BP CII Overview

CII Introduction and Best Practices Overview
Presented to the SLCCC
February 20, 2014
Kim Allen, CII Associate Director
• A consortium of leading owners,
contractors, and academics working
collaboratively to improve the
constructed project and the capital
investment process.
• An organized research unit of the
Cockrell School of Engineering at
The University of Texas at Austin.
Purpose
To measurably improve capital project delivery.
Mission
• Create and disseminate knowledge that improves the
safety, cost, schedule, quality and sustainability in the
delivery of capital projects.
• Create global competitive and market advantage for its
members through:
– Active involvement and participation in CII
– High use of CII Best Practices and research findings
Owner CII Members (69)
Abbott
Air Products and Chemicals
Ameren
American Transmission
Anglo American
Anheuser-Busch InBev
Aramco Services
ArcelorMittal
Architect of the Capitol
BP America
Cameco
Cargill
Chevron
CITGO Petroleum
ConocoPhillips
Consolidated Edison
Dow Chemical
DTE Energy
DuPont
Eastman Chemical Company
Ecopetrol S. A.
Eli Lilly
Eskom Holdings
ExxonMobil
General Electric
General Motors
GlaxoSmithKline
Global Infrastructure Partners
Huntsman
International Paper
Intel
Irving Oil
Kaiser Permanente
Koch Industries
Linde North America
LyondellBasell
Marathon Petroleum
NASA
NOVA Chemicals
Occidental Petroleum
Ontario Power Generation
Petrobras
PEMEX
Petronas
Phillips 66
Praxair
Procter & Gamble
Public Service Electric & Gas Co.
Reliance Industries
SABIC
Sasol Technology
Shell Global Solutions US
Smithsonian Institution
Southern
Statoil
SunCoke
Teck Resources
Tennessee Valley Authority
TransCanada
U.S. Army Corps of Engineers
U.S. Dept. of Commerce/NIST/EL
U.S. Dept. of Defense/Tricare Mgmt.
U.S. Dept. of Energy
U.S. Dept. of Health & Human Svcs.
U.S. Dept. of State
U.S Dept. of Veterans Affairs
Vale
The Williams Companies
Contractor CII Members (71)
Aecon Group
Alstom Power
AMEC
Audubon Engineering
AZCO
Baker Concrete Construction
Barton Malow
Bechtel Group
Bentley Systems
Bilfinger Industrial Services
Black & Veatch
Burns & McDonnell
CB&I
CCC Group
CDI Engineering Solutions
CH2M HILL
Coreworx
CSA Group
Day & Zimmermann
Dresser-Rand Company
Emerson Process Management
eProject Management
Faithful+Gould
Pathfinder
Fluor
POWER Engineers
Foster Wheeler USA
Quality Execution
The Robins Morton Group
Gross Mechanical Contractors
Richard Industrial Group
GS Engineering & Construction
S&B Engineers & Constructors
Hargrove Engineers + Constructors
SAIC Constructors
Hatch
SBM Offshore
Hilti
SKEC USA
IHI E&C International
SNC-Lavalin
IHS
Technip
Industrial Contractors Skanska
Tenova
International Rivers Consulting
TOYO-SETAL Engenharia
Jacobs
URS
JMJ Associates
Victaulic
JV Driver Projects
Walbridge
KBR
Wanzek Construction
Kiewit
WESCO
Kvaerner North American Construction Wilhelm Construction
Lauren Engineers & Constructors
Wilbros
Matrix Service
Wood Group Mustang
McCarthy Building Companies
WorleyParsons
McDermott International
Yates Construction
Zachry Holdings
Midwest Steel
Zurich
Parsons
CII’s Member-Directed Research Program
Attracts Top Academics from Leading Universities
Universities Performing Research 1983-2013 (51)
University of Alabama
University of Houston
Oregon State University
Arizona State University
University of Illinois
The Pennsylvania State University
Auburn University
Illinois Institute of Technology
University of Pittsburgh
Baylor University
Iowa State University
Purdue University
Bucknell University
University of Kansas
Polytechnic University of New York
University of Kentucky
San Diego State University
Lehigh University
San Jose State University
University of Maryland
Stanford University
University of Michigan
State University of New York-Albany
University of Milwaukee-Wisconsin
Vanderbilt University
Michigan State University
Virginia Tech
Colorado State University
Mississippi State University
Texas A&M University
Columbia University
University of New Mexico
University of California-Berkeley
Carnegie Mellon University
University of Cincinnati
Clemson University
University of Colorado-Boulder
Drexel University
North Carolina State University
East Carolina University
North Dakota State University
University of Florida
Northeastern University
Florida International University
Ohio University
Georgia Institute of Technology
Oklahoma State University
The University of Texas at Austin
(CII headquarters & founding university)
Tsinghua University
University of Washington
University of Waterloo
University of Wisconsin-Madison
Worcester Polytechnic Institute
CII Knowledge Processes
Management, organization,
and assessment of CII’s
BOK and Communities of
Practice oversight.
