cii: an introduction cmaa owners’ forum may 2, 2010 atlanta, georgia manuel a. garcia, p.e....

CII: An Introduction

CMAA Owners’ ForumMay 2, 2010Atlanta, GeorgiaManuel A. Garcia, P.E.

Associate Director

Construction Industry Institute

Today’s Agenda

• Introduce CII• CII-CMAA Alliance• Present High Owner Relevance CII Practices

– Zero Accidents– Partnering– Team Building– Alignment– Front End Planning– Planning For Start Up– Project Delivery & Contract Strategies

What is CII?

• A consortium of leading owners, contractors &

suppliers, and academia working to improve the

constructed project and the capital investment process.

• A research unit of the Cockrell School of Engineering at

The University of Texas at Austin

CII History

• Established as a recommendation from The Business Roundtable CICE Project to address:– construction research

– fragmentation of the industry

• Founded in 1983 by 28 companies;Now 108 members

• First to bring research to the engineering-construction world

• First industry-government-academic research collaboration for the constructed project

Mission• Enhance business effectiveness and sustainability of the

capital facility life cycle

• Expand the global competitive advantage of its members through:

– active involvement & participation

– effective use of CII research findings, including CII Best Practices.

PurposeTo measurably improve the delivery of capital facilities.

Owner MembersAbbottAir LiquideAir Products and ChemicalsAlcoaAmerenAmerican Transmission Co.Anheuser-Busch InBevAramco Services CompanyArcher Daniels Midland Barrick GoldBP AmericaBristol-Myers SquibbCargillChevronCITGO PetroleumCodelco-ChileConocoPhillipsConstellation EnergyDFW International AirportDow Chemical

DuPontEastman ChemicalEli LillyExxonMobilGlaxoSmithKlineHovensaInternational PaperKaiser PermanenteMarathon OilNASANaval Facilities Engineering

CommandNOVA ChemicalsOccidental PetroleumOntario Power GenerationPetrobrasPraxairProcter & GambleProgress EnergySaudi Basic Industries Corp

(SABIC)

Sasol TechnologyShell Global Solutions USSmithsonian InstitutionSouthern CompanySunocoTennessee Valley AuthorityTrans Canada Corp.U.S. Architect of the CapitolU.S. Army Corps of

EngineersU.S. Dept. of Commerce/

NIST/Building & Fire Research Lab

U.S. Dept. of EnergyU.S. Dept. of Health &

Human ServicesU.S. Dept. of StateU.S. General Services

Administration

Contractor MembersAker SolutionsAlstom PowerAMECAtkins Faithful + GouldAZCO Baker Concrete ConstructionBarton MalowBateman EngineeringBechtel GroupBentley SystemsBIS Frucon Industrial Svcs.Black & VeatchBowen EngineeringBurns & McDonnellCB&ICCC GroupCDI Engineering SolutionsCH2M HILLCSA Group

Day & Zimmermandck worldwideDresser-Rand CompanyEmerson Process Mgt.e Project ManagementFluorFoster Wheeler USAGrinaker-LTA/E+PCGross Mechanical GS E & CHargrove and AssociatesHiltiJacobsJMJ AssociatesKBRLauren E & ConstructorsM. A. MortensonMcDermott InternationalMustang

OmniwareOracle USAParsonsPathfinderPegasus Global HoldingsR. J. MyckaS&B E and CThe Shaw GroupSiemens EnergySNC-LavalinTechnipURS CorporationVictaulic CompanyWalbridgeThe Weitz CompanyWanzek ConstructionWorleyParsonsZachryZurich

CII Chairmen, 2005–2010

David McKinneyVice President of Nuclear Construction – Southern Company

John DaltonExecutive Vice President – Mustang

Emerson T. JohnsFormer Finance Director, Engineering, Facilities, and Corporate Remediation – DuPont Company

Dr. J. J. SuarezPresident & Chief Executive Officer – CSA Group

Dennis SchroederPresident, Engineering – BE&K Engineering Company

G. Wayne BurchetteFormer Director of Worldwide Engineering and Construction – Eastman Chemical Company

Board of Advisors

Industry-Sector

Benchmarking

Product

Review

Knowledge Creation Knowledge Dissemination

Implementation Strategy

Committee

Professional Development Committee

Knowledge Management Committee

Benchmarking & Metrics

Committee

Special Functions

Branding Implementation Committee

Conference Committee

Finance Committee

Membership Committee

Nominating Committee

Research Teams

Academic Committee

Breakthrough Strategy Committee

Research Committee

Knowledge Management

Knowledge Assessment

Executive Committee

Strategic Planning

Committee

CII Organization

University of AlabamaArizona State UniversityAuburn UniversityBucknell UniversityCarnegie Mellon UniversityUniversity of CincinnatiClemson UniversityUniversity of Colorado-BoulderColorado State UniversityUniversity of California-BerkeleyEast Carolina UniversityUniversity of FloridaGeorgia Institute of TechnologyUniversity of HoustonUniversity of IllinoisIowa State UniversityUniversity of KansasUniversity of KentuckyLehigh UniversityUniversity of MarylandUniversity of MichiganMississippi State University

Universities involved 1983-2009University of New MexicoNorth Carolina State UniversityNorth Dakota State UniversityOklahoma State UniversityOregon State UniversityThe Pennsylvania State UniversityUniversity of PittsburghPurdue UniversityPolytechnic UniversitySan Diego State UniversitySan Jose State UniversityStanford UniversityState University of New York-AlbanyVanderbilt UniversityVirginia Polytechnic Institute and State University Texas A&M UniversityThe University of Texas at Austin(CII headquarters & founding university)University of WashingtonUniversity of WaterlooUniversity of Wisconsin-MadisonWorcester Polytechnic Institute

John BerraPresident –

Emerson Process

Alan BoeckmannChief Executive Officer –

Robert J. GiorgioPresident –

CDI Engineering Solutions

Steve HanksFormer President –

URS– Washington Division

Mike Illane President and General Manager –

Project Resources Company (Chevron)

Theodore C. KennedyFounder –

Lee A. McIntirePresident and Chief Operating Officer –

CH2M HILL

H. Ross PerotChairman Emeritus –

Perot Systems

Jan TuchmanEditor –

Engineering News-Record

Dr. J. J. SuarezPresident & Chief Executive Officer –

CSA Group

Vincent R. Volpe, Jr.President and Chief Executive Officer –

Dresser-Rand

David WyssChief Economist – Standard & Poor's

Industry Leaders Support the CII Mission

CII Knowledge Processes

Knowledge

Management

Knowledge

AssessmentKnowledge

Dissemination

Knowledge

Creation

Research to define best practices, breakthroughs, & industry norms.

