Modular Construction Conference 2012


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McLachlan Lister provides a range of management consulting and project management services. These are offered either discretely or as an integrated service - you control the depth of our relationship:

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Modular Construction Conference 2012

  1. 1. Adopting Effective Project Controls Strategies Dr. Anamaria Popescu, PE,PSP,PMP McLachlan Lister-Hill International Australia
  2. 2. My Profile• Associate Director-McLL in Brisbane• Project Auditing Services• Project Controls Implementation• Construction Claims Expertise• Forensic Schedule Analysis• Joined Hill International in 2011• Consulting to the Oil and Gas Industry• University of Texas at Austin• Civil Engineering/CEPM Program• PhD in Schedule Analysis• PM at Enron
  3. 3. A Good Indication…. ….that Your Project Controls System was Ineffective!!!
  4. 4. Project Characteristics• Coalbed Methane Natural Gas Drilling Program• Gas Field: 1.9 Trillion Cubic Feet of Gas• 13 Year Period• 1000 Wells• 2+ Billion Investment ($US)• Environmental Sensitive Area• Minimize Environmental Impact• Use Existing Infrastructure
  5. 5. Situation• Project in Feasibility Phase• No Project Controls People• No Cost Control or Schedule Existed• Wanted a Schedule to “Pass Through” Gate Review• Wanted it in Two Weeks• Did Not Have a Software Platform• “Power Point” as the Panacea• Huge Political Pressures for Success
  6. 6. Our Scope…to Develop:• A standard WBS for the project• An Integrated Schedule• Re-Alignment of Cost Estimate with WBS• Risk Allocation/Contingency Management• Earned Value System• The basis for the cost and schedule baseline
  7. 7. Step 1: Work Breakdown Structure Development FIRST THINGS FIRST…..What is a WBS Anyway? • Grouping of Project Elements • Defines the Total Scope of Work • Each Level More Detailed than Previous .
  8. 8. WBS Development Benefits• Scope Capture Check• Promotes Consistency of Cost and Schedule Data• Rollup for Reporting Requirements• Cost Breakdown Structure Framework• Earned Value is Actually Possible! $ $ $
  9. 9. WBS Development: What We Did…• Got a Plotter (A BIG One!)• Became Visio Experts• Had One-on-One Meetings…Lots of Them!• WBS Wallpaper• Captive Audience• Comment Period of One Week• Graffiti Allowed!• Custom Pen Colors!• True Integration Effort• Transparency in SOW• “Light Bulbs” Went Off• Made Changes…Replotted…Rehung• Not Very “Green” but Very Vital
  10. 10. WBS Requirements & Questions for Consideration • Number of levels in the WBS • Define Each Level • Schedule Activities Captured at Level X • Costs Captured at Level X • Numbering Structure: Alpha/Numeric Critical that the Team “Buys-In” and “Owns” the WBS
  11. 11. WBS Structure for Project Level 1 Project Level 2 Delivery Area Level 3 Facility Package Level 4 Facility Type/Rig No. Level 5 Specific Facility/Well Name Level 6 Phase Level 7 Discipline
  12. 12. WBS Structure: Levels 1-4
  13. 13. WBS Structure: Levels 5-6
  14. 14. Step 2a: OBS Development• Definition: The identification of project participants and their hierarchical relationship.• Assigned in P6 Directly
  15. 15. Step 2b: OBS Assignment• Intersection of OBS and WBS Creates:
  16. 16. Step 3: Activity Development Activity Elements Calendar Interface Relation- Points ships Activity Durations Codes (3) WBS No.
  17. 17. Activity Development: What We Did….• Set Up Excel Templates • 3 Durations• Emailed to Team Leads • Import into P6• One Tab per WBS Element • “Live” Logic Ties• Team Brainstorming Sessions • Schedule Projected on• No Dates! Screen
  18. 18. Activity Development: Standardization of Well ActivitiesWell No. 1 18
  19. 19. Step 4: Schedule Integrity Check• Assess through Metrics• Don’t Skip!• CP should not be published• P6 Schedule Report or Fuse
  20. 20. Step 5: Critical Path Review• Plotted Out both CP and NCP• Grouped by Top 10 Float Paths (Top 10 Wells)• Graphically Could See the Critical Path• Took Up Four Walls of Conference Room- “BAG”• Each Team Had a Different Colored Pen• Marked Up and Changed Logic Ties• Had Collaborative Discussions about Sequencing• Made Changes “Live” in P6• Re-plotted Top 3 Paths• Management Accepted “The Answer”• Not Thrilled but Convinced!
  21. 21. Step 5: Critical Path Review• Achievable project completion date set!• Avoided……….
  22. 22. Step 6: Incorporating Risk into the Schedule • Interactive workshop with various disciplines to come up with the risks. • Develop a Risk Register • Risk Matrix- Likelihood of Occurrence vs. Impact • Running a risk analysis on the baseline schedule in Pertmaster • Probability of achieving expected completion date • Schedule Contingency Management-Buffers
  23. 23. Step 6: Incorporating Risk into the Schedule Risk Register Mitigation Strategies
  24. 24. Step 6: Incorporating Risk into the ScheduleLikelihood of Occurrence Risk Assessment Matrix
  25. 25. Step 6: Incorporating Risk into the Schedule
  26. 26. Step 6: Incorporating Risk into the Schedule Forecasted Project Duration with Probability
  27. 27. Step 6: Incorporating Risk into theCost EstimateForecastedProject Total Cost by Probability
