Renovation and expansion of a food production plant in times of Covid

The Problem

 The company had recently been acquired by an important multinational group operating in the food sector. The integration of the company activities into the group required the adaptation of the production processes and an expansion of the headquarters to cope with the growing sales volumes. An executive project had already been created based on the company’s needs. The specificity of the production site and the high production volume made it impossible to stop the plants during the construction phases. An expense budget was prepared and agreed with the group’s top management.
The top management entrusts Contract Manager s.r.l. with the responsibility of guiding the execution of the project. An interim manager with experience in the set up of industrial plants is selected to supervise the project.

The Solution

Analysis of the project documents, performed by the project manager (PM), highlighted the following problems:

  • The proposed budget was underestimated by 30%.
  • The group’s environmental sustainability policies had not been considered.
  • The project did not comply with the company’s business strategies.

The project manager is aware that, partly due to the pandemic and the difficulties it has caused, the group management was not involved in determining the project objective. He initiated a thorough review of the project requirements, involving the global engineering team and stakeholders. The work lasted three months and led to the drafting of various options and the related cost-benefit analysis.

As regards the sustainability “requirements”, the PM launched a study on the energy consumption of existing production processes and analyzed the production, conversion and use cycles of energy in its various forms: electricity, gas and steam. Using pinch analysis techniques, energy consumption objectives for the new plants were defined. The project was presented to the board and approved, and the executive design and application for construction permits phase began immediately. To speed up execution times, design activities for the prefabs and foundations began before the permit was obtained, which allowed work to start rapidly.

The Covid pandemic changed consumer habits, negatively impacting sales forecasts and volumes produced at the new plant. The situation required adapting the scope of the project to the changing needs of the market. It was decided to change the layout of the plant and expand the product mix by inserting additional production lines in order to maximize the production capacity. It was thus possible to confirm the profitability of the investment.
The design changes involved a substantial change in layout, utilities, and cold storage, as well as a major revision of the project, which was kept within the allowed budget and within the agreed timeframe thanks to careful coordination of activities.

Results achieved

 The Project Manager’s work brought several improvements to the change processes in the project. He was able to address changes in the project scope brought about by changing market conditions, both in the design and implementation phases. The finished plant has a much greater production capacity and flexibility than originally planned. The energy impact reduction activity through pinch analysis has resulted in a reduction in energy consumption of 36 percent of the volume produced and a 55 percent reduction in methane consumption. All the hot water for processing and heating is obtained through heat recovered from the production cycle. The capacity of the steam generating plants has been significantly reduced. The project budget has been constantly monitored, keeping costs within the approved budget despite changes in scope, whilst maintaining scheduled times.