Dissemination through publications, implementation guides, educational materials, workshops, and conferences.

Assessment of the impact of CII practices through benchmarking.

Management, organization, and assessment of the 500-plus CII documents and publications.

construction-institute.org

CII Practices (CII Best Practice Candidates)Project Planning Phase

• Attract and Maintain Skilled Workers

• Automated Identification

• Construction Input Assessment

• Effective Use of Global Engineering Workforce

• Environmental Remediation Management

• Equitable Risk Allocation

• International Project Risk Assessment

• Leader Selection

• Modularization/Preassembly

• Organizational Work Structure

• Project Delivery and Contract Strategies

• Project Security

• Project Teams

• Technology Implementation

• Value Management

• Work Process Simulation

Design/ Construction/ Startup Phases

• Craft Productivity Practices

• Design for Maintainability

• Design for Safety

• Engineering Productivity Measurement

• Piping Design

Project Life

• Cost & Schedule Control

• Employee Incentives

• Fully Int. & Auto. Project Processes (FIAPP)

• Information Integration

• Management of Education & Training

• Managing Workers’ Compensation

• Project Health Assessment

• Small Projects Execution

CII Best Practices

Project Planning Phase

• Alignment

• Partnering

• Front End Planning

• Team Building

Design Phase

• Constructability

• Materials Management

Construction/Startup Phase

• Planning for Startup

• Zero Accidents Techniques

Project Life Cycle

• Benchmarking & Metrics

• Change Management

• Disputes Prevention

• Implementation of CII Research

• Lessons Learned

• Quality Management

Corporate Strategy

Project Level Use of Best Practices (Tactic)

Project Performance (Bottom Line)

· Improvement culture

· Funding· Incentive· Dedicated team· …

· Front End Planning

· Zero Accident Techniques

· Constructability· ...

· Cost· Schedule· Safety· Quality· Change

Use of Best Practices

Begins with Strong Implementation Culture

Ends with Improved Performance

CII Grouping of 10 Practices/ Best Practices

3 Components 10 PracticesPlanning · FEP

· Alignment During FEP· Planning for Startup

Execution · Constructability· Project risk Assessment (PRA)· Change Mgmt.

Organization Behavior (OB)

· Partnering· Project Delivery and Contract

Strategies (PDCS)· Team Building· Zero Accident Techniques

VBP Survey Start of Section 4.3

The Owner’s experience…

Impact of Best Practice Use on Schedule Performance- Owners

Mean N SEM PSig.

α=0.1

High 1.8% 27 3.3%0.082 Y

Low 11.5% 14 4.1%

VBP Survey Figure 14

High Use = 9.7 %Schedule

Improvement

Impact of Best Practice Use on Cost Performance- Owners

Mean N SEM PSig.

α=0.1

High -2.3% 29 2.2%0.030 Y

Low 8.6% 25 2.7%

High Use = 10.9 %Cost

Improvement

Impact of Planning Best Practice Use on Cost Performance- Owners

Mean N SEM PSig.

α=0.1

High -1.2% 29 3.0%0.080 Y

Low 6.3% 24 2.9%

Improvement

•Front End Planning•Alignment for FEP•Planning for Startup

Owners…

• If you are not implementing these CII Best Practices:– Front End Planning– Alignment for Front End Planning– Partnering– Change Management– Planning for Startup

Your projects are costing you

20% more than they should

The Contractor’s Experience…

Impact of Execution Best Practice Use on Cost Performance- Contractors

Mean N SEM PSig.

α=0.1

High -3.0% 12 2.7%0.011 Y

Low 9.2% 13 3.4%

Improvement

•Constructability•Project Risk Assessment•Change Management

Leadership at the Top to “Bottom Line” Impact

Company Culture

Practice Implementation

Performance Result$!

14.30 14.20

13.00 13.1012.20

11.8010.60

9.909.50 8.80 8.60 8.30 7.90

7.10 6.80 6.406.30 5.90

5.404.70

7.196.12

5.324.31

3.44 3.002.66 2.30

1.60 1.59 1.671.03 1.02

1.23 1.16 0.88 0.72 0.58 0.68 0.57

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

325 413 477 497 527 613 644 770 518 765 995 936 1,117 1,073 1,129 1,195 1,333 1,297 1,766 2,085

Industry*

*OSHA Construction Division, NAICS 236-238, SIC 15-17 Reflects OSHA Reporting Change

Year and Work Hours

TRIR Rate

6.80 6.79

6.105.80

5.50 5.50

4.904.50

4.404.00

4.20 4.10 4.00 3.803.60 3.40 3.40

3.202.80

1.90 1.551.45 1.14

0.63 0.810.55 0.45 0.31 0.41 0.27 0.26 0.23

0.460.36 0.33 0.25 0.21 0.23 0.20

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

325 413 477 497 527 613 644 888 591 763 1,122 936 1,117 1,073 1,129 1,301 1,419 1,100 1,724 1,969

Industry*

*OSHA Construction Division, NAICS 236-238, SIC 15-17 Reflects OSHA Reporting Change

