project control

© 2015– Hervé Baron

Welcome to this tutorial

It shows the practical ways and tools to control the progress of an Oil & Gas Project.

Please download this file so that you can see my trainer’s notes in the top left corner – latest Acrobat Pro feature.

Hervé

Project Control


Project Control

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Project Control

Delayed Project completion are common place

What are your bad / good experiences?

Phase What happened? Why? How to prevent this?

Engineering

Procurement

Construction


Project Control

Delayed Project completion are common place

Phase What happened? Why? How to prevent this?

Engineering Engineering unable to progress

Lack of information from vendors

Early placement of POs, identification + penalty for late dwgs, follow-up

Procurement

Supplier is late

Supplier overloaded

Purchaser progress control not effective

Ensure proper progress data is requested, attach to payments

Construction

Construction behind plan

Lack of accurate progress control

Under estimation of certain trades

Accurate (detailed) step-wise item-wise progress

Eng/Constr interface

Construction Timely completion of hydrotests

Incentive put in place N/A

Présentateur

Commentaires de présentation

Also: Poor FEED / Engineering leading to re-works => invest in FEED, no LS!


Training Objectives

Share Good practices, highlight meaningful information and good practices in:

• Planning • Scheduling • Progress measurement

Provide you with benchmarks, to enable you to control the execution of your CONTRACTOR


Training Agenda

The plan • The Principle • Planning assumptions

The schedule • Schedule integrity

Monitoring the compliance to the schedule • Leading • Lagging

Progress measurement & control • General • Engineering • Procurement • Construction


Training Agenda



Training Agenda

The plan • The Principle

− The contractor/supplier draws its plan as per its workprocess − Risks should be identified − The client reviews the plan − The client monitors achievement against the plan − Recovery/acceleration actions are identified


Training Agenda



Project Control: Starting point

The plan

Présentateur


Review the plan first, then the schedule



Basis of the schedule




What are these assumptions for an EPC Project?




• Quantities • Productivities • CPY/Third party approvals • Purchasing cycle • LLI lead time • Other eqt and bulk lead time • Steel structures lead time • Transportation duration • TSF/camp • Early works • Pre-fab • Heavy/large equipment Lifts • Type of foundations • Commissioning sequence: Power > Utilities > Process

Présentateur


Pre-fab: steel or RC pipe-racks


Oil & Gas Projects Most likely critical path

What is the most likely critical path of Oil & Gas Projects?


Most likely critical path

Source: “The Oil & Gas Engineering Guide”, 2nd Edition, 2015, Hervé Baron, Editions Technip

Présentateur


Introduce deriving E&P schedule requirements: ISOs Piping Material Delivered at Site Equipment Erected


Most likely critical path For the explanation and justification of the most likely critical path, please refer to: ”The Oil & Gas Engineering Guide”, 2nd Edition”, Hervé Baron, Editions Technip, Mars 2015 http://www.editionstechnip.com/en/catalogue-detail/1111/oil-gas-engineering-guide-the.html

http://www.editionstechnip.com/en/catalogue-detail/1111/oil-gas-engineering-guide-the.html























Training Agenda




Training Agenda



What would you review in the CTR proposed initial schedule?



Schedule integrity • No lags (which cannot be statused during schedule up-dates): to be

replaced by activity • No open end, i.e., no activity without a predecessor, except Project

Start, no activity without a successor, except Project Finish • No fixed constraints • Resource levelling has been done • Critical paths • Compliance with CONTRACT Milestones, intermediate CD • Float • Number of critical activities (10-15%) • Schedule logic


Project Control: Starting point Checking the schedule logic: typical FEED Engineering schedule

Source:

“The Oil & Gas Engineering Guide”, 2nd Edition, 2015, Hervé Baron, Editions Technip http://www.editionstechnip.com/en/catalogue-detail/1111/oil-gas-engineering-guide-the.html

Présentateur


One constraint of CTR is CADding, done by other group than Process The schedule is based on the following assumptions: PFD’s and PID’s markup are developed in parallel. PID’s will be developed from PFD’s Master document assuming that PFD’s are developed with company and no major comments are awaited from Company on PFD’s IFD. PID’s Client review to be done on PID’s IFR & Master Line List (Cadded LL’s are issued one week later than cadded PID’s) PID’s IFR are issued one week before PID’s Review. “PID’s IFR further markup” are issued one week before HAZOP Review HAZOP review is conducted on “PID’s IFR Markup”























