AACEI Houston Jan 2008

8/12/2019 AACEI Houston Jan 2008

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Presentation to:

AACEI Houston Gulf Coast Section

Oil and Gas

Benchmark ing

Construction Industry Institute (CII)

The University of Texas at Austin

January 15, 2008

Stephen P. Mulva, Ph.D.


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Outline

CII and its Benchmarking Program

CII Benchmarking Database

Uses for Benchmarking

Metrics

Downstream Oil and Gas

ProductivityAnalysis and Reporting

Questions


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Construction Industry Institute

A consortium of leading owners,

contractors, suppliers, and academia

working to improve the constructed project

and the capital facility delivery process.


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CII Mission

CII StrategicPlan

January 2005

Add value for members by enhancing thebusiness effectivenessand sustainabilityof the capital facility life cycle through CII

research, related initiatives, and industryalliances.

Expand the global competitive advantagerealized through active involvement andeffective use of research findings,including CII Best Practices.


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Owner Members3M

Abbott

The AES Corporation

Air Products and Chemicals

Alcoa

Amgen

Anheuser-Busch

Aramco Services

BHP Billiton

Biogen Idec

BP America

Cargill

Chevron

CITGO Petroleum

Codelco-Chile

ConocoPhillips

Dow Chemical

DuPont

Eastman Chemical

Eli Lilly and Company

ExxonMobil

General Motors

GlaxoSmithKline

Intel

International Paper

Kaiser Permanente

Kraft Foods

Marathon Oil

NASA

NAVFAC

NOVA Chemicals

Ontario Power Generation

Petrobras

Praxair

Procter & Gamble

Progress Energy

Rohm and Haas

Sasol Technology

Shell

Smithsonian Institution

Solutia

Southern Company

Sunoco

TVA

U.S. Architect of the Capitol

U.S. Army Corps of Engrs.

NIST

U.S. Dept. of Energy

U.S. Dept. of Health &Human Services

U.S. Dept. of State

U.S. General Svcs. Admin.

U.S. Steel

Weyerhaeuer


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OrderChangeApprovedCostProjectPredictedInitial

CostProjectTotalActualFactorBudget

88%

90%

92%

94%

96%

0 5 10 15 20 25

Years of CII Membership (3 Year Moving Average)

BudgetFa

ctor

1.1%

10 Years

Owner Members


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ChangesApprovedDurationProjectPredictedInitial

DurationProjectTotalActualFactorSchedule

90%

95%

100%

105%

110%

115%

0 5 10 15 20 25


ScheduleF

actor

7.0%

10 Years

Owner Members


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Contractor MembersABB Lummus Global

Adolfson & Peterson Constr.

Aker Kvaerner

Alstom Power

AMEC

Atkins Faithful & Gould

Autodesk

AZCO

Baker Concrete Construction

BE&K

Bechtel Group

Black & Veatch

Bowen Engineering

Burns & McDonnell

CB&I

CCC Group

CDI Engineering Solutions

CH2M HILL

CSA Group

Day & Zimmermann

Dick Corporation

Dresser-Rand

Emerson Process Mgmt.

Fluor

Foster Wheeler USA

Fru-Con Construction

Grinaker-LTA

GS Engrg. & Construction

Hargrove and Associates

Harper Industries

Hatch

Hill International

Hilti

Hyundai Engrg. & Constr.

J. Ray McDermott

Jacobs

JMJ Associates

KBR

Kiewit Construction Group

M. A. Mortenson

Mustang Engineering

Nielsen-Wurster Group

Parsons

Pathfinder

Perot Systems

Primavera Systems

R. J. Mycka

S&B Engrs. & Constructors

Shaw Group

Siemens Power Generation

Skire

SNC-Lavalin

Technip

URS Corporation

Victaulic

Walbridge Aldinger

WorleyParsons

Yates Construction

Zachry Construction

Zurich


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Contractor Members

90%

95%

100%

105%

0 5 10 15 20 25


BudgetFa

ctor

3.9%

10 Years


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Contractor Members

90%

95%

100%

105%

110%

0 5 10 15 20 25


ScheduleF

actor

5.3%

10 Years


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Five Elements of Project Success Work and Work Process

Organizational Engineering

Leadership and Governance

Communication and Information Flow Culture and Environment (Macro, Micro)

Lack Material, Information, Equipment, Labor?