Year and Work Hours (MM)

DART Rate

Project Distribution by Location

VBP Survey Figure 3

Project Distribution by Nature

VBP Survey Figure 4

Project Distribution by Industry Sector

VBP Survey Figure 5

Project Distribution by Cost Category

VBP Survey Figure 6

Project Distribution by Project Delivery System

VBP Survey Figure 7

Value of Best PracticesTheoretical Relationship

-0.24th Quartile 2nd Quartile 1st Quartile

Practice Use

BetterBetter

3rd Quartile

CII Resources

Research Products• CII Research Summaries• CII Implementation Resources• CII Research Reports

CII Mentoring• Implementation Champion Program• Experienced ISC members• CII Staff

Implementation Tool Box

CII Productions• Professional Development Continuum• CII Store• Education Modules• CII Online Education• CII Courses • Registered Education Providers• Executive Leadership ProgramCII Events

• Annual Conference• Performance Improvement Workshops• Benchmarking Seminars/ Workshops• Web Seminars• Communities of Practice

Professional Development Continuum• Development of project

management professionals

• Online education path outlining CII educational resources

• Targeted to competencies in:• Leadership & Human Relations• Project Organization & Management• Continuous Improvement• Front End Planning & Risk Management• Project Implementation & Controls• Design, Procurement & Materials Management• Construction Practices and Contracts• Safety, Health, Environment & Security

CII Education Modules

• CII research formatted as instructor-led courses• Developed by industry experts and adult

learning instructional designers

18 different topics

Taught right from the book– or –

Customized by your own trainers to specific company needs and applications

CII Education Modules

Everything an instructor needs …• PowerPoint Slides• Lecture Notes• Exercises• Case Studies

CII Online Education

• Based on CII Best Practices

• Fully interactive web-based learning

• Professional Development Hours (PDH) credits

Continuing Education Courses

Construction Industry Institute Continuing Education Courses are sessions

built from a series of half and full-day courses

presenting CII Research findings

in an interactive classroom environment

Participants may register for an individual course, multiple individual courses, or entire one-week session

Each Individual Course coversa specific area of CII Research

• Develop your next generation of industry leaders

• Two-week, intensive, in-residence program at UT’s Executive Conference Center

• Construction Industry Focus

• Now in its fifth year

This is where you want to send your top talent.

January 9-21, 2011ATT Executive Education CenterThe University of Texas at Austin

Changes for 2011

A better value in a difficult economy

• Two-week course – reduced from three weeks– 33% reduction in time required away from office

• $19,900 registration fee – reduced from $23,900– 17% reduction in registration fee

• Retains 87% of podium hours– 13% reduction in podium hours– reduction based on participant feedback

CII Executive Leadership Program Alumni

CII Class of 2011

Fill these spots with your rising stars!

What Is the ROI?

• Enhanced executive leadership capabilities

• Strategic business skills

• Collaborative relationships– between owners and contractors– with peers across the industry

• Benchmarking on best practices

• Executive level networking opportunities

Past Participant Companies• Abbott• Aker Kværner• Alstom Power• Aramco Services• BE&K• Baker Concrete Construction• Bateman Engineering• Bowen Engineering• Burns & McDonnell• CB&I• CCC Group• CDI• CH2M HILL• CSA Group• DuPont• Eli Lilly• Emerson Process Management• Flint Energy Services• Fluor• Foster Wheeler

• General Services Administration• Hatch• Hill International• Intel• International Paper• Jacobs• Midwest Steel• NOVA Chemicals• Ontario Power Generation• Rohm and Haas• S&B Engineers & Constructors• Saudi Aramco• The Shaw Group• Smithsonian Institution• Southern Company• Tampa Electric• TXI• U.S. Army Corps of Engineers• Walbridge• WorleyParsons

January 9-21, 2011ATT Executive Education CenterThe University of Texas at Austin

2010 CII Annual ConferenceAugust 3-5, 2010

• Over 500 Top Industry Attendees• Presentations on:

– New CII research

– CII product implementation case studies

• New CII Initiatives– Professional Development

– Implementation

– Benchmarking

– Other

• Notable Speakers

Grand Cypress ResortOrlando, Florida

Performance Improvement Workshop Fall

Focused on:• CII Product

Implementation• Best Practices

• New Practices• Case Studies• Networking

Houston, TexasNovember 8-10, 2010

Benchmarking Conferences & Workshops

• Essential for implementation of reliable benchmarking process.

• Updates improvements in the online system

• Explains new metrics & interactive reports

• Delivers annual training needed to stay in tune with improvements

• Ensures greatest benefit from this valuable CII resource.

Contact Frances DeCoux at (512) 232-3000 or

f.decoux@mail.utexas.edu

June 2-3, 2010Abbott Park (Chicago), ILHosted by Abbott

Celebrate Success

Products Training

Measure Results

Product Implementation

Product Champions/Review Boards

Implementation Plan and Goals

Self Audit

Corporate Implementation Champion

Corporate Commitment

CII Products CII Support Benefit/Cost Data

The Implementation Model

CII Resources

Research Products• CII Research Summaries• CII Implementation Resources• CII Research Reports

CII Mentoring• Implementation Champion Program• Experienced ISC members• CII Staff

Implementation Tool Box

CII Productions• Professional Development Continuum• CII Store• Education Modules• CII Online Education• CII Courses • Registered Education Providers• Executive Leadership ProgramCII Events

• Annual Conference• Performance Improvement Workshops• Benchmarking Seminars/ Workshops• Web Seminars• Communities of Practice

Participation Opportunities

• As User of CII Programs & Services– Professional Development

Continuum– CII Store– Education Modules– CII Online Education– CII Courses – Registered Education

Providers– Executive Leadership

Program

• As Contributor to CII Programs & Services– CII Committees– CII Research Teams– Communities of Practice– Best Practices Course

• As Attendee or Presenter at CII Events– Annual Conference– Performance Improvement

Workshops– Benchmarking Seminars/

Workshops– Web Seminars

Value of Best PracticesTheoretical Relationship

-0.24th Quartile 2nd Quartile 1st Quartile

Practice Use

BetterBetter

3rd Quartile

Questions?

