Dr Neveen Moussa, Principal at Sinclair Knight Merz, gives her take on the issue of cost and size as it relates to modularization. She also explains the methodology for “right sizing” your modularization decision.

1. 2000 Tonnes or more!
Why modularisation decisions should
not be based on cost and size alone
Dr Neveen Moussa
Principal – Sinclair Knight Merz
Contact: nmoussa@skm.com.au

2. Topics covered
About SKM
Why modularise and the benefits of
modularisation.
A methodology for “right sizing” your
modularisation decision.
Some final thoughts.

3. About Sinclair Knight Merz
Global engineering services & project
delivery firm
Established 1964 in Sydney, Australia
Annual revenue of over A$1B
Employs 6500 personnel globally
Operates across four market areas
(Business Units):
• Water & Environment, Mining & Metals, Buildings &
Infrastructure, Power & Industry
On track to reach goal of becoming a
Global Top 10 Firm within 5 years, as
measured by the benchmark
Engineering News Record

4. About Sinclair Knight Merz
SHANGHAI
Working with our clients to “deliver a positive
and enduring impact on the world”

5. SKM Projects in China
WHERE HAS SKM WORKED IN CHINA?

6. Why Modularise?
“Modularisation has the potential to enhance
project outcomes for all stakeholders (owner,
project delivery team, fabricators, contractors,
suppliers), whist offering the opportunity to
reduce consumption of resources and promote
sustainability for future generations”.

7. Modularisation Trends
Mass Module Build
Shipyard
Mass production
Overseas Module Build
Sea transport
Specialist yard
Local Module Build
Road transport
Local yard
Site Pre-Assembly Build
Minor workshop assemblies
Off plot construction facility Modularisation must provide
Site Stick Build a benefit (at an acceptable
Build in place
STD construction practise cost and level of risk) to the
project.

8. The benefits of Modularisation
Lower material rates
Lower labour rates
More skilled labour available
Controlled environment - higher labour
productivity & quality
Less man-hrs on site
Smaller construction camp/ Lower FIFO costs
Allows fabrication to start early.
Construction safety is improved
Reduction in land disturbance/ impact on
community/environment
Compressed construction schedule
All weather related risks minimised
Reduced site commissioning time
Early start up.

9. Quantifying the benefits of
Modularisation Risk
Traditional
on-site
mitigation
“stick build”
costs Benefits
Off-site Tax & Cost premium
Additional
Inspection/ coordination duty Cost
QA/QC / engineering advantage
costs costs
Transport
costs
Module
Yard costs

10. Right sizing
Stick Build Execution Fully Modularised Execution
Cheap skilled labour optimum Difficult execution
Local fabrication centre environment remoteness,
Equipment/bulks sourced locally
position weather, etc)
Brownfields works No local fabrication capability
No port near by Skilled labour shortages
Port structural/spatial/tidal constraints High cost of labour
Infrastructure constraints Compressed schedule
Local content laws Safety drivers
IR sabotage threats IR delay threats
Other logistical challenges Sustainability drivers
Transport equipment shortages
Arriving at the optimal position is project
specific and requires a BUSINESS CASE.

11. Methodology for Business Case Development
Step 0 – Define your modularisation drivers
Define your project’s modularisation drivers
Step 1 – Location & Transport Considerations
1. Define fabrication location and transport and logistics constraints
Step 2 – Supply Chain Considerations
2. Understand supply chain capabilities, capacities and limitations.
Step 3 – Select Pre-assembly/Module sizes / Fabrication location
3. Apply technical/construction knowledge to derive multiple module configurations (splits).
4. Economic evaluation of cost, man-hours, schedule impacts & risks for each split &
location.
5. Select optimum split and location.
Step 4 – Develop Overall Modularisation Strategy & Execution Plan
6.Collate fabrication selections and finalise overall pre-assembly strategy.
7.Develop shop detailing, contracting and commercial strategies.
8.Develop overall execution strategy & further develop PEP, schedule and estimate.

12. Methodology for Business Case Development
Step 0 – Define modularisation drivers & set-up a modularisation team
Define your project’s modularisation drivers and set-up a team t manage process
• Set up a dedicated multi-disciplinary team with strong
modular skill sets.
• Define project drivers with client, document, prioritise
and communicate them to all team member as they will
dictate your decisions & designs.
• Understand that modular may come at a premium
depending on labour cost at site location and transport
distances.
• Bring the engineers along on the journey.
• Plan the details early.
• Don’t make change without understanding their full
impact.

