IDEAS home Printed from https://ideas.repec.org/a/vrs/otamic/v12y2020i1p2245-2255n15.html
   My bibliography  Save this article

EPC 4.0: The quest for reducing CAPEX in EPC projects

Author

Listed:
  • Wagner Reinhard F.

    (Tiba Managementberatung GmbH, Board of Directors, Munich, Germany.)

Abstract

Engineering, procurement and construction (EPC) business in Europa is increasingly under pressure. Lack of productivity, low or negative profit margins for investors, and the lack of adopting necessary innovations and digitalization—from engineering activities through operations and maintenance to decommissioning—have caused significant deprivation of business and competitiveness compared to emerging providers in Asia. The quest for reducing capital expenditures (CAPEX) in EPC projects is intensifying. In May 2018, a research project was started to analyze the situation and key trends through desk research, to research how the challenges of the business could be tackled and to derive practical guidance for EPC contractors as well as for investors, owners, and operators (O/O). The project aimed to propose innovative ways of improving the EPC business model to reach the next level (“EPC 4.0”). In doing so, lessons learned from the automotive and aviation industry were considered. A key objective of the research project was to challenge statements of international EPC experts to cut CAPEX by 40–50% in EPC projects. With this statement in mind, the research focused on identifying measures with potential in six areas: (1) digitalization, (2) partnering, (3) flat supply chains, (4) flexible organizations, (5) core competences, and (6) the human factor. Summarizing the findings in these areas, the EPC 4.0 project came to a savings potential of up to 50% of the total budgeted project costs.

Suggested Citation

  • Wagner Reinhard F., 2020. "EPC 4.0: The quest for reducing CAPEX in EPC projects," Organization, Technology and Management in Construction, Sciendo, vol. 12(1), pages 2245-2255, January.
    • Handle: RePEc:vrs:otamic:v:12:y:2020:i:1:p:2245-2255:n:15
    DOI: 10.2478/otmcj-2020-0020
    as

    Download full text from publisher

    File URL: https://doi.org/10.2478/otmcj-2020-0020
    Download Restriction: no
    File URL: https://libkey.io/10.2478/otmcj-2020-0020?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:otamic:v:12:y:2020:i:1:p:2245-2255:n:15. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.