Dr. George Jergeas PEng University of Calgary Project Management Specialization

1. Managing Fast Track Projects: A Guide and Checklists Dr. George Jergeas PEng University of Calgary Project Management Specialization

2. Reference This presentation is based on the European Construction Institute (ECI) - UK ECI Manual The Fast Track Manual A guide to Schedule Reduction for Client and Contractors on Engineering and Construction Projects

3. Agenda • Introduction • Different Project Stages • Concept Stage * • Development Stage • Definition Stage * • Design Stage * • Procurement Stage • Construction Stage * • Commissioning • Operation Stage • Key Issues

4. Introduction • Takes place more quickly than normal • A difficult and often stressful route to follow • There is no boundary between a normal project and a fast track project • Projects ranged from 4 - 36 months • Schedule reduction 10 - 29% • Cost increase 10 - 20%

5. Reasons for Fast Track • Urgent requirements by client • To maximize profit or limit loss • Imposed deadline • Start of academic year • End of current lease • New legislation • Minimize disruption of services

6. Objectives • To assist who are considering a fast track to make the right decisions • To help implement fast track strategy successfully

7. Key Success factors • The calibre of individuals and their working relationships • The adequacy of the definition of the project • Strategy adopted and systems for implementation • The passion to succeed on the part of key participants

8. Definitions • “A managerial approach to the achievement of early project delivery, involving the application of innovations in the management of construction procurement and recent advances in the process that, bringing into play; • The integration of construction and design phases • The involvement of the contractor in both the design and construction phases • Overlapping of work packages to enable construction of sections of the project to proceed while the design for other sections is being progressed • The employment of the expertise of suppliers in design and construction Kwakye, 1991

9. Definitions • “Design and construction are overlapped and different sections of the plant are designed and built in parallel with significant additional risk due to the links between the design of different parts of the plant” Turner, 1996 • The reduction of the the schedule to the minimum practicable is the principal driving force for one or more stages of the project

10. Project Stages Normal Project Fast Track Project

11. General Principles • Work Package Overlap • Work packages are progressed in parallel • Overlap the stages for each work package • Early Decisions • Experienced judgement and empowerment • Commence design before scope has been defined • Must accept wrong decisions

12. General Principles • Integrated Project Team • Main parties are combined into a single organization and participate to the limit of their capability in achieving the project objectives • Partnering • Benefits • Availability of additional expertise • Avoiding learning curve errors • Reduction in the overall workload • Commitment to the project definition and schedule • Design and construction developed together

13. General Principles • Additional Staff • More labour will be needed at peak period as a consequence of scheduling activities in parallel • More management resource will be needed to deal with interface and progress issues arising from inter-dependencies between disciplines and between design, procurement and construction • Schedule Reduction Techniques • Project must be managed in an efficient manner making full use of project management and schedule reduction techniques

14. General Principles • Additional Risks • Decisions based on limited information, cannot always be right first time • A structured and thorough risk management process needed

15. Advantages vs. Disadvantages • Advantages • Time to market • Commercial benefits • Short schedule (at least 10%) • Reduce time period for risk exposure • Disadvantages • Additional risk factors, very limited alternatives • Increased amount of PM, control, etc. • Cost increase (at least 10 – 20%)

16. Characteristics that Support Strategy • Ownership • Client support • Project sponsor or champion • Stakeholder support and commitment • Organization • Project team needs to be simple, clear and devoid of rigid hierarchy • If parent organization has a functional matrix structure, the functional line must be subordinate to the project management (task) line for the duration of the project team

17. Characteristics that Support Strategy • Desirable Team Characteristics • Honesty - Openness - Trust • Anticipation and avoidance of issues rather than waiting for them to turn into problems • Mutual support - issue resolution, coaching • No blame culture • Access to all parties, no communication barriers • Lean organization, which aids communications and speeds decision taking • Full time members • Authorized and empowered team members • Decision making on the spot without referring

18. Characteristics that Support Strategy • People and Relationships • Technical competence • Decisiveness - self starter - can do - flexibility • Ability to forecast outcome and act accordingly • See the big picture • Willing to collaborate • Enthusiasm • Strong leadership • Managerial competence • Openness

