CII: An Introduction CMAA Owners’ Forum May 2, 2010 Atlanta, Georgia

CII: An Introduction CMAA Owners’ Forum May 2, 2010 Atlanta, Georgia
Manuel A. Garcia, P.E. Associate Director Construction Industry Institute

Present High Owner Relevance CII Practices
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 A May 2003 GAO report to the U S Senate cites CII Best Practices as a resource it used to check out the UN Billion dollar capital budget. In December 2008 CII was consulted by President-elect Obama’s transition team to determine the job growth impact of the economic stimulus package per Billion dollars of infrastructure spending. In June 2009 the AGC invited CII to participate in an Innovation & Productivity Forum to help craft a national agenda. In January 2010 we are forming the CII-CMAA Best Practices-Best Practitioners Alliance. We are a principal industry forum for the exchange of views on global challenges.

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

Purpose To measurably improve the delivery of capital facilities. 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. 5

Owner Members As of July 2008
Abbott Air Liquide Air Products and Chemicals Alcoa Ameren American Transmission Co. Anheuser-Busch InBev Aramco Services Company Archer Daniels Midland Barrick Gold BP America Bristol-Myers Squibb Cargill Chevron CITGO Petroleum Codelco-Chile ConocoPhillips Constellation Energy DFW International Airport Dow Chemical DuPont Eastman Chemical Eli Lilly ExxonMobil GlaxoSmithKline Hovensa International Paper Kaiser Permanente Marathon Oil NASA Naval Facilities Engineering Command NOVA Chemicals Occidental Petroleum Ontario Power Generation Petrobras Praxair Procter & Gamble Progress Energy Saudi Basic Industries Corp (SABIC) Sasol Technology Shell Global Solutions US Smithsonian Institution Southern Company Sunoco Tennessee Valley Authority Trans Canada Corp. U.S. Architect of the Capitol U.S. Army Corps of Engineers U.S. Dept. of Commerce/ NIST/Building & Fire Research Lab U.S. Dept. of Energy U.S. Dept. of Health & Human Services U.S. Dept. of State U.S. General Services Administration As of July 2008 CII Owners spend over $258 billion annually on capital improvements 6 6

Contractor Members As of July 2008
Aker Solutions Alstom Power AMEC Atkins Faithful + Gould AZCO Baker Concrete Construction Barton Malow Bateman Engineering Bechtel Group Bentley Systems BIS Frucon Industrial Svcs. Black & Veatch Bowen Engineering Burns & McDonnell CB&I CCC Group CDI Engineering Solutions CH2M HILL CSA Group Day & Zimmerman dck worldwide Dresser-Rand Company Emerson Process Mgt. e Project Management Fluor Foster Wheeler USA Grinaker-LTA/E+PC Gross Mechanical GS E & C Hargrove and Associates Hilti Jacobs JMJ Associates KBR Lauren E & Constructors M. A. Mortenson McDermott International Mustang Omniware Oracle USA Parsons Pathfinder Pegasus Global Holdings R. J. Mycka S&B E and C The Shaw Group Siemens Energy SNC-Lavalin Technip URS Corporation Victaulic Company Walbridge The Weitz Company Wanzek Construction WorleyParsons Zachry Zurich As of July 2008 CII Contractors build over $229 billion worth of construction projects annually 7 7

Instructor’s Notes – Introduction and Eliminating Fall Hazards
CII Chairmen, 2005–2010 David McKinney Vice President of Nuclear Construction – Southern Company John Dalton Executive Vice President – Mustang Emerson T. Johns Former Finance Director, Engineering, Facilities, and Corporate Remediation – DuPont Company Dr. J. J. Suarez President & Chief Executive Officer – CSA Group Dennis Schroeder President, Engineering – BE&K Engineering Company G. Wayne Burchette Former Director of Worldwide Engineering and Construction – Eastman Chemical Company

