Executing Small Capital Projects Executing Small Projects Research

Executing Small Capital Projects Executing Small Projects Research Team Gareth Williams Bechtel CII Annual Conference 2001

The Circumstances • Industries maturing • Small capital projects are a larger percentage of most budgets • Small project processes less well understood • Small project managed instinctively

It Is Time to Rethink Let’s Break Out of Our Old Ways of Thinking!

Executing Small Projects Research Team Gertraud Breitkopf General Services Administration, Chair Coy Campbell Kværner Terry D’Souza 3 M Jon Dutcher Abbott Labs Eric Johnson Solutia Tony Kanaly BMW Constructors Matthew Nissen Watkins Engineers & Constructors Gary Smith North Dakota State Jim Staudt Rohm & Haas Gareth Williams Bechtel

What Is A Small Project? • Total cost $100, 000 to $2 million • Part-time, multi-disciplined team • Operating facility environment • Short duration

The Approach • Focused on practices that are different for small projects. • Surveyed 36 diverse organizations that do small projects. • Compiled an exhaustive survey of practices and results. • Visited and interviewed leaders face to face.

Results Across the Board • Interviewees had experience with 30 -150 projects per year • Inconsistent data • Inconsistent organizational structures • Inconsistent work processes

The Analysis • Documented standard industry practices. • Separated organizations into groups. • Analyzed differences – practices and performance.

The Industry Needs • Improved body of small project knowledge • Clear, documented small project best practices • Consistent small project measures • More attention paid to small projects

The Small Projects Toolkit

The Differences

Four Percent Improvement Equals Various Size Projects 25 $1 Million Free Project! Small Cap Annual Budget ($ Million) 0

Other Benefits e e r F ! s t c e j o r P • Higher returns on investment • Improved schedule compliance and improved budget compliance • Improved customer satisfaction • Reduced average project duration

CII Knowledge Structure • Front-End Planning Project Processes • Project Processes • Design • Project Controls • Procurement • Contracting • Construction • Safety, Health & Environment • Start-Up and Operations • People • Organization • Technology & Information • Global

Best Practices – People

Percent of Small Project Delivered On Schedule 100% g n i 90% 80% 70% v a 60% 50% 40% 30% 20% 10% 0% S No Core Team ! s Core Team

Best Practices – Organization

Organizations with Alliances Engineering Alliances Constructor Alliances 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0% Large Projects Small Projects

Budget Performance of Teams with and without Alliances Project Cost Growth 8. 0% g n i 7. 0% 6. 0% 2. 1% Improvement 5. 0% v a 4. 0% 3. 0% 2. 0% 1. 0% 0. 0% ! s S No Alliance

Best Practices – Work Processes

Percent Using Checklists Small Project Organizations with Front-End Planning Checklists 80 70 60 50 40 30 20 10 0 S Better v a Poorer Schedule Performer ! s g n i Better Poorer Budget Performer

Best Practices e e r ! F s t c e j o r P • Improved Return on Investment • Improved Schedule and Budget Reliability • Improved Customer Satisfaction

It is Time to Get out of Our Jar! • Let’s re-examine: - Where we put our best people - Where we invest our time - Our practices - Our operations

A Few of the Tools in the Toolbox Come to the Implementation Session and See More!

Implementation Session • Introduction • People - Scenario - Research - Best Practices • Front End Planning • Organization • Conclusion