Authors: Jerry Weisenfelder & Chris Payne
For all of their complex detail, plans for major infrastructure projects are only as strong as their weakest link.
By focusing on all of the links – including the strongest – RLG International, a Vancouver-based performance improvement consulting company, is helping clients save time and money through improved planning and management systems.
“The complexity and detail of major infrastructure, maintenance and capital projects have significantly increased over the past 5-10 years,” explained RLG executive vice-president Jerry Weisenfelder.
“Success or failure of major projects is increasingly determined by the rigor, detail and discipline of the planning, scheduling and execution optimization processes, which have become crucial factors in the success of almost all of these types of projects.”
To illustrate, Weisenfelder noted his company’s recent involvement with an offshore drilling contractor determined to achieve efficiencies for major deep-water oil-rig maintenance, upgrade and repair projects. Results include shorter work schedules and reduced project cost overruns that saved the company an estimated $1 billion over three years.
“The performance turnaround was remarkable. Our client went from a situation where every project ran late – it was just a matter of how much it would run over – to a point where the vast majority of projects are now completing on or ahead of schedule.”
Faster turnarounds were crucial for the client, who undertakes up tooper 15 major deep-water oil-rig maintenance, upgrade and repair projects each year. One day of project overruns costs $600,000 – including over $400,000 in lost rental income when rigs are not able to re-enter service on time. Such over-runs can happen even though individual projects were scheduled and planned years in advance.
Solutions for a billion-dollar problem
“Senior management knew it had a billion-dollar problem but did not know how to fix things,” Weisenfelder said. “The company had already documented and established some planning and execution processes, but it became apparent that existing processes were not being fully applied or followed within the organization.”
RLG provided a detailed assessment across the capital projects business unit to identify gaps and strengths. The client and RLG then co-developed an implementation plan that included a more disciplined approach to the use of existing processes.
As well, new tools were introduced to develop, optimize and keep score of the integrated plans for the projects. And finally, an Operating Rhythm™ was established to regularly review key performance indicators for the planning phase, and to coordinate an integrated team effort across planning, maintenance, operations and management.
Operating Rhythm™ is RLG’s process to cascade critical communication, data, accountability and priorities from senior leaders to the frontline, and across departments’ stakeholders. The system calls for leaders to engage their teams daily and weekly to talk about priorities, issues, opportunities and expectations.
“We built a ‘one-team’ culture to bring the client’s capital projects and operations organizations together in a strong partnership,” said RLG vice-president Chris Payne, who led the effort.
Elements of the Operating Rhythm™ were tailored to drive a completely new level of engagement and accountability through the planning, optimization, and execution phases of the client’s projects.
In doing so, the client and RLG implemented a variety of practices to optimize the planning and scheduling of each project. For example, RLG introduced its Theoretical Maximum Performance (TMP™) system to engage key individuals to identify risks to the schedule and find opportunities to optimize results. TMP brings together operators, maintenance, contractors, planners and managers in collaborative sessions to review the logic, durations and sequencing of their schedules.
“The result was an improved schedule that mitigated risks, and an engaged team that was more committed to project success,” Payne said.
Client: ‘The most successful project that I have seen’
Results proved the value of the work. In the first three years of adopting the new approach, $39 million was saved compared to losses of $1.1 billion over the previous three years, and schedule overruns were reduced by 2,150 days.
RLG’s contributions to achieving completions ahead of time and under budget were exemplified by a recent deep-water rig project. A rig in the Barents Sea north of Norway was scheduled for a 90-day refit valued at $200 million, including lost revenue while the unit was out of service. RLG helped optimize the project plan for completion in 68 days and saw the project actually come in at 61 days, with no recordable safety or environmental incidents.
“The focus was on detailed planning, stripping away the fat and asking about every line of activity in order to get an optimized schedule, then executing the schedule with the daily rigor and discipline necessary to manage the project’s critical path,” Payne explained. “Our performance experts were deeply engaged with the planning and execution, like coaches working with a championship sporting team.”
“We pushed to get tight, logical, credible schedules; we detailed the front-end planning, we optimized every schedule via detailed challenge sessions and we executed with a real tenacity to manage the critical path and plan for high-risk, complex or emerging scopes. Success meant mitigating risk, putting teamwork in place and putting tension on the Operating Rhythm.”
The planning phase featured detailed reviews of the scope, costs, schedule, conflicts and potential simultaneous operations. Team sessions analyzed critical and near-critical path scopes to identify opportunities for improvement. Finally, the Operating Rhythm™ of structured reviews kept progress and performance both visible and viable.
“I have done seven projects in 18 years and this is the most successful project that I have seen from both safety and execution perspectives,” a senior company official said. Prior to adopting RLG’s systems, “…we did not plan our work effectively, measure our performance or use schedules to drive execution,” he explained.
Results were “…the epitome of the model to which we aspire for major capital projects. The focus on critical path, while safely conducting the work with high quality standards, resulted in truly excellent project performance.”
The client has since incorporated RLG’s systems into its internal processes, including modifying the job descriptions of project managers, construction managers and schedulers to incorporate planning, schedule optimization and execution best practices as core responsibilities.
The company has also embedded RLG’s systems into its planning, forecasting, marketing and financial processes for project planning and delivery thereby sustaining the improvements into the future.
To learn more about major capital projects planning & execution optimization, view the case study.