CII Organization Board of Advisors Industry-Sector Benchmarking Product Review Board 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 By Governance Document we are a small staff working with 800 volunteers

Universities involved 1983-2009
University of Alabama Arizona State University Auburn University Bucknell University Carnegie Mellon University University of Cincinnati Clemson University University of Colorado-Boulder Colorado State University University of California-Berkeley East Carolina University University of Florida Georgia Institute of Technology University of Houston University of Illinois Iowa State University University of Kansas University of Kentucky Lehigh University University of Maryland University of Michigan Mississippi State University University of New Mexico North Carolina State University North Dakota State University Oklahoma State University Oregon State University The Pennsylvania State University University of Pittsburgh Purdue University Polytechnic University San Diego State University San Jose State University Stanford University State University of New York-Albany Vanderbilt University Virginia Polytechnic Institute and State University Texas A&M University The University of Texas at Austin (CII headquarters & founding university) University of Washington University of Waterloo University of Wisconsin-Madison Worcester Polytechnic Institute

Industry Leaders Support the CII Mission
John Berra President – Emerson Process Alan Boeckmann Chief Executive Officer – Fluor Robert J. Giorgio President – CDI Engineering Solutions Steve Hanks Former President – URS– Washington Division Mike Illane President and General Manager – Project Resources Company (Chevron) Theodore C. Kennedy Founder – BE&K Lee A. McIntire President and Chief Operating Officer – CH2M HILL H. Ross Perot Chairman Emeritus – Perot Systems Jan Tuchman Editor – Engineering News-Record Dr. J. J. Suarez President & Chief Executive Officer – CSA Group Vincent R. Volpe, Jr. President and Chief Executive Officer – Dresser-Rand David Wyss Chief Economist – Standard & Poor's These are some of the industry leaders that support the CII vision They choose to be associated with you- CII

CII Knowledge Processes
Creation Research to define best practices, breakthroughs, & industry norms. Management, organization, and assessment of the 500-plus CII documents and publications. Knowledge Assessment Knowledge Dissemination Dissemination through publications, implementation guides, educational materials, workshops, and conferences. Knowledge Management Assessment of the impact of CII practices through benchmarking.

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 Since 1983 CII has been identifying practices for positive and repeatable results 14 of these have been proven so effective as to be deemed Best Practices Looking back over my career: What would project performance and personal experience been through consistent application of these practices?

Use of Best Practices Begins with Strong Implementation Culture
Ends with Improved Performance

CII Grouping of 10 Practices/ Best Practices
3 Components 10 Practices Planning 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 The groupings were suggested by the data. This grouping comes from the 2009 Value of Best Practices Study. The study examined some of the CII Practices and Best Practices to gauge usage by members and the corresponding project performance. VBP Survey Start of Section 4.3

The Owner’s experience…
ASK AN OWNER

Impact of Best Practice Use on Schedule Performance- Owners
High Use = 9.7 % Schedule Improvement Mean N SEM P Sig. α=0.1 High 1.8% 27 3.3% 0.082 Y Low 11.5% 14 4.1% VBP Survey Figure 14

Impact of Best Practice Use on Cost Performance- Owners
High Use = 10.9 % Cost Improvement SEM= standard error of the mean. P= measure of degree of association of the value on one axis with a corresponding value on the other axis. 0 implies 100% confidence interval. If alpha > 0.1 at a 90% confidence interval the relationship is deemed significant. Mean N SEM P Sig. α=0.1 High -2.3% 29 2.2% 0.030 Y Low 8.6% 25 2.7% VBP Survey Figure 13

Impact of Planning Best Practice Use on Cost Performance- Owners
High Use = 7.5 % Cost Improvement Front End Planning Alignment for FEP Planning for Startup Mean N SEM P Sig. α=0.1 High -1.2% 29 3.0% 0.080 Y Low 6.3% 24 2.9% VBP Survey Figure 15

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 See Stephen Mulva dated 9Apr10

The Contractor’s Experience…

Impact of Execution Best Practice Use on Cost Performance- Contractors
High Use = 12.2 % Cost Improvement Constructability Project Risk Assessment Change Management Mean N SEM P Sig. α=0.1 High -3.0% 12 2.7% 0.011 Y Low 9.2% 13 3.4% VBP Survey Figure 16

Leadership at the Top to “Bottom Line” Impact
Company Culture Practice Implementation Performance Result$!