19. Characteristics that Support Strategy • Motivation • Create a team culture that avoid de-motivation of individuals who are keen to succeed, but are prevented by the organization, procedures,….. • Working part of a team, working equally hard and supporting each other • Appoint key positions to individuals known to be good motivators • Early identification and removal of under-performing individuals • Team building and partnering sessions • Incentive/penalty clauses

20. Characteristics that Support Strategy • Contractual arrangements • Achieve win-win situation • Pre-selected, preferred contractor • Reimbursable basis, with incentives • Lump-sum can also be used • Partnering • Up front agreement for payment for changes and extras

21. Characteristics that Support Strategy • Communications • More informal communication - face-to-face • Barriers should be removed - information flows directly between the parties regardless of parent organization and level of hierarchy • Responsibility for communication lies with the individual who has made a decision • Frequency and progress meetings • Frequent and concise reporting

22. Concept Stage • Introduction • Time to establish the concept is NOT recoverable • The opportunity to influence the outcome falls off rapidly • People • Stakeholders (ALL Should be identified) • Integrated Team (Sponsor, Project Manager & Senior Managers from different key players) • Qualified personnel and motivated

23. Concept Stage • Scope • Identify the real Goal and Objectives of the client • Identify Critical Success Factors (CSFs) • Strategy • Fast tracking should be avoided unless the client business benefits from early completion significantly and outweigh risks • Contract strategy addressed and outlined

24. Concept Stage • Business and PM Systems • Business Planning • process for weeding out poor projects • A smooth transition from business process to PM process • Stage gates process • Communications • Rapid transmission of information • IT systems • Publicity needs to be controlled • Risk Management • Cost and Risk • Determination of cost is difficult • Limited industry information on fast track projects • As accurate as possible estimate to help in the decision to adopt a fast track strategy

25. Concept Stage • Logistics • Consideration to location of new asset in relation to: • Location of customers • Source and availability of feedstocks, component parts • Supply routes • Transport security and cost of supply and products • Existing assets • Workforce skills and availability • Also should consider: • Locations of parties involved • Client site - design office - contractor - contractors and sub-contractor - suppliers • Sources of construction equipment - material - supply routes and methods - Site access and controls

26. Definition Stage • Introduction • Lack of adequate definition has arguably been responsible for more project failures • Expenditure of 25% of the total design effort • Design will need to be progressed on those elements of the definition that are sufficiently secure in order to feed information to construction at the earliest practicable time… • Quality of project definition is very often a casualty, with the potential for overruns of cost & time

27. Definition Stage • People • Clarity of objectives • A clear focus on the objectives as agreed with stakeholders at the concept stage must be maintained in order to aid in the decision making process • Stakeholders • The significant stakeholders early identified should continue to be involved, consulted and advised • Any other identified stakeholders should be involved ASAP • Integrated Team • If the project has not so far been led by the project manager who will be responsible for seeing it through to beneficial use, that individual should be appointed at the beginning of the definition stage

28. Definition Stage • People • Suitably qualified and experienced personnel • The team should not be selected only on their technical and managerial competencies… but also on their ability to: • Overcome the obstacles and succeed in achieving the project CSFs • Work with high level of uncertainty • Work flexibly outside the normal work boundaries • Co-operate with others for the benefit of the project • Project Scope • It is essential that the project team have a clear understanding of what has been agreed by stakeholders to be in the scope and what is outside the scope

29. Definition Stage • Scope • For technical definition consider: • Fit for purpose (which may not be ideal sometimes) • Fastest to manufacture/construct rather than cheaper • Reuse of design from existing assets • Modular design • Pre-fabrication of components • Minimization of project scope – lean construction approach • Reduction in the number of processing steps in a manufacturing plant

30. Definition Stage (Cont.) • Scope • Reduction in the size of the asset • Elimination of non-essential elements of the design • Standardization of layout or repeated units • Standard / off-the-shelf components • Simplification of design dependencies • Simplification of the build/construct/assemble process • Avoidance of innovation/new/untried elements in general • Early identification and ordering of long delivery items • Constructability / Operability • This stage should also include: • Arrangements for handover and commissioning • Proving and warranty test to be carried out • Definition of beneficial operation / use as the end point of the project

