There will always be a vast array of information to be analysed in the development of a new project, but the starting point has to be the known facts; basic site-specific information of demographics, traffic and competition and so on.
The collation and implementation of these key fundamentals, along with a good understanding of past performance, will produce the foundation for a more detailed feasibility study and enable a more realistic projection of potential of fuel sales, shop and other offerings; ie, car washing and service. When – and only when – these are established and fully understood should you start to design your project.
During my time with Total, we undertook an exercise to collate historic cost and design data from affiliates and this became a very powerful tool which enabled them to formulate some key ratios for elements such as volume per filling position, tank capacity per sales volume, canopy size per filling position and cost per square metre of various elements, including shops.
The initial use was as a benchmarking tool across countries, to be able to challenge affiliates to raise their performance. However, within each affiliate it also became a highly effective and rapid estimating tool as to the expected cost of a new project and a target to beat. This information was then incorporated into the project appraisal process, to ensure that development staff could quickly and easily assess the investment impact of their choices.
Of course, once you have the factual data, it is then possible to drill down into the information, standards and specifications to find ways and means of improving the investment performance. This includes all aspects of the design team, including developers, engineers, purchasers and suppliers.
The key tools for this are;
- Value management – Ensure projects are built the right size and layout
- Value engineering – Ensure projects are built to the right specification
- Programme management – Ensure the development process is properly managed to reduce time to market
- Procurement – Ensure the best prices are achieved for every project
At the same time, never forget key objectives such as best practice in design and construction, reduction of cost (I have seen as much as 25% reduction on some projects), speeding up the development process to reap investment benefits earlier and ensuring corporate standards are respected.
In order to ensure a rigorous development process, I also strongly recommend the following principles:
- Consistent allocation of cost to compare projects on a like-for-like basis
- Analysis of historical costs, the key measurement tool for future progress
- Benchmarking of baselines and key performance indicators across projects/affiliates
- Agreement of targets, opportunities and challenges to project teams
- Analysis of each project against a baseline
Barry Wyeth of Wyeth Projects has 20 years’ experience in the retail petroleum market with Petrofina, Total and, most recently with Wyeth Projects Services, a specialist consultancy working in the retail petroleum sector.