Today’s Agenda

CII - CMAA Alliance

Best Practices - Best Practitioners

Mission Statement- Improve delivery of capital facilities in all settings by

promoting the professional practice of Construction and Program Management in conjunction with the broadest possible application of recognized industry Best Practices.

Why Best Practices- Best Practitioners

• CII – Dedicated to organizational transformation.– Promotes a culture of high quality execution in contractor

(architect/engineer companies, construction companies) & owner organizations.

• CMAA– Emphasis on individual excellence.– Established Certified Construction Manager credential

and its – Solid Standards of Practice.

Budget Factor - Contractors

Benchmarks – Cost

Cost Growth - Owners

Median (-3%)

“Best in Class” (-19%) Median (0.98)

“Best in Class” (0.83)

OWNER CONTRACTOR

COST GROWTH BUDGET FACTOR

Best in Class= 6 x Better Cost

Performance

Best in Class Leads

by 15%

Schedule Factor - Contractors

Benchmarks – Schedule

Schedule Growth - Owners

Median (+2%)“Best in

Class” (-11%)

Median (1.00)

“Best in Class” (0.83)

Schedule Growth Schedule Factor

OWNER CONTRACTOR

Best in Class Leads

by 13%

Best in Class Leads

by 17%

A word on semantics…

CMAA Construction Manager = CII Project Manager

CMAA Service Provider = CII Contractor

Same Focus:

Owner support from project conception

through turnover of facilities

CII Professional Development Program Users• CII Professional Development Programs should be

expanded to assist continuing improvement efforts- 77%• CII should expand distance learning opportunities-76%• CII should expand instructor led professional development

opportunities- 68%• CII should expand support for professional accreditation

programs- 66%

Dec09 CII Value & Satisfaction Survey Responses- Agree or Strongly Agree

October 2009 CII BOA- SPC Poll results

Trend Category 2010 Outlook

2011-2015 Outlook

Change in Priorities

Workforce & Human Capability

3 1 Increasing

Project Delivery 2 5 Decreasing

Corporate Strategy 2 4 Decreasing

Technology & Innovation

4 3 Increasing

Market & Demand Drivers

1 2 Decreasing

Attention to Work Force Development Returns

The Challenge Returns With Economic Recovery:

• Aging workforce.

• Growing backlogs.

• Shortage of skilled professionals.

• Need for a structured professional development program.

Organizational Synergies

• The two organizations will promote safer, higher quality, faster and more efficient construction

• Will combine– CII’s research findings, professional development

resources and published Best Practices with– CMAA’s Construction Management Standards of Practice

(SOP) and the Certified Construction Manager (CCM) program administered by the Construction Manager Certification Institute (CMCI)), a subsidiary of CMAA.

Current Alignment Activities

• Dissemination of combined bodies of knowledge.

• Reciprocal discounts.

• Supporting each others’ events.

• Joint review of CMAA’s CM “core competencies,” as defined in the new SOP.

Current Alignment Activities

• Comparing those core competencies to associated CII Best Practices documents.

• Coordinating events calendars.

• Beginning to explore cooperative original research.

What does it mean to CII & CMAA members?

• Confidence in a CII endorsed professional certification process.

• Recognition of continuing education credits earned through participation in programs and activities.

• Greater dissemination of CII research findings extending the reach to your contractors, subcontractors, vendors.

So what do I do now?

• CII Members– Begin your CCM journey– Tap CMAA Professional Development Opportunities

• CMAA Members– Learn about CII practices and Best Practices– Tap CII Professional Development Opportunities

• Enjoy the discounts and reap the benefits!

CII - CMAA Alliance

Best Practices - Best Practitioners

• Best Practices

• Implemented through Best Practitioners

Questions?

Today’s Agenda

Where do CII Practices & Best Practices fit in the project cycle?

Conceptual &Front End Planning

Basic Detail

Startup & Commissioning

Procurement

Construction

Operations

Engineering

Everywhere!

Major Influence

Rapidly DecreasingInfluence

LowInfluence

Definition

Commitment$$

ConceptualAnalysisand R&D

Front EndPlanning

BasicData andScoping

ProjectAuthorization

ProductionEngineering

andProcurement

Construction EngineeringComplete

Turnoverand

Start-up

Project Life Cycle

Influence

Opportunity for Influence

CII Best Practices

• Alignment

• Partnering

• Team Building

Design Phase

Project Life Cycle

• Benchmarking & Metrics

• Lessons Learned

How good is your safety record?

• What is:

– Your Total Recordable Incident Rate (TRIR)?

– Your goal for a TRIR?

– Your Days Away, Restrictions and Transfers rate (DART)?

– Your goal for a DART rate?