31. Definition Stage (Cont.) • For the Overall Scope also consider: • Achievement of the overall project objectives, both what is to be done and how it is to be achieved • Whether phased completion would be acceptable • Arrangements for handover and commissioning • Proving and warranty test to be carried out • Definition of beneficial operation / use as the end point of the project • Project specific critical success factors

32. Definition Stage • Project Strategy • It should take into account the same aspects which were considered in the concept and development stages that include: • Work Breakdown Structure and the ability to spilt the project into relatively independent parts • Willingness to take early decisions and accept competent solutions • Ability to keep options open until the last responsible moment • Elimination of hold points for the approval of design • Agreement that the project will accept the best decision in light of the information available at the time • Acceptance of risk taking, and the impact of each risk • Delegation and empowerment of the team to promote decisions • Early applications of authorization and approvals • Availability of benefits / incentives for all project parties • Opportunities to allocate risk and share rewards

33. Definition Stage • Project Management Procedures • Planning • It is essential that, as the definition evolves, work is scheduled on the basis of achieving the earliest beneficial use of the finished asset • It is also essential that interactive planning process advocated as a team building activity • Project Process • Based on the project organization, the project procedures may be those of the client, the contractor or one of the other parties • Standard processes need to be modified to accommodate the degree of overlap between various stages • Authority to approve modifications should be assigned ASAP • A project risk management system must be set up as part of the project procedures • A good system for project documentation is essential

34. Definition Stage • Project Management Procedures • Project control • Care is needed to ensure that previously rejected ideas are not reintroduced at the definition stage • The use of Value Engineering / Constructability is essential to enhance the decision making process • Project Communications • A good communications system need to be established and maintained • This could include: intranet, Extranet, Internet, Chat rooms, Bulletin Boards, Event Calendars, Data Base, etc. • The greater the level of integration in the sharing and re-use of information the more that the communication system will support the project and enhance success

35. Definition Stage • Project Management Procedures • Cost and risk • Cost • Approval of cost will have to be given on a lower level of definition and with a wider tolerance on the estimate if the project is to proceed unhindered by the supply of funds • A cost estimate to within plus or minus 10% will not be obtained until the end of the design stage • It is recommended that a control estimate should be produced once all the necessary details are known • During this stage it will be necessary to address the potential cause of increased cost which may rise

36. Workshop 1: Risks List risks associated with the increased level of overlap between definition and design stages of a project.

37. Solution: Workshop 1 • Design and construction rework arising from lack of firm definition • Additional management effort at peak to control the project • Use of additional resources arising from repeat work and parallel working requiring more than optimal number of people • Essential additional items to achieve the CSFs which creep into the scope through lack of firm definition • Procurement against best/guaranteed delivery rather than lowest price • Additions to equipment orders as details evolve • Additional expediting

38. Solution: Workshop 1 • Air freighting to speed delivery • Incorrect initial material quantities which may give rise to surpluses, or shortages which will need to be topped up at premium costs • Additional contingencies being included in quotations to cover unknown elements where there is no scope • High allowances in tender prices to cover penalties for defaults • Overtime and shift working resulting in higher cost and loss of productivity • Over design vs. waiting for detailed information

39. Design Stage • Introduction • The main purpose of this stage is to finalize the design requirements for the project • This stage requires a good understanding of the options for compressing the schedule • It requires the use of the most up-to-date proven computer aided design • People • Clarity of objectives • The most elegant design is useless unless it is capable of being built safely and to time and budget, this has to be fully understood by the project team and senior management

40. Design Stage • People • Stakeholders • The interests of all stakeholders should be kept under review as the design progress so that interested parties can be kept up to date and involved at the earliest appropriate stage • Alliances • Establishment of a long-term relationship between the companies and team involved helps to ensure a rapid start-up of the team involved on the project at each stage • Integrated Team • This stage requires the use of single design team incorporating the expertise of all discipline and involving those responsible for subsequent stages of the project • The design should be able to be “right first time” to minimize the number and duration of design reviews

