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Facilitating Economic Growth in Cuba
Shared Visions for Cuba-US Relations Conference
Austin, Texas
January 29-30, 2009
Manuel A. Garcia, P.E.
Associate Director, CII
Cockrell School of Engineering
The University of Texas at Austin
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7/8/2017
Today’s Presentation
• Potential Scenario
• Construction Industry Institute
• Facilitation Tools
2
• Potential Scenario
–
–
–
–
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Improved Cuba-US Relations
Opportunity for economic growth
Tight financial markets
Higher financial bar to overcome
Opportunity for different capital project
execution methods
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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
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Construction Industry Institute- Owner Members
Abbott
The AES Corporation
Air Products and Chemicals
Alcoa
Ameren Corporation
Amgen Inc.
American Transmission Co.
Anheuser-Busch- Inbev
Aramco Services Company
Archer Daniels Midland Co.
BP America, Inc.
Bristol-Myers Squibb Co.
Cargill, Inc.
Chevron
CITGO Petroleum Corp.
Codelco-Chile
ConocoPhillips
DFW International Airport
The Dow Chemical Co.
DuPont
Eastman Chemical Company
Eli Lilly and Company
ExxonMobil Corporation
General Motors Corp.
GlaxoSmithKline
Hovensa L.L.C.
Intel Corporation
International Paper
Kaiser Permanente
Kraft Foods
Marathon Oil Corporation
NASA
NAVFAC
NOVA Chemicals Corp.
Occidental Petroleum Corp.
Ontario Power Generation
Petrobras
Praxair, Inc.
The Procter & Gamble Co.
Progress Energy, Inc.
Rohm and Haas Company
Sasol Technology
Shell Oil Company
Smithsonian Institution
Solutia Inc.
Southern Company
Sunoco, Inc.
Tennessee Valley Authority
Tyson Foods, Inc.
U.S. Architect of the Capitol
U.S. Army Corps of Engineers
U.S. Dept. of
Commerce/NIST/BFRL
U.S. Dept. of Energy
U.S. Dept. of Health & Human
Services
U.S. Dept. of State
U.S. General Services
Administration
U.S. Steel
Vale
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Construction Industry Institute- Contractor Members
Adolfson & Peterson
Construction
Aker Solutions
Alstom Power Inc.
AMEC, Inc.
Atkins Faithful & Gould
Autodesk, Inc.
AZCO INC.
Baker Concrete Construction
Barton Malow Company
Bateman Engineering N.V.
Bechtel Group, Inc.
BIS Frucon Industrial Svcs.
Black & Veatch
Bowen Engineering Corp.
Burns & McDonnell
CB&I
CCC Group, Inc.
CDI Engineering Solutions
CH2M HILL
CSA Group
Day & Zimmermann
dck Worldwide LLC
Dresser-Rand Company
Emerson Process Mgt.
Fluor Corporation
Foster Wheeler USA Corp.
Grinaker-LTA/E+PC
Gross Mechanical
Contractors
GS Engineering &
Construction
Hargrove and Associates, Inc.
Hatch
Hill International, Inc.
Hilti Corporation
Jacobs
JMJ Associates Inc.
KBR
Kiewit Power Construction
M. A. Mortenson Company
McDermott International, Inc.
Mustang
Parsons
Pathfinder LLC
Pegasus Global Holdings
Primavera Systems, Inc.
R. J. Mycka, Inc.
S&B Engineers and
Constructors, Ltd.
The Shaw Group Inc.
Siemens Energy, Inc.
SNC-Lavalin Inc.
Technip
URS Corporation
Victaulic Company
Walbridge
The Weitz Company, Inc.
