South Florida PMI Chapter Dinner MeetingThe 3 Projects of the Panama CanalLessons Learned from one of the engineeringwonde...
2<br />Agenda<br />Some history and the importance of the Canal<br />The French project and its lessons learned<br />The A...
3<br />Theimportance of LessonsLearned<br />
The importance of the Canal<br />Technically it is one of the greatest engineering achievements of humankind. <br />It lon...
5<br />
Beyond engineering is about economics<br />It’s the second primary route for imported goods to the USA (first customer)<br...
Panama, the Nation of the Canal<br />25% of the Government ‘s income comes from the Canal’s Economy<br />Direct and Indire...
What does it mean to the World?<br />8<br />
Some History…<br />First “suggestion” of a canal by Charles V, King of Spain in 1534<br />The Spanish Camino Real for tran...
The French Project<br />Started in 1880 by Ferdinand de Lesseps<br />Lacked prior studies of the geology and hydrology of ...
The Darien Expedition by the Scots in 1699
The somewhat successful American Railway experience, considering a dead toll of 12,000 workers by malaria and yellow fever...
The French Project<br />Work continued trough 1889, when the French abandoned the project<br />Heavy machinery was insuffi...
Lessons Learned<br />Prior failing -extreme disaster- experiences were dismissed due to a seemingly recent successful expe...
The American Project<br />Foreign landowners in Panama lobbied the US Congress to chose Panama over Nicaragua for a canal ...
Experiences considered<br />The American Railway construction through the Isthmus (1885)<br />The Spanish-American war in ...
Lessons Learned<br />Political issues got involved into a technical decision <br />Panama vs. Nicaragua <br />Panama’s sec...
The handover to Panamanians<br />The treaty of the canal was signed in 1903<br />The new canal was finished in 1914, two y...
The Panamanian Project<br />Only 25 ships can go through the Canal every day (reservation slot needed)<br />Ships’ size ha...
Bigger is better<br />More larger-than-Panamax-size <br />ships are being built in the <br />world<br />18<br />
Contribution to Panama’s Economy<br />Direct and Indirect Contribution of the Canal as a percentage of the Government’s cu...
The Strategic Plan<br />Strategic Stages at the Panama Canal<br />Maximize Benefit of Transit Business<br />Expand Transit...
From past lessons…<br />Political gambling has been reduced to a minimum<br />A wide, extent communication plan has been e...
From past lessons…<br />Human feasibility includes: Healthcare, Personal and Professional Development, History and Sociolo...
Where is PM contributing?<br />Some unrefined PM practices were used during the American Project (still for many years rem...
Portfolio Management<br />Managing new construction technologies developed ad hoc for this endeavor<br />Managing Canal op...
Time Management (Top Level)<br />25<br />
Cost Management<br />Multimillionaire Budget handling coming from diverse sources  implies a strict expense control and de...
Cost-Schedule Alignment<br /><ul><li>Modern PM allows for proper alignment of budget and schedule for every subproject wit...
Risk Management<br /><ul><li>The development, construction, and start-up of new high-tech facilities, while the system is ...
Quality Management<br />Technological developments must live-up beyond their expectations, and good quality management is ...
Resource Management<br />Adequate procurement, supply, and human capital, coming from everywhere in the world must be prop...
Project running as expected…<br />Canal Expansion Project seems to be online according to the macro-schedule<br />Everyday...
