benchmarking the value of best practices cpi conference september 30, 2002 austin, texas

Benchmarking the Value Benchmarking the Value of of

Best PracticesBest Practices

CPI ConferenceSeptember 30, 2002

Austin, Texas

Session ParticipantsSession Participants

ModeratorModerator•John Tato - John Tato - U.S. Department of U.S. Department of State State

PanelistsPanelists•Jack Yarbrough – JacobsJack Yarbrough – Jacobs•Steve Thomas - CIISteve Thomas - CII

Goals of this SessionGoals of this Session

• Highlight recent Benchmarking & Highlight recent Benchmarking & Metrics Program improvementsMetrics Program improvements

• Present key findings from the Present key findings from the programprogram

• Illustrate the value of Illustrate the value of benchmarkingbenchmarking

• Address barriers to Address barriers to benchmarkingbenchmarking

Reasons for Reasons for notnot benchmarking: benchmarking: • Lack of time and other resources. Lack of time and other resources.

• Project management reporting Project management reporting process not formally established. process not formally established.

Q: Are you currently benchmarking your Q: Are you currently benchmarking your projects?projects?

NO26%

YES74%

• No in-house systemNo in-house systemReason for Reason for “No” “No” responsesresponses::

Q: Do you have a data collection Q: Do you have a data collection infrastructure that facilitates the infrastructure that facilitates the

collection of data essential to an effective collection of data essential to an effective benchmarking system? benchmarking system?

YES50%

NO50%

• No program has been implementedNo program has been implemented

• More consistency/standardization needed inMore consistency/standardization needed in benchmarking projectsbenchmarking projects

• Benchmarking efforts need to be focused on other typesBenchmarking efforts need to be focused on other types of projects of projects

• Data systems should be more flexible/automatedData systems should be more flexible/automated

Reasons for Reasons for “No” “No” responses:responses:

Q: Are you satisfied with your Q: Are you satisfied with your benchmarking program?benchmarking program?

YES30%

NO57%

YES/NO4%

NA2%

NR7%

Our CharterOur Charter

• Establish common definitions.Establish common definitions.

• Establish metric norms.Establish metric norms.

• Determine value of best practices.Determine value of best practices.

• Provide members a basis for self-Provide members a basis for self-

analysis. analysis.

• Support CII research and Support CII research and

implementation activities through implementation activities through

feedback.feedback.

Our CustomersOur Customers

• Member Companies Member Companies

• Research and ImplementationResearch and Implementation

• Funded StudiesFunded Studies

• AlliancesAlliances

• Benchmarking Participants Benchmarking Participants

Program (BMPP)Program (BMPP)

Owner ParticipantsOwner ParticipantsAbbott LabsAbbott Labs Eastman ChemicalEastman Chemical Ontario Power Ontario Power

GenerationGeneration

Air Products and Air Products and Chemicals, Chemicals, Eli Lilly and Company Eli Lilly and Company Procter & GambleProcter & Gamble

Anheuser-BuschAnheuser-Busch EnronEnron Rohm and Haas Rohm and Haas

Aramco Services Aramco Services Company Company

Exxon Research & Exxon Research & Engineering Engineering Shell OilShell Oil

ArcoArco FINA Oil and Chemical FINA Oil and Chemical SolutiaSolutia

Bayer CorporationBayer Corporation General Motors General Motors Corporation Corporation TVATVA

Bethlehem Steel Bethlehem Steel GlaxoSmithKline GlaxoSmithKline TexacoTexaco

BP AmocoBP Amoco IntelIntel Army Corps of Army Corps of Engineers Engineers

CelaneseCelaneseaa James River James River U.S. Steel U.S. Steel

Champion Champion International International LTV Steel LTV Steel Union Carbide Union Carbide

CITGO PetroleumCITGO Petroleum Merck Merck U.S. Department of U.S. Department of State State

Dow ChemicalDow Chemical NASA NASA University of Texas University of Texas System System

