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1© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Focused CCPM Implementation with the Project Execution
Maturity Matrix
Presented By: Christoph Lenhartz, MBA, TOCICO certified, JonahGeneral Manager Europe, Middle East & Africa, Pinnacle StrategiesPast Chairman of the Board of TOCICODate: June 10, 2014
2© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Objectives
• Understand the need for a CCPM-Based Project Execution Maturity Model and the flaws of benchmarking-based models
• Explore a case to understand details and benefits of focused CCPM implementation
3© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
CCPM Changes an Existing System
Goal/objectives and necessary conditions Procedures, processes, applications People, organization, management Measurements, performance
4© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Performance Is a Function of Capability
BusinessCapabilities
Project Management Capabilities
BusinessMaturity
Business Project Management Maturity
Project ManagementMaturity
Ability Behavior Result
BusinessPerformance
ProjectPerformance
5© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Project Management Maturity Models
• Purpose: Evaluate, compare and improve project management performance
• Over 30 different models, based on various paradigms• Rarely defined, but seem to be useful
» A Maturity Model is a special competence model defining different maturity levels in order to evaluate how a competence object fulfills the generally defined requirements for a class of competence objects«*
* Ahlemann, F., Schröder, C. & Teuteberg, F. (2005). Kompetenz- und Reifegradmodelle für das Projektmanagement: Grundlagen, Vergleich und Einsatz (Arbeitsbericht Nr. 01). Osnabrück: ISPRI - Forschungszentrum für Informationssysteme in Projekt- und Innovationsnetzwerken. P. 15
6© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
From Planning to Process Maturity
• Maturity models have emerged into more general process improvement approaches.
• Modern models are based on existing best practices• Using a maturity model should enable an organization to
− Determine what is and what isn’t working− Establish a case for action− Develop a plan for improvement
• The critical role of execution remains underdeveloped
7© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Looking for a Breakthrough?
Today’s high-speed trainis not
the result of benchmarkingamong steam locomotives!
8© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Capabilities Drive Business Value
Delivery Excellence
Maturity Model based on capabilities required to achieve a logically derived ideal state of execution effectiveness and efficiency.
9© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Understand the Existing System
10© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Case Study: FMC Technologies
FMC Subsea:• Leading global provider of technology solutions
for the energy industry• 16,000 employees, 27 production facilities in 16
countries• Site: Kongsberg (Norway)Business Situation: • Growing customer demand and delivery
expectations• Need to rapidly improve throughput and lead
time for its master control station (SCU) products.
• Lead time should improve from 24 to 14 months
11© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
About the Product Line
HydraulicActuators
InjectionChemicals
HydraulicPower unit
XmasTree
SubseaDistribution
unit
Umbilical Cross Section
ElectricCables
Umbilical
MasterControlStation Electric
Power Unit
TopsideGateway
Hydraulic and Chemical Lines
SCM
SubseaControl
Unit (SCU)
SCUs (sometimes called master control stations) are the
hardware/software units that sit on the surface and control all of the subsea
oil & gas equipment on the ocean floor.
Source: FMC Technologies
12© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
What to Change
Average lead time: 24m
Best case lead time: 18m
Quoted lead time: 14-17m
Requested lead time: 8mRequired improvement:
minimum 7-10m
13© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Demand Is Growing
13
Even higher need to improve throughput
14© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Operational Challenges
Start early, without full kit and scope SCUs delay projects Dependencies with other systems and resources Rework
Resource shortages Statoil does “fast track projects” Tried everything…
15© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Project Execution Maturity
Order Promising
Order Promising
Delivery Date MgtDelivery Date Mgt
Managing Bottle-necks
Managing Bottle-necks
ManagingSchedule
Riks
ManagingSchedule
RiksRemote
CollaborationRemote
Collaboration
PriorityControlPriorityControl
Collaborative Execution
Collaborative Execution
ControlWIP
ControlWIP
Functional AlignmentFunctional Alignment
ProbabilisticPlanning
ProbabilisticPlanning
Subcontractor Management
Subcontractor Management
Capacity Management
Capacity Management
16© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
TOC in One Word
FOCUS
Doing what should be done. Not doing what not should be done.
17© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
A Step-by-step Improvement
18© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Ground Floor: Base Coordination
PriorityControlPriorityControl
Collaborative Execution
Collaborative Execution
ControlWIP
ControlWIP
Functional AlignmentFunctional Alignment
Near term Work before you Team before you The process you own
19© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
1 – Functional Alignment
PriorityControlPriorityControl
Collaborative Execution
Collaborative Execution
ControlWIP
ControlWIP
Functional AlignmentFunctional Alignment
1 2 4 3
“Show me how you measure me,I’ll show you how I’ll behave.”
(“If you measure me in an irrational way, don't complain about irrational behavior.”)
Eli Goldratt
Metrics are the backbone of the performance management system and align the team:1. What is the behavior we want?2. How do we know it is happening?3. What is acceptable and unacceptable?4. How to encourage/discourage behaviors?
20© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
2 – Control Work in Process (WIP)
PriorityControlPriorityControl
Collaborative Execution
Collaborative Execution
ControlWIP
ControlWIP
Functional AlignmentFunctional Alignment
1 2 4 3
• Establish a Visual Board to expose all WIP and existing bottlenecks
• ‘Freeze’ half of all projects in work and apply freed up capacity to ‘active’ projects
• As projects complete, selectively ‘unfreeze’
• Start new projects as late as possible• Establish a ‘Release Control Manager’
to full kit new projects
1. Reduce overland2. Control release of work3. Eliminate multitasking4. Match capacity and demand
21© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Visual Project Board (VPB)
Based on value stream map and additional interviews,first visual project board posted after 2 weeks
22© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
VPB and Metrics
Project Progress – Total Completion Major Impact Issues
Fixing Problems as they are Identified Failure to Escalate Early
23© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
3 – Priority Control
PriorityControlPriorityControl
Collaborative Execution
Collaborative Execution
ControlWIP
ControlWIP
Functional AlignmentFunctional Alignment
1 2 4 3
Common Situations:• Matrix organizations with multiple
reporting structures• Shared resources left to decide
priorities for themselves• Functional goals of team members
differ• Friendships & favors• Weak leadership / absence of guidance
1. Educate organization2. Empower priority manager3. Convey priorities
24© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
4 – Collaborative Execution
PriorityControlPriorityControl
Collaborative Execution
Collaborative Execution
ControlWIP
ControlWIP
Functional AlignmentFunctional Alignment
1 2 4 3
Working together to achieve shared goals:• Provide visibility• Focus on the future: Stop blaming
and get moving• Focus on the right things• Bust bottlenecks• Establish common goals• Solve the team’s problems
1. Accurate and shared assessment of the situation
2. The right people in the room3. Acting to achieve the goal
25© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Second Floor: Improved Coordination
Move beyond local execution to other, remote teams Emphasis on flow and velocity Schedule risk-based priority system Deliver on time Medium term
Order Promising
Order Promising
Delivery Date Mgt.Delivery
Date Mgt.Managing
Bottle-necks
Managing Bottle-necks
ManagingSchedule
Risks
ManagingSchedule
RisksRemote
CollaborationRemote
Collaboration
4 1 2 3 4
26© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Improved Coordination Steps
Order Promising
Order Promising
Delivery Date Mgt.Delivery
Date Mgt.Managing
Bottle-necks
Managing Bottle-necks
ManagingSchedule
Risks
ManagingSchedule
RisksRemote
CollaborationRemote
Collaboration
4 1 2 3 4
• Reliable delivery promises• Consider impact of shared resources• Monitor & manage interdependen-
cies within/across projects• Understand critical chain and
schedule risk
• Manage the uncertainty• Ambitious targets + strategic
buffering and buffer management
• Five Focusing Steps
27© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Top Floor: Integrated Planning & Execution
Strategic focus: manage the portfolio/business Go beyond own borders Future-oriented – planning for and managing risks
and resources, and developing process capability for ongoing improvements.
ProbabilisticPlanning
ProbabilisticPlanning
Subcontractor Management
Subcontractor Management
Capacity Management
Capacity Management
1 2 ./.
28© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Integrated Planning & Execution Steps
ProbabilisticPlanning
ProbabilisticPlanning
Subcontractor Management
Subcontractor Management
Capacity Management
Capacity Management
1 2 ./.
• Consistent planning methodology for consistent results
• Accommodate variations• Align project requirements & portfolio needs• Absorb shifting resource availability
Align interests• visibility into suppliers’ workflow to
enable early identification of problems• collaboration to synchronize supplier
and project work
29© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Re-assessment Results
30© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Tracking 54% improvement
AverageQuoted Lead Time
Results after 10 Weeks
Engineering Lead Time reducedNew estimate: 11 months from historic average of 24 months
54% improvement in engineering lead time at
little variation
31© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Financial Impact*To
tal a
nnua
lbot
tom
line
impa
ct: ≥
USD
5.3
to6.
2
*All figures: annual bottom line impact in million USD, conservative estimates
SCU impact with additional
sales• “More with same”• New sales
= new projects + aftermarket1.4
CDU impact with additional
sales
• “More with same”• New sales
= new CDM projects + SCU aftermarket• What would be impact of
next bottleneck?
1.9 to 2.8
Improved effectiveness &
efficiency• “Same with less”• 27% reduction of project lead
times translated into cost savings2.1
32© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Preserve and Grow the Good
» The struggle of maturity isto recover the seriousnessof the playing child. «
Friedrich W. Nietzsche (1844-1900)
33© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
The Project Execution Maturity Model
• Acknowledge existing system as constraint for any improvement
• Compare current capability to ideal state, based on logically derived CCPM execution model
• Focus on creating desired execution behaviors• Identify maturity levels per element• Prioritize focused implementation steps from least mature
element in lowest level upwardsResults:• Fast and effective implementation• Preserve and reinforce existing strengths• Higher maturity = Better operational and financial
performance
34© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
Questions & Answers
34
35© 2014 TOCICO. All rights reserved.
TOCICO 2014 Conference
About the Presenter
Christoph Lenhartz, MBA, Jonah, TOCICO-certified, Certified Consultant (bdvb)is a Board Member and Past Chairman of TOCICO.In over 20 years he has acquired a wide-ranging, international experience inindustry, as a successful entrepreneur and a leader of management consultingteams in high complexity TOC implementations. Having lead strategic,business transformation, supply chain management and IT projects, hisexpertise also includes post-merger integration of supply chain operationsfor major international groups.As one of the leading TOC and management experts in Europe he is the General Manager Europe, Middle East and Africa for Pinnacle Strategies, a pioneer in operational excellence consulting based on TOC principles.The author of several articles on TOC and management topics in journals such as “Quality Progress”, he has translated and (co-)authored TOC-books. He is an appreciated speaker and enjoys teaching TOC and related topics.Christoph holds an MBA from Clemson University (USA), he graduated from the University Essen (Germany) as a Diplom-Kaufmann and has pursued post-graduate studies at Washington State University (USA).Christoph can be reached at [email protected] or [email protected]