An Integrated Approach to Management Practices and Measurement Aimed at Productivity Improvement for the Construction and Maintenance Sectors of the Singapore Petrochemical Industry (SINGAPORE PROJECT)
September 16, 2014
Q & A:
1) CII is based in the U.S. The U.S. uses a time and material contracting strategy. So I can understand how productivity improvement translates to profitability. Singapore uses lump sum contracting strategy. So project cost (and hence profit margin) is decided up-front. How can productivity improvement be translated to profit margin to the contractors?
THE PROJECT COST IS ESTIMATED UP-FRONT. HOWEVER, THE ACTUAL PROJECT COST IS ONLY DETERMINED AT THE END OF THE PROJECT. PRODUCTIVITY IMPROVEMENTS MAY LEAD TO LOWER ACTUAL COSTS, WHICH WOULD THEN INCREASE THE PROFIT.
2) 10-10. The score is relative …. do you provide examples of what each of the score looks like ? Example. When we say the team is working well, how well is well and what does it look like. I would be interested to see how we operationalize 10-10 assessment. How you translate that score to actionable items. Would CII provide advice with actionable items?
THE REPORTS FROM THE 10-10 SYSTEM INDICATE HOW WELL A PROJECT IS DOING IN COMPARISON WITH THE OTHER PROJECTS IN THE DATABASE. QUARTILES INDICATE THE METRIC DISTRIBUTION. THE OUTPUT OF THE 10-10 ASSESSMENT INDICATES THE AREAS THAT NEED IMPROVEMENT. USERS CAN TRACK WHICH ASPECTS OF EACH METRIC CONTRIBUTED TO HIGH OR LOW SCORES AND USE THAT INFORMATION TO MAKE IMPROVEMENTS.
3) I understand that owners and contractors who participate in the pilot projects will benefit directly from the guidance of CII productivity professionals. Is that correct?
THIS IS CORRECT. THE TEAM OF PRODUCTIVITY PROFESSIONALS FROM CII, UNIVERSITY OF TEXAS, AND NATIONAL UNIVERSITY OF SINGAPORE WILL PROVIDE DIRECT SUPPORT TO THE COMPANIES INVOLVED IN THE PILOT STUDIES.
4) Will CII be sharing initiatives that have been adopted globally in the mechanization study?
DATA FOR THE MECHANIZATION STUDY WILL BE COLLECTED GLOBALY WITH SUPPORT FROM CII PARTNERS IN DIFFERENT COUNTRIES. THE RESULTS OF THE MECHANIZATION STUDY WILL BE DISSEMINATED TO ALL PARTICIPANTS OF THE SINGAPORE PROJECT.
5) On each pilot project, all the CII tools – BPPII, 10-10,etc. – all will be applied, correct?
EACH PILOT PROJECT WILL FOCUS ON ONE INITIATIVE. IN YEAR 1, THE FIVE PILOT PROJECTS WILL ON THE IMPLEMETETION OF ACTIVITY ANALYSIS. IN YEAR 2, THE FIVE PILOT PROJECTS WILL BE ON THE IMPLEMENTATION OF BPPII. IN YEAR 3, THE FIVE PILOT PROJECTS WILL BE ON THE IMPLEMENTATION OF WORKFACE PLANNING.
10-10, PRODUCTIVITY BENCHMARKING, AND THE MECHANIZATION STUDY DON’T REQUIRE PILOT PROJECTS. THERE WILL BE INITIAL TRAINING SESSIONS FOR EACH OF THESE THREE INITIATIVES. THEN, COMPANIES CAN START IMPLEMENTING THE PRACTICES RIGHT AFTER THE TRAINING WITH SUPPORT FROM THE TEAM OF PRODUCTIVITY PROFESSIONALS FROM CII, UNIVERSITY OF TEXAS, AND NATIONAL UNIVERSITY OF SINGAPORE
6) Please elaborate on the section of pilot projects in Singapore. Has any pilot projects been identified? What is the timing for selection? At what stage will CII be involved (i.e., FEED, Early Engineering, or only Construction?