DuPontDuPont NAVFACNAVFAC

Contractor ParticipantsContractor ParticipantsABB Lummus ABB Lummus

GlobalGlobal Dick CorporationDick Corporation Kellogg Brown & RootKellogg Brown & Root

Atkinson Atkinson Construction Construction

Dillingham Dillingham ConstructionConstruction KvaernerKvaerner

BE&K, Inc.BE&K, Inc. Fluor DanielFluor Daniel M. A. MortensonM. A. Mortenson

Bechtel Group, Inc.Bechtel Group, Inc. Foster Wheeler Foster Wheeler USAUSA Morrison Knudsen Morrison Knudsen

Black and VeatchBlack and Veatch Fru-Con Fru-Con ConstructionConstruction

Parsons Energy & Parsons Energy & ChemicalsChemicals

BMW Constructors BMW Constructors Inc.Inc. GraycorGraycor PT Rekayasa Industri PT Rekayasa Industri

Cherne Cherne Contracting Contracting

H.B. Zachry H.B. Zachry CompanyCompany

Raytheon Engineers & Raytheon Engineers & ConstructorsConstructors

Chiyoda Chiyoda Corporation Corporation HoneywellHoneywell S&B Engineers and S&B Engineers and

ConstructorsConstructors

Cianbro Cianbro Corporation Corporation J.A. JonesJ.A. Jones TPATPA

CoSyn Technology CoSyn Technology JacobsJacobs Turner Construction Turner Construction Company Company

Day and Day and Zimmerman IntlZimmerman Intl James N. Gray James N. Gray Watkins Engineers & Watkins Engineers &

ConstructorsConstructors

Most Active 2000-2002Most Active 2000-2002

OwnersOwners ContractorsContractorsAnheuser-BuschAnheuser-Busch BE&K, Inc.BE&K, Inc.

Aramco Services Company Aramco Services Company Bechtel GroupBechtel Group

Bethlehem SteelBethlehem Steel BMW ConstructorsBMW Constructors

General Motors General Motors Day and Zimmerman IntlDay and Zimmerman Intl

NAVFACNAVFAC Dick CorporationDick Corporation

TVA TVA H.B. Zachry CompanyH.B. Zachry Company

U.S. Department of StateU.S. Department of State KvaernerKvaerner

JacobsJacobs

Parsons Energy & Chemicals Parsons Energy & Chemicals GroupGroup

Benchmarking User Benchmarking User AwardAward

OwnerOwner• Aramco Services Aramco Services

CompanyCompany

ContractorContractor• S&B Engineers and S&B Engineers and

Constructors Ltd.Constructors Ltd. • Watkins Engineers Watkins Engineers

& Constructors& Constructors Inc. Inc.

Questionnaire Questionnaire DevelopmentDevelopmentVersion Version

11

Version 1

Best

Practices

Metrics

Performance

Metrics

• Cost Performance• Schedule Performance• Safety Performance• Change Performance• Rework Performance

• Pre-Project Planning• Constructability• Team Building• Zero Accident Techniques

209 Projects209 Projects $ 11.47 Billion$ 11.47 BillionFirst versionFirst version

Questionnaire Questionnaire DevelopmentDevelopment

Version 2

Best

Practices

Metrics

Performance

Metrics


• Pre-Project Planning• Constructability• Team Building• Zero Accident Techniques• Project Change Mgmt• Design/Info. Tech.

