2011 has been another tough year for the Engineering & Construction industry and the challenges ahead for the industry and its clients remain daunting. Project challenges continue to grow, competitive pressures mount and government budgets remain constrained. The Engineering & Construction industry is responding, innovating better solutions, generally incremental in nature. As a new year approaches, it is a good time to reflect on how we can do better by causing breakthrough or systemic innovation to occur.
This short Viewpoint piece has just appeared in Engineering News Record and is intended to cause the key players in the E&C industry to think about whether our own industry\'s model is a barrier to systemic innovation. Over the years you have all been most generous in your feedback, thoughts and challenges to the many articles I have written. In many ways this may be the most important. I value your input and encourage you to share your thoughts and suggestions with me.
“Reprinted courtesy of Engineering News-Record, copyright The McGraw Hill Companies, Inc., December 19, 2011, All rights reserved.”
Large scale construction projects suffer from cost and time overruns that are typically a symptom of productivity problems and directly affect overall industry profitability. As a result, methodologies have been developed to reduce the risk of overruns and improve project outcomes. A number of these methods are based upon Lean production principles that focus on identifying value, eliminating waste and creating a smooth flow of materials, information and work. The application of Lean to construction is based upon treating the construction site as a temporary production line and is referred to as Lean Construction.
Agile methods have been found to improve the reliability of project delivery in complex environments, by decomposing the scope into small manageable parts, then completing these parts in order of greatest value. Although Agile and Lean methods share many common values and principles, Agile methods have not been properly investigated as a means of reducing the overruns associated with large scale construction projects.
Large scale construction projects suffer from cost and time overruns that are typically a symptom of productivity problems and directly affect overall industry profitability. As a result, methodologies have been developed to reduce the risk of overruns and improve project outcomes. A number of these methods are based upon Lean production principles that focus on identifying value, eliminating waste and creating a smooth flow of materials, information and work. The application of Lean to construction is based upon treating the construction site as a temporary production line and is referred to as Lean Construction.
Agile methods have been found to improve the reliability of project delivery in complex environments, by decomposing the scope into small manageable parts, then completing these parts in order of greatest value. Although Agile and Lean methods share many common values and principles, Agile methods have not been properly investigated as a means of reducing the overruns associated with large scale construction projects.
Leading construction industry to lean agile (le agile) project managementIram hasan
Paper; Leading Construction Industry to Lean-Agile (LeAgile) Project Management
Agility Conference 2015
PMI Global Congress North America 2015
Orlando, Florida (11-13 Oct 2015)
CONNECT, the magazine for SMEs seeking innovation through the digital sciences, and get access to ICST news, updates on the state of research and applied technology for industry, portraits of partners who have participated in INRIA research teams working with innovative SMEs, special reports and other features. In the current issue: Is cloud computing where it's at for SMEs? Digital sciences for domestic health.
Manufacturing Extension Partnership Centers collaborate with universities for outreach to manufacturers, service delivery, and getting new technology into companies. As MEP Centers move aggressively to support companies in their efforts to innovate their products and processes, to sell to new customers and enter new markets, these partnerships are more important than ever. This session will describe several of these “Next Generation Strategies” and new initiatives for MEP and how MEP centers are working with universities to implement them. They present opportunities for university engagement in economic development and job creation, and deeper partnerships between MEP centers and universities.
Industry - Evolution and migration - Incremental and Iterative Reengineering ...ICSM 2011
Paper: Incremental and Iterative Reengineering towards Software Product Line: An Industrial Case Study
Authors: Gang Zhang, Liwei Shen, Xin Peng, Zhenchang Xing and Wenyun Zhao
Session: Industry Track Session 3: Evolution and migration
Guiding companies and organisations through the strategic management of technology within tough economic times whilst establishing a sound relationship between the business and IT.
Sources of innovations have considerably changed in the past. How can policy makers react? What are the key desing features of new innovation support schemes. Based on the so called ANIS approach, regional innovation systems can be analysed and appropriate innovation support schemes developed.
Leading construction industry to lean agile (le agile) project managementIram hasan
Paper; Leading Construction Industry to Lean-Agile (LeAgile) Project Management
Agility Conference 2015
PMI Global Congress North America 2015
Orlando, Florida (11-13 Oct 2015)
CONNECT, the magazine for SMEs seeking innovation through the digital sciences, and get access to ICST news, updates on the state of research and applied technology for industry, portraits of partners who have participated in INRIA research teams working with innovative SMEs, special reports and other features. In the current issue: Is cloud computing where it's at for SMEs? Digital sciences for domestic health.