Results in Poor Productivity (Metrics)

Results in Poor Project Performance (Metrics)

Need for Reliable Metrics

Point of Departure


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CII Benchmarking & Metrics Overview

Industry Leaders Choose CII Benchmarking

Because it Leads to Success

CII Benchmarking is a user

friendly, resource efficient,

statistically credible

benchmarking system that

provides quantitative data

essential for the support of

cost/benefit analyses. ...


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Enhance Business Effectiveness

Highlight Problems and RootCauses

Establish ImprovementGoals

Implement CII Best Practices(BP)

Realize Up to: 22% Schedule Reduction

16% Cost Savings Continuously Improve

Benchmarking

ImplementBP

Measure

Plan and Eduction

Start

Continuous

Improvement

What Gets Measured Gets Improved:

Benchmark with CII and Get Results


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Project KeyReports

Industry Reports24/7Internet

Data Entry

CII Benchmarking Products

Enable Best in Class Performance

Identify Industry Trends and Drivers


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BM&M Committee

Gibson, Jim (Co-Chair)Alstom PowerHelland, Harold (Co-Chair)Abbott

Allmen, Carol - General Motors

Caggiano, JohnU.S. Corps of Engineers

Chapman, BobNIST

Curbello, ChrisCB&I

Davis, ShariMustang Engineering

Dove, RalphCH2M HILL

Gokey, MarkBechtel

Gordon, ScottShell Oil Company

Green, CharlieAramco Services

Herrington, BobJacobsHile, DaveBlack & Veatch

Kass, HowardNASA

Neale, DavidFluorNielsen, MikeMerck

Orellana, RobertoProcter & Gamble

Perkins, DavidRohm and Haas

Pitcher, JonEli Lilly

Scott, DannyBE&K

Slaughter, JimmyS&B Engineers andConstructors

Warnock, SteveWashington Group

Woldy, PaulChevron

Mulva, Stephen (Ex-Officio)CIIDai, Jiukun (Ex-Officio)CII

DeGezelle, Deborah (Ex-Officio)CII


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CII Benchmarking

BenchmarkingAssociate

Project Team

Project Team

Project Team

Project Team

AccountManager

AssociateDirector

SystemsAnalyst

ResearchEngineer


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Small or Large?

Which Questionnaire?

TIC $100K-$5M

Duration 14 mo.

Site Wk-Hrs 100K

Full-time PM resources not required

Small ProjectQuestionnaire

TIC $5M

Duration 14 mo.

Site Wk-Hrs 100K

Full-time PM resourcesrequired

Large ProjectQuestionnaire


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Large Project QuestionnaireGeneral

General Info Project Scope Owner PMT % Union Site Construction Workforce

PerformanceBudgeted and Actual Project Costs by Function Planned & Actual Project Schedule

Others

Achieving Facility Capacity Project Outcomes

Work-Hours and Accident Data Project Impact Factors

PracticesFront End Planning Alignment during FEP Partnering

Team Building Project Delivery & Contract Strategy Constructability

Project Risk Assessment Change Management Zero Accident Techniques

Benchmarking Dispute Resolution Planning for Startup

Engineering Productivity (Optional)Eng. Description Concrete Structural Steel Instrumentation

Piping Electrical Equipment Direct Hire / Contract / Off-Shore

Construction Productivity (Optional)

Concrete Structural Steel Electrical Piping

Instrumentation Equipment Insulation Scaffolding


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Large Project

Supplements *

Targeted Industry Metrics

Pharma Bulk Mfg.

Pharma Secondary Mfg.

