Change Impact: Disruption and Loss of Productivity – A Model for Securing Price and Schedule Adjustment
EPC Contractors’ margins in the E&C industrial plant sector are disproportional to the risk taken and the value added to Owners’ investments resulting from the projects delivered. When combined with inevitable fact of changes to the planned scope of work, this results in significant challenges relative to productive and economic work performance, as well as profitability. The impact of change has the potential to jeopardise project success, both in terms of time and cost targets, to such an extent as to fully erode anticipated margins.
In this paper it is discussed that EPC Contractors must dominate change, that use of critical path analysis is flawed thinking, and that disruption is actually the big impact item to be addressed. Based upon the considerable body of research, Kingsfield Planning has developed an approach to the analysis of disruption and delay which presents EPC Contractors with a real opportunity to substantiate the cumulative effect of unproductive working borne as a consequence of Owner imposed changes.