Worldwater & Solar
Technologies
WorleyParsons
Zachry
Zurich
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Universities involved in CII Research 1983-2008
University of Alabama
University of New Mexico
Arizona State University
North Carolina State University
Auburn University
North Dakota State University
Bucknell University
Oklahoma State University
Carnegie Mellon University
Oregon State University
University of Cincinnati
Clemson University
University of Colorado-Boulder
Colorado State University
Columbia University
The Pennsylvania State University
University of Pittsburgh
Purdue University
Polytechnic University
University of California-Berkeley
San Diego State University
East Carolina University
San Jose State University
University of Florida
Stanford University
Georgia Institute of Technology
State University of New York-Albany
University of Houston
Vanderbilt University
University of Illinois
Virginia Polytechnic Institute and State University
Iowa State University
Texas A&M University
University of Kansas
The University of Texas at Austin
University of Kentucky
Lehigh University
University of Washington
University of Maryland
University of Waterloo
University of Michigan
University of Wisconsin-Madison
Mississippi State University
Worcester Polytechnic Institute
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CII Mission
• Enhance business effectiveness and
sustainability of the capital facility life cycle
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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 116 members
• First to bring research to the engineeringconstruction world
• First industry-government-academic research
collaboration for the constructed project
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• CII Practices (Facilitation Tools)
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–
–
–
Widely researched and applied
Identified through proven research methodology
Yielding positive results
Supported by ready to use manuals
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Results
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Value of CII Best Practices
(CII Owners)
130%
Budget Factor
Better
120%
110%
100%
16.4%
90%
80%
0 Minimal
1 2
Implementation
3
4
5
6
7
8
9
10 Robust
11 12 13 14 15
Implementation
CII Best Practice Usage
(Best Practice Index)
Note: Average Budget 53 Million, submitted after 2002 (n=152)
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Value of CII Best Practices
(CII Owners)
140%
Schedule Factor
Better
130%
120%
110%
21.4%
100%
90%
80%
1 Minimal
2 3
Implementation
4
5
6
7
8
9
10 Robust
11 12 13 14 15 16
Implementation
CII Best Practice Usage
(Best Practice Index)
Note: Average Planned Duration 135 weeks, submitted after 2002 (n=152)
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DART (1989-2007)
8.00
7.00
6.80
Industry*
CII
6.79
DART (LWCIR) Incidence Rate
6.10
6.00
5.80
5.50
5.50
5.00
4.90
4.50
4.40 4.00 4.20 4.104.00
4.00
3.80 3.60
3.40
3.40
3.20
3.00
2.00
1.90
1.55
1.45 1.14
0.63
1.00
0.81
0.55 0.45 0.31 0.41
0.27 0.26 0.23
0.46 0.36
0.33 0.25
0.21 0.23
0.00
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
325
413
477
497
527
613
644
888
591
763 1,122 936 1,117 1,073 1,129 1,301 1,419 1,100 1,724
Year and Work Hours (MM)
*OSHA Construction Division, NAICS 236-238, SIC 15-17
Reflects OSHA Reporting Change
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CII Database
International
312
(19%)
Contractors
Domestic
719
(44%)
1,334
Owners
927
(56%)
(81%)
 1,646 projects
 Worth > $76 Billion
 Large & Small Projects Combined
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Alignment
• Projects participants working in
harmony to develop and meet a
uniformly defined and understood set
of project objectives.
Initial Application
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Elements of Alignment
Top-to-Bottom Alignment
Executive
Business
Project
Business Planning
Pre-Project Planning
Project Execution
Functional
Facility Operation
Project Life Cycle Alignment
Cross-Organizational Alignment
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Alignment Index vs. Performance Analysis
(from recent Research Team 213 data)
Alignment Index Score*
Performance
Cost
Less than Median
Greater than Median
3.3% over budget
6.5% below budget
(N=30)
Schedule
24.5% behind
schedule
(N=33)
Change orders
8.2% of budget
(N=26)
(N=34)
8.4% behind
schedule
(N=35)
7.6% of budget
(N=27)
Med. = 7.81
*Alignment During Pre Project Planning
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Partnering
• Project specific partnering
– Project objectives focused; short term.