TRIR Rate

DART Rate

Project Distribution by Location
VBP Survey Figure 3

Project Distribution by Nature
Modernization= revamp/ upgrade Brownfield or co-location= new unit on old site 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
Any of these delivery systems could be epc VBP Survey Figure 7

Value of Best Practices Theoretical Relationship
High 0.4 0.3 0.2 0.1 -0.1 -0.2 4th Quartile 2nd Quartile 1st Quartile Practice Use Performance Better 3rd Quartile Low

Implementation Tool Box
CII Resources Research Products CII Research Summaries CII Implementation Resources CII Research Reports CII Productions Professional Development Continuum CII Store Education Modules CII Online Education CII Courses Registered Education Providers Executive Leadership Program CII Events Annual Conference Performance Improvement Workshops Benchmarking Seminars/ Workshops Web Seminars Communities of Practice CII Mentoring Implementation Champion Program Experienced ISC members CII Staff Implementation Tool Box

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 35 35

Taught right from the book
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 37 37

Everything an instructor needs …
CII Education Modules Everything an instructor needs … PowerPoint Slides Lecture Notes Exercises Case Studies 18 topics and 2 more in the works 38 38

Accessible on the Internet 24/7
CII Online Education Based on CII Best Practices Fully interactive web-based learning Professional Development Hours (PDH) credits 18 online hours on 7 topics Accessible on the Internet 24/7 39 39

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 covers a specific area of CII Research 40 40

This is where you want to send your top talent.
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 January 9-21, 2011 ATT Executive Education Center The 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
100 Graduates to date!

Fill these spots with your rising stars!
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 46

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

2010 CII Annual Conference August 3-5, 2010
Grand Cypress Resort Orlando, Florida Managing Today to Excel Tomorrow 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

Performance Improvement Workshop Fall
Focused on: CII Product Implementation Best Practices New Practices Case Studies Networking Houston, Texas November 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) or What you measure you improve! June 2-3, 2010 Abbott Park (Chicago), IL Hosted by Abbott

The Implementation Model
Celebrate Success Measure Results Product Implementation Products Training Product Champions/Review Boards Implementation Plan and Goals Self Audit This is the CII implementation concept- walk through it Corporate Implementation Champion Corporate Commitment CII Products CII Support Benefit/Cost Data 51

Implementation Tool Box
CII Resources Research Products CII Research Summaries CII Implementation Resources CII Research Reports CII Productions Professional Development Continuum CII Store Education Modules CII Online Education CII Courses Registered Education Providers Executive Leadership Program CII Events Annual Conference Performance Improvement Workshops Benchmarking Seminars/ Workshops Web Seminars Communities of Practice CII Mentoring Implementation Champion Program Experienced ISC members CII Staff Implementation Tool Box

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 Practices Theoretical Relationship
High 0.4 0.3 0.2 0.1 -0.1 -0.2 4th Quartile 2nd Quartile 1st Quartile Practice Use Performance Better 3rd Quartile Low All of these resources work to improve your performance

Questions?

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.

