Development of a Risk-Based Standard Operating Procedure to Improve Time and Cost Performance in EPC Projects: A Case Study of a Water Treatment Project at PT XYZ

Abstract

Engineering, Procurement, and Construction (EPC) projects are highly complex due to the strong interdependencies among engineering, procurement, and construction phases, thereby requiring an integrated control system to maintain project schedule and cost performance. However, several EPC projects at PT XYZ have experienced schedule delays and cost overruns caused by weaknesses in process control, cross-functional coordination, technical verification, document management, and decision-making during project execution. In addition, PT XYZ does not yet have a Standard Operating Procedure (SOP) specifically designed to govern EPC project execution. This study aims to develop a risk-based SOP to improve schedule and cost performance in EPC projects, using a Water Treatment project at PT XYZ as a case study. This study employed a mixed-methods approach consisting of six stages: EPC project activity mapping, stakeholder mapping, risk identification, dominant risk determination, risk response development, and risk-based SOP development. Data were collected through a literature review, project archive analysis, field observations, questionnaires administered to 30 respondents, and expert validation. The results identified 104 risks across all EPC project phases, of which 61 were classified as dominant risks requiring priority control measures, comprising 29 risks predominantly affecting schedule performance and 32 risks predominantly affecting cost performance. The study developed a risk-based SOP that integrates project phases, stakeholders, dominant risks, and risk responses through enhanced verification mechanisms, decision gates, supporting documents, and adjustments to stakeholder roles and responsibilities.