442 Projects442 Projects(Cumulative)(Cumulative)

$ 25.95 Billion$ 25.95 Billion(Cumulative)(Cumulative)

RefinementsRefinementsAddition of Two practicesAddition of Two practices

Version Version 22


Version 3

Best

Practices

Metrics

Performance

Metrics





PDRI PDRI For BuildingsFor Buildings

(part of Pre-Project Planning)(part of Pre-Project Planning)

Version Version 33


Version 4

Best

Practices

Metrics

Performance

Metrics





Electronic/Web Electronic/Web QuestionnaireQuestionnaire

Version Version 44

Version 5

Best

Practices

Metrics

Performance

Metrics


• Pre-Project Planning• Constructability• Team Building• Zero Accident Techniques• Project Change Mgmt• Design/Info. Tech.• Materials Management• Planning for Startup



Entire PDRI - Entire PDRI - (part of Pre-(part of Pre-Project Planning)Project Planning)

Materials ManagementMaterials ManagementPlanning for StartupPlanning for Startup


55

Version 6

Best

Practices

Metrics

Performance

Metrics

• Cost Performance• Schedule Performance• Safety Performance• Change Performance• Rework Performance• Construction Productivity Metrics• Pre-Project Planning• Constructability• Team Building• Zero Accident Techniques• Project Change Mgmt• Design/Info. Tech.• Materials Management• Planning for Startup• Quality Management

Project EnvironmentProject EnvironmentQuality ManagementQuality Management

Construction Productivity MetricsConstruction Productivity Metrics1037 Projects1037 Projects

(Cumulative)(Cumulative)$ 54.19 Billion$ 54.19 Billion

(Cumulative)(Cumulative)


66

Version 7

Best

Practices

Metrics

Performance

Metrics

• Cost Performance• Schedule Performance• Safety Performance• Change Performance• Rework Performance• Construction

Productivity Metrics• Pre-Project Planning• Constructability• Team Building• Zero Accident Techniques• Project Change Mgmt• Technology Auto. / Integ.• Materials Management• Planning for Startup• Quality Management


$ 56 Billion$ 56 Billion(Cumulative)(Cumulative)

Major Upgrade !!!Major Upgrade !!!100% Review/Rewrite &100% Review/Rewrite &32% Reduction in Basic 32% Reduction in Basic

Questionnaire Questionnaire


77

CustomersCustomers• Member Companies Member Companies • Research & ImplementationResearch & Implementation• Funded StudiesFunded Studies• AlliancesAlliances• BMPPBMPP

QuestionnaireQuestionnaire

MetricsMetrics• Cost & ScheduleCost & Schedule

• SafetySafety• Best PracticesBest Practices

• Environment Environment DataData• ProductivityProductivity

−ConstructionConstruction−EngineeringEngineering


Questionnaire Streamlining Questionnaire Streamlining ProcessProcess

October 25-26, 2001

DiagnoseDiagnose

December 11-12, 2001

Data AnalysisData Analysis& 1& 1stst

RevisionRevisionWorkshopWorkshop

January 17-18, 2002

22ndnd

RevisionRevisionWorkshopWorkshop

February 5, 2002

Power UserPower UserWorkshopWorkshop

March 4, 2002

Analysis/ValueAnalysis/Valueof Bestof Best

PracticesPracticesWorkshopWorkshop

March 4 – April 30, 2002

Final RevisionsFinal Revisions&&

ReprogrammingReprogramming

Questionnaire Streamlining Questionnaire Streamlining ProcessProcess

May 9, 2002

ReleaseRelease ofof

Version 7Version 7

The ResultsThe Results

SectionSection DescriptionDescriptionQuestionQuestion

DeltaDeltaPercent Percent ChangeChange

Front EndFront EndParticipant Data, Cost, Schedule, Participant Data, Cost, Schedule, Safety, Project Environment, Safety, Project Environment, Changes, & ReworkChanges, & Rework

-38-38 -24%-24%

Best PracticeBest Practice Pre-Project PlanningPre-Project Planning 00 0%0%

Best PracticeBest Practice ConstructabilityConstructability -5-5 -39%-39%

Best PracticeBest Practice Team BuildingTeam Building 00 0%0%

Best PracticeBest Practice Zero Accident TechZero Accident Tech +2+2 +12%+12%

Best PracticeBest Practice Project Change ManagementProject Change Management -1-1 -7%-7%

