Critical Chain Project Management

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Ira Summers
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1 Critical Chain Project Management Delivering a high performance result in the engineering design phase of a large capital project, using BIM for the first time

2 Inner Harbour debottlenecking project

3 Nelson Point

4 Finucane Island

5 FEED front end engineering design

6 Return on Investment What is the goal of your business? Throughput = sales variable costs Operating Expense = labour + overhead Investment = all money trapped in the system

7 Throughput per day Assumptions Total throughput per day in Port Hedland after the upgrade is $2m The duration between engineering finished to upgrade completed for each shut is fixed BHP Billiton will only arrange three super shuts for IHD1 in current sequence The investment in construction and procurement of materials and equipment is fixed ΔT Daily Throughput at the Port based on IHD1 assumptions $2,000,000 ΔOE Head Counts for BHP 4 ΔI Head Counts for Ensemble 3 Average working hours for Fluor employees per day 9 Head Counts for Fluor 70 Materials and equipment

8 Statement of fact to go here Results The results from the use of CCPM in IHD1 FEED Productivity factor for IHD1 was reduced from a typical 1.2 to 0.87 indicating a 27.5% increase in productivity A net benefit to of more than $2m A saving of engineering cost for IHD1 estimated at AUD million 100% due date performance for the engineering work on all of the routes of the IHD1 project Working as a team with the EPCM and the owner, we have successfully identified $190 million extra Throughput.

9 The Theory of Constraints (TOC)

10 The 5-step FOCUS

11 Implications of TOC Constraints govern the rate at which value is created Any system has one constraint that has most impact A gain for the constraint is a gain for the system as a whole The constraint must do only that which only the constraint can do Non-constraints have capacity relative to the constraint

CMMI-SVC The Goal Processes continually improved efficient

smaller performance variation, reachable goals for quality

predictable costs, steep increase in productivity Better

deadlines frequently met quality on the up and up Not much

12 CMMI-SVC The Goal Processes continually improved efficient and effective agile organisation Quantitative process control smaller performance variation, reachable goals for quality and performance Shared common processes, comparable data predictable costs, steep increase in productivity Better plans, more reasonable commitments, corrective actions deadlines frequently met quality on the up and up Not much discipline, poorly established commitments success cannot be reproduced Time / $ /

13 Innovation: three critical dimensions

14 Managing the Critical Chain The Power of Aggregation Shrink task durations to 50% probability of completion (P50) and aggregate the difference between P90 and P50, for each task, as protection in feeding and project buffers.

15 Statement of fact to go here The executable workplan - 1

16 The executable workplan - 2

17 Schedule aggregation Statement of fact to go here

18 Resource aggregation

19 The Fever Chart: Telling the Story

20 The Portfolio Fever Chart: Management by Exception

21 Maestroux

22 Maestro and Concerto: Resource Load vs. Capacity Report Clear identification of what specific resource types are the bottleneck, who is assigned to that work type, and when they roll on and roll off

23 23 The life of the task manager Work can be viewed and updated as task lists, Kanban board or in timeline view, filtered for relevance by user

24 24 Operating discipline Multi-tasking No updates Measuring critical operating discipline drivers encourages simplified, standard ways of working Schedule assignments

25 25 Project financials Forecast, schedule and actual costs available at the press of a button