Manufacturing Extension Partnership Centers collaborate with universities for outreach to manufacturers, service delivery, and getting new technology into companies. As MEP Centers move aggressively to support companies in their efforts to innovate their products and processes, to sell to new customers and enter new markets, these partnerships are more important than ever. This session will describe several of these “Next Generation Strategies” and new initiatives for MEP and how MEP centers are working with universities to implement them. They present opportunities for university engagement in economic development and job creation, and deeper partnerships between MEP centers and universities.
Industry - Evolution and migration - Incremental and Iterative Reengineering ...ICSM 2011
Paper: Incremental and Iterative Reengineering towards Software Product Line: An Industrial Case Study
Authors: Gang Zhang, Liwei Shen, Xin Peng, Zhenchang Xing and Wenyun Zhao
Session: Industry Track Session 3: Evolution and migration
Guiding companies and organisations through the strategic management of technology within tough economic times whilst establishing a sound relationship between the business and IT.
Sources of innovations have considerably changed in the past. How can policy makers react? What are the key desing features of new innovation support schemes. Based on the so called ANIS approach, regional innovation systems can be analysed and appropriate innovation support schemes developed.
Find out why the ability to operate effectively in business networks, be they coordinated or collaborative, is critical to sustaining competitive advantage in a commoditizing global economy. This white paper provides insight into the trend of business network transformation from top thought leaders and SAP executives.
Introductory paper on shifts in construction technology that are leading to significant gains in productivity, supply chain management, materials procurement and project execution
The overall evolution of the Construction industry is referred to as "ConTech"
Discute as facilidades que uma ferramenta como portal corporativo pode oferecer a uma organização, apresenta os critérios de avaliação, infra-estrutura de tecnologia de informação, e o posicionamento, visão e impacto do portal na corporação.
www.terraforum.com.br
Globalization intensified competition in most industries. This came at a time when firms competing in mature markets were experiencing increased difficulty to grow revenues in their home markets. As a result, firms were forced to focus on cost reduction as a means to increase shareholder value. Firms also felt an increased dependence on suppliers for value creation.
Bill Stankiewicz Copy Of Cvcr Summer 2010 NewsletterBillStankiewicz
Bill was also on the Board of Directors for the St.Vincent DePaul Foodbank in Roseville California helping with the fund raising and meals to the poor program. While based in Northern California he was successful in fund raising programs for the Crusade of Mercy and helped Father Dan Madigan at the Sacramento Food Bank also. For 2008, Bill is a member of the Board for WORKTEC on also an Advisory Board Member for Boys and Girls Club for Metro Atlanta-Clayton County Chapter. See www.worktec.biz or www.bgcma.org . Bill is also on the Board of Directors for the Southeastern Warehouse Association & represents Georgia for 2010-2012.
Bill Stankiewicz
Vice President and General Manager
Shippers Warehouse
Buildings are the largest contributor to
global carbon emissions, accounting
for about 40 percent of the world’s
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Revolutionary improvements in project execution and delivery are requiredBob Prieto
The challenges the engineering and construction industry faces are well recognized. They range from unacceptable levels of project failure to productivity levels that are largely unchanged over the last several decades. Solutions to these and other challenges must be comprehensive and far reaching. This slideshare addresses one potential solution, establishment of industrywide knowledge sharing frameworks
Cloud computing and Innovation in ManufacturingInfosys
The Cloud has the power to change the way products are made, by accelerating the development lifecycle, enabling seamless collaboration and creating a smooth and agile supply chain. This paper discusses how Cloud computing - representing a paradigm shift for manufacturers who strive for a smarter IT organization and business processes - provides an answer.
Efficient Infrastructure Maintenance at Universities - Rick Craig & Robert Mo...marcus evans Network
Rick Craig and Robert Moore of AKIMA Facilities Management, LLC, a solution provider at the marcus evans University CXO Summit 2013, on why outsourcing may be the best solution for efficient university infrastructure maintenance and repair work.
Interview with: Rick Craig, President, & Robert Moore, Senior Director of Operations, AKIMA Facilities Management, LLC
How can you open up your enterprise to the vast array of consumer devices available without opening it up to risk?
The recent Olympic and Paralympic Games were a perfect microcosm for a BYOD, or ‘Bring-Your-Own-Device’ strategy. The advantages of such a policy for your enterprise are clear: continuous renewal of technology, increased personal productivity and less reliance on support desk functions, to name just a few.
http://bit.ly/M9emb7
Application of system life cycle processes to large complex engineering and c...Bob Prieto
The complexity of megaprojects and programs continues to grow and with it the challenges of delivering ever larger and more complex programs. These large complex programs open the door to many new opportunities but also to increased challenges in delivery and sustainment throughout their lifecycle. Prior articles have described the open nature of this large complex program system and compared its attributes to many we find in the world of relativistic physics. These challenges must be addressed recognizing that they arise from a combination of physical, fiscal and human attributes in a realm of complexity which challenges the very foundations of project management theory.