Assessment of the
impact of CII
practices through
benchmarking.
Knowledge
Creation
Knowledge
Management
Knowledge
Assessment
Research to define best
practices, breakthroughs,
and industry norms.
Dissemination
through publications,
implementation
guides, educational
materials,
workshops, and
conferences.
Knowledge
Dissemination
Best Practices
Processes or methods that, when executed effectively,
lead to enhanced project performance.
To qualify, a practice must be sufficiently proven through
extensive industry use and/or validation.
• Front End Planning
• Partnering
• Alignment
• Quality Management
• Constructability
• Change Management
• Lessons Learned
• Disputes Resolution
• Materials Management
• Zero Accidents Techniques
• Team Building
• Implementation of CII Research
• Planning for Start-up
• Benchmarking & Metrics
• Project Risk Assessment
Use of CII Practices
Begins with strong leadership and ends with
improved performance…this is the opportunity!
Project Level
Use of Best
Practices
(Tactics)
Corporate
(Strategy)
• Leadership
• Improvement
culture
• Funding
• Incentive
• Dedicated team
•
•
•
•
•
•
•
•
Front End Planning
Alignment
Project Risk Assessment
Planning for Startup
Constructability
Materials Management
Zero Accidents Techniques
Others
Project
Performance
(Bottom Line)
• Cost
• Schedule
• Safety
• Quality
• Change
Practice Implementation
Use / Benefit Diagram
0.4
Performance
0.3
0.2
Better
0.1
0
-0.1
-0.2
4th Quartile
Low
3rd Quartile
2nd Quartile
Practice Use
1st Quartile
High
Impact of Best Practice Use on
Cost Performance: Owners
20%
Cost Growth
15%
10%
High Use = 10.9 %
Cost
Improvement
8.6%
5%
0%
-2.3%
-5%
-10%
High
(N=29)
Low
(N=25)
Best Practice Index
P=0.03 (within 90% confidence interval)
Ref: BMM 2010-4 CII Value of Best Practices Report
Impact of Best Practice Use on
Schedule Performance: Owners
Schedule Growth
20%
High Use =
9.7 %
Schedule
Improvement
15%
11.5%
10%
5%
1.8%
0%
-5%
-10%
High
(N=27)
Low
(N=14)
Best Practice Index
P=0.08 (within 90% confidence interval)
Ref: BMM 2010-4 CII Value of Best Practices Report
Impact of Execution Best Practice Use
on Cost Performance: Contractors
20%
Cost Growth
15%
10%
• Constructability
High Use =
12.2 % Cost
Improvement
9.2%
• Project Risk
Assessment
• Change
Management
5%
0%
-3.0%
-5%
-10%
High
(N=12)
Low
(N=13)
Execution Best Practice Index
P=0.01 (within 90% confidence interval)
Ref: BMM 2010-4 CII Value of Best Practices Report
14
TRIR Rates
16
Total Recordable Incidence Rate (TRIR)
14.3 14.2
14
Industry*
13.0 13.1
CII
12.2
12
11.8
10.6
9.9
10
8
9.5
8.8 8.6
8.3
7.19
7.1
6.12
6
5.32
4.31
4
2
7.9
3.44
3.00
2.66
2.30
1.60 1.59 1.67
6.8
6.4
6.3
5.9
5.4
4.7
4.3
4.0
3.9
1.03 1.02 1.23 1.16 0.88
0.72 0.58 0.68 0.57 0.64 0.81 0.43 0.42
0
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
325 413 477 497 527 613 644 770 518 765 995 936 1,1171,0731,1291,1951,3331,297
1,7662,0852,4032,2722,0862,617
Year and Work-hours (MM)
*OSHA Construction Division, NAICS 236-238 (SIC 15-17)
Reflects OSHA reporting
DART Rates
8
Industry*
7
6.8
6.8
CII
DART (LWCIR) Incidence Rate
6.1
5.8
6
5.5
5.5
4.9
5
4.5
4.4
4.0
4.2
4.1
4
1.90
1
3.8
3.6
3.4
3.4
3.2
2.8
3
2
4.0
1.55
1.45
2.5
2.3
2.1
2.1
1.14
0.63 0.81
0.55
0.45 0.31 0.41 0.27 0.26 0.23 0.46 0.36 0.33 0.25
0.21 0.23 0.20 0.17 0.17 0.16 0.15
0
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
325 413 477 497 527 613 644 888 591 763 1,122 936 1,1171,0731,1291,3011,4191,100
2,196
1,7241,9692,375
1,9822,617
Year and Work-hours (MM)
*OSHA Construction Division, NAICS 236-238 (SIC 15-17)
Reflects OSHA reporting
CII Member Resources
Research Products
• Research Summaries
• Implementation Resources
• Research Reports
CII Member Resources (continued)
Professional Development
• Executive Leadership Program
• Education Modules
• Courses
• Online Education
• Professional Development Continuum
• Registered Education Providers
• Web Seminars
CII Member Resources (continued)
Mentoring
• Communities of Practice
• Implementation Champion
Program
• Experienced Implementers
• CII Staff
CII Member Resources (continued)
Events
• Annual Conference
• Performance Improvement Workshops
• Performance Assessment Workshops
JW Marriott Indianapolis,
site of CII’s 2014 Annual Conference
July 21-23, 2014
“Driving Performance at Every Turn”
CII Senior Staff
Wayne Crew
Director
Steve Thomas
Research, Breakthrough Strategy, and Academic Liaison
Manuel Garcia
Professional Development and Implementation
Stephen Mulva
