Discussion on the interactions among project changes

1. Construction project
change impacts
Research on the interactions among multiple project changes
ABHISHEK BORPUJARI

2. OUTLINE
• Research goal
• Proposed
Framework
• Case study 1
• Case study 2
• Case study 3
• Discussions
• Conclusions
• Recommendations

3. RESEARCH GOAL
Problem definition
 Productivity loss due to cumulative effect of changes.
 Contractors frequently end up bearing extra costs
 Research suggest interaction among changes is key
 No method to determine and show interactions among
significant changes.
Research objective and focus
 Determine-interactions among significant changes
 Provide a framework to construction companies
Research question
 How can the interactions among significant multiple
changes in construction projects be illustrated?
NO METHOD TO
DETERMINE AND SHOW
THE UNDERSTANDING
CONTRACTORS BEARING
EXTRA COSTS / NO
COMPENSATION FROM
OWNER
PRODUCTIVITY LOSS
DUE TO CUMULATIVE
IMPACT OF CHANGES
RESEARCH FOCUS

4. Research goal
Literature review
New Proposed
framework
Data collection
Case study analysis
and results
Discussions, conclusions
and recommendations
METHODOLOGY

5. Project changes
 “Common result of interventions that often
alter the scope of a project”- (Ibbs, 1994)
 Occurs in three stages of a project; pre-
design; design; construction
 Agreed changes are formalized as change
orders
 Various causes influence the occurrence of
changes – 80 different causes spread out in
9 groups
 Occurrence of changes lead to impacts on
project outcome
 Collectively, the impact from multiple
changes outweigh their individual impacts
Learnings about
project changes
Scientific theories
Proposed framework
Validation and
application
CHANGE Cumulative impact of multiple changes
 Combined impact > individual impacts
 “Unforeseen disruption of productivity
resulting from ‘Synergistic effect’ of a
group of changes”- (Ibbs, 2015)
Synergy
 Positive and negative
 Interaction among the components of a
system
 Three types of synergistic relationships -
 1+1> 2 –Positive Synergistic
relationship
 1+1=2 – Static relationship
 1+1< 2 – Self- destructive relationship
(negative synergy)

6. PROPOSED FRAMEWORK
Proposed framework based on?
 Negative synergy
 Self destructive relationship of negative Synergistic theory
 Each individual part consumes more resource than it generates
 Less productive output (1+1< 2)
 Two types of interactions-
 Direct – Causal relationship between parts of a system
 Indirect – relation of a part with the surrounding environment
Steps
• Identify the significant changes
• Determine and demonstrate the effects of each change (Figure
2)
• Isolate the common and the causal effects (Figure 3)
• Illustrate the common and the causal effects (figure 4)
• Determine interactions from the illustration
1
2
3PROPOSED CHANGE
INTERACTION MODEL
Change combination Effects(common and causal)
Change X and Y Causal effect
Change Y and Z Common effect

7. SELECTION
OF PROJECTS
GATHERING
DATA
EXPERT
INTERVIEWS
APPLICATION
OF
PROCEDURE
RESULTS
METHODOLOGY TO APPLY THE PROCEDURE IN PROJECTS
• Three construction projects are selected
• The projects are based on constructions in the oil and gas industry,
The Netherlands
• Entire lists of change orders are obtained from the three projects
• Gannt charts or important figures that support the case studies
• Other details regarding construction, completion of project,
disciplines, and costs are also obtained
• Interviews are conducted with the project managers of the three
projects
• This step involves providing the managers with the list of change
orders (narrowed down) to gather data regarding the significant
changes
All the steps are applied one by one to finally obtain a change
interaction diagram to determine the interactions among the
changes.
• Discussion on the understanding and learnings from the cases
• Based on the results, a conclusion is made on the validity of
the procedure

8. CASE STUDY 1
 Details
o Construction of a new gas treatment installation at the
Oil and gas industry, The Netherlands.
o Estimate cost- € 9.4 million
o Value of scope change- € 2.532 million
o Final cost- € 11.4 million (9.4 +2.5- 2)
o Loss- € 532,000
o Number of change orders- 317
o Number of significant issues and changes- 3
o Total delay- 7 weeks
MAJOR CHANGE (% IMPACT ON FINAL COST) MAIN CAUSE
§ CHANGE 1- New pipe spec (0.6 %)
§ CHANGE 2- Insufficient duplex materials (0.7 %)
§ CHANGE 3- Cabinet cable supply delay (2.32 %)
Changes in plans and specifications by owner
Ambiguities and errors in designs and specification
Ambiguities and errors in designs and specifications
STEP 2: Determine and demonstrate the effects of each significant change
STEP 1: Identify the significant changes
CHANGE 1
CHANGE 2
CHANGE 3
Ambiguities and errors in design and specifications
Changes in plans and specifications by owner