Company TRIR Percentile Rank of All Industry GroupU.S. Projects

0 10 20 30 40 50 60 70 80 90 100

Percentile (%)

Owners

Contractors

Company DART Rate Percentile Rank of All Industry GroupU.S. Projects

0 10 20 30 40 50 60 70 80 90 100

Percentile (%)

Owners

Contractors

Definition of Zero Accident Techniques

Techniques that promote a culture that believes that

• all accidents are preventable• establishes zero accidents as the

only acceptable goal.Initial Application

Basic Detail

Procurement

Construction

Operations

Engineering

Zero Accidents Techniques

• EM-160 Making Zero Accidents A Reality

• SP32-2 Zero Injury Economics

• IR101-2 Design for Construction Safety Toolbox, Version 2.0

• RS216-1 Targeted Safety Programs

• RS190-1 The Owners’ Role in Construction Safety

• RS160-1 Safety Plus: Making Zero Accidents A Reality

• RS160a-1 Making Zero Accidents A Reality: Focus on Shutdowns, Turnarounds, and Outages

• RS32-1 Zero Injury Techniques

• RS13-1 Managing Subcontractor Safety

• Video DVD-1 One Too Many

Elements of Zero Accident Techniques

• Owner’s influence

• Management actions

• Design considerations

• Written programs

• Training

• Role of safety professionals

• Award program effectiveness

• Safety meetings

• Inspections and audits

• Other related issues

Techniques address:

Impact of Zero Accident Techniques on TRIR- Owners

High Use = 61%TRIR

Reduction

Impact of Zero Accident Technique on TRIR- Contractors

High Use = 54%TRIR

Reduction

Additional CII Implementation Resources

• Education Modules

• Continuing Education

• Online Education

• Registered Education Providers

• Community of Practice

• Web Seminars

EM160-21

Course II

WS11-01 & 02

Partnering• Project specific partnering

– Project objectives focused; short term.

• Strategic alliances– Enterprise objectives focused; long term

Optimum Application

Partnering StrategyFor

ABC Partners

Basic Detail

Procurement

Construction

Operations

Engineering

Partnering

Partnering ToolKit, IR 102-2• Proactive management process

• Integrates & optimizes value-added services of each party to best achieve business objectives of all parties within the relationship.

• Promotes use of common values and honorable business practices.

Owner’s Internal

Alignment

Phase 1 Phase 2 Phase 3 Phase 4 Phase 5

Work Process

Alignment

Partnering Relationship

Alignment

Project Alignment

Partner Selection

• Identify Business Drivers

• Evaluate Partnering

• Prepare and Align

• Select Optimum Partner

• Align Objectives

• Develop Measures

• Develop Reward System

• Develop “Win / Win”Objectives

• Reward Accomplish -ment of Objectives

• Establish Intraproject Goals

• Establish Processes to Support Measures

The Partnering Process

Benefits of Partnering

• Efficiency improvements from working together.

• Reduced costs for all from effective resource utilization.

• Increased opportunity for innovation.

• Promotes continuous improvement.

• Improved profits (value) for all parties.

• Attitude change from adversarial to cooperative, from self-centered to team-focused, from win/lose to win/win.

Benchmarking Partnering vs. Traditional ConstructionCategory Result Area Results

Cost Total Project Cost (TPC)

Construction Administration

Marketing

Engineering

Value Engineering

Claims (% of TPC)

Profitability

10% reduction

24% reduction

50% reduction

$10 per hour reduction

337% increase

87% reduction

25% increase

Schedule Overall Project

Schedule Changes

Schedule Compliance

20% reduction

48% reduction

Increased from 85% to 100%

Safety Hours without lost time accidents

Lost work days

Number of doctor cases

Safety rating

3 million vs.

48,000 industry standard

4 vs. 6.8 industry standard

74% reduction

5% of national average

Quality Rework

Change orders

Direct work rate

50% reduction

80% reduction

42% increase

Claims Number of claims

Projects with claims

83% reduction

68% reduction

Other Job satisfaction 30% improvement

Impact of Partnering on Cost Growth- Owner

Mean N SEM PSig.

α=0.1

High Use -6.73% 15 2.78%0.019 Y

Low Use 2.44% 75 1.62%

Improvement

EM102-21

Pending Interest

CT16-CT19

Team Building?92

Team Building?

Team Building

• Project-focused process with team:

– Shared goals & interdependence,

– Trust, commitment, accountability,

– Collaborative problem-solving skills.

Initial Application

Basic Detail

Procurement

Construction

Operations

Engineering

Team Building

• Team Building: Improving Project Performance RS37-1

• Building the Project Team – Participant Handbook EM37-21A

Elements of Team Building:

Culture- Leadership- Communication- Trust and Honesty

AlignmentAlignment

Execution Processes

- Stakeholders- PPP Process- Reward and Recog.

Information- Priority between

cost, schedule, and features

Tools- Team Meetings- Teamwork and Team

Building- Planning Tools

BBaarrrriieerrss

Benefits of Team Building :

• Reducing adversarial relationships, developing trust and team spirit.

• Improving cooperation, cohesiveness, and problem-solving skills.

• Providing alignment of goals and expectations.

• Identifying problems early.

• Shortening schedule.

• Lowering cost.

• Improving safety record.

• Reducing and managing changes.

Impact of Team Building on Schedule Growth- Owner

Mean N SEM PSig.

α=0.1

High Use -0.95% 26 3.24%0.074 Y

Low Use 5.96% 48 2.19%

Improvement

CII Implementation Resources

EM37-21

Course I

Planned

Pending Interest

Alignment

• Projects participants working in harmony to develop and meet a uniformly defined and understood set of project objectives.

Initial Application

Basic Detail

Procurement

Construction

Operations

Engineering

Alignment

• Alignment During Pre-Project Planning, IR113-3.

• Project Objective Setting, RS12-1, Second Edition

Elements of Alignment

Business Planning

Pre-Project PlanningProject Execution

Facility Operation

Business

Executive

Project

Functional

Project Life Cycle AlignmentCross-Organizational Alignment

Top-to-Bottom Alignment

Alignment During Front End Planning

Alignment of Project Objectives

Objective Setting Phases Agreement Matrix

Benefits of Alignment

• Ensures that participants are working toward a common goal.

Alignment Index vs. Performance Analysis (from recent Research Team 213 data)

Performance Less than Median Greater than Median

Cost 3.3% over budget 6.5% below budget

(N=30) (N=34)

Schedule 24.5% behind

schedule8.4% behind

schedule

(N=33) (N=35)

Change orders 8.2% of budget 7.6% of budget

(N=26) (N=27)

Alignment Index Score*

*Alignment During Pre-Project Planning (Front End Planning)

Impact of Alignment during FEP on Cost Growth- Owners

Mean N SEM PSig.