  28. 28. Step 6: Cost and Schedule Sensitivity Index Pareto Principle : 80% of Risks Originate from 20% of the Activities
  29. 29. Step 6: Cost and Schedule Sensitivity Index Cost Sensitivity H007 - RR Flagging & Administration 64% D001 - Detailed Engineering 44% H002 - General Conditions 39% H004 - Inflation 38% H006 - CA&I Incidentals 37% H003 - Overhead & Profit 36% H001 - Balance of Scope 25% D002 - Permitting 19%C009 - Electrical Service & Distribution 8% C011 - Membrane Roofing -7%
  30. 30. Step 6: Contingency Management• CP shows only the early date for project completion.• The next step will be to determine the late dates for project completion• The project will have two completion dates: • a finish date without contingency (the early date) • a finish date with contingency (the late date).• Paradigm shift for most companies-usually mange to only one finish date & no contingency 30
  31. 31. Step 6: Contingency Boxes• This step is based on the organizational structure of the project and the company.• The person with authority to distribute a portion of the project float needs to be assigned a contingency box.• These boxes are represented as activities in the schedule-tied in series• The schedule will now have two finish dates: • the early target finish date, preceding the contingency • the late target finish date that succeeds the boxes. 31
  32. 32. Step 6: Contingency Boxes (Continued) + + + = 32
  33. 33. Step 6: Calculate the Contingency• Choose the % of Contingency to Allocate based on: • The corporate culture of the company. • How much risk the leadership team is willing to take. • Risk management plan • Monte Carlo Simulation (PERT) of the baseline schedule using the three durations • Pert Master © • “What-If” Scenarios using all 3 durations • Benchmark Data • “Cutting Edge Technology” vs. “Tried and True” Projects • Length of Project • Phase of Project Calculate contingency duration based on Total Duration of Longest Path x % – From Start Milestone to Early Finish Date of Project 33
  34. 34. Step 6: Percentage Allocation• Distribute the contingency to each box based on the amount of authority the three team leaders have on the project.• Percentage distributed to each box.• DOES NOT HAVE TO BE EQUALLY APPORTIONED.• Formal Float Distribution Process-Float is not “Scattered” throughout 34
  35. 35. Step 6: Percentage Allocation 15% Contingency Total Project Duration=300 Days Contingency:45 Days PM: 60% PGM: 30% PD: 10% “Drop Dead Date” 35
  36. 36. Output: Integrated Baseline Schedule
  37. 37. Output: Overall Program Critical Path DrillingSequence 37
  38. 38. Step 7: Schedule Basis• Baseline AFTER critical path acceptance• Key step that is overlooked• Assumptions/Key decisions recorded• Provides validity to the schedule itself• Provides an understanding of team’s thought process• Allows team members to resist scrutiny/criticism• Basis for change management• Excusable Delay: Conditions Different than Assumptions
  39. 39. Step 8: Integrating Cost and Schedule: EarnedValue
  40. 40. Integrating Cost and Schedule: Earned Value
  41. 41. Value• Standardization of activities• Great Communication Tool: Everyone Spoke the Same Language• Integrated Software Platform: Primavera Enterprise• Schedule allowed for realistic and accurate well count by year• Contractor Payments-Virtually Eliminated Disputes• No management surprises!!!• Benchmarking – Setting standards for other drilling programs• Record actual times and adjusted future projections accordingly• Accuracy increased year by year
  42. 42. Conclusions• Understand what the Client Needs vs.Wants (two very different things in this case)• Don’t expect them to know terminology and benefits…educate them (Project Controls 101 Class)• Hands-On Development of Project Schedule (face-time is key)• Print out items for discussion and hunt people down….no passive emails..if you are an introvert, get over it! (also a six foot long schedule is hard to read on a screen)• Let the teams mark stuff up, nothing is set in stone!!!!• Have many integration meetings…live in a conference room, I did…• Schedule Review Meetings should have strict time management…no more than 1 hour at a time…you will lose people and they never will come back! Respect their time and they will respect yours…..
  43. 43. Conclusions• Have the team explain their scope and process on a “generic” project first• Get them thinking Logic not Dates… they can’t cheat the schedule that way• Set up different report templates to match their needs so they will actually use it….what a concept!• Allow suppliers, engineering firms, etc. to attend the progress meetings and comment on the schedule… don’t worry about the contractual hierarchy• Have a transition plan and implement it before you leave• Momentum is Key….• ….losing it can derail all of your efforts
  44. 44. Questions ?
  45. 45. Contact Information Dr.Anamaria Popescu, PE,PMP,PSP Brisbane Office 2/19 Musgrave Street West End, QLD, 4101 Email: Phone: 61 07 3255 0223 Sydney Office Perth Office Level 1, 1 Hickson Road 189 Colin Place Phone: 61 02 9241 7328 Phone: 61 08 9480 0647