Performance Assessment
Kim Allen
Knowledge Management, Communities of Practice, and
Strategic Communications
Jewell Walters
Membership Engagement, Board of Advisors, and Annual
Conference
Benchmarking and Metrics
“The systematic process of measuring an organization’s
performance against recognized leaders for the purpose of
determining best practices that lead to superior performance
when adapted and utilized.”
C O
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CII Benchmarking & Metrics (BM&M)
•
•
•
•
2,100 projects entered since 1995, valued at ~$300 Billion
Confidential
Cost Effective
Compelling, Focused Metrics
– unique measures of CII Best Practices and productivity for
engineering and construction
– external performance benchmarks of safety, cost, schedule,
change, and rework
• Unique Approach
• Experienced
– Competent, Professional Staff
CII Performance Assessment Process
Traditional Three-step Process
Online
Questionnaire
Benchmarking
Database
Data Mining and
Reporting Engine
CII Standard Metrics
Performance
• Cost Performance
• Schedule Performance
• Safety Performance
• Change Performance
• Rework Performance
• Construction Productivity
• Engineering Productivity
Practice Use
• Front End Planning
• Alignment
• Team Building
• Partnering
• Project Risk Management
• Change Management
• Constructability
• Zero Accident Techniques
• Planning for Start-up
• Project Delivery & Contract Systems
• Benchmarking
PAS – Data Miner
Specialty Metrics by Industry Sector
• Current
– Pharmaceutical
– Downstream oil & gas
– Oil sands (COAA)
– Upstream oil & gas
– Healthcare facilities
• Future
– Power Generation
– Metals and Mining
New for 2014: CII’s 10-10 Program
Sample Statement-Based Question
Strongly
Disagree
26. The interfaces between project stakeholders were well managed.
◘
Neutral
Strongly
Agree
◘ ◘ ◘ ◘
Sample Output Metrics
Sample Input Metrics
 Develop Corrective Action Plans
 Implement CII Research and Tools
10-10 Input Metrics
• Simple
• Motivating
• Insightful
• Phased
180%
30,000
80
160%
70
140%
25,000
26,400
20,000
15,000
10,000
60
50
49.00
40
30
Capacity Effiency
90
Project Schedule Effiency
(weeks/1000 ton/day)
35,000
120%
100%
60%
10
20%
0
0
0%
12,000
50
600
45
10,000
8,000
6,000
4,000
2,000
8,000
40
35
30
25
20
15
10
27.50
Phase Burn Rate ($/week)
Thousands
40%
5,000
500
400
300
200
100
5
0
0
1.02
80%
20
Phase Schedule Effiency
(weeks/1000 ton/day)
Phase Cost Efficiency ($/ton/day)
Project Cost Efficiency ($/ton/day)
10-10 Outcome Metrics
0
291
Implementation of CII Research
“The comprehensive and effective use of proven CII products by
member organizations as outlined in the Implementation Model”
C O
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The Implementation Model
Celebrate Success
Measure Results
Product Implementation
Products Training
Product Champions/Review Boards
Implementation Plan and Goals
Self Audit
Corporate Implementation Champion
Corporate Commitment
CII Products
CII Support
Benefit/Cost Data
Key Implementation Resources
CII Best Practices Guide
Implementation Resource 166-3, Version 4.0
Implementation Planning Model:
Steps to Success
Implementation Resource 246-2, Version 1.2
Implementation Assistant
Online tool, found on CII Website
Implementation Tool Box
Found on CII Website
The Role of Executive Support in
Implementation Champion Success
Research Summary 246-1a
CII Best Practices Guide:
Improving Project Performance – IR166-3, v4.0
• Provides a number of tools to assist in planning and
executing the implementation of CII Best Practices
• Provides material on the current CII Best Practices,
including the following:
− a description of each best practice
− a listing of essential elements for each best
practice
− a summary of reported benefits realized
through adoption and use
− a checklist for evaluating the degree of
implementation at project or organizational levels
− a list of pertinent CII references related to each
best practice
Company Procedures
CII Best Practices Guide
CII Best Practice
Incorporated
Project
Procedure
xxx
Performance Improvement Workshop
April 2 – 4, 2014
Focused on:
• CII Product Implementation
• Best Practices
• New Practices
• Case Studies
• Networking
Jersey City, NJ
(New York Metropolitan Area)
www.construction-institute.org/kd/piw/index.cfm
Project Risk Assessment
“The process to identify, assess, and manage risk. The project team
evaluates risk exposure for potential project impact to provide
focus for mitigation strategies.”
