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Austin delivers "Results, not Excuses®." More than a motto, it represents our commitment to solving challenges and exceeding expectations with innovation, dedication and passion. Brandon Davis is Vice President of Operations and General Manager at The Austin Company. He has been involved in the development, construction and/or maintenance of automotive plants and facilities for the past twenty years, including some of the most marquee automotive projects in North America. He has functioned on both the owner and contractor sides of capital project efforts, allowing him to provide a unique prospective on the entire development through operations process. At this year's annual American Automotive Summit he took the stage to present "Making Your Capital Projects Awesome and Delivering Results", where he discussed the challenges and strategies for leading successful projects, both big and small, while optimizing costs. We took a moment to sit down with Brandon to talk further about this topic.
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Brandon, can you tell us a little about The Austin Company? Austin is a large U.S. based industrial design-build company. We were founded in 1878 by an immigrant skilled tradesman, Samuel Austin. Samuel had a brilliant and revolutionary idea at the time to integrate all the disparate parties involved in capital project delivery into a single company, with a single point of responsibility and accountability. He believed this would allow projects to be delivered faster, with better overall quality, all while minimizing the plant owner's distraction from their core business. By 1903 his son had graduated with an engineering degree and they officially implemented this method of project delivery, which many years later become adopted by the industry and referred to as design-build or EPC. Their new method delivered amazing results which drove Austin to become the first national construction company in the USA. With the industrial growth of the era, Austin quickly became the go to company for fast manufacturing project delivery. In 1917 we started working for the earliest transportation and automotive industries, and we've never stopped serving OE Ms and their suppliers since. That's over 100 years of service to the automotive industry. Over the years we added site location consulting, process design, financing, build-to-suit and maintenance to our engineering and construction capabilities. Today we operate throughout the USA and Mexico, providing a full set of solutions and services related to capital project development and maintenance.
Your session at the American Automotive Summit focused on how manufacturers can drive rapid project delivery and reduce cost. What is one key takeaway you wanted to leave attendees with? Capital projects aren't always thought about as a core part of the manufacturing business. Yet, capex is one of the largest long-term asset investments made by many manufacturers. It's been my experience that most manufacturers don't really know how they perform on capex investments or even how they effectively and proactively manage those investments. The lack of predictability in commodities pricing, labor resource availability and interest rates, all get a lot of attention, whereas capex volatility and predictability remain a mystery, hidden in a cloud of fog. With all this in mind, I shared with attendees the unfortunate current statistics related to these large capital project investments. Here in North America, 98% of large "mega" projects experience cost overruns or delay compared to their original plans. And, more than 65% of all industrial capex projects, including the small and medium sized investments, fail to achieve their performance objectives. This is a major impact on optimizing cash flows, investments and NPV calculations on investments. The key take away is that generally we aren't delivering capital projects very well across North America. But, with some simple proven practices, manufacturers can add predictability and certainty to capex and maintenance investments.
How can OEMs and suppliers execute on a successful plant expansion? What steps do they need to take to achieve their target production date? The Austin Company has established an entire program around ensuring successful and predictable capex and maintenance project delivery, including plant expansions, renovations, line change outs, or greenfield projects. This is something I love to discuss and share with manufacturers as it is robust.
Here are five key points to keep in mind. 1.
One of the most important aspects for a manufacturer to consider is when to start. My advice is to start far earlier than you think you have to. The time and treasure invested in planning and on-boarding partners early in the process will be cents paid for dollars gained later. The second point to remember is to implement a defined stage gate process so the project can develop in a controlled manner. Third, for some projects the cheapest available option might be the solution, but for most industrial projects this is not the case. Fourth, start with the end in mind and work backwards in your scheduling, incorporating current market conditions and feedback from your partners constantly. And finally, always to be careful of overzealous or overly optimistic board room pitches to get the project or funding approved or to get the contract awarded.
