Benchmarking the Value of Best Practices Annual Conference Keystone, Colorado
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
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
“If we don’t change our direction, we might end up where we’re headed. ” Chinese proverb
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.
Q: Do you have a data collection infrastructure that facilitates the collection of data essential to an effective benchmarking system? NO 50% YES 50% Reason for “No” responses: • No in-house system
Q: Are you satisfied with your benchmarking program? YES/NO NA 4% 2% NR 7% YES 30% NO 57% 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
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.
Our Customers • Member Companies • Research and Implementation • Funded Studies • Alliances • Benchmarking Participants Program (BMPP)
Owner Participants • • Abbott Labs • Air Products and Chemicals, • Anheuser-Busch • Aramco Services Company • • Bayer Corporation • Bethlehem Steel • CITGO Petroleum • • • Enron Ontario Power Generation • Rohm and Haas • • Intel • Jacobs • LTV Steel • Merck • • NASA TVA Texaco Army Corps of Engineers • James River • Solutia • Glaxo Wellcome • Shell Oil • General Motors Corporation • NAVFAC Procter & Gamble FINA Oil and Chemical Dow Chemical Du. Pont • Exxon Research & Engineering Celanesea Champion International • • Eli Lilly and Company BP Amoco • • • Arco • Eastman Chemical U. S. Steel Union Carbide • U. S. Department of State • University of Texas System
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 • Co. Syn Technology • Jacobs • Turner Construction Company • Day and Zimmerman Intl • James N. Gray • Watkins Engineers & Constructors
Most Active 2000 -2002 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
Benchmarking User Award Owner • Aramco Services Company Contractor • S&B Engineers and Constructors Ltd. • Watkins Engineers & Constructors Inc.
Questionnaire Development Version 1 Performance Metrics • Cost Performance • Schedule Performance • Safety Performance • Change Performance • Rework Performance Version 1 Best Practices • Pre-Project Planning • Constructability • Team Building • Zero Accident Techniques Metrics First version 209 Projects $ 11. 47 Billion
Questionnaire Development Version 2 Performance Version 2 Metrics Best Practices Metrics Refinements Addition of Two practices • Cost Performance • Schedule Performance • Safety Performance • Change Performance • Rework Performance • Pre-Project Planning • Constructability • Team Building • Zero Accident Techniques • Project Change Mgmt • Design/Info. Tech. 442 Projects $ 25. 95 Billion (Cumulative)
Questionnaire Development Version 3 • Cost Performance • Schedule Performance • Safety Performance • Change Performance Metrics • Rework Performance Version 3 Best Practices Metrics PDRI For Buildings (part of Pre-Project Planning) • Pre-Project Planning • Constructability • Team Building • Zero Accident Techniques • Project Change Mgmt • Design/Info. Tech. 745 Projects $ 39. 88 Billion (Cumulative)
Questionnaire Development Version 4 • Cost Performance • Schedule Performance • Safety Performance • Change Performance • Rework Performance Metrics Version 4 Best Practices Metrics Electronic/Web Questionnaire • Pre-Project Planning • Constructability • Team Building • Zero Accident Techniques • Project Change Mgmt • Design/Info. Tech. 906 Projects $ 49. 68 Billion (Cumulative)
Questionnaire Development Version 5 • Cost Performance • Schedule Performance • Safety Performance • Change Performance Metrics • Rework Performance Version 5 Best Practices Entire PDRI - (part of Pre- Metrics Project Planning) Materials Management Planning for Startup • Pre-Project Planning • Constructability • Team Building • Zero Accident Techniques • Project Change Mgmt • Design/Info. Tech. • Materials Management • Planning for Startup 988 Projects $ 52. 15 Billion (Cumulative)
Questionnaire Development Version 6 • • Performance • • Metrics • • Version 6 Best Practices Metrics Project Environment Quality Management Construction Productivity Metrics • • • Cost Performance Schedule Performance Safety Performance Change Performance Rework Performance Construction Productivity Metrics Pre-Project Planning Constructability Team Building Zero Accident Techniques Project Change Mgmt Design/Info. Tech. Materials Management Planning for Startup Quality Management 1037 Projects $ 54. 19 Billion (Cumulative)