Pharma Laboratory

PharmaceuticalQuestionnaire

Project and ProcessMetrics

Sulfur Recovery Units

Coker Units

Hydrotreaters

DownstreamOil and Gas

Questionnaire

* Targeted Metrics ProgramsAvailable Through Annual

Subscription


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System Features


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1,562 projects

Worth > $72 Billion

Large & Small Projects Combined

292(19%)

1,270(81%)

Domestic

International

686(44%) 876

(56%)

OwnersContractors

Domestic

CII Database


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244

66

390

176

565048

532

0

100

200

300

400

500

Buildings Heavy Industrial Infrastructure Light Industrial

Industry Group

NumberofPro

jects

Owner

Contractor

CII Database


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90

275

222209

80

97

129

206182

72

0

50

100

150

200

250

300

$100MM

Cost Category

NumberofProjec

ts

Owner

Contractor

CII Database


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250 247

363

16

234236207

9

0

50

100

150

200

250

300

350

400

Addition Grass Roots Modernization Maintenance

Project Nature

NumberofProjects

Owner

Contractor

CII Database


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The Value of Benchmarking

Improvesproject & company performance

when used as an ongoing measure

Establishesimprovement goals based onexternal/competitivebenchmarks

Enablesyour company to understand & achieve

best in classperformance


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Validation of Project Definition/ Gated Approval

PDRI: Project Definition Rating Index


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Company A Company B


Determining Performance Relative to Peers


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Benchmarking Roadmap

Adapted from Robert C. Camp

Determine What to Benchmark(Critical Success Factors)

Define the Metrics

Develop Data CollectionMethodology

Collect Data

Identify Performance &

Practice Use Gap

Identify Reasons for Deficiencies

(Root Cause for Gap)

Develop Action Plan(Select Practices to Narrow Gap)

Integrate Best Practices intoProject Delivery Processes

Institutionalize as Part of

Continuous Improvement Program


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FEL1 FEL2 FEL3 Project Implementation

Comm/SU

Front End Planning

Detailed Engineering

Procurement

Construction

Start-up

SingleProject

ConceptAdopted &

FormalProjectTeam

Established

Project Sanction

ContractAward to

EngineeringFirm

Release of all Drawings& Specs

Development ofProcurementPlan for Major

Equipment

All Major EquipmentDelivered to Site

Commencementof Foundationsor Driving Piles

SubstantialCompletion

MechanicalCompletion

CustodyTransfer

BusinessPlanning-MarketAnalysis-SiteSelection-Constraints

Envir. Market Resource Risk

Analysis

ConceptPlanning-Proj Object-Prelim OpnPlan-Permitting-Prelim ProjDocument

ProcessAlts

ConceptEstimate

FinancialAnalysis

MilestoneSchedule

ScopingSummary

BasicEngineering-ExecutionPlan

Engineer Procurement Construction Operations

-Update ProjectDocumentation Design

Criteria Flow Sheets P&IDs Equipment

Specs & Price Project

Estimate (+10%) Detailed Scope Financial Analysis

CF Curves

IRR Milestone Schedule

Project Implementation-Organization Established Organization Chart Roles & Responsibilities Team Building Contract Style

-Detailed Design-Procurement

Policy

Equipment Assignment of Contracts Material

-Construction Execution Plan Field Admin Progress Review

Meetings

Commission/SU-Commission Plan-Training Plan-Start-up Plan

Safety SU Curve Raw Material

PerformanceTesting

AcceptanceCriteria


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Effort vs. Value

CollectionEffort

Low High

High

Data Value

Yes

No


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Types of Metrics

Performance:

Relative: Cost Growth, Schedule Growth

(Compares actual to planned)

Absolute: $/SF, $TIC/$Process Equipment,Execution Duration/GSF (Actual or should cost)

Process:Equipment Count/Capacity (Industry Specific)

Product iv i ty:Engineering & Construction Practice Use:Front End Planning, Constructability,

Zero Accident Techniques


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NormalizationHard Cost (Absolute)