9. STEP 3: Isolate the common and the causal effects
STEP 4: Illustrate the common and the causal effects
STEP 5: Determine interactions from the illustration
OBSERVATIONS
 The significant changes show indirect
interaction at four points
 Cannot determine resulting synergy,
hence, resulting impacts from the
points of interactions
 More financial data is required

10. CASE STUDY 2
 Details
o Construction of SDA (solvent DeAsphalter)-WS3
(workflow 3) in the oil and gas industry, the
Netherlands
o No estimate cost (rolling project)
o Value of scope change- € 1.4 million
o Final cost- € 9 million
o loss- no record
o Number of change orders- 240
o Number of significant issues and changes- 3
o Change of scope and schedule by owner- dominant
cause
o Total delay- 6 weeks
MAJOR CHANGE (% IMPACT ON FINAL COST) MAIN CAUSE
§ CHANGE 1- Work front gap (0.6 %)
§ CHANGE 2- Staff changes (1.42 %)
§ CHANGE 3- Extra supervisor (0.5 %)
Lack of strategic planning by contractor
Change of project scope and schedule by owner
Change of project scope and schedule by owner
CHANGE 1
CHANGES 2
AND 3
STEP 1: Identify the significant changes
STEP 2: Determine and demonstrate the effects of each significant change
Manage

11. STEP 3: Isolate the common and the causal effects
STEP 4: Illustrate the common and the causal effects
STEP 5: Determine interactions from the illustration
OBSERVATIONS
 The significant changes show direct
interaction at two points
 The significant changes show indirect
interaction at 3 points
 Cannot determine resulting synergy,
hence, resulting impacts from the
points of interactions as more time and
financial data is required

12. CASE STUDY 3
 Details
o Construction of a new tank terminal in the Oil and gas
industry, the Netherlands.
o Estimate cost- €11.7 million
o Value of scope change- € 1.42 million
o Final cost- € 13.6 million
o Loss- € 430,000
o Number of change orders- 229
o Number of significant issues and changes- 6
o Ambiguities and errors in design -dominant cause
o Total delay- 10 weeks
MAJOR CHANGE (% IMPACT ON FINAL COST) MAIN CAUSE
§ CHANGE 1- TM-RUBIS-CWI-0002 Electrical cable list(1.4 %)
§ CHANGE 2- TM-RUBIS-CWI-0002 Instrument cable list (0.5 %)
§ CHANGE 3- Extra supervisor (0.5 %)
§ CHANGE 4- Add isometrics Vapor in TLS and TTLS and Tie-ins (0.6 %)
§ CHANGE 5- Adjustments Vapor Return piping (0.45 %)
§ CHANGE 6- Expiration costs WTK (1.27 %)
Ambiguities and errors in designs and specification
Ambiguities and errors in designs and specification
Change of project scope and schedule by owner
Ambiguities and errors in designs and specification
Ambiguities and errors in designs and specification
Ambiguities and errors in designs and specification
CHANGES 1, 2
AND 3
CHANGES 4, 5
AND 6
STEP 1: Identify the significant changes
STEP 2: Determine and demonstrate the effects of each significant change
Extension of time RUBIS

13. STEP 3: Isolate the common and the causal effects
STEP 4: Illustrate the common and the causal effects
STEP 5: Determine interactions from the illustration
OBSERVATIONS
 The significant changes show direct
interaction at two points and indirect
at two.
 NO determination of impacts from the
points of interactions

14.  Three project managers interviewed
 ”When multiple changes occur in the same time frame
(or close to one another), there is sharing of the
available resources, tools or equipment. This is
regardless of any similarity between the changes and is
due to having a common project management team.
Hence, you could say this is a form of an interaction “
 General understanding of the problem
 Changes interact first and then there is sharing of
resources
 Resource demands at points of interactions
 1+1+ ?=3
 Experience 1+1= 3
 Number of change increases, probability of
interactions increases
 Number of changes cannot be predicted up front
 Productivity= output /input
 Project input >> project output
 Control measures
• Adaptability
• Communication
• Trust
DISCUSSIONS
TWO CHANGES HAVING COMMON EFFECTS
RESOURCE DEMAND

15. Objective – To determine and show interactions among changes
Research deliverables
• Framework to construction companies
• Reasonable understanding regarding cumulative change impacts
Cumulative impact theory
o Self destructive relationship of interactions
o Leads to a new procedure
o Steps in the procedure- framework
Applied in three projects
The three projects show interaction
Resourced demand at points of interactions
Discussion on control measures
Research question answered
Limitations –
o Do not show resulting synergy (only interactions)
o Consideration of only the contracting side
o Interactions among only significant changes
CONCLUSIONS

16. • Use the steps of the procedure to determine interactions
• Points of interactions show the resource demand from the changes
• Serve as an understanding for the extra costs resulting from the changes
• Show clients points of extra resource demand
• Can be used during construction to determine points of resource demand to balance
requirements
• Use management techniques
• Future research on the amount of resource demand per interaction
• Future research on developing a software version
RECOMMENDATIONS