Questionnaire Development Version 7 Major Upgrade !!! 100% Review/Rewrite & 32% Reduction in Basic Questionnaire • Cost Performance • Schedule Performance • Safety Performance • Change Performance Metrics • Rework Performance • Construction Productivity Metrics • Pre-Project Planning • Constructability • Team Building Best • Zero Accident Techniques Practices • Project Change Mgmt • Technology Auto. / Integ. Metrics • Materials Management • Planning for Startup • Quality Management 1037 Projects $ 55 Billion (Cumulative)
Questionnaire Customers • Member Companies • Research & Implementation • Funded Studies • Alliances • BMPP Questionnaire Metrics • Cost & Schedule • Safety • Best Practices • Environment Data • Productivity −Construction −Engineering
Questionnaire Streamlining Process October 25 -26, 2001 December 11 -12, 2001 January 17 -18, 2002 Diagnose Data Analysis & 1 st Revision Workshop 2 nd Revision Workshop February 5, 2002 March 4 – April 30, 2002 Analysis/Value of Best Practices Workshop Final Revisions & Reprogramming Power User Workshop
Questionnaire Streamlining Process May 9, 2002 Release of Version 7
The Results Section Front End Description Participant Data, Cost, Schedule, Safety, Project Environment, Changes, & Rework Question Delta Percent Change -38 -24% Best Practice Pre-Project Planning 0 0% Best Practice Constructability -5 -39% Best Practice Team Building 0 0% Best Practice Zero Accident Tech +2 +12% Best Practice Project Change Management -1 -7% Best Practice Materials Management -39 -74% Best Practice Quality Management -7 -36% Proposed Best Practice Planning for Startup -26 -65% Other Practice Design/Information Tech - Tech Auto/Integ -15 -34% 0 0% PDRI Total -Project Definition Rating Index -32%
Process of Determining Value of Best Practices Determine Practice to BM Revise Practice Use Questions or Drop Practice Failed Add Practice to BM&M Questionnaire Survey Practice Use & Performance Perform Preliminary Analysis (Correlation) Preliminary Assessment Passed Continue Data Collection Perform Comprehensive Analysis Report Output 1. Recommended Status as BP 2. Value of BP
Project Budget Factor= Actual Total Project Cost (Initial Predicted Project Cost + Approved Changes)
Preliminary Analysis Expected Correlation
Preliminary Analysis No Correlation
Comprehensive Assessment
Cost Savings
Cost Savings $10. 9 MM – Cost of average building project x 8. 5% – Cost growth savings $926 K – Potential savings for typical project
Schedule Reductions
Schedule Reductions 28 Month x 31. 7% 8 Month – Total duration of average building project – Schedule growth savings – Potential savings for typical project
Gap Analysis Project Cost Growth Project Outcome 0. 10 0. 05 0. 00 -0. 05 Δ Opportunity -0. 10 -0. 15 -0. 20 Ver 1 1996 Ver 2 1997 CII Average Practice Use CII 1 st Quartile Practice Use Ver 3 1998 Ver 4 1999 Ver 5 2000 Ver 6 2001 Questionnaire Version and Year Time
Comprehensive Assessment Impact on Cost Performance The Effects of Best Practice Use by Industry Sector – Project Cost Impact Owner Best Practices Contractor Bldg. H. I. Infra. L. I. Pre Project Planning High Low Med High Low Constructability Med Med High Med Low High Change Mgmt High Low Low Design / Info Technology Low Low Low Med Low Team Building Low Med Med Med Zero Accident Techniques Low Low Low High Med Low
Comprehensive Assessment Impact on Schedule Performance The Effects of Best Practice Use by Industry Sector – Project Schedule Impact Owner Best Practices Contractor Bldg. H. I. Infra. L. I. Pre Project Planning Low Med High Med Low Constructability Low High Low Med Change Mgmt Low High Low Med Low Design / Info Technology High Med Low Med High Med Low High Team Building Low Med High Low Zero Accident Techniques Med High Low Low High Low
The Results Safety Performance Recordable Incidence Rate 16 Owners & Contractors 14. 30 14. 20 13. 00 13. 10 14 12 12. 20 Industry 11. 80 10. 60 10 8 4 9. 50 8. 80 8. 60 8. 30 7. 19 6. 12 6 9. 90 CII Est. 7. 28 5. 32 4. 31 3. 44 3. 00 2. 66 2. 30 2 1. 60 1. 59 1. 67 1. 03 1. 02 0 1989 1990 325 413 Note: Industry based on OSHA SIC 15 -17 1991 1992 1993 477 497 527 1994 1995 1996 1997 1998 1999 2000 613 644 770 518 Year and Work-hours (MM) 765 995 936 2001 1, 115
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. ”
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 http: //cii-benchmarking. org Assess • Evaluate your performance • Determine the gap Improve • Use the Benchmarking and CII tools to improve
You Need To Benchmark!
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