Project Control: Starting point Checking the schedule logic: typical EPC Engineering schedule

Source:

“The Oil & Gas Engineering Guide”, 2nd Edition, 2015, Hervé Baron, Editions Technip http://www.editionstechnip.com/en/catalogue-detail/1111/oil-gas-engineering-guide-the.html























Training Agenda



Monitoring the compliance to the schedule

How would you ensure compliance with the schedule?


Training Agenda



Monitoring the compliance to the schedule • Leading: look-ahead schedule / “to do” list • Lagging: review schedule up-dates


Example: FEED Project / Schedule set-up and monitoring


Follow-up: the weekly “to do” list


Training Agenda



Monitoring the compliance to the schedule • Leading: look-ahead schedule / “to do” list • Lagging: review schedule up-dates


Schedule up-dates: Milestones status review

Présentateur


Milestones are Critical Activities for Success, derived from the CP


Schedule up-dates

Review of she schedule up-dates • Late actual starts % S slips, Avg # days delay • Late actual finish % F slips, Avg # days delay • Change of logic nb logic changes • Change of duration • Increase in number of activities with total float < 50 days • Increase in number of activities with total float <= 0 days • Change in critical paths


Training Agenda






Training Agenda





What is the worst measure of progress?

Présentateur


Consumed hours


Training Agenda





What is the worst measure of progress?

Manhours spent

Présentateur


Consumed hours


Training Agenda





Physical progress is better… here is how we measure it

Présentateur


Consumed hours


Progress Measurement/The principles

The various activities of a Project are weighted as per their $ value (common denominator).

They are broken down in elementary tasks, the progress of each one if tracked by work steps. For instance, procurement of an equipment: 10% for placing of PO, 50% for raw material at supplier’s shop etc.

The Individual progress of each task are then integrated to give the overall progress.

The schedule information (planned date for each of these activities/tasks) gives the planned progress for each cut-off date and allows to compare planned vs actual progress

Présentateur


The Progress is for sure a key information for the Project however it has some intrinsic limit. Rather theoretical weighing in terms of $ value. Does not relate to critical progress and level of effort, e.g. placing of one expensive PO.


Progress Measurement

The graphical depiction of the planned progress is the “S” curve,

Plotting the actual progress allows to identify delay and cruising speed

Présentateur


Recall the origin of the S curve discovery: Owner payments (cash out), typically on construction contracts: installed qties * rates. This was a good measure of progress as reliable, as there were based on measurement installed qties, and claimed immediately by contractors.


Training Agenda






Engineering Progress



What additional information do you need to assess Engineering progress performance?



What conclusions do you derive from the above Progress table?



What additional information do you need to assess the reason for the lag in Process progress?


Process Progress vs Manhours

In your opinion, what is the reason of the lack of progress?

Présentateur


Behind plan Low mob: 502 vs 891 Low overall productivity (actual cumul 23% with 3950 mhrs vs plan of 29% with 3572 mhrs) but improving (last week: 5% progress with 439 mhrs vs plan of 6% with 937 mhrs).


Safety Engineering

In your opinion, how is Safety performing?

Présentateur


Ahead of plan Safety made 20% more progress but spent 25% more. Safety is properly mobilized. Productivity is a bit low. Must be missing documents from other disciplines.


Engineering Progress Measurement

Know the limits of the % Progress measurement system • based on manhours, not on criticality • uses “internal progress steps”, such as “Started”, “IDC” difficult to

check • Rather theoretical

Actual progress > Planned but the Project may still be in delay

It shall not be the only measure of progress…

Another way to measure progress?








Milestones!



=> Request the schedule up-dates to contain the status of these MS

Présentateur


Have trainees to guess Typical Key Milestones: Typical Key Milestones: P&ID 1st issue4 LLI PO5 HAZOP6 1st model review7 1st Piping PO6 Control valves, PSVs PO10 Plot Plan IFC12 IFC P&IDs12 50% ISOs18








Workfront curves


Engineering Progress Measurement Available work front


Engineering Progress Measurement Available work front

How many such workfront curves do you draw?