Benchmarking Requires

Locat ionand Time Ad justmentsprovide a

common basis for comparisons Projects can be grouped geographically and

by time or

Projects can be normalized to a commonlocation & time

Foreign currency exchange


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Cost Performance

Schedule Performance

Safety Performance

Change Performance

Rework Performance

Construction ProductivityEngineering Productivity

Practice Use

Front-End Planning

Alignment

Team Building

Partnering

Project Risk Management

Change Management

ConstructabilityZero Accident Techniques

Planning for Startup

Proj. Delivery & Contract Systems

Benchmarking

Traditional Performance &Practice Use Metrics

Performance Practice Use


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14.30 14.20

13.0012.20

11.80

9.90

9.508.80 8.60 8.307.90

13.10

10.60

7.106.80 6.40 6.30

0.88

7.196.12

5.324.31

3.44 3.002.66

2.301.60 1.59 1.67

1.03 1.02 1.23 1.160.72 0.58

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

325 413 477 497 527 613 644 770 518 765 995 936 1,117 1,073 1,129 1,195 1,333 1,276

Year and Work Hours (MM)

TotalRecordableIncidenceRate

Industry*

CII

*OSH A Construction Division, SIC 15-17 Re flects OSH A Re porting Change (updated July 18,06)

Best Practice Use (Safety)TRIR (1989-2006)


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Cost Growth Actual Total Project Cost - Initial Predicted Project Cost

Initial Predicted Project Cost

Delta Cost Growth | Cost Growth |

Budget Factor Actual Total Project CostInitial Predicted Project Cost + Approved Changes

Delta Budget Factor | 1- Budget Factor |

Phase Cost GrowthActual Phase Cost - Initial Predicted Phase Cost

Initial Predicted Phase Cost

Phase Cost Factor Actual Phase Cost

Actual Total Project Cost

Cost Performance Metrics


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Schedule Growth Actual Total Proj Duration - Initial Predicted Proj Duration

Initial Predicted Proj Duration

Delta Schedule Growth | Schedule Growth |

Schedule Factor Actual Total Proj Duration

Initial Predicted Proj Duration + Approved Changes

Delta Schedule Factor | 1- Schedule Factor |

Phase Schedule GrowthActual Phase Duration - Initial Predicted Phase Duration

Initial Predicted Phase Duration

Phase Schedule Factor Actual Phase Duration

Actual Total Proj Duration

Schedule Performance Metrics


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TRIR Total Number of Recordable Cases x 200,000Total Site Work-Hours

DART Total Number of DART Cases x 200,000

Total Site Work-Hours

Safety Performance Metrics


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Change Cost Factor Total Cost of Changes

Actual Total Project Cost

Total Field Rework Factor Total Direct Cost of Field ReworkActual Construction Phase Cost

Change Performance Metrics

Rework Performance Metrics


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Industry Sector-Specific Metrics

Current Pharmaceutical

D/S Oil & Gas

COAA (Contract)

Upcoming Healthcare Facilities

U/S Oil & Gas

Aviation Facilities

Future Power Generation Food and Beverage

K-12 Education
http://www.watsonnorie.co.uk/glaxo.jpg


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Downstream Oil and GasIndustry-Specific Metrics Program


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Purpose & Scope

Purpose Develop a user defined, transparent, real

time accessible, credible and cost effective

benchmarking resource for the oil and gas

industry Scope

Development of the metrics framework,

metric definitions, and data collection

instrument Project selection and data input

Data analysis

Report development


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Round I Current Participants

Aramco Services

Chevron

CitgoMarathon Oil

Shell Oil

Petrobras

Potential ParticipantsConocoPhillipsSunoco

60 Projects (10/Company) Committed

Downstream Participants


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Questionnaire

Scope Focused on Refinery Projects Detailed Cost Metrics

Two Levels of Benchmarking Project Level

Process Unit LevelHydrotreating

Sulfur Recovery

Coking

Owner Project Management Team (PMT) Two points of Benchmarking

AFE (Authorization For Expenditure)

