This document discusses issues with traditional project management approaches and proposes an alternative approach called Lean Project Management. It argues that traditional approaches focus too much on tasks and activities rather than managing the flows and dependencies between operations. Lean Project Management views a project as a network of operation flows and focuses on managing these flows. Key aspects of Lean Project Management discussed include the Last Planner System for detailed planning and measuring planning reliability through Percent Planned Complete. The document advocates for adopting Lean Project Management approaches to improve project outcomes in the oil and gas industry.

1. Stopping from the insanity
Various Industries are using many Project Control tools and methodologies, as
such: Agile, Waterfall, SCRUM, Six Sigma, Lean, Critical Path Method (CPM), etc.
However, in Oil & Gas industry, the standard Project Management methodology
is that one promoted by the Project Management Institute (PMI) and is focused,
in a nutshell, on “Managing projects by results “and thus, resources productivity.
Resource productivity is a tool to both establish a sounding planning paths and
evaluating the quantum progress achieved at each given point of time of the life
span of the projects.
Following this methodology, a project will depict as a sequence of activities using
a Gantt chart, and all the activities/tasks are linked to each other by logic
relationships. Activity B cannot start until activity A is finished, and can be
performed in parallel with activity C, and so on and on, till the end of the project.
The majority of Project Managers are using this technique to plan and
monitoring the projects.

2. As you are well known, the process begins with defining a Work Breakdown
Structure (WBS) and then develops a bar chart schedule, which will bring to the
Critical Path and sometimes Project Evaluation & Review Technique (PERT). To
control & monitor (and decide if and when a deviation happens) the most
common technique is the Earned Value Method (EVM). The EVM is a project
control technique, which provides a quantitative measure of work performance.
It involves crediting dollars or labor hours based on unit rates, for the various
types of work performed. The earned value technique is said to be superior to
independent schedule and cost control for evaluating work progress to identify
potential schedule slippage and areas of budget overruns.
All the above assumes and imposes to the project management that performing
tasks is the primary objective. Instead of, in my view and experience, this process
should rather than be understood as a real process – like a chemical process: as a
phenomenon producing the desired outcome fed by many flows (Operation-
Flow). Is my opinion, supported by decades of experience in any project,
believing that budget and cost on each cost account are the primary decision
criteria for selecting work assignments, the workflow becomes unreliable, which
results in longer durations and higher "costs" than necessary thus, schedule and
cost overruns the target expectation.
Despite vast amounts of research and effort by Oil & Gas professionals and
project owners around the world, a large percentage of projects still fail to
complete on time or budget, with 90 percent of megaprojects facing at list cost
overruns. The root-causes of so many project delay and cost overrun have well
documented. The primary issues include poor project initiation, insufficient time
spent on front-end design, the management of resource productivity rather than
workflow productivity, and the use of contracts with inappropriate risk transfer.
Thus, I believe it is arrived the time for all O&G professionals, to start to consider
projects, no more as a sequence of activities, but as a network or a chain, if you
wish, of Operation-Flows from one node to another. Each of this Operation-Flow
is influencing and is the prerequisite for the entire process. The project
management is therefore not as much to manage the process itself but to manage
the feeding flows, any of which may be or become critical at any time.

3. Let me make an example to understand this concept better. Consider for instance
the Site Piping prefabrication: the flow includes getting sub-contractor awarded;
get ready the site prefabrication yard; the Sub-contractor’s piping crew released
from other projects; bringing them to the site; HSE induction training, feeding
them with instructions/work practices, drawings and supplying them with
equipment and materials, etc.
These flows may easily tie in with other operation flows. The sub-contracting
department delaying the contract award; a crew may not be able to be released
from its previous job; the flow of information could similarly constrain by the
designers having other tasks or not having fed with the right information, and
therefore delaying the flow of drawings; there may be a lead-time on equipment
or materials, etc.
For any individual Operation-Flow, as the number of uncertainties in all of the
flows grows, so grows the potential variability of the execution of the whole
project. Again, what is important is to manage the feeding flow efficiently.
In accordance to the professor Glenn Ballard (University of California- Berkeley),
one of the most effective ways to increase productivity/efficiency is: a) Plan
more efficiently - b) Improving delivery production by reducing delays (wastes) -
c) Getting the work done in the best constructability sequence - d) Matching
workforce to available work, and e) To Coordinate multiple interdependent
activities.
All of this is the basis of Lean Project Management, which aims to maximize value
and reduces waste. It accomplishes these objectives through the use of Supply
Chain Management (SCM) and Just-In-Time (JIT) techniques; as well as, the open
sharing of information between all the parties involved in the project
development process, as shown in the above example.

4. In Lean Project Management, Planning and Control are considered to be
synergetic and dynamic processes maintained during the project life cycle.
Planning defines the criteria and creates the strategies required to reach the
project objectives. At the same time, Control makes sure that each event will
occur following the planned sequence. Re-planning will happen when the
previously established chains are no longer applicable or convenient. Of course,
feedbacks are central to this philosophy, because it facilitates the learning curve
when the events do not occur as planned.
It is therefore imperative, to change the way in which is considered the
"Control." It is time to redefine Control from only monitoring and analyze results
(progress percentage, EVM, etc.) to "making things happen" Following this vision
professor Glen Ballard and his team develop a technique called Last Planner
System (LPS), which has been demonstrated to be a handy tool for the
management of project process and continuous monitoring of the planning
efficiency.
I guess that several of you will ask: who bloody is the Last planner?
Well, the "Last Planner" is the last in the chain because the output of his/her
planning process is not a directive for a lower level planning process, but results
in production, as shown in the below picture.

5. Rationalizing and stabilizing the work environment begins by learning to make
and keep commitments. Last Planners can be expected to make promises (WILL)
to doing what SHOULD be done, only to the extent that it CAN execute. The "last
planner" only releases workable jobs to the “field,” as opposed to the traditional
practice of pushing assignments onto EPC crews to meet scheduled dates.
When systematically implemented, this technique can bring many advantages
and add significant benefits to project management practice in general and
planning exercise in particular. The Last Planner System (LPS) will practically
help to achieve the following: a) Planning in greater detail as time gets closer to
executing the work - b) Developing the work plan with those who are going to
perform the work - c) Identifying and removing work constraints ahead of time
as a team - d) To make work ready and increase the reliability of work plans - e)
Making sure promises and driving work execution based on coordination and
active negotiation with trade partners and project participants. And f) Learning
from planning failures by finding the root-causes and taking preventive actions.
The Last Planner integrated components are Master plan; Phase planning; Look-
ahead planning; Weekly planning; Percent Planned Complete (PPC) and reasons
for incomplete.

6. The process starts with the Master Schedule, which is the output of front-end
planning, describing work to be carried out over the entire duration of a project.
It identifies significant milestone dates. Then, The Phase scheduling generates a
detailed schedule covering each project phase such as Engineering, Procurement,
Construction/Installation, and Commissioning. In a collaborative planning setup.
The "phase" or pull schedule employs reverse phase scheduling and identifies
handoffs among the various specialty organizations and assess the sub-
milestones to find the best way to meet the milestones stated in the Master
Schedule. From this, it is possible to develop the Look-ahead planning with a
time frame usually six (6) weeks. At this stage, activities are broken down into
the level of processes/operations, constraints identification, responsibilities
assignment, and the assignments are Made Ready. Finally, we will have the
Commitment planning, which represents the most detailed plan in the system,
showing interdependence between the works of various specialist organizations.
It directly drives the production process. At the end of each plan period,
assignments are reviewed to measure the reliability of planning and the
production system. Analyzing reasons for plan failures and acting on these
causes are used as the basis for learning and continuous improvement.
The method to review and monitoring the planning reliability is Percent Planned
Complete (PPC). The PPC is a measure of workflow and is the result by dividing
the number of near-term "tasks" completed by the total number of "tasks" made
for the plan period. The equation for PPC is as follows:
Numbers of planned activities completed
PPC % = --------------------------------------------------------- X 100
Numbers of planned activities
Data required for PPC calculation are the number of assigned tasks and the
number of completed tasks. These data are coming from project engineers or
supervisors without any additional time and effort. No further monitoring such
as of resource consumption is necessary for this measurement.

7. All of this leads to two very significant observations: The Lean Project
Management fundamentally base its method on open-information-sharing and
genuine cooperation among all project’s stakeholders. As well shown by Nuno Gil
in his article - Developing Cooperative Project Client-Supplier Relationships:
HOW MUCH TO EXPECT FROM RELATIONAL CONTRACTS? [California
Management Review] – “A prerequisite at the core of this strategic approach is
the development of cooperative relationships with the project suppliers. To
enable this, project promoters realized they needed to rethink commercial
practices and started to experiment with “Relational Contracts” - The basic
tenets [https://en.wikipedia.org/wiki/Relational_contract] that are foundational
to relational contracting, including: communication, risk allocation, problem
solving, no-blame culture, joint working, gain and pain sharing, mutual
objectives, performance measurement and continuous improvement.
Thus, as I commented to the very professional article done by Herve Baron – EPC
delays: the universal cause - the question is: Are Project Owner willing to discard
hard-nosed lump-sum forms of contracting for others that nurture cooperative,
and maybe long-term relationships with the preferred project suppliers?
The second observation: To move from theoretical stage to “field” operation, the
Oil & Gas players have to invest a consistent amount of time and money to
revolutionize their organization, they have to convince their management to
embrace this new way of thinking and of course overcome the conflicts that
irresistibly will raise.
Stopping from the insanity of repeating unreliable project-delivery practices, is
crucial if the industry is to boost productivity/efficiency and deliver projects on
time and to budget. So far, in my experience, we do not have the incentives or
structures in place to drive this change. But change is possible. The solutions that
are briefly highlighted here provide a clear route to fixing, most of the time,
strained, if not deteriorated, the relationship between Project Owners and the
Supply Chain and to driving increased profitability/efficiency, across the
Industry.