Présentateur


3: Foundations, Steel structures, Piping


Factors that could delay Engineering

Be vigilant with respect to the factors that can impact the schedule

• delay in critical vendor drawings => check delays in submission are penalized in POs, monitor timely submission





• dragging pending technical issues, delays will lead to re-work => ensure resolution is expedited

• pending open points, e.g. deviation requests => demand a log and its up-date

• delay in implementation of HAZOP, 3D model review, P&ID review action points => ask for monthly status

Delays in the definition of interfaces with third parties => demand and check status

Transfer from home office Engineering center to satellite office => check hand-over plan, detailed work instruction issued describing work to be done, tools to be used, deliverables to be issued, check adequate follow-up


Training Agenda





Wrap-up: the Project Control dashboard of the Project during Engineering phase….


Project Control dashboard

Source: “The Oil & Gas Engineering Guide”, 2nd Edition, 2015, Hervé Baron, Editions Technip http://www.editionstechnip.com/en/catalogue-detail/1111/oil-gas-engineering-guide-the.html























Training Agenda






Procurement Progress


Procurement progress control

% Progress

Milestones

How do you measure Procurement Progress?

What are the meaningful Procurement progress Milestones?

Présentateur


1) List of Material Requisitions 2) Monitor Progress by steps (planned/actual): CFT BCD PO KOM Start Fab Delivery


Procurement schedule Benchmarks

All LLI POs placed • Month 3

Last GADs for LLI Equipment • Month 9

1st Piping Inquiry • Month 6

1st Piping PO • Month 10

Last Equipment PO • Month 10


Procurement follow-up table

Item RFQ BCD TBT Clarif PO Ex-Works

ROS

TC

GTG

Centrif pumps

Piping bulk

Etc.

Présentateur


ROS comes from Construction RFQ goes to Engineering


Critical Equipment

In your opinion, which equipment are critical?


Critical Equipment

LLIs

How are LLI identified?

Présentateur


Recently purchased similar equipment + trend of the market


Critical Equipment

LLIs

How are LLI identified?

Which other equipment are critical?

Présentateur


Recently purchased similar equipment + trend of the market


Critical Equipment

LLIs

Equipment critical for site delivery • Heavy or high and large Equipment, for

heavy lift • Columns requiring pre-dressing • Pressure vessels for nozzles availability for

Piping erection


Critical Equipment

LLIs

Equipment critical for site delivery • Heavy or high and large Equipment, for

heavy lift • Columns requiring pre-dressing • Pressure vessels for nozzles availability for

Piping erection

What else?


Critical Equipment

LLIs

Equipment critical for site delivery • Heavy or high and large Equipment, for heavy lift • Columns requiring pre-dressing • Pressure vessels for nozzles availability for Piping erection

Equipment critical for vendor information • Rotating • Packages • Fired Equipment


Procurement benchmarks

Purchasing cycle: from inquiry to PO

Lead Time • Equipment (except LLI): 10-18 months • Piping Bulk: 7 months for pipe, 8 months for fittings, 9 months for

valves • Electrical equipment: 10-16 months • DCS: 17 months (including FAT) • Control - Safety - On/Off Valves: 9 to 12 months

Transportation

Présentateur


From inquiry to PO: 4 months Transportation, from Europe/US to ME: 2 months


Supplier Progress Control

The principle: • A supplier draws its schedule • The Purchaser monitors compliance

Critical points • Learn the work sequence: different actors, critical activities • Monitor closely: you get what you inspect, not what you expect!

Monitor, i.e. upon receipt of progress report: • Analyze the data critically, • Identify bottlenecks, • Draw list of actions required from the supplier • Request supplier to implement mitigations

Progress Report

Ensure the supplier puts the priority on your job!


Supplier’s workprocess and reporting tool



Exercise: analyze the steel structure manufacturer’s reports and draw conclusions and recommendations

Présentateur


Drafting office understaffed Planning Dept performing very well Fab shop performing very well Galvanizing is the bottleneck



How are the various parties involved performing? • Drafting office • Planning Dept • Fab shop • Galvanizer

What would you recommend?