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Integrated Project Risk Assessment
Integrated Project Risk Assessment,
IR181-2, Version 2.0
• Focuses on issues that are specific to
all projects (formerly focused on
international projects)
• Includes investor, owner, contractor,
and operations issues
• Provides a formal method for
identifying and assessing project risk
• Allows project teams to evaluate risk
through the full project life cycle
• Provides assessment indicating critical
risk factors for mitigation
• Provides structure for analysis
Benefits to Project Teams
•
Identifies potential risks not typically considered.
•
Rank orders potential risk areas.
•
Focuses on risk identification and assessment for the
entire project life cycle.
•
Communicates risk within the team and with the
project sponsors.
•
Initiates the mitigation process.
•
Provides a standardized risk evaluation process.
•
Validated by significant owner and contractor input.
The Risk Management Process
Identification
Assessment
Analysis
Mitigation
Evaluate
Results
Enhancing risk assessment
for capital projects with
attention to the risk
management process
Using the IPRA: Application Points – Timing
Program
Decision
Front End
Planning
Primary
Application
Engineering
& Design
Construction
Secondary
Application
= Recommended application points
Operations
IPRA Tool Structure – Risk Elements
• Section I – Commercial
• Section III – Facilities
– I.A Business Plan
– III.A Product Scope
– I.B Finance/Funding
– III.B Sourcing and Supply
– III.C Design/Engineering
• Section II – Location
– II.A Tax/Tariff
– II.B Political
– II.C Cultural
– II.D Legal
– III.D Construction
– III.E Start-Up
• Section IV – Production/
Operations
– IV.A People
– IV.B Legal
– IV.C Technical
Basic Components of IPRA Method
IPRA Assessment Sheet
Likelihood of Occurrence (L)
Very Low
Relative Impact (I)
Very High
Negligible
Extreme
CATEGORY
NA
1
2
3
4
5
A
B
C
D
Baseline
Coordinate
L, I
Comments
E
II.A
BUSINESS PLAN
II.A.1
Business case
E
II.A.2
Economic model/
feasibility
D
II.A.3
Economic incentives/
barriers
E
II.A.4
Market/product
D
II.A.5
Standards and practices
D
II.A.6
Operations
D
II.A.7
Tax and tariff
D
IPRA Element Description
I.A7. Tax and Tariff
Host country taxes and tariffs impact projects and early identification of their repercussions is
critical considering the entire life cycle of the venture. Most taxes and tariffs arise under statutes
that are administered by government agencies and can provide for serious sanctions in case of
violation. Calculation, administration, and reporting requirements related to foreign taxes and
tariffs are functions where in-country expertise is often required (see Category C, Section II for a
more detailed treatment of tax and tariff). Taxes and import duties need to be understood for
investment, construction, and ongoing facility operation. Items to consider include:
 Basis and rate of charges
 Volatility for changes
 Registration and applications
 Nature of enforcement
 Type of tax (income, business, VAT, corporate, technology, etc.)
 Application of tax and duty laws and their specificity
 Miscellaneous fees, levies, import duties, etc.
 Other
IPRA Risk Matrix
Very High
5
4
Likelihood of
Occurrence (L)
3
2
Very Low
1
A
B
C
D
E
Not Applicable
Negligible
Extreme
Relative Impact (I)
Questions
45

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