THE PILOT PROJECTS HAVEN’T BEEN IDENTIFIED YET. THEY WILL BE SELECTED IN CONSULTATION WITH THE STEERING COMMITTEE. CII WILL WORK WITH THE STEERING COMMITTEE RIGHT AFTER THE KICK OFF OF THE SINGAPORE PROJECT TO DEFINE THE SELECTION CRITERIA AND IDENTIFY THE PILOT PROJECTS.
ACTIVITY ANALYSIS FOCUS IS ON THE CONSTRUCTION/MAINTENANCE PHASE. BPPII AND WORKFACE PLANNING FOCUS IS ON THE END OF FRONT END PLANNING AND CONSTRUCTION/MAINTENANCE PHASES.
7) Is there a list of productivity issues encountered by various contractors that was captured by CII in their study and what are the solutions CII has recommended to overcome these issues? Can these be shared to achieve shorter learning curves for the participants?
YES. CII RECENTLY CONCLUDED A 6-YEAR RESEARCH ON CONSTRUCTION PRODUCTIVITY. THE REPORTS AND IMPLEMENTATION RESOURCES PRODUCED IN THIS 6-YEAR STUDY WILL BE ACCESSIBLE TO ALL MEMBERS OF THE SINGAPORE PROJECT. THE TRAINING SESSIONS WILL ALSO ADDRESS THESE PRODUCTIVITY ISSUES AND RECOMMENDATIONS.
8) If the industry prefers that you implement all the tools instead of staging it out annually, are you prepared to re-consider?
I BELIEVE WE CAN REVISIT THE ROLL OUT STRATEGY. HOWEVER, WE NEED TO CONSIDER THAT THERE IS A LEARNING CURVE ASSOCIATED WITH THE IMPLEMENTATION OF EACH OF THESE INITIATIVES. CII’S EXPERIENCE IS THAT IMPLEMENTING THEM IN STAGES MAY LEAD TO BETTER RESULTS AT THE END. THERE IS ALSO AN ISSUE OF THE RESOURCES NEEDED TO SUPPORT THE IMPLEMENTATION.
9) Can CII also identify the culture differencesaffecting productivity in Singapore? Does CII see culture affecting Productivity?
CULTURE IS CERTAINLY ONE OF THE FACTORS. THAT HAS BEEN CII’S EXPERIENCE.
10) What is the basis of selecting companies for pilot projects? What are the training courses for first line and second line managers?
THE FINAL SELECTION CRITERIA HASN’T BEEN DEFINED YET. THESE CRITERIA WILL BE PREPARED BY CII AND THE STEERING COMMITTEE IN THE INITIAL MONTHS OF THE SINGAPORE PROJECT. THE SINGAPORE PROJECT TEAM WOULD LIKE TO MAXIMIZE COMPANY PARTICIPATION AND HAVE A BALANCED REPRESENTATION OF CONSTRUCTION AND MAINTENANCE PROJECTS, AS WELL AS LARGE AND SMALL PROJECTS.
11) Based on your experience, what is the minimum % improvement in profit that a contractor can expect by adopting CII practices?
CII’S EXPERIENCE IS THAT CONSTRUCTION/MAINTENANCE PRODUCTIVITY CAN BE IMPROVED UP TO 50% WITH THE IMPLEMENTATION OF THESE PRACTICES. THESE PRODUCTIVITY IMPROVEMENTS MAY LEAD ACTUAL COST REDUCTIONS OF UP TO 20%. LOWER COSTS LEAD TO HIGHER PROFITS. HOWEVER, IT IS HARD TO PINPOINT A PERCENTAGE SINCE THERE ARE OTHER TECHNICAL AND NON-TECHNICAL FACTORS THAT IMPACT THE PROFIT MARGIN.
12) Are there any avenues that ASPRI Institute of Process Industry can collaborate with CII on some of the training courses?
YES. CII WILL BE RESPONSIBLE FOR THE INITIAL TRAINING SESSIONS DURING THE 3-YEAR SINGAPORE PROJECT. THE PLAN IS TO WORK WITH SINGAPORE ORGANIZATIONS TO ESTABLISH A SUSTAINABLE TRAINING PROGRAM THAT CAN CONTINUE AFTER THE END OF THIS 3-YEAR EFFORT.