Présentateur


Drafting office understaffed Planning Dept performing very well Fab shop performing very well Galvanizing is the bottleneck – Note that to bring a second galvanizer in the loop will require prior qualification => delay


Incident in supply – case study

CTR Material Requisition specifies flanged valves as per CPY spec

Vendor offer is based on sandwich type, without flanges, this point is not picked up by purchaser during bid review & clarif

The PO is placed with reference to the MR, supplier acknowledges the PO without comment

Vendor drawing, showing valve without flange, is approved by purchaser

CPY identifies the issue and requests compliance

This comes very late => 1 year delay + > 1m USD extra cost

In your opinion, how will the problem be solved? Who will pay?

Présentateur


In theory Purchaser could have the vendor mitigate at its cost but limited power = moneys due + perf bond = less than it will cost vendor to re-do It would cost Purchaser more to go to another vendor + delay CTR and Vendor will negotiate. Outcome: Vendor cost is assessed at USD 1m. Purchaser agrees to pay 400k. This settlement leaves the vendor with a hard feeling against Purchaser. Remark: Contractual standpoint: vendor’s offer is not contractual. Only the MR is. CTR’s review of the drawing does not change the supplier’s responsibility. An argument in favor of the supplier would have been that the wording used in the offer/MR was not fully explicit about flanges, whereas the wrongly approved drawing clearly showed that valves had no flanges. Even if CTR could request compliance to the PO, go to another vendor and back charge the full cost, CTR has a duty to mitigate by the most cost effective way, i.e. by staying with the same supplier.


Training Agenda






Construction progress

Présentateur


3 things: Workfront: Engineering drawings, access Materials Personnel: labour & Supervision


Construction progress

How to monitor construction progress, the case of cables for a FPSO:

254 km of Electrical cables, 166 km of Instrument cables and 69 km of Telecom cables to pull, gland, terminate. What is the progress?


Construction Reporting: overall progress

Présentateur


The overall progress is calculated by consolidation of all disciplines, on the basis of man-hours. The respective weights (number of man-hours) are calculated initially by applying the forecast productivity to the work volume.



How to get an accurate progress of each trade?



How to get an accurate progress of each trade? Break the work in elementary steps.

Présentateur


The progress of each individual discipline, sometimes called the “physical progress”, to differentiate it from the Overall progress, is based on the completion of the discipline work items. Progress of work items are measured by completion of work steps (done/not done). Such work step and binary approach avoids disputes on whether such item is, say, 70% or 60% complete etc.


Piping progress

You must have a report down to elementary steps, i.e., status of each weld for piping, to actually monitor progress.


E&I cable progress

Individual item (cable) and work step (pull/gland/terminate) status

Σ

Présentateur


Only through detailed status, broken down by individual work item and work step completion, can one ascertain the exact progress of the work. The trick is that the 100% derives from the Engineering development!


Work steps For various construction activities

Foundations • Excavation / Re-bar / Formwork & Anchor bolts / Concrete Placing / Backfill

& Compaction

Pre-cast concrete • Re-bar / Formwork / Concrete Placing / Excavation / Installation / Backfill

Steel Structure • Main steel erection / Bolting & Alignment / Grating / Hand rails, ladders,

stairs /QC release (punch cleared)

Equipment installation • Pump, Skid: Chipping & padding / Rigging / Leveling & Grouting / First

alignment • Pressure vessel: same + Stage & ladders / Internals / Clean-out & box-up /

Final check • Air-Cooler: Structure / Tube bundle / Mechanical part / Alignment


Work steps Example: PR column

Preparing the foundation to receive the Column

Chipping process to enhance bond between column and foundation Erecting the Column

Holding the Column with shims

Mixing the Grout Pouring the Grout Mixing the Grout

Column pre-casting

Présentateur


Poor FEED / Engineering leading to re-works => invest in FEED, no LS! Eng / Constr conflict of interest => ensure proper interface, communication