This paper looks at hard systems aspects as contrasted with the soft system aspects more characteristic of an open system. Its purpose is to adapt a systems engineering framework associated with the hard closed elements of these large complex project systems without losing site of the overall open systems nature of large complex programs.
The systems life cycle process codified in ISO 15288 lends itself to application in large complex engineering and construction programs.
Engineering and construction project startupBob Prieto
This paper looks at engineering and construction project startup for three different project execution approaches. While specific to this industry, project professionals in other industries may find it is a good analog for their own efforts.
The paper underscores that:
• Large complex projects require strong foundations
• A day at the beginning of a project is just as valuable as a day at the end
• Strong project foundations are built during project startup
• Vertical startup is enabled by the use of a dedicated startup team
• Project startup should consider lessons learned on other projects
This paper addresses project startup for three general types of contracts:
• Pure design or engineering contracts typically performed for the Owner
• Design/build contracts performed for the Owner but recognizes that engineering may be undertaken by an engineering subcontractor within the D/B team
• Pure construction contract
I have previously written about the transition that I believe is necessary in project management thinking related to large complex projects. In those writing I describe the shift as analogous to the shift from Newtonian to relativistic physics. Subsequently, I have compared the nature of large complex programs to open systems. Reflecting back, classical project management theory was very much based on closed systems thinking and early applications of systems thinking to projects and engineering was also very much based on closed systems thinking.
This is analogous to the closed systems of Newton and Einstein’s correction of his original General Theory of Relativity through the introduction of the cosmological constant to close a system which he believed behaved mechanistically and not expanding. In hindsight the cosmological constant was not necessary but does suggest some properties of the universe and became relevant in explaining an accelerating expansion of the universe. Subsequently, there was at least one special case where the deterministic nature of a closed system broke down when considering General Relativity suggesting at least some open nature to this system.
Systems nature of large complex projectsBob Prieto
This paper explores the system characteristics and behaviors of large engineering and construction programs with a particular focus on those that would be characterized as complex. It recognizes the interrelated and interacting elements of both programs and projects as they strive to form a complex whole. Large complex programs and projects are not well bounded as classical project management theory as espoused by Taylor, Gantt and Fayol would have us believe but rather behave in both independent and interconnected ways in a dynamic systems environment.
Large complex programs demonstrate the evolutionary nature of all complex systems; uncertainty; and emergence that comes with human actions and interactions. They struggle from insufficient situational awareness, treating the program to be more well-bounded than reality would suggest and using simplified models to understand the complexity inherent in execution. Best practices from project management literature were typically not derived from such environments and, worse, have fallen short on other large complex programs and projects.
In the engineering and construction industry governance needs and requirements exist at
multiple levels. These include:
• Governmental and industry level governance (laws, regulations, codes, standards)
• Enterprise level (encompassing social (stakeholder), political, economic (market,
shareholder, financial institutions), cultural (corporate and national/local),
technological)
• Portfolio and programs
• Project
This paper focuses on the portfolio and program level, collectively referred to as program in
this paper.
Strengthen outcome based capital project deliveryBob Prieto
Over the course of my career I have looked at a number of underperforming mega-projects. In every instance there was a common element of underperformance, the lack of clarity around the strategic business outcomes to be accomplished. Conversely, some of the best performing projects exhibited high clarity of recognized and shared outcomes.
This paper looks at the imperative to continue the shift to outcomes based contracts versus more traditional output based contracting forms. This shift is discussed from the perspective of the engineering and construction industry in the United States but draws upon the experience in other countries and other sectors.
Today’s infrastructure and facilities are “smart”. At least that is our objective as we seek to enhance lifecycle performance and capital efficiency. These “smart” facilities transcend any given sector and bring new challenges to the engineering and construction industry. In some ways our more traditional projects are today outcomes focused or capabilities delivering IT projects with bits of concrete and steel wrapped around them!
This “smart” focus is not limited to just a technology and systems dimension but goes further, demanding an increased and increasing environmental, social and governance (ESG) focus as well. Together “smart” and ESG create a greatly expanded set of interfaces for program and project managers to manage.
