Rework: Anticipating What May Go Wrong

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  • 1. 25th August 2011
    Professor Peter ED Love PhD FRICS
  • 2. Anticipating What Might Go Wrong
    1. Introduction
    2. Introspection
    3. Nature of Rework
    4. Costs
    5. Causes
    6. Rework Reduction
  • 3.
  • 4. Research Process
    Case Studies
    Construction
    Offshore
    Mining
    Engineering
  • 5.
  • 6. A
    Budget (Bt)
    Bt
    ACV
    OCV
    B
    C
    Appraisal (Briefing)
    Difference from Bt
    D
    Strategic Brief
    Overrun
    E
    Original Contract Value (OCV)
    Outline Proposal
    Preparation
    F
    Detailed Deign
    G
    Scheme Design and Planning
    Actual Contract Value (ACv)
    H
    Production of Information
    Difference from OCV
    Tender Documentation
    J
    Tender Action
    K
    L
    Operations to Practical Completion
    Project Planning and Mobilization
    Design
    M
    Practical Completion
    Feedback
    Use
    Construct
  • 7. Construction Projects
    Cost Overrun
    12.6%
    52%
    Rework contributes to:
    20.7%
    Schedule Overrun
  • 8. Civil Engineering Projects
  • 9. Offshore Projects
    Mean cost overrun for offshore construction programs 35%
    Mean schedule overrun 7 months
    The International Energy Agency (IEA) has indicated worldwide energy infrastructure is projected to reach US$17 trillion by 2039.
    Source: DNV 2011
  • 10. Unnecessary effort of re-doing a process or activity that was incorrectly implemented the first time
  • 11. Structure of Rework
    Errors
    Economic, environmental & social impacts
    Non-compliance
    Rework
    Mistakes
    Incubation Period
    Failure
    Accidents
    Latent Conditions
    Slips
    Lapses
    Cognitive Failure
  • 12.
  • 13. Pathogens
    Pathogens are latentconditionsand lay dormant within a system until an error comes to light
    People are unawareof the impact of decisions, practices or procedures can have
  • 14. Qualities of Pathogens
    Stable phenomena and have been in existence for a substantial time before the error occurs
    Before the error occurs they would not have been seen as obvious stages in an identifiable sequence failure
  • 15. Learned Behavior
    Individuals may repeat practices such as taking short cuts and not follow due processes.
    When a practice provides an outcome that is satisfactory, then this practice is used again, even it is unsuitable for that task/process.
  • 16. Types of Error
    Mistake - rule or knowledge based
    Non-compliance – decides not to carry out a task
    Slips and lapses of attention – forgetfulness, habit, etc
  • 17. Total Rework Costs
  • 18. Mean Rework Costs
  • 19. Rework and Contract Value
  • 20. Goodness of Fit Test
    Compatibility of a random sample with a theoretical probability distribution.
    Kolmogorov-Smirnov statistic (D) expressed as (Eq.1):
    Anderson-Darling statistic (A2) (Eq.2):
  • 21. Pareto Distribution
  • 22. Probability Distribution
    Cumulative probability distribution (CDF)
    Probability density distribution: Histogram
    79% (n=218) < 16% Ocv
    Probability density distribution (PDF)
    k = 0.173 σ = 9.132, μ = 0.250
    CDF expressed as (Eq.3):
    PDF expressed as (Eq.4):
  • 23. Probability by Point
    Probability > 5% rework is 34%
    Probability < 10% rework is 85%
  • 24. Probability by Contract Range
    Construction projects > $A101m (M=6.81%) the probability of rework is:
    P(X < X1) = 0.85, P(X >X1) = 0.15.
    Civil engineering projects with a contract value in the range of $A11-50m (M= 10.99%) the probability of rework is:
    P(X < X1) = 0.66, P(X >X1) = 0.34.
  • 25. Fixed Platform
    Spar
    FPSO
    Semi-Submersible
    Tension Leg Platform
  • 26. Offshore: Rework Costs
    Con. FPSO: 55%
    New Build FPSO: 10 -15%
    TLP: 20 – 25%
    Expected and ‘norm’: 10%
  • 27. Pathogen and Omission Errors
    Construct
    (n=31)
    Mining
    (n=26)
    Oil /Gas
    (n=28)
    Failure Type (e.g)
    Omission Error
    Cause Examples
    Description
    Pathogen Category
    17
    17
    19
    Violation
    Violation
    • Failure to undertake design reviews
    • 28. Distribution of tentative design documents
    Pathogens arising from people’s deliberate practices
    Practice
    4
    5
    2
    Slip
    Violation
    • Engineer failed to detect and corrects an omission in design documentation
    • 29. Schedule pressure resulted in disproportionate time allocation for tasks
    Pathogens arising from the nature of task being performed
    Task
    2
    1
    2
    Violation
    Lapse
    • Low design fees meant tasks were deliberately left out
    • 30. Schedule pressure result in some tasks not being recalled at the appropriate time
    Pathogen arising from the situation or environment the project is operating in
    Circumstance
    5
    2
    4
    Violation
    Violation
    • Re-use of existing specification and design solutions
    • 31. Failure to adhere to new company polices
    Pathogens arising from standards and routines
    Convention
    3
    1
    1
    Violation
    Slip
    • Inoperability with CAD software applications (no checking for inconsistencies)
    • 32. Simplification of tasks and neglect for other aspects of design
    Pathogens arising from a characteristic of a technical tool
    Tool
  • 33. Causal Chain: Example
    Pathogen
    Practice of designing work on tentative information
    Extract
    Practice of departing from project protocols
    Omission Error
    Example: “……….The electrical engineers simply went ahead with designing the cable tray without talking to us and explaining their problem. It cost us hundreds of thousands of dollars to rectify this problem”.
    Information overloadand higher demands based on electrical engineer –design check step missed
    Planned departurefrom standard operating procedures
    Practice of under estimating the time required for design
    Effect
    ↑ Conflict etc
    ↑ Stress
    ↑ Cost
  • 34. What an Engineer Said
    “There’s always going to be figures that don’t match up. It’s a fact of life, and we normally sort out any problems that arise with the contractor”.
  • 35. What an Architect Said
    “It’s cut throat out there. Fees are very tight and clients are not willing to pay us what we require. I understand that documentation is sometimes poor, but we also don’t have enough time to prepare it. Client’s expectations have increased, but fees have not. They think that we can design overnight sometimes”.
  • 36. View From the Field
    Observation 1: “No one had a clue, they had different understandings of the same event”Observation 2: “People filter out most of the information around them”Observation 3: “Cultural differences increase the likelihood of different interpretations of the same event”Observation 4: “Problems arise when the goals of people in the same organisation start to diverge”
  • 37. View From the Field
    Observation 6: “People’s decisions are a trade-off between the available information and the available time”.
    Observation 5: “People break rules to make work more efficient”.
    Observation 7: “People make mistakes. Organisations make it possible for them to be really serious”.
  • 38. Dynamics of Rework
    Alliances between engineering contractors and offshore fabricators can improve interfaces. The client/operator can reduce costs and interparty claims between engineering contractors and fabricators.
    Uncertainty in scope may arise when a clients perceptions of market conditions change or when capital is required to push ahead with a project even when a reservoir has not been fully defined
    If rework is required then activities and processes may be subjected to acceleration
    The ‘+’, and ‘-’, respectively, classifies positive and negative consequences of an increase of the original variable on the relying variable.
  • 39. Rework Reduction
    Measures designed to limit the occurrence of errors
  • 40. Learning to reduce