Best in Class= 6 x Better Cost Performance
Benchmarks – Cost OWNER CONTRACTOR Best in Class= 6 x Better Cost Performance Best in Class Leads by 15% Median (-3%) “Best in Class” (-19%) Median (0.98) “Best in Class” (0.83) COST GROWTH BUDGET FACTOR

Benchmarks – Schedule OWNER CONTRACTOR Best in Class Leads by 13%
Median (+2%) Median (1.00) “Best in Class” (-11%) “Best in Class” (0.83) Schedule Growth Schedule Factor

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

Dec09 CII Value & Satisfaction Survey Responses- Agree or Strongly Agree
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% Users of the CII professional development programs value it and would like to expand it. Duration 30 sec

October 2009 CII BOA- SPC Poll results
Trend Category 2010 Outlook Outlook Change in Priorities Workforce & Human Capability 3 1 Increasing Project Delivery 2 5 Decreasing Corporate Strategy 4 Technology & Innovation Market & Demand Drivers At last fall’s board meeting you weighed in on your priorities for 2010 as well as beyond 2010 As we move beyond 2010 your priorities change We see increased interest in tackling professional work force issues, including professional development Duration 36 sec 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. So the challenge returns… Aging workforce baby boomers Increasing backlogs Shortage of professionals to execute the backlog competently What are we going to do about it? Duration 30 sec

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.

Enjoy the discounts and reap the benefits!
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?

Where do CII Practices & Best Practices fit in the project cycle?
Conceptual & Front End Planning Basic Detail Startup & Commissioning Procurement Construction Operations Engineering Everywhere! 73

Opportunity for Influence
Major Influence Rapidly Decreasing Influence Low Influence Influence Level of Influence Commitment$$ Project Expenditures Scope Definition Ability to influence a project (configuration, capabilities, components, etc) decreases as the project progresses. Expenditures, and cost of delaying decisions or making changes, increases dramatically as the project progresses. Optimum point to most influence the final project for the lowest cost is during pre-project planning. Conceptual Analysis and R&D Front End Planning Basic Data and Scoping Project Authorization Production Engineering and Procurement Construction Engineering Complete Turnover and Start-up Project Life Cycle 74 12

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 Since 1983 CII has been identifying practices for positive and repeatable results 14 of these have been proven so effective as to be deemed Best Practices Looking back over my career: What would project performance and personal experience been through consistent application of these practices?

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?

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 Conceptual & Front End Planning Basic Detail Startup & Commissioning 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
Techniques address: 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

Impact of Zero Accident Techniques on TRIR- Owners
High Use = 61% TRIR Reduction VBP Survey Figure 24

Impact of Zero Accident Technique on TRIR- Contractors
High Use = 54% TRIR Reduction VBP Survey Figure 27

Additional CII Implementation Resources
Education Modules Continuing Education Online Education Registered Education Providers Community of Practice Web Seminars EM160-21 Course II CT07 YES YES WS11-01 & 02

Partnering Project specific partnering
Project objectives focused; short term. Strategic alliances Enterprise objectives focused; long term Partnering Strategy For ABC Partners Optimum Application Conceptual & Front End Planning Basic Detail Startup & Commissioning 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.

The Partnering Process
Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Owner’s Internal Alignment Partnering Relationship Alignment Work Process Alignment Partner Selection Project Alignment 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

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 Construction
Category 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 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
High Use = 9.1 % Cost Improvement Mean N SEM P Sig. α=0.1 High Use -6.73% 15 2.78% 0.019 Y Low Use 2.44% 75 1.62% VBP Survey Figure 19

Education Modules Continuing Education Online Education Registered Education Providers Community of Practice EM102-21 Pending Interest CT16-CT19 YES YES

Team Building? Team Building?

Team Building Project-focused process with team:
Shared goals & interdependence, Trust, commitment, accountability, Collaborative problem-solving skills. Initial Application Conceptual & Front End Planning Basic Detail Startup & Commissioning Procurement Construction Operations Engineering 93

Team Building Team Building: Improving Project Performance RS37-1
Building the Project Team – Participant Handbook EM37-21A 94

Elements of Team Building:
Culture Leadership Communication Trust and Honesty Alignment Execution Processes Stakeholders PPP Process Reward and Recog. Information Priority between cost, schedule, and features Tools Team Meetings Teamwork and Team Building Planning Tools B a r i e s 95