Project Completion


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Project Metrics Cost (20 Absolute)

15 are applicable at AFE & Completion

Schedule (12 Absolute)8 are applicable at AFE & Completion

Productivity (11 Absolute)9 are applicable at AFE & Completion

Safety (3 Absolute)

Others (8 Absolute)6 are applicable at AFE & Completion

Metrics

Process Unit Metrics Cost (14 Absolute)

12 are applicable at AFE & Completion

Others (3 Absolute)3 are applicable at AFE & Completion

Process ParametersHydrotreaters (9 Parameters)

Sulfur Recovery Units

Cokers


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Cost Structure

Project Level


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Cost Structure contd

Process Unit Level


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Cost

Metrics: Example

CostEquipmentMajorISBL

CostISBLTotal

TIC

CostFEEDTotal

Schedule

DurationOverall

DurationFEED

TIC

DurationOverall


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Downstream Work Plan

Finished Activities Define Oil and Gas Metrics

Program Data Collection Tool

Training for Data Collection

Currently Ongoing Activities Input Project Data

Normalization Issues

Future Activities Analyze data Generate Key and Summary Reports

Assess Path Forward


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Engineering

Productivity =Actual Wk-Hrs*

IFC Quantity* Per Design Component

Productivity = Actual Wk-HrsQuantity Installed

Construction

Productivity


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Categories

Concrete

Structural Steel

EquipmentPiping

Electrical

InstrumentationInsulation (Construction Only)

Scaffolding (Construction Only)


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C t ti P d ti it


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Raw

Productivity

N = 43N = 19N = 20N = 26N = 21

Wk-Hr / CYWk-Hr / CYWk-Hr / CYWk-Hr / CYWk-Hr / CY

Total Foundations>50 CY20-50 CY5-20 CY< 5 CY

70

60

50

40

30

20

10

0

30.60

20.85

11.02

5.97

15.74

Bette

r

Construction Productivity

- Concrete Foundations Example

Small sample

Use with caution

Your Circle?

Foundation Size

Pi i E i i P d ti it b


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2000 2001 2002 2003 2004 2005 2006

2D Only

2D+3D

3D Only

Piping Engineering Productivity by2D/3D Implementation

3 year moving average

LowerProductivity

BetterProductivity

ProductivityInd

ex

Piping Engineering Productivity by


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Piping Engineering Productivity byProject Characteristics

Note: at the 90% confidence level

Better Productivity Lower ProductivityHr / LF

Analyzing CII Productivity Measures


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% Engineering Complete

ConstructionProductivit

yforISBL(Hr/LF)

100806040200

12

10

8

6

4

2

0

E

C50%

Analyzing CII Productivity Measures(Construction Productivity (ISBL Pipe) vs. % Engineering Complete)


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Q antif ing Val e of Best Practices


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Quantifying Value of Best Practices

PerformanceM

etric

(S

caleMetricDepe

ndent)

Better

BetterPractice Use Metric

0 1 2 3 4 5 6 7 8 9 10

What is the relationship?

Is it significant?

How good is the fit?

How to analyze the relationship?


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How to analyze the relationship?

PerformanceM

etric

(S

caleMetricDepe

ndent)

Better

Practice Use Metric

0 1 2 3 4 5 6 7 8 9 10

Better


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Improvement Potential

PerformanceM

etric

(S

caleMetricDepe

ndent)

Better

Practice Use Metric

0 1 2 3 4 5 6 7 8 9 10

Low Use

High Use

AveragePerformanceImprovement


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Individual Project Performance

Project Reports


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Metric Details

Project Reports


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Special Pharmaceutical MetricsCategory Metrics

Cost TIC / Process Equipment Cost

TIC / Gross Square Footage

Schedule (DesignOQ Duration) / GrossSquare Footage

(DesignOQ Duration) / Total

Equipment Piece CountDimension (Process Space SF + Process

Related Space SF) / Gross SquareFootage

Mechanical SF / Gross SquareFootage

Industry Analysis

CII C fid ti lit P li


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CII Confidentiality PolicySummary of Key Features

Company data are considered confidential. Data can be used to support CII benchmarking, research, and related

academic activities only if the confidentiality of companies submittingthe data is protected.