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The Three Projects Of The Panama Canal V.1.3

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The Three Projects Of The Panama Canal V.1.3

  1. 1. South Florida PMI Chapter Dinner MeetingThe 3 Projects of the Panama CanalLessons Learned from one of the engineeringwonders of the world or how a Mosquitocan kill your project!<br />Roberto Toledo, MBA, PMP<br />AlphaConsultoría<br />México and LatinAmerica<br />
  2. 2. 2<br />Agenda<br />Some history and the importance of the Canal<br />The French project and its lessons learned<br />The American project and its lessons learned<br />The Panamanian project and its lessons learned<br />
  3. 3. 3<br />Theimportance of LessonsLearned<br />
  4. 4. The importance of the Canal<br />Technically it is one of the greatest engineering achievements of humankind. <br />It longs 80 km from the Atlantic to the Pacific Ocean.<br />Its width ranges from 91m to 300m. <br />It possesses two terminal piers, three sets of twin locks and one of the largest artificial lakes in the world: Gatún Lake, which covers 425 square kilometers<br />4<br />
  5. 5. 5<br />
  6. 6. Beyond engineering is about economics<br />It’s the second primary route for imported goods to the USA (first customer)<br />It’s a main route for exported goods for China (second customer)<br />It grossed 1.3 Billion USD in 2008<br />Gathered 2.3 Billion USD for the Expansion Program<br />Out of 5.2 budgeted<br />Holds A2 investment rating <br />6<br />
  7. 7. Panama, the Nation of the Canal<br />25% of the Government ‘s income comes from the Canal’s Economy<br />Direct and Indirect Contribution of the Canal as a percentage of the Government’s current income<br />7<br />
  8. 8. What does it mean to the World?<br />8<br />
  9. 9. Some History…<br />First “suggestion” of a canal by Charles V, King of Spain in 1534<br />The Spanish Camino Real for transporting Peru’s gold<br />Feasibility study in 1793 by Italian-born Malasspina<br />US construction of the Panama Railway in 1855<br /><ul><li>In the 1870’s due to the Suez Canal Construction success, Ferdinand de Lesseps envisioned a new great endeavor: The Panama Canal</li></ul>9<br />
  10. 10. The French Project<br />Started in 1880 by Ferdinand de Lesseps<br />Lacked prior studies of the geology and hydrology of the region<br />Facts and experiences ignored:<br /><ul><li>There was a level difference between the oceans (known since 1590)
  11. 11. The Darien Expedition by the Scots in 1699
  12. 12. The somewhat successful American Railway experience, considering a dead toll of 12,000 workers by malaria and yellow fever</li></ul>10<br />
  13. 13. The French Project<br />Work continued trough 1889, when the French abandoned the project<br />Heavy machinery was insufficient and not working properly<br />More than 22,000 people died due to diseases like malaria and poor living conditions<br />The digging made by the French were vast and used though<br />11<br />
  14. 14. Lessons Learned<br />Prior failing -extreme disaster- experiences were dismissed due to a seemingly recent successful experience -the Suez Canal-<br />Prior technical knowledge was not reviewed nor verified<br />Environmental conditions were not considered as part of the Construction Management Plan<br />Sanitary conditions were not considered as part of the Construction Management Plan<br />12<br />
  15. 15. The American Project<br />Foreign landowners in Panama lobbied the US Congress to chose Panama over Nicaragua for a canal <br />The Cromwell scam<br />The access-granting treaty to the Canal Zone was not ratified by Colombia prompting Panama’s independence<br />13<br />
  16. 16. Experiences considered<br />The American Railway construction through the Isthmus (1885)<br />The Spanish-American war in the Caribbean (1898)<br />“Tropicalized” heavy machinery<br />The mosquito vector and disease control<br />How they did it???????<br />14<br />
  17. 17. Lessons Learned<br />Political issues got involved into a technical decision <br />Panama vs. Nicaragua <br />Panama’s secession from Colombia<br />Some technical studies were postponed due to political pressures<br />Proper housing and sanitary conditions for workers are a must.- People are your most valuable resource!<br />The adaptation of the tools (heavy machinery) avoided delays<br />Thorough planning and tight control allowed finishing the project two years ahead of time<br />PM did not formally existed as a discipline<br />15<br />