α=0.1

High Use -3.30% 51 1.58%0.001 Y

Low Use 5.39% 45 2.19%

Improvement

EM113-21

Course I

Pending Interest

Questions?

Definition of Front End PlanningFront End Planning is also known as:• Front end loading• Pre-project planning• Feasibility analysis

Initial Application

• Conceptual planning• Programming/schematic design• Early project planning

Basic Detail

Procurement

Construction

Operations

Engineering

Front End Planning

Front-End Planning Process, IR213-3

• HTML product only available by download

• Latest tools in sequence

• Prompts timely use of tools

• Includes electronic files of templates, checklists, and other tools

Front End Planning

Front-End Planning Process, IR213-2

• HTML product; download only

• Provides latest tools in sequence

• Prompts timely use of tools

• Files of templates, checklists, other tools

• Includes:

– IR113-2, Project Definition Rating Index (PDRI) – Industrial Projects

– IR155-2, PDRI – Buildings Projects

– IR113-3, Alignment During Pre-Project Planning)

– RS213-1 Front End Planning: Break the Rules, Pay the Price

– RS241-1 Optimizing Construction Input in Front End Planning

– IR242-2 Front End Planning in Renovation & Revamp Projects

0 FeasibilityFeasibility 1 ConceptConcept 2 Design and Design and

Construction Construction

Front End Planning Process

Initiate Phase

Generate Options

Filter Options

PDRI 1

Feasibility Report

Initiate Phase

Preliminary Design/Eng.

Preliminary Des./Eng. Reviews

PDRI 2i

Finalize Scope Definition

Cost & Schedule Control Estimates

PDRI 3

Project Definition Package

Initiate Phase

Analyze Alternatives

Conceptual Scope and Estimates

Evaluate and Select Best Alternatives

Concept Phase Report

PDRI 2

IncorporatesPDRI checkpointswith target scores

Recognizes role of design in support of the process

DetailedDetailedScopeScope

Planning Tools

• PDRI: Project Definition Rating Index, Industrial Projects, Third Edition, IR113-2

• Comprehensive checklist with 70 scope definition elements.

• Identifies level of scope definition, areas for improvement on industrial projects.

Min score 70Min recommended score 200Max score 1000

IR 113-2 PDRI- INDUSTRIAL

Planning Tools

PDRI, Project Definition Rating Index for Building Projects, Third Edition, IR155-2.

• Comprehensive checklist with 64 scope definition elements.

• Identifies level of scope definition, areas for improvement on building projects.

Min score 71Min recommended score 200Max score 1000

IR 113-2 PDRI- IndustrialSECTION IA. Manufacturing Objectives CriteriaB. Business ObjectivesC. Basic Data Research & DevelopmentD. Project ScopeE. Value Engineering

SECTION IIF. Site InformationG. Process/ MechanicalH. Equipment ScopeI. Civil, Structural & ArchitecturalJ. InfrastructureK. Instrument & Electrical

SECTION IIIL. Procurement StrategyM. DeliverablesN. Project ControlP. Project Execution Plan

SECTION IA. Business StrategyB. Owner PhilosophiesC. Project Requirements

SECTION IID. Site InformationE. Building ProgrammingF. Building/Project Design ParametersG. Equipment

SECTION IIIH. Procurement StrategyJ. DeliverablesK. Project ControlL. Project Execution PlanSomewhat s

imilar b

ut sub ite

ms address different is

IR 155-2 PDRI- Buildings

• Tests planning alignment/preparedness of multiple STO tasks.

• Helps identify inherent STO risks for early stage mitigation.

IR242-2 Shutdown/Turnaround Alignment Review (STAR) Tool

• Assists in developing overall approach.

• Enhances alignment among stakeholders.

• Helps establish multiple project communications.

• Provides planning consistency around shutdown, turnaround, outage (STO) objectives.

• Complements “PDRI” for Renovations/Revamps

0 Feasibility 321 DesignDetailed Scope

Concept

0 Feasibility 321 DesignDetailed ScopeConcept

0 Feasibility 321 DesignDetailed Scope

Concept

STOTimeline of communication between PM and STO leadership

Project n

Project 2

Project 1

Communications of statusand Input from PM/STO Leadership

At this point, the STOLeadership can collectivelyevaluate results for all projects

Example STAR Timeline

Actual timing for each application will be set by the Project/STO Leadership Team

IR242-2

Identifies Risks

IR242-2- Provides Risk Mitigation Action Plan

Additional IR242-2 Resource: Project Condition Investigation (PCI) Cards

Explores current available technologies for front end planning investigation & risk reduction:

• Underground Conditions

• Integrity (Mechanical/Structural/Electrical)

• Restricted Access

• Spatial Relationships

• Risk Identification

• Environmental Constraints

IR242-2 Identifies Tools & TechnologiesFor Risk Mitigation

Recent CII Front End Planning Benefit Data from Research Team 213

• Sample of 609 projects, $37 billion

• Results of good front end planning:

Cost: 10 percent less

Schedule: 7 percent shorter delivery

Changes: 5 percent fewer

Impact of FEP on Cost Growth- Owners

Mean N SEM PSig.

α=0.1

High Use -2.19% 59 1.54%0.030 Y

Low Use 6.35% 37 2.51%

Improvement

See next slide

Course I

CT09-CT13

Front End Planning Education Modules

• EM213-21 Front End Planning• EM241-21 Construction Input Assessment*• EM242-21 Front End Planning of Renovation &

Revamp Projects*• Project Definition Rating Index (PDRI)

– EM113-23 Industrial Projects– EM155-21 Buildings

* To be available later in 2010

Planning for Startup• Planning for the transitional phase between plant

construction completion & commercial operations, including:– Systems turnover.– Check-out of systems.– Commissioning of systems. – Introduction of feedstocks. – Performance testing.