• Strategic alliances
– Enterprise objectives focused; long term
Partnering Strategy
For
ABC Partners
Optimum Application
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Partnering Process Model
Phase 1
Owner’s
Internal
Alignment
• Identify
Business
Drivers
• Evaluate
Partnering
• Prepare
and Align
Phase 2
Partner
Selection
• Select
Optimum
Partner
Phase 3
Phase 4
Partnering
Relationship
Alignment
• Align
Objectives
• Develop
Measures
• Develop
Reward
System
Project
Alignment
Phase 5
Work
Process
Alignment
• Develop
“Win / Win”
Objectives
• Establish
Intraproject
Goals
• Reward
Accomplish ment of
Objectives
• Establish
Processes
to Support
Measures
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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
50% reduction
80% reduction
42% increase
Claims
Number of claims
Projects with claims
83% reduction
68% reduction
Other
Job satisfaction
30% improvement
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Front End Planning
Front end planning is also known as:
• Conceptual planning
• Front end loading
• Pre project planning • Programming/schematic design
• Feasibility analysis • Early project planning
Initial Application
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Front End Planning Process
0
Feasibility
1
Concept
2
Detailed
Scope
Initiate Phase
Initiate Phase
Initiate Phase
Generate Options
Analyze Alternatives
Preliminary
Design/Eng.
Filter Options
Conceptual Scope
and Estimates
Preliminary Des./Eng.
Reviews
PDRI 1
Evaluate and Select
Best Alternatives
PDRI 2i
Feasibility Report
Concept Phase
Report
PDRI 2
3
Design and
Constructio
n
Finalize Scope
Definition
Cost & Schedule
Control Estimates
PDRI 3
Project Definition
Package
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Recent CII Pre-Project 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
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Definition of Constructability
The optimum use of construction
knowledge and experience in planning,
design, procurement, and field
operations in order to achieve project
objectives
Initial Application
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The Constructability Process:
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Benefits of Constructability
• Avg. 4.3% reduction in project costs.
• Avg. 7.5% reduction in project schedule.
• Potential to improve:
•
•
•
•
•
Security, safety, & environmental impact.
Project quality.
Operability, functionality, and reliability.
Project team relationships.
Rework and rescheduling on the project.
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Definition of Materials Management
Integrated process for planning & controlling
all necessary efforts to
– Specify
– Procure
– Deliver materials & equipment to the job
site.
Initial Application
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Benefits of Materials Management
Average % Improvement
Reduced bulk supplies
Improved supplier performance
Cash flow savings
Reduced site storage and handling
Improved craft labor productivity
Improved project schedule
Reduced management personnel
Reduced risk
40
24
23
21
16
16
15
5
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Planning for Startup
• 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.
Initial Application
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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.
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CII Best Practices
Project Planning Phase
• Partnering
• Alignment of Project
Objectives
• Pre-Project Planning
• Team Building
Design Phase
• Constructability
• Materials Management
Construction/Startup Phase
• Planning for Start-Up
• Zero Accidents Techniques
Project Life Cycle
• Benchmarking
• Change Management & Scope
Control
• Disputes Resolution
• Implementation of CII Research
• Lessons Learned
• Quality Management
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Other CII Practices (CII Best Practice Candidates)
Project Planning Phase
• Attract and Maintain Skilled Workers
• Automated Identification
• 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 Integrated and Automated Project
Processes (FIAPP)
• Lessons Learned
• Management of Education & Training
• Managing Workers’ Compensation
• Project Health Assessment
• Small Projects Execution
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Value of Best Practices
Theoretical Relationship
Performance
0.4
0.3
0.2
Better
0.1
0
-0.1
-0.2
4th Quartile
Low
3rd Quartile
2nd Quartile
Practice Use
1st Quartile
High
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Manuel A. Garcia
Associate Director
Construction Industry Institute
3925 W. Braker Lane (R4500)
Austin, TX 78759-5316
(512) 232 1966
[email protected]
Construction Industry Institute
www.construction-institute.org
Thank you for your attention!
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