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7 Steps to Managing Capital Projects

As a manufacturing engineer and as a capital equipment sales person, I have seen seemingly every situation when it comes to the purchase and execution of a capital project.  The project could be for a new machine tool or a new automated assembly line.  We have primarily focused on automation, leak test equipment, laser marking systems, air filtration, and industrial wash systems in our business, but the fundamentals of a successful project are nearly the same for all capital projects.  In this article, we touch on the typical process steps of a capital project.


Project Steps

1.     Investment Justification – New Program Requires New Equipment, Safety Resolution, or Cost Savings. These are the three most common reasons for our customers make a capital investment.


2.     Request for Quote Created – The ideal scenario is that a customer takes the time to create a comprehensive quote request document to provide to vendors for reference during the quoting process.  We have a guide to creating an RFQ and templates available upon request.  This RFQ should include all technical expectations as well as commercial requirements to allow the vendors to provide a comprehensive quote.


3.     Vendor Selection – Selecting a partner for the capital equipment is one of the most important steps in the process.  It is important to have a clear plan for choosing a supplier to ensure a balance of technical comprehension, product & application experience, experience with vendor, references, price, delivery, terms, etc.  These should be weighted according to your company priorities.


4.     Kickoff – After you have released the purchase order it is important to have a comprehensive kickoff meeting with the vendor and your project team.  This will ensure everyone is on the same page prior to putting the first effort into design and build.


5.     Regular Follow Up – It is critical to stay connected to your vendor during all stages of the project.  Typical project phases are quote, design, build, debug, runoff (vendor), teardown, factory acceptance (customer), and post install support.  I recommend coordinating a regular conference call to discuss the status and manage the open issues list.  You should couple the calls with regular progress visits to audit and assess project status.  As a capital project manager, you should focus on developing the skill of assessing the project status based on communication and observation.  You will not know a project is behind if you aren’t able to match what is said with what you see.  This is your BS meter.


6.     Pre-installation – There are many actions you will need to take to prepare for the new equipment.  Here is a list of a few of the tasks most often required prior to equipment arrival; operator & maintenance training, gages purchased, facility preparations, runoff parts ordered, spare parts list submitted, process consumables set up, etc.


7.     Post-installation – After the equipment has been installed and accepted the final push to launch is critical for true project success.  This includes the process documentation for operators, maintenance manuals, equipment prints updated and submitted, final quality acceptance completed, gages set up, etc.



Each of these steps has many aspects.  It is important to develop your skills and understanding necessary to manage a project through each of these steps.  Most companies fall short during the middle and ending stages of a project.  Everyone is excited and eager to get started but too few have the same focus near the end of the project.  Capital Project Mastery is having the ability to run through tape at the end when the work gets messy and clear decisions become difficult.  You will also want to stay on top of the project so that you are able to hold vendors accountable.  Too often I see project managers check out or lose focus which inhibits their ability to hold vendors accountable because they did not provide the appropriate oversight when needed.

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