Initial Application

Basic Detail

Procurement

Construction

Operations

Engineering

Planning for Startup

Planning for Startup, IR121-2.

• Contains Toolkit with 26 tools to help plan successful startup.

• Details 45 activities that should be noted as part of planning for startup over eight typical phases of a project.

• Includes Startup Planning Model.

SuPERTOOL 1-A-2

WORK IN THIS ZONE

AVOID THIS ZONE

SuPER Score

Thorough Planning

No PlanningFront-End

EngineeringDetailed Design

Construction Checkout, Commissioning

& Initial Operations

Definition, Concept & Feasibility

Project Phases

Benefits of Planning for Startup

• Provides common objectives & plan for:– System turnover, checkout, commissioning & filling.

– Performance testing.

– Business unit & plant operations.

– Owner project management.

• Involves key front-end stakeholders before design is fixed.– Project Management, Engineering, Construction

– Plus Startup Manager, Plant Operations & Maintenance.

• Increased focus on:– Cost elements of startup.

– Estimate accuracy.

– Meeting commercial operations date.

• Timely & thorough identification of problems & issues during planning phase…before startup activities.

Impact of Planning for Startup on Cost Growth- Owners

Mean N SEM PSig.

α=0.1

High Use -1.72% 55 1.52%0.083 Y

Low Use 5.72% 22 3.85%

Improvement

Impact of Planning for Startup on Schedule Growth- Owners

Mean N SEM PSig.

α=0.1

High Use 1.13% 48 2.45%0.011 Y

Low Use 9.01% 15 1.72%

Improvement

Impact of Planning for Startup on Cost Growth- Contractors

Mean N SEM PSig.

α=0.1

High Use -3.40% 15 1.93%0.070 Y

Low Use 6.94% 9 4.76%

Improvement

EM121-21

Course I

CT13-CT14

Pending Interest

Definition Project Delivery & Contract Strategy (PDCS)

• A process to assist in selecting a contract delivery strategy to optimize project objectives.

Initial Application

Basic Detail

Procurement

Construction

Operations

Engineering

Project Delivery & Contract Strategy (PDCS)

Owner’s Tool for Project Delivery and Contract Strategy (PDCS) Selection User’s Guide, IR165-2

• Excel tool enables structured & integrated procedure for developing project delivery & contract strategies.

• Provides more project delivery & contracting strategy alternatives in decision-making process tailored to project needs.

• Incorporates quantitative assessment of 12 PDCS alternatives

• Harmonizes delivery systems with contract strategies & relates these to owner’s project objectives.

PDCS Tool Considerations

• Phase sequencing

• Project team relationships

• Compensation approach

PDCS Tool Considerations-Phase sequencing

PDCS Tool Considerations-Project Team Relationships

PDCS Tool Considerations-Compensation Approach

Tool Examines Effectiveness Value of Selected PDCS in Meeting Project Objectives

PDCS 01

PDCS 02

PDCS 03

PDCS 04

PDCS 05

PDCS 06

PDCS 07

PDCS 08

PDCS 09

PDCS 10

PDCS 11

PDCS 12

Factor 1

Control cost

growth

Factor 2

Ensure lowest cost

Factor 3

Delay or minimize

expenditure rate

Factor 4

Facilitate early cost estimates

Factor 5

Reduce or transfer risks to

contractor

Factor 6

Control time

growth

Factor 7

Ensure shortest schedule

Factor 8

Promote early

procurement

PDCS Analysis Tab View

Benefits of the PDCS Tool

• Relates PDCS to project objectives and success parameters.

• Provides decision support tool to facilitate selection of most suitable PDCS.

• Expands knowledge base with well-defined, documented PDCS alternatives.

• Provides rationale for selecting PDCS, based on quantification of alternatives.

• Supports CII Alignment and Front End Planning Best Practices.

• Web Seminars

EM165-21

Course II

Pending Interest

Yes- 4 part series

Key CII Education & Participation Resources

• The Professional Development Continuum- path for construction project management professional development & resources aid.

• CII Education Modules- recast CII original research into adult-learning courses for instructor-led training.

• Online Education courses- based on CII Best Practices, use the Internet to deliver CII education.

• CII Web Seminars- live events delivered on various topics of interest via the Internet.

• Continuing Education Courses- present CII education modules in an interactive classroom environment at The University of Texas at Austin.

• The CII Executive Leadership Program- partnership between CII and The University of Texas’ McCombs School of Business to offer a world-class leadership program for senior executive candidates.

Today’s Agenda

Questions?

Thank you for your attention!

Manuel A. GarciaAssociate Director

Construction Industry Institute3925 W. Braker Lane (R4500)

Austin, TX 78759-5316(512) 232 1966

mgarcia@cii.utexas.edu

Bonus!

• Additional information on the Project Health Indicator

CII Practices (CII Best Practice Candidates)Project Planning Phase

• Attract and Maintain Skilled Workers

• Automated Identification

• Construction Input Assessment

• Effective Use of Global Engineering Workforce

• Environmental Remediation Management

• Equitable Risk Allocation

• International Project Risk Assessment

• Leader Selection

• Modularization/Preassembly

• Organizational Work Structure

• Project Delivery and Contract Strategies

• Project Security

• Project Teams

• Technology Implementation

• Value Management

• Work Process Simulation

Design/ Construction/ Startup Phases

• Craft Productivity Practices

• Design for Maintainability

• Design for Safety

• Engineering Productivity Measurement

• Piping Design

Project Life

• Cost & Schedule Control

• Employee Incentives

• Fully Int. & Auto. Project Processes (FIAPP)

• Information Integration

• Management of Education & Training

• Managing Workers’ Compensation

• Project Health Assessment

• Small Projects Execution

Definition Project Health Assessment

• Assessment of project health through leading indicators to prevent adverse safety, quality, schedule and cost results.