Construction pre-requisite

Start activities at Site • Camp and TSF installed

Start Civil works • Batching plant ready + on-spec

Start Piping Pre-Fab • WPS and Welders qualified

Start loop tests • Buildings completed incl. HVAC • DCS installed


Construction schedule Benchmarks

Start Civil works with good productivity • 30% IFC dwgs

Start Piping Pre-Fab • 50% IFC ISOs • 70% Material (all types) delivered

Start Piping erection • 30% Piping pre-fabricated

Piping erection cruise • 60% Equipment erected • Civil works completed - area backfilled


Construction

The sub-contract arrangement: • Sub-contractor is paid installed quantities x agreed rates

Présentateur


Sub-contractor is paid a fixed rate for each installed qty, regardless of resources employed => sub-contractor has productivity risk


Construction

The sub-contract arrangement: • Sub-contractor is paid installed quantities x agreed rates


Construction

The sub-contract arrangement: • Sub-contractor is paid installed quantities x agreed rates • This is regardless of resources employed • Hence productivity risk lies with sub-contractor

Can you identify the conflict of interest?


Construction

The sub-contract arrangement: • Sub-contractor is paid installed quantities x agreed rates • This is regardless of resources employed • Hence productivity risk lies with sub-contractor

Can you identify the conflict of interest?

How would you avoid this conflict of interest?


Construction

Good Engineering / Construction communication • regular up-dates of work volumes to construction contractor for proper

planning by SUB and avoid idle resources

Check what information (list of steel structures, MTO with work volumes etc.) is exchanged and how frequently

Engineering commitments to construction contractor • check the schedule commitments in construction sub-contracts for date

of issue of drawings and delivery of equipment and materials (Work Time Schedule Exhibit of Sub-Contract)

• Monitor the achievement of these commitments by the EPC contractor

Control the timely deliveries of the EPC to its SUBs

Good Engineering / Construction work process intergation • transfer of design ISO to construction contractor for spooling • organization for pipe supports mass and on-time fabrication

Présentateur


Explain systemic issue


Schedule commitments in sub-contract: sample


Thank you for having gone through this tutorial

It deals only with control of progress, i.e., schedule, but remember that if you are on-time you will also be on-budget as you will not need to extend mobilization of people and equipment!

I will be happy to receive your comments which I will include after your agreement.

Hervé

mailto:Hervé[email protected]

Project Control

mailto:[email protected]


The Oil & Gas Engineering Guide - 2nd edition

A unique synthesis for the busy Project professional

270 pages

300 illustrations

Interested and wanting to know more on Engineering?



Discipline presentation: activities and deliverables

Table of Contents

The overall process

Methods & tools



Table of Contents

Discipline presentation: activities and deliverables


The work of each Engineering discipline is described


Design activities are explained, e.g., Plant

Equipment layout


Complex activities, such as QRA, are explained through a

practical example.


How are materials of construction selected ?


How and when are Piping Materials ordered?


A sample of all common Engineering documents is

included


A sample of all common Engineering documents is

included

Use this to specify what you want to your Engineering

supplier !


Verify the contents of engineering documents

with check lists.


Difference between Engineering and Shop

drawings


Understand the main technical aspects, e.g., DCS

vs ESD


The common 2 types of package control


The different Plant drainage systems


The dynamic forces to which an Off-Shore

Plant is subject



Table of Contents

The overall process


Use this as standard, question deviations.


Understand the new 3D-model centered engineering process


Know the interfaces between disciplines...

and with Vendors


Understand what drives the Project schedule



Table of Contents

Methods & tools


Use these methods as standard, question

deviations.


Implement powerful procedures


Request meaningful progress reports


Implement effective Project Control



This book is destined to both:

Oil & Gas companies Project execution personnel

Oil & Gas contractors Project execution personnel

Date of publication: March, 2015.


The Oil & Gas Engineering Guide 2nd edition

If your are on the Client side, i.e., contracting Engineering services, this book will help you to:

Specify to an Engineering supplier what you want: what deliverables and with what contents,

Set a standard in Engineering execution that you and your supplier can adhere to: design stages/gates, methods to be used, etc.

Specify the progress report you want, with the meaningful indicators,

Ask the right questions to assess the true progress,



If your are on the Contractor side, i.e., performing Engineering activities, this book will help you to:

Understand the work of each discipline and the overall picture,

Challenge what one discipline tells you,

Understand the critical areas,

Put in place the right methods to be successful,



Order direct from the publisher:



