AlfaTech Engineers Provide Perspective on Controlling Life Science Project Risk Due to Supply Chain Disruption

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The lingering pandemic is creating shortages touching all professions, including engineers. The Life Science industry is not immune from the challenges caused by these disruptions. In this article, AlfaTech shares its unique supply chain challenges with life science projects, offers realistic strategies to address these challenges, and discusses the intended results.

AlfaTech, a premier California-based engineering firm, offers a full range of professional engineering services from concept creation to commissioning and validation, including feasibility studies, condition assessments, planning, design, program management, and construction period services. In addition, the firm provides design and engineering services to create some of the world’s most advanced research and manufacturing facilities worldwide.

Supply chain disruption is causing a domino effect of risks in the design and construction of life science projects.  The industry is experiencing the combined impact of a lack of available building materials, products, and equipment with a significant increase in demand.  The result is a dramatic increase in project risks including cost, schedule, and quality.

Cost Impact. In many instances, owners see double the original estimated project cost, and costs are being driven both by lack of availability and the desire to fast-track.  Frankly, suppliers are able to increase costs because they can due to market conditions.

Schedule Impact.  Equipment and system manufacturers are quoting very long lead times compared to quotes for equivalent equipment just two years ago.  Driven by a lack of manufacturing capacity, qualified manufacturing labor, and distribution congestion, the industry is seeing lead times for custom HVAC equipment growing from 8 to 10 weeks to up to 26 weeks and longer.  These lead times force project teams to choose between significant delays in project delivery and installing alternative equipment that is less than equal for the project. 

Quality Risk.  A critical mitigating strategy employed by contractors and suppliers is to offer alternative specifications which are not necessarily of equal performance and quality.  These alternatives force the engineer and owner to carefully evaluate which risk is ultimately greater to the project outcome – appropriateness of the materials and equipment or on-time project delivery.  Quality risk also results from the availability of human resources, and the industry has experienced a loss of qualified labor just as demand has increased substantially.

Ultimately, these challenges are increasing project risk. As engineers, AlfaTech takes measures to control project risks, including supply chain challenges.  Our strategies include detailed risk assessment, detailed project planning with all project team members, and the ability to pivot as conditions change.

Risk Mitigation Strategies

Early Planning and Risk Management.  AlfaTech takes all steps in managing internal processes to help mitigate the risk that might take away from our team’s focus. Based on industry and project experience, Alfatech understands the potential “uncontrolled” risk along with “controlled” risk that might affect a project’s success. Our Project Management style is to help make transparent all potential risks that can be defined early under conceptual design. This approach helps predict the undefined project risks that evolve in the later stages. Within this management approach, Alfatech also partners with all project team members, providing risk solutions through design phases throughout construction.

Risk Assessment Design.  Understanding potential risk with a Risk Management Team approach starting early under conceptual design helps minimize the risks throughout the project design delivery and into construction. If potential risks are defined early, the team can provide a system design approach to help control the project outcome, also labeled Risk Control.  Conducting risk assessment throughout the project lifecycle is critical.

Team Approach.  Each project team member brings a valuable perspective from their respective role on the project.  A successful project team leverages each perspective to its fullest.  Engaging a contractor and major equipment suppliers at the planning phase helps keep the project in check. Defining required equipment or systems and identifying long lead items during the planning phase is essential to assure project quality and manage overall risk.

Flexibility.  The project team must pivot as project conditions change.  AlfaTech believes in continuous risk assessment, which drives decisions throughout the life of each project.  Strategies don’t permanently eliminate risk.  It’s often the engineer’s job to help the owner understand which decision offers the slightest chance to a project.  As a simple example, on a recent project, the team faced an extended lead time for a critical piece of equipment.  Given the criticality of the operational date to allow the owner to deliver drugs on time for a clinical trial, the team determined the least risky strategy was to rent temporary equipment while waiting for delivery of the permanent solution.  This added cost to the project but ultimately allowed the owner to meet their overall business goals.

AlfaTech believes strongly that employment of these strategies consistently throughout the project life is necessary to deliver a successful project.