It’s true that bigger is often better, but in the case of gigafactories, they often come with equally enormous requirements. To meet the outsized demands of these projects—and earn commensurate rewards—legendary engineering, procurement and construction (EPC) provider Bechtel employs several innovative strategies and best practices for organizing its clients, partners and other participants, and giving their joint efforts the best chance for success.
“Gigafactories begin with the manufacturer’s technology and product development process, securing funding, and identifying customers,” began Keith Churchill, Bechtel manager of construction for manufacturing and technology, in his Gigafactory Day keynote address during this week’s 2024 Honeywell Users Group conference in Dallas. “These are often established companies looking to expand. However, even though these are huge projects, construction isn’t the client’s core business, so they often see it as necessary evil, and only leave a narrow bar in their timeline to build them. Even so, gigafactory projects don’t have to be as complex as they seem.”
Earlier awareness
Churchill reported that he’s a big fan of “advanced work packaging,” which starts before the commissioning and operations phases. It details what a manufacturer wants to occur when their gigafactory or other facility starts up and feeds that visualization and its details back to the project’s designers and builders. “There isn’t lots of gigafactory experience out there, so we have to start with our project’s design in mind, and think of its happy place, where all of its devices, processes and personnel are running great, and we can see it on our Power BI or other functional dashboards,” explained Churchill. “This is much better than scrambling during commissioning at the end of a project.”
Beyond their size and complexity, gigafactories typically includes loads of new technologies that must be understood, integrated and trained on. “Designers, clients, builder, users and everyone else to decide when to deploy them, what information they’ll need from them, and which people will use them and what the need to know. All of these are critical to success,” added Churchill. “Gigafactories are monster projects, so they also require different approaches to deal with everything from supply chain issues to which people are needed onsite.”
Gigafactories require different execution strategies as they proceed through the project influence curve, where costs increase and risks decrease over time. At the same time, the influence and ability of all participants to make changes diminishes over time as projects are put together and established. Its stages include:
- Planning and scoping,
- Front-end design,
- Site selection,
- Detailed design and engineering,
- Procurement,
- Construction,
- Commissioning and
- Operations.
The five W’s and how
To reduce procedural bumps, especially when nearing the end of gigafactory projects, Churchill reported it’s important to understand the difference between the five principles that Bechtel uses to complete traditional projects and how it revised them for gigafactories. The five W’s and how for traditional projects are:
- What are we building?
- When do we need it built by? What is the schedule?
- How and what is our strategy for building it? What’s in the contract?
- Where are we going to build? How is the site selected?
- Why and what are our priorities?
- Who will do the work? Which architects, designers and contractors?
Because they’re so much larger and typically require longer-term commitments, gigafactories shift several of these principles, and notably shifts “who” way up, so it can drive the “how” section, and give it a better chance for success. Consequently, the five W’s and how for gigafactories are:
- What are we building?
- Why and what are our priorities for this project?
- Who will do the work? Which architects, designers and contractors?
- How and what is our strategy for building it? What’s in the contract?
- Where are we going to build? How is the site selected?
- When do we need it built by? What is the schedule?
“‘Who’ has to move up because gigafactories are new projects, and there are many uncertainties,” added Churchill. “Plus, ‘how’ depends on ‘who,’ so it must be settled sooner.”
Invest in safety, revise incentives
Similarly, while regular clients and projects are focused on speeding time-to-market and achieving cost-certainty, Churchill reported that gigafactories demand revised and sometimes counterintuitive strategies.
“For example, safety must be number one, above all else, and designed in from the beginning. The old mantra was that safety inhibited schedules, but this is not true. More users and manufacturers are realizing that a lack of safety leads to low morale and performance, and inevitably leads to incidents, losses of life and limb, fines and fees, and halted projects,” explained Churchill. “Likewise, quality products must be produced the first time, so they don’t risk impacting downtime. Too much focus on staying on schedule can lead to quality problems that show up during commissioning and operations, which means users must waste time going back and fixing them. If users succeed at safety and quality, then optimized production will follow. Instead of incentivizing for short-term speed and likely damage, more gigafactory contracts are being drafted to encourage safety, quality, efficiency and speed over longer-terms.”
In addition, while cost-certainty efforts used to focus on breaking up projects into easily biddable chunks or chipping away at costs by demanding lump-sum bids, Churchill reported both of these traditional strategies are also mistakes. “When projects focus on minutiae or just prices, customers think there will be fewer changes later. However, these strategies mean more risk for contractors, so they incorporate extra fees, contingencies and exchanges ahead of time that protect them. As a result, initial prices are never final costs because changes always occur,” he said. “It would be much more beneficial for clients to think of incentives that wouldn’t cause contractors to adjust their fees so much.”
Churchill added that Bechtel’s gigafactory projects concentrate on who will build them and seek to develop trust and accountability with its clients, subcontractors and other partners. “Successful projects develop and bring in teams they can work with because their managers know they’ll be there when things get bumpy. These teams don’t think of fees first. They think about solving problems and reducing their impact,” said Churchill. “On a gigafactory project, these are people we’ll likely be meeting with for two or three years, so it’s important for us all to be accountable and have contracts with useful performance incentives. We also recommend using the Construction Industry Institute’s (CCI) integrated project definitions and devices, which let all participants share risks and rewards. This is why ‘how’ we do a project is based on ‘who’ is doing it.
Site selection, diversity and day care
Beyond seeking locations for gigafactories that are close to raw materials and other resources. Churchill reported that site selection is increasingly driven by available workforces and their abilities.
“It’s reported there will soon be 40,000 too few construction personnel, and a worsening skills gap based on those leaving and entering the field,” added Churchill. “This makes it important not to shy away from union-based areas, which typically have better-trained workforces. Also, the construction field is still only 4% women, which is a big problem. It’s imperative that we don’t ignore half of our population and potential workforce, which can affect the viability of gigafactory projects, and instead offer services they and their families need like onsite daycare.”
