Characteristics of Project Planning in Plant Engineering and Construction - The Example of the Linde Group
Plant engineering and construction is characterized by long-term, customized make-to-order production. If production start and end fall into different accounting periods, equity-market orientated entities have to follow the IAS11 rules. These stipulate the recognition of costs and profits on an accrued basis and define the permissible measuring methods to reliably determine the stage of completion of projects in a „true and fair view“. The Linde Engineering (LE) specific „Refined-POC-Method“ is described, which is applied to major projects. Determining the parameters requires an „accompanying project cost calculation“. Another precondition for the adaptability of IAS11 is an effective internal budgeting and reporting system. Within the scope of this thesis, the methodology and accuracy of project controlling instruments during the order execution of contracts presently in use within LE are analyzed, mainly in terms of the following parameters: contract value, cost, profit and degree of completion. The PoC-Index, as the measure for the planning accuracy of the PoC-factor, and the PoC-Variance indicating the percentage of planning deviation, are introduced. Furthermore, the issue of contract value changes on the PoC-Index has been investigated. The order categories as used by LE induce different planning methods; specific potential improvements of described planning methods are presented within this thesis.