41. Design Stage • Integrated Team • The team need to be supported with appropriate collaboration and communication systems • Team members should have clearly identified roles and objectives to eliminate duplication and inefficiencies • The team members need proper empowerment to promote rapid and effective decision making • Team members should be very competent and experienced in order to enhance the efficiency of the design • Project Scope • Clarity of definition • The problem with some fast track projects is that detailed design has to proceed without total clarity of definition • It is a a matter of judgment as to which areas are sufficiently well defined to proceed without incurring too great risk

42. Design Stage Project Scope • Extent of design • The extent of design details need to be defined from the beginning. Some elements of design has always been left to contractors on site to complete • There will be no benefit if the easy 95% of the project is fully detailed and the contractor is left to struggle with the difficult 5% • Design can only be based on the best option at the time given information available • Early involvement of contractors and suppliers is essential

43. Design Stage Over-design • In the absence of hard information it is necessary to make more generous allowances than would normally be the case • The level of the over-design will depend on the extent of the un-known, the significance and perhaps the cost of the time • The design can be based on the maximum expected values e.g., weight of structure, pressure in system together with an appropriate safety factor rather than waiting until precise values can be calculated. • Example: There maybe little cost difference for the project as a whole if piling is 30% over-designed or 50% over-designed, but may allow site work to proceed well ahead before the accurate details of the superstructure can be determined.

44. Design Stage Design process • The design sequence must be planned to ensure that the schedule needs of construction drive the design process for the production at the right time of: • Design information • Drawings • Documents • Materials • Equipment • Long lead item data sheets and specifications will need to be produced out of sequence with the rest of the design.

45. Design Stage Design process • Visual appearance and structural design may need to be compromised to achieve the fastest completion • Design option selection may be based on fastest to manufacture or build rather than lowest cost • Design will overlap with procurement and construction • Design of work packages will be in parallel • By-pass design areas with insufficient information and work to assumptions – put experienced team members to work resolving the issues within the black box area • Incorporate constructability to ensure the optimum construction productivity • Design holds must be minimized as possible • Design reviews must be carried out very thoroughly

46. Design Stage Design process • Design freeze • The overlap between definition, design and construction means that the number of unknowns remains higher than in a normal project while work is proceeding on the following stage • Only freeze part of the design which then have to be accepted as constraints on the rest of the design

47. Design Stage • Strategy • Simplicity and repetition • Reduction in the number of processing steps in a manufacturing plant • Reduction in the size of the asset • Elimination of non-essential elements of the design (de-scoping) • Standardization of layout or repeated units • Simplification of the build / construct / assemble process • Standard / Reusable / Off-the-shelf-design • Consideration should be given to re-use design of an existing asset • An existing asset can be used to train both the constructors and users of the new asset • Base the design of the long delivery items on those that already exist so that material procurement and fabrication can be started at the earliest possible time.

48. Design Stage • Strategy • Modularization • If the overall design can be structured as a series of units or modules then there is the potential to introduce a number of schedule reduction approaches • Progress separate modules in parallel using separate design teams, suppliers, construction contractors … • Care to identify all the interdependencies between the separate modules and to ensure that these are taken into account as the design progresses. • If a number of the modules can be of similar design then should be possible to utilize the experience gained on early modules to improve the efficiency and time • In a process plant design as a number of parallel streams, rather than a single large stream – Smaller and off-the-shelf items • Consider the concept of sub-modules mounted within plant p may be interchangeable

49. Design Stage • Strategy • Prefabrication / Pre-assembly • Manufacture modules off the site and under factory controlled conditions • Cladding panels complete with windows, external fittings, internal finishes • Fully finished air handling units • Skid mounted plant • Fully finished bathrooms • Standardized internal partitioning • Completed, tested, validated pilot/ process plant • Design tools • The low technology approach will often be found (on many projects) to be the quickest to produce results • Consideration to the use of the latest, proven, design (CAD) and communication systems (IT)

50. Design Stage • Project Management Systems and Procedures • Planning • Planning of the design must be driven by the requirements of later stages, mostly the construction stage. • Interactive planning which involves all members of the project team in problem solving and plan optimization. • Critical Chain project planning methodology has been credited with a significant reduction in project duration. The methodology results in the schedule contingency, which is normally hidden in the planned duration of each activity, being removed from the critical chain of activities and being replaced by a number of buffers of project contingencies that are provided to protect blocks of activities and are visible to the project team