What are some key strategies to optimize operational costs through plant layout planning? Two high level considerations to optimize operational costs are:
First, we encounter a lot of "Just model it after this ..." or "This is how we always have done it." statements. How projects were completed or plants were laid out in the past is not necessarily the right answer. Of course, it is good to have a basis to start from; however, the pace of new technology, new equipment innovations, new construction and maintenance practices, we have to be open to new ideas and concepts and always consider re-thinking how something was done before. Even something a couple years ago that I reviewed and disapproved now works because our operating conditions have changed. We have seen in real world environments where a simple mindset adjustment has resulted in financial benefit to the manufacturer. Internally we encourage this type of thinking all the time. We then track the results through a proprietary lesson(s) learned and value engineering database. A second consideration is the investment in upfront planning. That 0.5%, 1% or 1.5%-whatever it may be--of the total anticipated project costs spent upfront on scoping, planning and estimating will pay dividends if done early enough, and with enough planning time allotted during the project development phase.
In your own words, what is BIM? How can automotive manufacturers benefit from a fully integrated BIM environment? BIM, or "Building Information Modeling," is a big topic with lots of interpretations. Some people will say BIM and they mean 3D modeling designs that were previously 2D drawings. Some people will say BIM and will mean 3D modeling of designs but with fabrication level details. Some people will say BIM and they will mean everything from process simulation through smart tagging (adding equipment information and operations manuals) of every piece of equipment in the model for use in maintenance and operations. Others will say BIM and what they really mean is model use in the field for coordination, construction planning, and ease of understanding installation and construction methods for the design. And still others will say BIM and will have no idea what they mean. The benefits of any version of BIM range and depend heavily on strategic factors and business decisions outside of just a project design effort. For example, will we
make a business move to actively manage maintenance using a 3D design model? If so, it might make sense to make the investment in the smart tagging and making a full and true BIM model. If not, it might not make sense to make the investment. The trick is for owners to talk with someone who knows about BIM, and the various levels of BIM, regarding your plans and potential use of a model. Many firms, like Austin, have the ability to provide advice and general guidance on this topic. And many of them, just like us, are passionate about the possibilities of BIM and get excited at the opportunity to guide, coach and share information. Once you find that kind of advisor, an informed decision balancing benefits versus cost (and ROI) can be made.
Why do companies choose to work with The Austin Company? What makes your organization unique? There are a few things that make The Austin Company unique. First, we have been at this a good long while. We just passed our 141st year in business with more than 100 years in automotive plant design and construction. We have continued to hone The Austin MethodÂŽ of project delivery by innovating, optimizing or adjusting with the times- many times adjusting the times to us. Our method and our constant search for a better way helps us ensure predictability and certainty-what others call success-in project delivery. Second, we have deep experience. Our team members understand manufacturing and industrial projects and plants.
Our team is diverse and includes new thinkers early in their careers as well as many people that have been designing and building manufacturing and industrial projects and plants with Austin for 30, 40 or even 50 years. These folks know how to deliver results! Third, and probably most important, we have a mindset of service. In all that we do we are in service. Our founder infused this into the DNA of the company and throughout the decades our teams have continued to be in service to our clients, to each other, to our communities, to our profession and to our industry. I believe it is because of these three attributes that companies choose to work with us. The greatest compliment Austin can receive from a client is an ongoing relationship. We've built partnerships with many of our core clients, including automotive OEMs and suppliers, that go back more than 90 years. With countless projects delivered, we are truly humbled by their continued trust in our service.
THE AUSTIN COMPANY The Austin Company offers a comprehensive portfolio of design-build services, including planning, design, engineering, construction and facility maintenance, as well as site location and operations improvement consulting, for commercial and industrial companies throughout North Am erica. Founded in 1878 in Cleveland, Ohio, The Austin Company continues to uphold our founder's core values and belief in providing, "Honest work, well done." Our facility solutions are developed and implemented to improve operations and make them more efficient - the results are more than just shade and shelter for businesses. From aerospace and automotive to food processing and hospitality, Austin works as an extension of any organization, offering unrivaled insight into the core markets they serve.
Find out more: www.theaustin.com