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Benchmarking the Value of Best Practices
Annual Conference Keystone, Colorado
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Session Participants Moderator John Tato - U.S. Department of State
Panelists Bob Ogletree – BE&K Charlie Green – Aramco Services Company Bob Herrington – Jacobs Steve Thomas - CII
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Goals of this Session Highlight recent Benchmarking & Metrics Program improvements Present key findings from the program Illustrate the value of benchmarking Address barriers to benchmarking
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“If we don’t change our direction, we might end up where we’re headed
Chinese proverb
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Q: Are you currently benchmarking your projects?
NO 26% YES 74% Reasons for not benchmarking: Lack of time and other resources. Project management reporting process not formally established.
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Reason for “No” responses:
Q: Do you have a data collection infrastructure that facilitates the collection of data essential to an effective benchmarking system? YES 50% NO Reason for “No” responses: No in-house system
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Q: Are you satisfied with your benchmarking program?
YES 30% NO 57% YES/NO 4% NA 2% NR 7% Reasons for “No” responses: No program has been implemented More consistency/standardization needed in benchmarking projects Benchmarking efforts need to be focused on other types of projects Data systems should be more flexible/automated
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Our Charter Establish common definitions. Establish metric norms.
Determine value of best practices. Provide members a basis for self-analysis. Support CII research and implementation activities through feedback.
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Our Customers Member Companies Research and Implementation
Funded Studies Alliances Benchmarking Participants Program (BMPP)
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Owner Participants Abbott Labs Eastman Chemical NAVFAC
Air Products and Chemicals, Eli Lilly and Company Ontario Power Generation Anheuser-Busch Enron Procter & Gamble Aramco Services Company Exxon Research & Engineering Rohm and Haas Arco FINA Oil and Chemical Shell Oil Bayer Corporation General Motors Corporation Solutia Bethlehem Steel Glaxo Wellcome TVA BP Amoco Intel Texaco Celanesea Jacobs Army Corps of Engineers Champion International James River U.S. Steel CITGO Petroleum LTV Steel Union Carbide Dow Chemical Merck U.S. Department of State DuPont NASA University of Texas System
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Contractor Participants
ABB Lummus Global Dick Corporation Kellogg Brown & Root Atkinson Construction Dillingham Construction Kvaerner BE&K, Inc. Fluor Daniel M. A. Mortenson Bechtel Group, Inc. Foster Wheeler USA Morrison Knudsen Black and Veatch Fru-Con Construction Parsons Energy & Chemicals BMW Constructors Inc. Graycor PT Rekayasa Industri Cherne Contracting H.B. Zachry Company Raytheon Engineers & Constructors Chiyoda Corporation Honeywell S&B Engineers and Constructors Cianbro Corporation J.A. Jones TPA CoSyn Technology Jacobs Turner Construction Company Day and Zimmerman Intl James N. Gray Watkins Engineers & Constructors
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Aramco Services Company Parsons Energy & Chemicals Group
Most Active Owners Contractors Anheuser-Busch BE&K, Inc. Aramco Services Company Bechtel Group Bethlehem Steel BMW Constructors General Motors Day and Zimmerman Intl NAVFAC Dick Corporation TVA H.B. Zachry Company U.S. Department of State Kvaerner Jacobs Parsons Energy & Chemicals Group
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Benchmarking User Award
Owner Aramco Services Company Contractor S&B Engineers and Constructors Ltd. Watkins Engineers & Constructors Inc.
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Questionnaire Development
Version 1 Performance Metrics Cost Performance Schedule Performance Safety Performance Change Performance Rework Performance Version 1 Best Practices Metrics Pre-Project Planning Constructability Team Building Zero Accident Techniques First version 209 Projects $ Billion
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Questionnaire Development Addition of Two practices
Version 2 Performance Metrics Cost Performance Schedule Performance Safety Performance Change Performance Rework Performance Version 2 Best Practices Metrics Pre-Project Planning Constructability Team Building Zero Accident Techniques Project Change Mgmt Design/Info. Tech. Refinements Addition of Two practices 442 Projects (Cumulative) $ Billion (Cumulative)
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Questionnaire Development (part of Pre-Project Planning)
Version 3 Performance Metrics Cost Performance Schedule Performance Safety Performance Change Performance Rework Performance Version 3 Best Practices Metrics Pre-Project Planning Constructability Team Building Zero Accident Techniques Project Change Mgmt Design/Info. Tech. PDRI For Buildings (part of Pre-Project Planning) 745 Projects (Cumulative) $ Billion (Cumulative)
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Questionnaire Development Electronic/Web Questionnaire
Version 4 Performance Metrics Cost Performance Schedule Performance Safety Performance Change Performance Rework Performance Version 4 Best Practices Metrics Pre-Project Planning Constructability Team Building Zero Accident Techniques Project Change Mgmt Design/Info. Tech. Electronic/Web Questionnaire 906 Projects (Cumulative) $ Billion (Cumulative)
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Questionnaire Development Entire PDRI - (part of Pre-Project Planning)
Version 5 Performance Metrics Cost Performance Schedule Performance Safety Performance Change Performance Rework Performance Version 5 Best Practices Metrics Pre-Project Planning Constructability Team Building Zero Accident Techniques Project Change Mgmt Design/Info. Tech. Materials Management Planning for Startup Entire PDRI - (part of Pre-Project Planning) Materials Management Planning for Startup 988 Projects (Cumulative) $ Billion
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Questionnaire Development Construction Productivity Metrics
