Global Engineering Engagements: The Imperative to Service Plant Engineering Projects
Published on : Wednesday 03-08-2022
Vinay Bhanot elaborates why it is imperative to service plant engineering projects in global engineering engagements.
The global economy is recovering from the effects of the Covid-19 pandemic. Against this unprecedented recovery scenario, global engineering engagements, driven by an expansion in service plant engagements, continues to expand the digital frontier scope of work for industries. Business leaders are increasingly recognising the value of outsourcing their engagements to key technology and engineering service providers who can help them achieve their goals while also maintaining a sense of personal stake and ownership in their engagements.
EPCM service dynamics
Engineering, Procurement and Construction Management (EPCM) is one such area where a global engineering model can bring value to clients. EPCM refers to a construction procurement method where the client selects a head contractor to manage entire projects on their behalf. In this arrangement, the project owners (the clients) remain in total control of their projects, while the contractors manage the process from end-to-end, thus creating a single point of management where complex engineering needs and coordination requirements are handled as an extension of the client. In this service model, since a large significance is placed on specialist engineering processes, a coordinated approach ultimately yields tangible outcomes because it provides clients with complete transparency and engagement with the process, procurement, construction, and costing.
The importance of globalised engineering engagements
The globalised engineering model opens up several new opportunities for process industries to expand their plant operations. Because of the outsourced nature of the service contract, both engineering service providers and their clients have reaped the benefits of globalised operations. As it stands, the global engineering outsourcing market is estimated to be at around 1.30 trillion USD in 2021, with a revenue forecast of 5.50 trillion USD by 2028. Out of this, the EPC & EPCM services procurement category is expected to grow at a CAGR of 4.13 % during the period of 2022 to 2026. This market is expected to see a spend of around 425 billion USD during this forecast period.
This surge of anticipated growth in the next few years can be attributed to heavy competition, rising technical complexity and the pressure to reduce costs for original equipment manufacturers. Simply put, a global engineering engagement model is the way forward, and is one of many conducive steps toward a system that will boast shorter times to markets and product life cycles, as well as greater flexibility and access to industry expertise that go beyond local borders.
For process industries in particular, with their many components spread across multiple countries and supply chains, the need for a well-defined global engineering model is critical for sustainable growth. An engineering company with a technology differentiator brings benefits in such a model, as engineering service providers can leverage their in-house digital engineering tools and innovative technology solutions to optimise project executing and drive efficiency for their clients. Thus, large-scale, multi-vertical engagements, where clients have transparency while contractors are allowed to maintain their singular point of contact status throughout project lifecycles, is a system that bodes well for global plant engineering operations.
Globalised engineering engagements can help make best use of the Engineering Value Centre concept (EVC). The right EVC framework relies on a collaborative and iterative approach with a focus on value-based outcomes. Understanding of project scope, establishment of infrastructure, formation of work teams, work standards, and task-specific workflow, and integration of work processes and standards are some of the key elements of a robust EVC framework. It results in quick scaling up of volume, process optimisation, streamlined work processes, and continued improvement.
The benefits offered by global engineering engagement are multifaceted – strategic, operational, and technological. It enables the best use of an engineering partner who comes onboard with specialised offerings and experts with multi-domain experience. This provides enterprises with a strategic advantage that traditional delivery models cannot offer.
Process industries will have a variety of compelling reasons for accepting a global engineering engagement model, but a few major benefits that will see their plant complexes benefit include –
1. Maintaining compliance and accuracy to international codes and standards when manufacturing goods. By contracting with experienced service providers, all outsourced plants will be able to adhere to a standardised set of global standards which are reliable based on their industries.
2. Flexible engagement models that are tailored to the client’s needs and scope for change throughout the course of the plant and/or project lifecycle.
3. Intelligent solutions and high-level expertise will be readily available. The engineering service provider will not only be able to provide their own set of skills, but will also be able to coordinate with other sub-contractors to bring a diverse range of innovations that encompass both recommended best practices and smart solutions to better manage plant-based engagements.
4. By outsourcing engineering engagement, costs can be better optimised while boosting efficiency and reducing wastage.
A reliable partner will make a difference in any global engineering engagement, with the promise of greater value addition and efficiency for any client’s engineering operations. As the world continues to grow more interconnected through more digital avenues, so too does the scope to look beyond the rote confines of rigid engagement models. As globalised engineering models gain more traction and popularity within the process industry and beyond, both clients and service providers are now in a better position than ever before to leverage these partnerships in ways that will benefit both parties over fruitful long-term engagements.
Vinay Bhanot is Executive Vice President – Americas, L&T Technology Services Ltd. He has a successful track record in managing multi-million-dollar engagements and growing businesses for Fortune 500 companies in Technology, Industrial, and Transportation segment across (AMER, EMEA & APAC). Vinay enjoys using leading-edge technologies to innovate and business models to develop a competitive advantage.
Article Courtesy: NASSCOM Community – an open knowledge sharing platform for the Indian technology industry: https://community.nasscom.in/communities/engineering-research-design/global-engineering-engagements-why-it-imperative-service
(This article is attributed to L&T Technology Services Ltd)