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. 96

Impact of Team Building on Schedule Growth- Owner
High Use = 7.0 % Schedule Improvement Mean N SEM P Sig. α=0.1 High Use -0.95% 26 3.24% 0.074 Y Low Use 5.96% 48 2.19% VBP Survey Figure 20

CII Implementation Resources
Education Modules Continuing Education Online Education Registered Education Providers Community of Practice EM37-21 Course I Planned YES Pending Interest 98

Alignment Projects participants working in harmony to develop and meet a uniformly defined and understood set of project objectives. Initial Application Conceptual & Front End Planning Basic Detail Startup & Commissioning Procurement Construction Operations Engineering

Alignment Alignment During Pre-Project Planning, IR113-3.
Project Objective Setting, RS12-1, Second Edition

Elements of Alignment Top-to-Bottom Alignment
Executive Business Business Planning Project Pre-Project Planning Functional Project Execution Facility Operation Project Life Cycle Alignment Cross-Organizational Alignment

Alignment During Front End Planning
102

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)
Alignment Index Score* Performance Less than Median Greater than Median Cost 3.3% over budget 6.5% below budget (N=30) (N=34) 24.5% behind 8.4% behind Schedule schedule schedule (N=33) (N=35) Median = 7.81 (.781) Change orders 8.2% of budget 7.6% of budget (N=26) (N=27) *Alignment During Pre-Project Planning (Front End Planning)

Impact of Alignment during FEP on Cost Growth- Owners

Education Modules Continuing Education Online Education Registered Education Providers Community of Practice EM113-21 Course I CT02 YES Pending Interest

Questions?

Definition of Front End Planning
Front End Planning is also known as: Front end loading Pre-project planning Feasibility analysis Conceptual planning Programming/schematic design Early project planning Initial Application Conceptual & Front End Planning Basic Detail Startup & Commissioning 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

Recognizes role of design in support of the process
Front End Planning Process 2 Detailed Scope 1 3 Design and Construction Feasibility Concept Initiate Phase Generate Options Filter Options PDRI 1 Feasibility Report Initiate Phase Analyze Alternatives Conceptual Scope and Estimates Evaluate and Select Best Alternatives Concept Phase Report PDRI 2 Initiate Phase Preliminary Design/Eng. Preliminary Des./Eng. Reviews PDRI 2i Finalize Scope Definition Cost & Schedule Control Estimates PDRI 3 Project Definition Package Recognizes role of design in support of the process Incorporates PDRI checkpoints with target scores 112

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 70 Min recommended score 200 Max score 1000

IR 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 71 Min recommended score 200 Max score 1000

IR 113-2 PDRI- Industrial IR 155-2 PDRI- Buildings
SECTION I A. Manufacturing Objectives Criteria B. Business Objectives C. Basic Data Research & Development D. Project Scope E. Value Engineering SECTION II F. Site Information G. Process/ Mechanical H. Equipment Scope I. Civil, Structural & Architectural J. Infrastructure K. Instrument & Electrical SECTION III L. Procurement Strategy M. Deliverables N. Project Control P. Project Execution Plan SECTION I A. Business Strategy B. Owner Philosophies C. Project Requirements SECTION II D. Site Information E. Building Programming F. Building/Project Design Parameters G. Equipment SECTION III H. Procurement Strategy J. Deliverables K. Project Control L. Project Execution Plan Somewhat similar but sub items address different issues!