26 Integrating Procurement Vendor data Strategy Red Yellow Green Received INPUT -> Expected Date 1/08/2014 1/08/2014 1/08/2014 1/08/2014 1/08/2014 1/08/2014 1/08/2014 1/08/2014 1/08/2014 1/08/2014 5/08/2014 5/08/2014 5/08/2014 5/08/2014 5/08/2014 5/08/2014 5/08/2014 5/08/2014 1/08/2014 4/08/2014 pending/in design pending/in design pending approval BHP 4 weeks from OK of Prposal to design 2 options by Manufacturer E2 Recevied Vendor Data Stat Drives Siemens 450 kw (3.3 kv SC Siemens 630 kw (11 kv W Siemens 630 kw (3.3 kv W Siemens 630 kw (6.6 kv W Siemens 800 kw (11 kv W Siemens 800 kw (6.6 kv W Siemens 1000 kw (11 kv W Siemens 1000 kw (6.6 kv W Siemens 1250 kw (6.6 kv W Siemens 1500 kw (6.6 kv S Siemens 1750 kw (11 kv W Siemens 1750 kw (6.6 kv S Siemens 1750 kw (6.6 kv W Siemens 2000 kw (6.6 kv S Pulleys TBA DA D2A D D TBA TBA D ND NDA 18-8-ND 18-9-D 18-9-ND LS Brakes LS 2 Caliper Oil Coolers Size 8 Size 9 Size 10 Screens LRP2 Special V/Feeders LRP2 Special Shut Off Gates LRP2 Special Other CPS - 99% Stock 4 new ones CST - lots of changes standard equip FI1: P809 + TS809: Vendor Data: Mech: E2 Vendor Data Receiv 1/10/2014 FI FI4: P800: Vendor Data: Mech: E2 Vendor Data Received 6/08/2014 FI FI4: P801 + TS801: Vendor Data: Mech: E2 Vendor Data Receiv 6/08/2014 FI FI4: P802: Vendor Data: Mech: E2 Vendor Data Received 6/08/2014 FI FI6: P982 + TS982: Vendor Data: Mech: E2 Vendor Data Receiv 25/09/2014 FI FI7: P804 - Drive Station: Vendor Data: Mech: E2 Vendor Data 23/09/2014 FI FI7: P898: Vendor Data: Mech: E2 Vendor Data Received 8/09/2014 FI LRP2: P807 + TS807: Vendor Data: Mech: E2 Vendor Data Rece 25/08/2014 LRP LRP2: P815 (Incl. Shuttle): Vendor Data: Mech: E2 Vendor Data Received 26/08/2014 LRP LRP2: P816 Tail: Vendor Data: Mech: E2 Vendor Data Received 16/09/2014 LRP LRP2: P816-Head + P817-Head + P808 + TS808 : Vendor Data: Mech: E2 15/08/2014 Vendor Data LRP2 Received LRP2: P817 Tail: Vendor Data: Mech: E2 Vendor Data Received 12/09/2014 LRP LRP2: PLANT: Vendor Data: Mech: E2 Vendor Data Received 6/08/2014 LRP NP1: BWR6: Vendor Data: Mech: E2 Vendor Data Received 6/08/2014 NP NP1: P510: Vendor Data: Mech: E2 Vendor Data Received 14/08/2014 NP NP1: P511 + TS504: Vendor Data: Mech: E2 Vendor Data Received 11/08/2014 NP NP1: P512 + TS505: Vendor Data: Mech: E2 Vendor Data Received 6/08/2014 NP NP1: P513 + TS513: Vendor Data: Mech: E2 Vendor Data Received 14/08/2014 NP NP1: P560 + TS560: Vendor Data: Mech: E2 Vendor Data Received 6/08/2014 NP NP1: P561: Vendor Data: Mech: E2 Vendor Data Received 7/08/2014 NP NP2: P501-Head + P503-Tail + TS501: Vendor Data: Mech: E2 Vendor Data 22/08/2014 ReceivedNP NP2: P502-Head + P505-Tail + TS503: Vendor Data: Mech: E2 Vendor Data 26/08/2014 ReceivedNP NP2: P503-Drive Station: Vendor Data: Mech: E2 Vendor Data Received6/08/2014 NP NP2: P505-Drive Station: Vendor Data: Mech: E2 Vendor Data Received8/09/2014 NP NP2: P515 + TS515: Vendor Data: Mech: E2 Vendor Data Received 22/08/2014 NP NP3: P564 + TS560 + Truss Mods: Vendor Data: Mech: E2 Vendor Data 21/08/2014 Received NP NP3: P565: Vendor Data: Mech: E2 Vendor Data Received 8/09/2014 NP NP4: P351 + TS351: Vendor Data: Mech: E2 Vendor Data Received 25/09/2014 NP NP4: P355 + TS355: Vendor Data: Mech: E2 Vendor Data Received 18/09/2014 NP FI1: P865: Sketches: Revise Drawings for Checking - Mechanical 22/10/2014 FI Idlers Belt Weighers FL Smidth Samplers Thiess Krupp BWR6 There is no systematic way to link either vendor data or contracts management activity to their criticality with respect to the CCPM priorities

27 Integrating technologies

28 Earned value versus work management

29 Contracting strategies

We do not act rightly because we have virtue or excellence, but we rather

30 The Right Stuff: Excellence as a habit Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but we rather have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit. Aristotle

31 The Flight Plan

32 Bringing people on the journey Innovations in productivity to inspire your people and uplift performance

Duration of online examination will be of 1 Hour 20 minutes (80 minutes).

Duration of online examination will be of 1 Hour 20 minutes (80 minutes). Program Name: SC Subject: Production and Operations Management Assessment Name: POM - Exam Weightage: 70 Total Marks: 70 Duration: 80 mins Online Examination: Online examination is a Computer based examination.