implementing lean project delivery at alcoa -...

Implementing Lean Project Delivery at Alcoa Perth Industry Leadership Forum

Ives Blomme – Capital Manager , Global RefiningVenkatesh Iyer – Manager, Projects Management, Global RefiningStuart Pavitt – Project Delivery Manager, Global Refining (Presenter)

110th November 2015

Agenda

What is Lean?

Alcoa’s “Lean” Journey

“Lean” Results

Where to from here?

Questions

2

Kwinana RSA H

What is ‘Lean’?

Lean is a philosophyCoined from study of Toyota’s Production System (TPS)Key concepts:

Customer defines what is value by their willingness to pay for it Value is always compared to the next best alternativeFewer resources implies non-stop journey for betterment

“Lean means creating more value for customers with fewer resources” Lean Enterprise Institute

Alcoa’s Lean Delivery Journey

4

Program StatusProgram and Governance

• Delivery focused on “pleasing others”• Questioning & challenging seen as “non-trust”• Limited, data based performance metrics

Scope • Jumping to the solution rather than defining the problem• Deliverables not assessed against actual need

Cost • Spend equated to progress• Optimistic forecasting

Time • Schedule seen as a required deliverable• Non-integration of $’s, deliverables, and risk

Risk • Risks only seen as “negative” impacts (i.e. threats)• Limited use of full risk management lifecycle

4 years ago in Large Project execution:

Capital Program & Portfolio are Similar to a “Production Process”

5

Continuous flow of projects mimics a manufacturing production line

Lean philosophy is still applicable to project delivery

Principles implementable in relation to project delivery aspects only and not organisation process aspects (which are outside the delivery teams control)

Expected Outcomes: Improved Customer Value

• Life cycle fit for purpose• Optimal cost and time• Best safety and enviro. performance

Improved Business Value• Sustainable competitive advantage

Alcoa’s Lean Delivery Journey - Implementation Hypothesis

Wagerup Liquor Pond Uplift

Alcoa’s Lean Delivery Journey - Process Model / Framework

7

Plan vs Actual

Adherence

QuantityQuantity

BestPractice

ProjectEffectiveness

Execution Management

PM FunctionalManagement

Single Source of Truth

Problem

Scope, Cost, Time, T&O & Quality

Project Management Business Management

Process Management

Governance

Baseline Value

Monitoring, Changes

KPI’s

DeliveryEffectiveness

T&O, Trends andAnalysis

Continuous LearningManagement

SupplierManagement

Earned ValueManagement

Alcoa’s Lean Delivery Journey - Applied Philosophies and Focus Elements

( )

People• Challenge, Data

Driven (respect)

• Build (int / ext) Capabilities

• Consensus / No surprises, Influence & clear hurdles (Newamashi)

• Reflect / Learn (Hansei)

Stable, Standardised and Sustained Processes

Customer ValueLife Cycle Fit For Purpose; Optimal Cost; Optimal Time; Best Safety;

Sustainable Competitive Advantage

Tools• Single Source of

Truth

• Periodic (Takttime) Reviews

• Build in Quality (Jidoka)

• Solve for better (Kaizen)

• Visual Focus

Methods• See for yourself

(GenchiGembutsu)

• Optimised plans, resourcing (Heijunka)

• The 5 Why’s -Solve the Problem (Root Cause)

Vision – Unified Long Term Purpose

Alcoa’s Lean Delivery Journey - Key Elements Explained Unified (Long Term) Purpose / Vision

Progressively succeed in the following stages: Improving INTEGRITY from projects to stakeholders Achieving DELIVERY EXCELLENCE Enabling FLAWLESS EXECUTION Becoming LEARNING ORGANISATION Be the PREFERRED CAPITAL MANAGER

Overarching Common Principles: Provides benefit / value for business Aligns with organisational values “Would I do it if it were my own money?” Provide stability and well being of team members (internal stakeholders)

and enables mutual success (external stakeholders)?