Initial Application

Basic Detail

Procurement

Construction

Operations

Engineering

Project Health Assessment

Project Health Indicator (PHI) Tool, IR220-2

• Addresses 43 leading indicators of project trouble.

• Begins where CII Project Definition Rating Index (PDRI) ends: after front-end planning.

• Identifies & quantifies extent of each leading indicator throughout project execution.

• Provides direction for corrective action.

• Excel based; requires 30-45 minutes to complete.

High team turnover rate & instability.

Project team losing confidence in schedule accuracy & validity.

Owner and Contractor personnel are not properly aligned.

PM lacking required level of experience and skills.

Samples of Leading Indicators

Leading Indicator Input Example

Outcome Example

Project Practices Implementation Assessment

Customization

Potential Uses

Status Reporting Project Reviews Auditor Reviews Benchmarking / Training Gap identification

Using the PHI Tool

Benefits of Project Health Assessment Tool

Early Warning – uses leading indicators rather than traditional lagging indicators.

Provides basis for proactive decisions.

Predicts risks & systemic process deficiencies by Project Outcome and Project Practice Area.

Alternate perspective to progress reporting: quantifies non quantifiable measures- “Gut Feeling.”

Applicable to Owners & Contractors at any level, project size or market sector.

Usable throughout project execution, identifies risk areas & long term project system gaps.

Suggests potential CII sources for mitigation strategies.

Identifies project controls opportunities and areas for project& corporate focus.

Pending Interest

Extra Bonus!

• Additional information on CII Benchmarking & Metrics

CII Best Practices

• Alignment

• Partnering

• Team Building

Design Phase

Project Life Cycle

• Benchmarking & Metrics• Change Management

• Lessons Learned

Basic Detail

Procurement

Construction

Operations

Engineering

Definition of Benchmarking and Metrics

The systematic process of measuring performance against recognized leaders to determine best practices that lead to superior performance.

Initial Application

Benchmarking

Benchmarking Implementation Toolkit, IR BMM-2

• Introduces the CII Benchmarking & Metrics Program

• “What you measure you improve”

CII Database

1,882 projects

Worth > $98 Billion

Large & Small Projects Combined

839(45%) 1,043

OwnersContractors

368 (80%)

1,514(80%)

International

Domestic

• 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

• Zero Accident Techniques

• Proj. Delivery & Contract Systems

• Benchmarking

Performance Practice Use

CII Standard Metrics

CII Benchmarking Process

Three-step Process

OnlineQuestionnaire

CII BenchmarkingDatabase

Data Mining and Reporting Engine

Available Tools

• Data Mining Capability

Online Data Mining

Project-Level Productivity

• Engineering Productivity (1 Number) • Construction Productivity (1 Number)

Piping Construction Productivity Results

Project-Level Productivity Example

Good 1Q

• 11% Improvement (2nd to 1st Quartile)

• 26% Improvement (4th to 1st Quartile)

Industry Sector-Specific Metrics

• Current– Pharmaceutical– D/S Oil & Gas– COAA (Contract)– U/S Oil & Gas– Healthcare Facilities

• Future– (Nuclear) Power– Aviation Facilities

Benchmarking ResultsKey Report

Benefits of CII Benchmarking and Metrics

• Builds a performance culture.

• Highlights strengths and weakness.

• Allows focus on improvement where needed without wasting scarce resources.

• Avoids making mistakes in project implementation.

• Organizational level benchmarking yields positive bottom line.

• Provides understanding & focus on most effective practices for greater bottom-line impacts.

CII Benchmarking is Compelling

• Provides information not available elsewhere

• Provides source of analysis to drive improvement– Integrates with other data sources

– Industry-level analysis

– Measurement of best practices

• Provides multiple perspectives of performance

• Quantifies Value

• Confidential

Performance Metrics(Cost Change Factor vs. Project Cost Growth)

-10.0%

-20.0%

-30.0%

-40.0%

Cost Change Factor

<5% >=5%

N=428 N=428

Median: 5.0%

Cost Change Factor = Cost of All Changes/Final Cost of Project

CII Benchmarking Safety ResultsSharp Reduction

In RecordableInjuries

Zero RecordableInjuries In Quartiles 1 & 2

Proven Results From Benchmarking Efforts

Pharmaceutical and Biotechnology Owners Benchmarking Program

Cost Performance (6% Less) Schedule Performance (26% Less)

Automated Data Entry

• Benchmark ALL your projects (unlimited)

Project Data &Performance

Results

CII Database

Member Database

CII Key Report

Jacobs Performance Management System

Schedule

Safety

Data Sources

Operability Data

Data Collection

Input Form

- Cost- Schedule- Changes- Safety- Operability

Project Data &Performance

Results

Member Database

CII Database

Data Entry

Internal Reports

Internal BM CII BM

CII Implementation Resources

Benchmarking Metrics Committee

Dr. Stephen Mulva

Associate Director

stephen.mulva@mail.utexas.edu

Dr. Jason Dai

Research Engineer

jiukun.dai@engr.utexas.edu

Hong Zhao

Sytems Analyst

hong.zhao@engr.utexas.edu

CII NextGen Benchmarking System

• Tier 1 (80% less questions), Tier 2 Questionnaire

• Internal (Business Unit, Product Line) Benchmarks

• Instant Feedback with Monthly Quartile Updates

• Automated Data Entry (XML)

• Worldwide University-Based Performance Assessment

Labs (PAL’s)

• CII Summer Intern Program

Dashboard – Donut Chart View (Your Company)

Thank you for your attention!

Manuel A. GarciaAssociate Director

Construction Industry Institute3925 W. Braker Lane (R4500)

Austin, TX 78759-5316(512) 232 1966

mgarcia@cii.utexas.edu

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