Version 6 Performance Metrics Cost Performance Schedule Performance Safety Performance Change Performance Rework Performance Construction Productivity Metrics Version 6 Best Practices Metrics Pre-Project Planning Constructability Team Building Zero Accident Techniques Project Change Mgmt Design/Info. Tech. Materials Management Planning for Startup Quality Management Project Environment Quality Management Construction Productivity Metrics 1037 Projects (Cumulative) $ Billion (Cumulative)
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Questionnaire Development 32% Reduction in Basic Questionnaire
Version 7 Performance Metrics Cost Performance Schedule Performance Safety Performance Change Performance Rework Performance Construction Productivity Metrics Version 7 Best Practices Metrics Pre-Project Planning Constructability Team Building Zero Accident Techniques Project Change Mgmt Technology Auto. / Integ. Materials Management Planning for Startup Quality Management Major Upgrade !!! 100% Review/Rewrite & 32% Reduction in Basic Questionnaire 1037 Projects (Cumulative) $ 55 Billion (Cumulative)
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Questionnaire BM&M Customers Member Companies
Research & Implementation Funded Studies Alliances BMPP Questionnaire Metrics Cost & Schedule Safety BM&M Best Practices Environment Data Productivity Construction Engineering
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Questionnaire Streamlining Process
October 25-26, 2001 Diagnose December 11-12, 2001 Data Analysis & 1st Revision Workshop January 17-18, 2002 2nd Revision Workshop February 5, 2002 Power User Workshop March 4, 2002 Analysis/Value of Best Practices Workshop March 4 – April 30, 2002 Final Revisions & Reprogramming
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Questionnaire Streamlining Process
May 9, 2002 Release of Version 7
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Proposed Best Practice
The Results Section Description Question Delta Percent Change Front End Participant Data, Cost, Schedule, Safety, Project Environment, Changes, & Rework -38 -24% Best Practice Pre-Project Planning 0% Constructability -5 -39% Team Building Zero Accident Tech +2 +12% Project Change Management -1 -7% Materials Management -39 -74% Quality Management -7 -36% Proposed Best Practice Planning for Startup -26 -65% Other Practice Design/Information Tech - Tech Auto/Integ -15 -34% PDRI Project Definition Rating Index Total -32%
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Process of Determining Value of Best Practices
Determine Practice to BM Revise Practice Use Questions or Drop Practice Failed Perform Preliminary Analysis (Correlation) Add Practice to BM&M Questionnaire Survey Practice Use & Performance Preliminary Assessment Passed 1. Recommended Status as BP 2. Value of BP Perform Comprehensive Analysis Continue Data Collection Report Output
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Project Budget Factor= Actual Total Project Cost
(Initial Predicted Project Cost + Approved Changes)
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Preliminary Analysis Expected Correlation
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Preliminary Analysis No Correlation
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Comprehensive Assessment
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Cost Savings
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Cost Savings $10.9MM – Cost of average building project
x 8.5% – Cost growth savings $926K – Potential savings for typical project
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Schedule Reductions
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Schedule Reductions 28 Month – Total duration of average building
project x 31.7% – Schedule growth savings 8 Month – Potential savings for typical
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Gap Analysis -0.20 -0.15 -0.10 -0.05 0.00 0.05 0.10 Ver 1 1996 Ver 2
1997 Ver 3 1998 Ver 4 1999 Ver 5 2000 Ver 6 2001 Questionnaire Version and Year Project Cost Growth Time Project Outcome Δ Opportunity CII Average Practice Use CII 1st Quartile Practice Use Practice Use is an Aggregate (average) of the 4 original practices in the questionnaire: Pre-Project Planning Constructability Team Building Zero Accidents
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Comprehensive Assessment Impact on Cost Performance
The Effects of Best Practice Use by Industry Sector – Project Cost Impact Infra. Bldg. Contractor H.I. L.I. Team Building Zero Accident Techniques Design / Info Technology Change Mgmt Constructability Pre Project Planning Best Practices Owner Low High Med
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Comprehensive Assessment Impact on Schedule Performance
The Effects of Best Practice Use by Industry Sector – Project Schedule Impact Infra. Bldg. Contractor H.I. L.I. Team Building Zero Accident Techniques Design / Info Technology Change Mgmt Constructability Pre Project Planning Best Practices Owner Med High Low
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Recordable Incidence Rate Year and Work-hours (MM)
The Results Safety Performance Owners & Contractors 16 14.30 14.20 14 13.00 13.10 12.20 Industry 11.80 12 10.60 9.90 9.50 10 8.30 8.80 8.60 Est. 7.28 Recordable Incidence Rate 8 7.19 6.12 6 5.32 CII 4.31 3.44 4 3.00 2.66 2.30 1.60 1.59 1.67 1.03 2 1.02 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 325 413 477 497 527 613 644 770 518 765 995 936 1,115 Year and Work-hours (MM) Note: Industry based on OSHA SIC 15-17
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Benchmarking Is critical to continuous improvement process.
Requires senior management commitment. Requires continual analysis and assessment. Requires a structured approach. Is not resource-intensive. Is available now. Is important to the “bottom-line.”
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Get Involved Measure Your Performance
Attend a Benchmarking training session to get your password to Project Central – CII Benchmarking’s website Add your project data to Project Central at Assess Evaluate your performance Determine the gap Improve Use the Benchmarking and CII tools to improve
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You Need To Benchmark!
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