Rework in Engineering & Construction ProjectsBob Prieto
This paper is focused on engineering and construction projects which will experience increased emphasis as nations increase their focus on economic stimulus and climate change. It deals narrowly with the inevitable rework these projects often experience and which contributes to the cost and schedule growth we all too often witness. The objective of this paper is to:
• Categorize rework factors into four broad categories – project, human, organizational and complexity
• Identify rework impacts not just on cost and schedule but importantly morale and trust.
• Recognize that strategies exist to reduce the potential for required rework
• Suggest four dozen control points.
In this paper I will attempt to:
• Outline some of the systems of systems challenges that we will likely face.
• Discuss the emergent nature of both the challenges as well as the potential resultant outcomes.
• Draw attention to some of the driving forces acting both on this system of systems as well as the national and sectoral programs that may emerge to respond to this challenge.
• Highlight some of the feedback loops which may exist or emerge from both apparent and hidden coupling.
• Discuss system of system risks, program risks and where our perceptions and appetite for such risks may change over time.
• Outline some particular challenges for program managers as they are engaged in addressing this challenge.
A growing world requires improved and expanded infrastructure. Juxtapose that with the need for massive public investment driven by pandemic created economic weakness and the prospects for significant investment in infrastructure is improved, but as history has taught us not necessarily assured.
We have been through other infrastructure stimulus programs focused on so-called shovel ready projects and have been disappointed. But whether we define them as “shovel ready” or otherwise we need infrastructure projects, especially the largest of them, to be successful.
In this paper we will look at common reasons large scale infrastructure projects fail and importantly suggest some strategies and tactics to improve their success rate.
This paper builds on my beliefs that the prevailing theory of project management has failed us with respect to large complex projects. I have written extensively on this including highlighting that the assumptions of Gantt and Fayol fall short at scale and complexity. In this paper I examine the successes that underpin modern project management theory and seek to understand how the resulting approach to project management has failed to deliver comparable successes with regularity. As I explored these questions, I sought to understand the unique characteristics of the Atlas and Polaris missile programs; the subsequent institutionalization of the perceived success factors; and importantly, did perception and reality align. In other words, have we made an incomplete set of assumptions and institutionalized them?
Impact of correlation on risks in programs and projects Bob Prieto
One of the most under considered elements of cost and schedule risk is the correlation that exists within various WBS elements of a project or across projects comprising a program. Failure to adequately consider correlation between various activities and projects compounds the impact of other factors present in large complex projects.
This paper looks at the special case of decision making under uncertainty. The relationship between uncertainty and complexity is explored as is their joint relationship with large complex projects. The importance of getting these projects well founded from an ability to manage uncertainty is discussed and the aspects of these strong foundations is described
Post Dorian Engineering & Construction in the BahamasBob Prieto
As the task of recovery and rebuilding in the Bahamas post hurricane Dorian begins, it is important to understand that it cannot be business as usual. The increasing frequency and severity of hurricanes, driven by global climate change, cannot be ignored. Building codes will have to be further strengthened and development in coastal areas rethought.
Debating project decisions in an ai enabled environmentBob Prieto
I had the opportunity to watch the first debate between AI powered IBM Debater and a recognized human expert debater. I will not spoil the outcome for those who have not yet watched the debate but I will underscore one key aspect - all learned more about both sides of the position as a result of the debate.
We have seen a construct for the management of large
complex projects laid out in the earlier chapters. In these chapters we will simply lay out some of the main concepts and
considerations for a practitioner. Each of these can be more
extensively developed.
In the world of physics, classical theory breaks down at
scale. Conventional project management theory similarly
seems to break down at scale. The theoretical construct I
have been building to in this book is very much focused on this
project realm where scale and complexity rule.
In developing this theoretical construct I have essentially
considered three simple hypotheses, the first of which is:
Large complex projects are not well served by
conventional project management theory and
practice.
This hypothesis was demonstrated at the outset of this
book and the differential behavior between large and
traditionally scaled projects has been previously noted.
The second hypothesis considered relates to the Theory of
Management as applied to the management of projects. In
simplest terms this hypothesis says:
- The Theory of Project Management does not draw
fully on the richness of the Theory of Management
This hypothesis is demonstrated as we explored the
extensions of the Theory of Management to address chaos and
complexity and the more limited extensions of project
management theory.
The third and final hypothesis we considered focused on
the Theory of Projects, positing:
Large complex projects have significantly different
attributes than the more traditional projects which
comprise the basis for classical project management
theory
This chapter summarizes various aspects of large
projects and provides a foundation to consider what a new
Theory of Project Management for large complex projects may
look like.