9

Alcoa’s Lean Delivery Journey - Key Elements Explained People

Respect for People Challenge and contesting of ideas

Build Internal / External Capabilities Proactive engagement

Newamashi – Go around roots Early engagement of wide ranging

stakeholders Influence stakeholders. Don’t

bring Surprises

Hansei – Reflect / learn from mistakes Continuous cycle of sharing

10

Kwinana Residue Filtration

Alcoa’s Lean Delivery Journey - Key Elements Explained Methods

Genchi Gembutsu – Go and see for yourself

Heijunka – No waxing/waning but levelled or optimised production

Working Backwards ‘Efficiently’ at the Front End

11

Alcoa’s Lean Delivery Journey - Key Elements Explained Tools

“Single source of truth” P6 Integrates scope, cost, time and risk

Jidoka – Built in quality Automatically and proactively reveal issues

12

Kaizen – Doing for Better Only doing those things

that lead to improvement

Visual Focus• Visually show trends for

proactive intervention

Pinjarra RSA 10

Alcoa’s Lean Delivery Journey - Single Source Data driven

13

Building blocks define Scope (and Exec. Strategy) for different suppliers. Given scope, the project team nominates & drives ownership and data collection. Collected data is validated for fidelity.

Cost Performance S Curves – From the Single Source

14

Unit Rate and Production Analysis – From the Single Source

15

Stretch Target

Health & Safety Performance – Heat Mapping

16

Audit aligned to Project ScheduleCorrective Actions Identified

Base elements in every audit

Specific ‘risk’ elements 4 wks before work in schedule

Measures & Scores No open action

Environmental Performance – Heat Mapping

17

Kwinana Filtration Project KW0811 Environment Audit Program ‐ Schedule & Heat MapAudit Focus Areas # Mar‐15 Mar‐15 # Apr‐15 Apr‐15 May‐15 # May‐15 Jun‐15 # Jun‐15 # Jul‐15 Jul‐15 # Aug‐15 Aug‐15 # Sep‐15Fortnight F1 F2 F1 F2 F1 F2 F1 F2 F1 F2 F1 F2 F1Corrective Actions Overdue of Target Date 0 0 0 0 0 0 0 0 0 0 0 0 0

General Environmental Awareness (Works Approval, Guidance Docs) 71 69 68 70 74 77 77 78 77 78 78 82 82Planning 70 70 77 83 80 83 77 83 83 80 83 83 80Communication & Training 67 71 75 78 78 80 80 80 80 80 84 84 84Application in the Field 76 68 62 61 71 74 76 76 74 76 74 81 81Dust Management Plan Compliance 73 85 78

Noise Management Plan Compliance 62 75 70

AIR MANAGEMENT 60

WASTE MANAGEMENT 61

CHEMICAL MANAGEMENT 54 75 54 54 89

LAND MANAGEMENT 80

81‐100% ‐ Excellent (Best practice) 80% ‐ Good (Meets minimum compliance) 51‐79% ‐ Fair (Some minor non‐compliance to be rectified) 26‐50% ‐ Poor (Stop work and rectify non‐compliance) 1‐25% ‐ Stop Work (Reconsider use of contractor at Alcoa)Audit Score Legend Corrective Actions: Total Identified To Date (28) ‐ Closed (26) ‐ Open (2) ‐ Overdue (0) ‐

Audit findings worthy of sharing with wider Alcoa group, to be added to IHS as a Risk Notification or IFE.

Scheduled (adjust Audit Schedule as required to suit Project Risk Profile ‐ identify with grey fill colour). Enter Audit Score % in relevant cell above & heat map will auto generate in line with the legend on the left.Hyperlink Audit Record to the Score % entered above for ease of access to specific Audit Record details.Audit Focus Area titles are hyperlinked to the Audit Checklist Templates for ease of access.

Environmental Audit Program Heat Map

Positive performance

Minor administrative non conformance

(Dust Management Focus)

Achieved outcomes… Improved customer value Increase in business value

… as demonstrated by…

Alcoa’s Lean Delivery Journey - Implementation Results (Validated Hypothesis)

Improved capital output per resource


19

Optimising cost and schedule performance

20


Reduction in monthly forecasting

variability


21

Increased focus on chasing savings


22

Creating required deliverables only


23

More capital available to

the Business

Where to from here?

Continued focus on becoming the Preferred Capital Manager by: Sustaining current practises Sharing knowledge and learning from mistakes Continual improvement in resource skills Adapting to the business’ needs

The journey has only begun… there’s still a long way to go!

Wagerup RSA 9 and ROCP 3

Question & Discussion Time

implementing lean project delivery at alcoa -...

Documents