  18. 18. The handover to Panamanians<br />The treaty of the canal was signed in 1903<br />The new canal was finished in 1914, two years ahead of schedule<br />A new agreement was signed in 1977 named the Torrijos-Carter Treaty<br />In 1999 the US government gave Canal’s control to Panama<br />16<br />
  19. 19. The Panamanian Project<br />Only 25 ships can go through the Canal every day (reservation slot needed)<br />Ships’ size has steadily increased since WWII<br />Heavier traffic is expected in the following years<br />Two competing projects challenged the Canal’s supremacy (Mexico and Nicaragua)<br />Panama’s economy dependence on the Canal increases every year<br />17<br />
  20. 20. Bigger is better<br />More larger-than-Panamax-size <br />ships are being built in the <br />world<br />18<br />
  21. 21. Contribution to Panama’s Economy<br />Direct and Indirect Contribution of the Canal as a percentage of the Government’s current income<br />The impact of the Canal’s <br />contributions to Panama’s <br />economy grows every year.<br />19<br />
  22. 22. The Strategic Plan<br />Strategic Stages at the Panama Canal<br />Maximize Benefit of Transit Business<br />Expand Transit Business<br />Create Options for Growth<br />20<br />
  23. 23. From past lessons…<br />Political gambling has been reduced to a minimum<br />A wide, extent communication plan has been established<br />Economical benefit -our business, our country, our customers, our people- is the guideline<br />Technical feasibility included: Heavy Industry studies, TI, Marketing, Engineering, Hydrogeology, Economic and Project Management and 6-Sigma<br />21<br />
  24. 24. From past lessons…<br />Human feasibility includes: Healthcare, Personal and Professional Development, History and Sociology<br />Stakeholders considered are quite more in number and interests than in the past<br />22<br />
  25. 25. Where is PM contributing?<br />Some unrefined PM practices were used during the American Project (still for many years remained isolated practices)<br />The building of a new Canal implies using state of the art PM tools<br />23<br />
  26. 26. Portfolio Management<br />Managing new construction technologies developed ad hoc for this endeavor<br />Managing Canal operations in parallel to construction activities<br />Managing interfaces.- where construction and daily operation activities meet<br />Managing millionaire budget coming from external sources<br />Managing several complex stages at different levels, zones and stages<br />24<br />
  27. 27. Time Management (Top Level)<br />25<br />
  28. 28. Cost Management<br />Multimillionaire Budget handling coming from diverse sources implies a strict expense control and detailed accounts reporting<br />Financing: 2.3 billions<br />Own cash flow: 2.9 billions<br />26<br />
  29. 29. Cost-Schedule Alignment<br /><ul><li>Modern PM allows for proper alignment of budget and schedule for every subproject within the portfolio</li></ul>27<br />
  30. 30. Risk Management<br /><ul><li>The development, construction, and start-up of new high-tech facilities, while the system is still working requires an adequate risk management</li></ul>28<br />
  31. 31. Quality Management<br />Technological developments must live-up beyond their expectations, and good quality management is the key<br />Quality standards are required for all components. Project Quality Management aligns planning, control and assurance.<br />29<br />
  32. 32. Resource Management<br />Adequate procurement, supply, and human capital, coming from everywhere in the world must be properly managed, with the necessary planning, controlling and executing. <br />30<br />
  33. 33. Project running as expected…<br />Canal Expansion Project seems to be online according to the macro-schedule<br />Everyday operations at the Canal are running as usual<br />Fine control over smaller projects and subprojects is vital to remain on line<br />The ACP and its governance bodies seem to be covering properly their roles as sponsors and stakeholders <br />31<br />
  34. 34. Success must be repeatable!!<br />By using a consistent methodology efficiency and consistency are guaranteed<br />Don not brag about your successes<br />Avoid the French Syndrome: One great success does no guaranty another greater success!<br />We know some new surprises will emerge in the future for the Panama Canal… be wise and be prepared…<br />Lastwords…<br />32<br />
  35. 35. ¡Thankyou!¿Questions?<br />Roberto Toledo, MBA, PMP<br />ManagingPartner of Alpha Consultoría<br />rtoledo@alpha-consultoria.com<br />(+52.55) 5211.6828<br />
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