13. Methodology for Business Case Development
Step 1 – Location & Transport Considerations
1. Define fabrication location and transport and logistics constraints
• Identify alternative fabrication centres both local and overseas.
• Survey site constraints in terms of labour availability/skills, rates,
productivity, IR, local content laws, weather, environmental issues,
permits, safety issues.
• Site access, elevations, laydown areas, heavy lift footprint.
• Survey all transport routes for physical constraints: powerlines, bridges,
roads, turning circles, etc.
• Look at available public Wharfs (structural strength) or alternative
Material loading/off -loading facilities.
• Identify tidal movements/depth and dredging potential at offloading port.
• Identify vessel/barge/tug limitations: speed, draft, deck capacity, ability
to discharge and acceleration characteristics.
• Identify land transport axle limitations.
• Define transport envelopes maximum & optimum) – these dictate
maximum module sizes for each route.

15. Methodology for Business Case Development
Step 2 – Supply Chain Considerations
2. Understand supply chain capabilities, capacities and limitations.
• Survey alternative fabrication centres both local and
overseas.
• Survey market for available lifting/transport
equipment
• Survey market for available ships
• Understand quarantine & customs requirements
• Ambient road laws, vehicle size constraints & local
police availability, if escorts required.
• Province requirements/lead time for permits.
• Other community/environmental risks.

16. Methodology for Business Case Development
Step 3 – Select Pre-assembly/Module sizes / Fabrication location
3. Apply technical/construction knowledge to derive multiple module configurations (splits).
4. Economic evaluation of cost, man-hours, schedule impacts & risks for each split &
location.
5. Select optimum split and location.
Technical Considerations:
• Design to eliminate unproductive hours and address safety by examining ways to minimise:
– workforce congestion.
– manual handling.
– working at heights.
– scaffolding.
• Modularise around equipment not around structural steel and considering installation sequence.
• Modularise only where economic, i.e. do not ship air.
– Where modularisation is not possible assemble at ground level and utilise flat packs/panels.
• Optimise shipping by ensuring that modules fit standard vessels.
• Optimise cranage usage - consider lifts (single vs. dual) by conventional (vs. specialised) cranes and
four point lifts.

17. Methodology for Business Case Development
Technical Considerations (continued) :
• Assemble modules including grid mesh, handrail & plate work c/w liners.
• Assemble modules with cable tray, brackets, light and accessories.
• Product bins to be shipped c/w liners.
• Loose steel to be shipped as large nested flat-pack panels including
grid mesh and pre-fabricated handrail panels .
• Maximise personnel access by including flooring, handrail, electrical access
for cable installation, and complete access towers.
• Sub-stations & control rooms and transformer kiosks (c/w distribution panels)
to be fitted out as transportable units.
• Consider alignment issues
• Consider construction sequencing and module placement
• Consider crane movement and laydown areas.
• Temporary steel should be part of the structure as much as possible.
• Make allowances for grillage, sea fastening, temp steel, double
columns/module connections Expect to see more steel quantities.
• Adopt standard connection details, lifting points/lugs.

18. Example of splits

19. Economic Evaluation
Man-hour comparisons

20. Economic Evaluation
Cost comparisons: based on data sourced by procurement

21. Schedule Evaluation
Undertake schedule
comparisons with a baseline
stick build timeline for all
options considered based on
reduced man-hours.
Quantify schedule benefits.

22. Risk Evaluation
• If you think modularisation is
business as usual THINK AGAIN!
• Plan, plan, and then plan. Stuff ups
are too messy and too costly!
• Do it during FEL2 or earlier otherwise
you risk schedule, budget and rework.
• The following risks should be assessed:
• Technical
• Multiple locations/languages/currencies
• Transport & logistics
• Material management
• Lifting
• Laws, regulations, permits
• Skills in modularisation
• Interfaces

23. Methodology for Business Case Development
Step 4 – Develop Overall Modularisation Strategy & Execution Plan
6.Collate fabrication selections and finalise overall pre-assembly strategy.
7.Develop shop detailing, contracting and commercial strategies.
8.Develop overall execution strategy & further develop PEP, schedule and estimate.
• Modularisation team to use a structured approach to assess each
option looking at iterations of:
• Cost models
• Schedules
• Risks
•May assign weights to each attribute
•May use simulation to arrive at optimal decision per facility
•Collate all selections and rationalise to align strategy with market
conditions.
•Develop strategy and execution plan accordingly.

24. Final thoughts
The inland nature of most mining projects will limit modularisation
opportunities to pre-assemblies
A structured approach to arrive at an optimal modular decision aligned
with market conditions will be required.
Focus will have to be on “right-sizing” of modules to suit project drivers
and constraints.
Pre-assembly density will be a key factor and will be largely
determined by the location of equipment fabrication
Procurement of bulk and special materials and equipment should not
be fixed until modular decision is made
Areas that do not justify full assemblies/modules will be done as
prefabricated panels/flat packs, e.g. conveyors.
Anticipated benefits may not be fully realised if not executed
effectively.