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 Tests planning alignment/preparedness of multiple STO tasks. Helps identify inherent STO risks for early stage mitigation. 117

Example STAR Timeline = STAR At this point, the STO
Feasibility 3 2 1 Design Detailed Scope Concept STO Timeline of communication between PM and STO leadership Project n Project 2 Project 1 Communications of status and Input from PM/STO Leadership = At this point, the STO Leadership can collectively evaluate results for all projects Example STAR Timeline STAR Actual timing for each application will be set by the Project/STO Leadership Team 118

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 121

IR242-2 Identifies Tools & Technologies
For 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

Education Modules Continuing Education Online Education Registered Education Providers Community of Practice See next slide Course I CT09-CT13 YES Yes

Front End Planning Education Modules
EM Front End Planning EM Construction Input Assessment* EM Front End Planning of Renovation & Revamp Projects* Project Definition Rating Index (PDRI) EM Industrial Projects EM Buildings * To be available later in 2010

Planning for Startup Engineering Procurement Construction Operations
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. Conceptual & Front End Planning Basic Detail Startup & Commissioning Procurement Construction Operations Engineering Initial Application

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

SuPERTOOL 1-A-2 WORK IN THIS ZONE SuPER Score AVOID THIS ZONE
Thorough Planning 100 90 WORK IN THIS ZONE 80 70 60 SuPER Score 50 AVOID THIS ZONE 40 30 20 10 No Planning Definition, Concept & Feasibility Front-End Engineering Detailed Design Construction Checkout, Commissioning & Initial Operations 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

Impact of Planning for Startup on Schedule Growth- Owners
High Use = 7.9 % Schedule Improvement Mean N SEM P Sig. α=0.1 High Use 1.13% 48 2.45% 0.011 Y Low Use 9.01% 15 1.72% VBP Survey Figure 23

Impact of Planning for Startup on Cost Growth- Contractors

Education Modules Continuing Education Online Education Registered Education Providers Community of Practice EM121-21 Course I CT13-CT14 YES Pending Interest

Definition Project Delivery & Contract Strategy (PDCS)
A process to assist in selecting a contract delivery strategy to optimize project objectives. Initial Application Conceptual & Front End Planning Basic Detail Startup & Commissioning 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
Factor 1 Factor 2 Factor 3 Factor 4 Factor 5 Factor 6 Factor 7 Factor 8 Control cost growth Ensure lowest cost Delay or minimize expenditure rate Facilitate early cost estimates Reduce or transfer risks to contractor Control time growth Ensure shortest schedule Promote early procurement PDCS 01 80 90 100 80 20 PDCS 02 50 100 70 20 50 50 50 90 PDCS 03 80 70 90 10 60 20 10 PDCS 04 80 70 90 10 60 20 PDCS 05 50 60 60 20 20 50 40 90 PDCS 06 60 40 40 70 70 70 80 100 PDCS 07 90 80 10 90 90 90 100 100 PDCS 08 70 80 30 80 80 80 90 100 PDCS 09 50 20 10 90 80 PDCS 10 60 60 50 PDCS 11 100 80 100 100 100 100 100 PDCS 12 40 40 100 60 80 100 100

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.

Education Modules Continuing Education Online Education Registered Education Providers Community of Practice Web Seminars EM165-21 Course II Pending Interest YES 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.

Questions?

Construction Industry Institute
Thank you for your attention! Manuel A. Garcia Associate Director Construction Industry Institute 3925 W. Braker Lane (R4500) Austin, TX (512)

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 Conceptual & Front End Planning Basic Detail Startup & Commissioning 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 minutes to complete.

Samples of Leading Indicators
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.

Leading Indicator Input Example

Outcome Example

Project Practices Implementation Assessment

Customization

Using the PHI Tool Potential Uses Status Reporting Project Reviews
Auditor Reviews Benchmarking / Training Gap identification

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.

Education Modules Continuing Education Online Education Registered Education Providers Community of Practice Pending Interest Pending Interest Pending Interest Yes Pending Interest

Extra Bonus! Additional information on CII Benchmarking & Metrics

CII Best Practices Benchmarking & Metrics 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 Since 1983 CII has been identifying practices for positive and repeatable results 14 of these have been proven so effective as to be deemed Best Practices Looking back over my career: What would project performance and personal experience been through consistent application of these practices?