In this chapter we will look at a few of the project attributes
that we observe in large complex projects and suggest they
may serve as a basis for a neo-classical Theory of Large
Complex Projects.
Theory of Management of Large Complex Projects - Chapter 7Bob Prieto
The world of large complex projects is challenging to say the least with a majority of these projects significantly under performing. It is this weak performance regime that underpins the key premise of "Theory of Management of Large Complex Projects" – project management theory as it currently exists and is applied to large complex projects falls short, significantly short, of what these projects require.
I have decided to serialize this book for the benefit of those interested in better understanding and improving project performance. If you are interested in purchasing a copy of the 400 page paperback you may click on http://www.lulu.com/us/en/shop/bob-prieto/theory-of-management-of-large-complex-projects/paperback/product-22342232.html
Theory of Management of Large Complex Projects - Chapter 7
Fostering Systemic Innovation
1. Viewpoint Fostering Systemic Innovation By Robert Prieto
where a wide variety of project
E&C Needs a New teams come together, driven by
owner preference to preserve the
Business Model
industrial era’s serial specialization
model or by a sole focus on first
costs.
Rigid trade or corporate struc-
T
he life-cycle costs of the facilities we design and build are under pres- tures, together with limited flexibil-
sure as our clients face more global competition, key resources— ity in redistributing work across the
such as skilled labor, water, energy and materials—grow scarce and project team, also act to limit op-
portunities for systemic innovation
government support dwindles. To address such challenges, engineering
and real productivity improvement.
and construction participants must step outside our day-to-day frame of While we will continue to achieve
reference and question whether process in a coordinated fashion.” meaningful incremental improve-
our current paradigm allows us It differs from so-called incremen- ment, does our model essentially
to develop needed solutions. tal innovation, which can be accom- preclude opportunity for broad and
Is our business model broken? plished within the context of a meaningful systemic improvement?
Engineering and construction single company or project.
(E&C) is one of the world’s largest In fact, we have seen examples Potentials, Not Deliverables
industry sectors. It accounts for 9% of systemic innovation in engineer- Innovation that is systemic and sus-
of U.S. gross domestic product and ing and construction: integrated tainable needs patience. It is about
more than 11% globally. Today’s supply-chain management, prefab- potentials, not deliverables. It will
projects are larger and rication of building systems, build- involve failure, likely multiple fail-
more complex than ever, ing information modeling, public- ures, which are a hallmark of a true
yet, compared to other sec- private partnerships and breakthrough and systemic change.
tors, construction produc- modularization, to name just a few The need for innovation should
tivity has lagged since 1970. that already have delivered huge cause us to reconsider how we con-
Cost overruns, unantici- benefits to firms and their clients. duct our research and rethink how
pated risks and schedule Innovation is critical to the re- products and applications are de-
PRIETO
slippages are still too com- newal of industries, but productiv- veloped. Can the current E&C
mon. Why is this, and what can be ity gains are greatest when that in- model support this transformation
done to change it? novation is systemic. E&C is on par or is it a barrier?
with manufacturing in incremental Engineering and construction is
Systemic Innovation innovation—for example, minor an important industry sector—in
In many ways, the current industry changes in product—but it lags in many ways, it is the foundation of
model was established after World systemic innovation when multiple the global economy. We must reig-
War II. Its structure is industrial in firms must change their processes. nite the creative spirit that defined
nature and based on the “serial spe- Simply put, engineering and the sector’s former master builders.
cialization” that existed in manufac- construction has an innovation Where will that leadership come
turing at that time. deficit. We continue to harvest from? This is a question to an-
But the century we’re now in is largely from past efforts and to sow swer—and soon.
not the same as the last one. The very few new seeds. Robert Prieto is a senior vice presi-
experiences of other industry sec- Key traits of industries strong in dent of Fluor Corp., Irving, Texas,
tors have shown that significant systemic innovation include rela- responsible for strategy in its indus-
productivity gains are linked to in- tional stability, which is a tendency trial and infrastructure group. He
dustry models that facilitate “sys- to use a small number of firms per focuses on development and delivery
temic” innovation. specialty; networked corporate in- of large, complex global projects and
Construction researchers John terests; boundaries that facilitate can be reached at Bob.Prieto@fluor.
E. Taylor and Raymond Levitt de- redistribution of work; and strong com or at 609-919-6376.
fine systemic innovation as that network-level agents for change.
If you have an idea for a column, please
form of innovation requiring “mul- These are not the hallmarks of contact Viewpoint editor Richard Korman
tiple specialist firms to change their engineering and construction, at richard_korman@mcgraw-hill.com
76 ENR December 19, 2011 enr.com