Access to data is limited to CII staff and authorized researchers only. All persons with access to CII data must sign confidentiality agreements

and abide by CII confidentiality policies. When data are provided in support of research activities, all confidential

identifiers will be removed and only essential subsets of data will beprovided.

All data published and/or presented must reflect the aggregate of atleast 10 projects from 3 separate companies.

Reports and data files containing only individual project or companydata are considered confidential will not be published or provided toresearchers.

In cases where a disproportionate amount of data are provided by asingle company, CII will suppress publication of results until the data setis sufficiently large to mitigate confidentiality or bias concerns.

CII W b d P j t C t l


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CII Website: http://www.construction-institute.org/

CII Web and Project Central


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Project Central My Projects

Select a Section of the Questionnaire


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to input or update data


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Data Entry

Easy to UseConsistent format


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Project Managers Company BenchmarkingAssociate

CII Staff, Account Mgrs.& Committee

Key Participants

BMA Responsibility

CII Responsibility

30 Day Goal

Validation Process


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Project Central - Reports

Progress Key Report


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Progress Key Report

Progress Key Report


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Progress Key ReportSummary View with Percentiles

Click on the bar or the n number to get a statistical summary

Click

Here!


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Project Key Report

Statistical summaryand Project Score for

Process Constr. Cost

Process Equip. Cost


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Data

ReportSelect the level of

detail and a metric,

click chart-o-rama.

1. Pick your X Axis

2. Select your level of

detail.

3. Get your chart!

1

2

3

2


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Data

Report

1. Pick your X Axis

2. Select your level ofdetail.

3. Get your chart!

1

2

3

Under Development


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Output

Format

Selection

Parameters

Choose

Your ProjectsPick Metrics

Aggregate

Comparisons

Save Selections Build ReportClear Selections

Output Format:

External / Internal w/ Comparison

Selection Parameters:

My Selections: Status Bar:Status Bar:

Chart Only

Chart vs/ Project Data

Datasheet

Key Report

Projects:

Metrics:

BULK

MANUFACTURING

$ T I C /

$ P r o c e s s

E q u i p m e n t

C o s t

$ F a c i li ty

C o n s t . C o s t /

G S F

$ T IC / G S F$Soft Cost /$Hard Cost

($Design +$Const.mgmt.Cost) /$TIC

($Com. +$Qual. Cost)

/ $TICAverage

PharmaProjectCost

Growth

PharmaDeltaCost

Growth

Average

1001 3 4 4 3 2 4 3.33 4 4 4.00 3.50

1002 1 4 3 4 3 2 2.83 1 3 2.00 2.63

1003 1 1 1 2 1 2 1.33 1 1 1.00 1.25

Overall MetricPerformance

1.7 3.0 2.7 3.0 2.0 2.7 2.5 2.0 2.7 2.3 2.5

OVERALL PROJECT PERFORMANCE

PROJECT ID

AVERAGE

OVERALL COST PERFORMANCE

Absolute Cost Performance Relative Cost Performance

Chart-o-Rama V2

PerformanceSummary Dashboard

Dynamic data mining and

reporting tool with aggregatereporting features (Sep 08)

High level performancesummary (Mar 08)

C it


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eCommunity

C it


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eCommunity

A Look Ahead


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A Look Ahead

Upstream Oil & Gas Program Support from Fluminense Federal University

(UFF) / Petrobras (Brazil)

Joint Industry Program (JIP) with UT

Petroleum Engineering

Other Geographic Areas of Offshore Activity

Healthcare Specialty Metrics Program

Extension of COAA Contract

Aviation Facilities


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What gets measured, gets improved!

When you re average, you re just as close to the bottom as youare the top

- Unknown

Documents

AACEI Houston Jan 2008