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 Conceptual & Front End Planning Basic Detail Startup & Commissioning Procurement Construction Operations Engineering 164

Benchmarking Benchmarking Implementation Toolkit, IR BMM-2
Introduces the CII Benchmarking & Metrics Program “What you measure you improve”

CII Database International Domestic 1,882 projects
368 (80%) 1,514 International Domestic 839 (45%) 1,043 (55%) Owners Contractors 1,882 projects Worth > $98 Billion Large & Small Projects Combined 166

CII Standard Metrics Practice Use Performance Practice Use
Cost Performance Schedule Performance Safety Performance Change Performance Rework Performance Construction Productivity Engineering Productivity Front-End Planning Alignment Team Building Partnering Project Risk Management Change Management Constructability Zero Accident Techniques Planning for Startup Proj. Delivery & Contract Systems Benchmarking

CII Benchmarking Process
Three-step Process Online Questionnaire CII Benchmarking Database Data Mining and Reporting Engine 168

Available Tools Data Mining Capability 

Online Data Mining 170

Project-Level Productivity 
Engineering Productivity (1 Number) Construction Productivity (1 Number)

Piping Construction Productivity Results

Project-Level Productivity Example
11% Improvement (2nd to 1st Quartile) 1Q Good 2Q 3Q 4Q Poor 26% Improvement (4th to 1st Quartile) 173

Industry Sector-Specific Metrics
Current Pharmaceutical D/S Oil & Gas COAA (Contract) U/S Oil & Gas Healthcare Facilities Future (Nuclear) Power Aviation Facilities

Benchmarking Results Key Report
Hard costs for the pharma group include procurement and construction Soft costs for the pharma group include engineering, planning & other

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. 176

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)
Better Projects with cost of all changes exceeding 5% of TIC experienced an average of 10.3% cost overrun. Projects with cost of all changes less than 5% of TIC experienced an average of 2.4% reduction in cost growth. Cost Change Factor = Cost of All Changes/Final Cost of Project

Injuries In Quartiles 1 & 2
CII Benchmarking Safety Results Sharp Reduction In Recordable Injuries This data is based on 1172 projects out of the 1882 projects in our data base (62% of the projects in the data base.) The first owner group had high recordable injury rates across second to fourth quartiles The second owner group had zero recordable injuries in the first and second quartiles The first contractor group had high recordable injury rates across all quartiles The second contractor group had zero recordable injuries across the first and second quartiles and very few in the third and fourth quartiles Benchmarking shows sharp recordable injury reduction and dramatic increase in projects with zero recordable injuries Zero Recordable Injuries In Quartiles 1 & 2

Proven Results From Benchmarking Efforts
Pharmaceutical and Biotechnology Owners Benchmarking Program Cost Performance (6% Less) Schedule Performance (26% Less) 180

Automated Data Entry Benchmark ALL your projects (unlimited)
Project Data & Performance Results CII Database Member Database

Jacobs Performance Management System
Data Sources Data Entry Internal BM CII BM Member Database CII Database Project Data & Performance Results

CII Implementation Resources
Benchmarking Metrics Committee Dr. Stephen Mulva Associate Director Dr. Jason Dai Research Engineer Hong Zhao Sytems Analyst 183

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 184

Dashboard – Donut Chart View (Your Company)
185

Construction Industry Institute
Thank you for your attention! Manuel A. Garcia Associate Director Construction Industry Institute 3925 W. Braker Lane (R4500) Austin, TX (512)

CII: An Introduction CMAA Owners’ Forum May 2, 2010 Atlanta, Georgia

Similar presentations

Presentation on theme: "CII: An Introduction CMAA Owners’ Forum May 2, 2010 Atlanta, Georgia"— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

CII: An Introduction CMAA Owners’ Forum May 2, 2010 Atlanta, Georgia

Similar presentations

Presentation on theme: "CII: An Introduction CMAA Owners’ Forum May 2, 2010 Atlanta, Georgia"— Presentation transcript:

Similar presentations

About project

Feedback