Any Time, Any Place, Any Product: A Roadmap for Successful International Pharmaceutical Plant Construction Projects
“International relationships are preordained to be clumsy gestures based on imperfect knowledge.” – Rebecca West
By Harold Boman, Vice President, Fluor Corp.
|For an overseas project, the parties' alignment requires a broad analysis of issues and challenges unique to the selected site.|
If Ms. West, an English journalist and novelist, were a project manager in today’s world, she might find a rewarding career in risk management with global pharmaceutical owners and contractors. While she does take a relatively pessimistic view of the challenges facing today’s international project environment, she is correct in one aspect — the cultural and communication issues associated with international projects are in fact the greatest barriers to success.
Our task as engineers and managers in the global construction industry is to use the processes, communication tools and information sources available to us today to perfect our knowledge of a project’s technological, logistical and financial issues. Doing so allows us to overcome “clumsy gestures” and create a model that ensures a high probability of success.
The design and construction of pharmaceutical facilities has never been a simple task. Changing technologies, a stringent regulatory environment and the need for exhaustive product testing add dimensions to projects not always found in those of other industries. International projects must overcome differences in language, politics, climate and time zones and uncertainties associated with ocean freight and material and labor availabilities — not to mention the obvious cultural differences.
This article will address pharmaceutical project execution in a global environment, and outline how proven elements of project management can be combined with modern tools of communication and coordination to improve project delivery.1. Project Assessment: Define, align and assign
The first order of business in any project is to align the objectives of all participants. Yet, a surprising number of projects are initiated, and even completed, without going through this essential phase. Often the schedule is so demanding that projects simply mobilize and start. Neglecting to clearly define objectives and outline the risks associated with them for all parties is the surest road to failure. The alignment process is essential for a project to live up to its potential.
In a conventional alignment, participants articulate the business purpose and functionality of the facility, then discuss cost, schedule and quality criteria so that the project team’s leadership has a clear picture of the road ahead.
All of the key stakeholders in the project owner’s organization — corporate engineering, strategic sourcing, manufacturing and quality — must contribute. Productive alignment sessions address such issues as facility flexibility, expandability, code compliance and amenities.
For an international project, the alignment of the parties requires a broad analysis of issues and challenges unique to the selected site. From the conceptual design on, all significant players in facility design, procurement, construction and qualification must keep in mind unique aspects of the chosen location. Which language will predominate, where design staff will be located and what permitting strategy to use are all key considerations that will vary from location to location.
In addition, the project’s units of measurement (imperial units vs. metric system) should be fixed during the alignment. Changing measurement units later in the project can put a project behind schedule and over budget.2. Project Management: Tough job, high risk
An international project manager must be a seasoned veteran with experience in pharmaceutical facility delivery. The ideal candidate should have adequate tenure with his or her employer to ensure a thorough knowledge of company practices and access to the company’s internal network and resources. The project manager will face a number of potential pitfalls, including:
- Onshore/offshore contractual issues — Negotiating the contract for any project is more difficult these days as the parties attempt to protect their respective corporate interests. For international projects, the negotiation process demands legal expertise on both sides. The parties must first specify the appropriate entity of a corporation that will be signatory to the agreement. In most cases, two or more contracts will be required to provide appropriate legal coverage for work performed in multiple locations. As international project sites are selected, determining the split between onshore and offshore work is critical.
- Commercial issues — Once the onshore/offshore portions of the scope are determined, the two parties must arrive at a mutually attractive commercial deal. Contractors rightfully expect to be compensated for undertaking the additional risks associated with an international project, so fees on these projects will typically be higher than for domestic projects, while lump sum contracting is much more common in the global construction market than cost-plus and reimbursable arrangements.
- Relationship building — Positive personal relationships between designer, builder and owner are absolutely critical in international projects. Managers in certain cultures, notably Southeast Asia and Latin America, will usually not discuss business before they’ve developed confidence in and a connection to their services suppliers, which can take several weeks of “small talk” at dinners and other events. In these instances, one should never talk business before a strong rapport has been reached.
- Site-specific risks — During contractual negotiations, greater attention must be focused upon labor harmony, weather and geopolitical risks. The potential for force majeure events is significantly higher in some locations.