate about, given that our fundamental motto is “Saving time for you is our business”. Rudy sits squarely in the procurement processing area and initial feedback indicates a time savings obtained of over 90% in the evaluation process.
As Rudy is introduced to newer and newer clients, he is beginning to digitally learn a lot more within single and multiple disciplines. In my next blog, I will discuss how Rudy, the Digital AI assistant is purpose built for intelligent task automation in the EPC industry.