Best PracticeBest Practice Materials ManagementMaterials Management -39-39 -74%-74%

Best PracticeBest Practice Quality ManagementQuality Management -7-7 -36%-36%

Proposed Best Proposed Best PracticePractice Planning for StartupPlanning for Startup -26-26 -65%-65%

Other PracticeOther Practice Design/Information Tech - Tech Design/Information Tech - Tech Auto/IntegAuto/Integ -15-15 -34%-34%

PDRIPDRI Project Definition Rating IndexProject Definition Rating Index 00 0%0%

TotalTotal -32%-32%

Revise Practice Use Questions or Drop PracticeRevise Practice Use Questions or Drop Practice

Survey Practice UseSurvey Practice Use&&

PerformancePerformance

PerformPreliminary

Analysis(Correlation)

Add PracticeAdd Practice to BM&Mto BM&M


PerformPerformComprehensiveComprehensive

AnalysisAnalysis

ReportReportOutputOutput

ContinueContinueData CollectionData Collection

PreliminaryPreliminaryAssessmentAssessment

FailedFailed

PassedPassed

Process of Determining Value of Best Process of Determining Value of Best PracticesPractices

DetermineDeterminePractice to BMPractice to BM

1. Recommended1. Recommended Status as BPStatus as BP

2. Value of BP2. Value of BP

Preliminary AnalysisPreliminary AnalysisExpected CorrelationExpected Correlation

Project Change Management vs. Project Cost Growth

-0.6

-0.5

-0.4

-0.3

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0 1 2 3 4 5 6 7 8 9 10

Project Change Management

Pro

ject

Co

st G

row

th

Actual Data

Project Change Management vs. Project Cost Growth

-0.6

-0.5

-0.4

-0.3

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0 1 2 3 4 5 6 7 8 9 10

Project Change Management

Pro

ject

Co

st G

row

th

Actual Data

Preliminary AnalysisPreliminary AnalysisNo CorrelationNo Correlation

Notional Data

Practice X vs. Project Cost Growth

-0.6

-0.5

-0.4

-0.3

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0 1 2 3 4 5 6 7 8 9 10

Constructability

Pro

ject

Co

st G

row

th

Practice X

Notional Data


-0.6

-0.5

-0.4

-0.3

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0 1 2 3 4 5 6 7 8 9 10

Constructability

Pro

ject

Co

st G

row

th

Notional Data


-0.6

-0.5

-0.4

-0.3

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0 1 2 3 4 5 6 7 8 9 10

Constructability

Pro

ject

Co

st G

row

th

Practice X

Comprehensive AssessmentComprehensive Assessment

-0.1

0.0

0.1

0.2

0.3

0.4

Location: GlobalIndustry Group: Heavy Industrial

Project Nature: All

Best Practices Aggregate

Pro

jec

t P

erf

orm

an

ce

s A

gg

reg

ate

4th Quartile 2nd Quartile3rd Quartile 1st Quartile

-0.2

Low High

Best Practices Aggregatevs Project Performances Aggregate

Respondent : OwnerCost Category: AllProject Type: All

Potential forImprovement

-0.1

0.0

0.1

0.2

0.3

0.4

Location: GlobalIndustry Group: Heavy Industrial

Project Nature: All

Best Practices Aggregate

Pro

jec

t P

erf

orm

an

ce

s A

gg

reg

ate

4th Quartile 2nd Quartile3rd Quartile 1st Quartile

-0.2

Low High

Best Practices Aggregatevs Project Performances Aggregate

Respondent : OwnerCost Category: AllProject Type: All

Potential forImprovement

Cost SavingsCost Savings

By Standardized Practice Index

1st Quartile2nd Quartile3rd Quartile4th Quartile

.10

.08

.06

.04

.02

-.00

-.02

-.04

-.06

-.08

-.10

n=32 n=33 n=30 n=33

Respondent: OwnersCost Category: AllProject Type: All

Database: GlobalIndustry: BuildingsProject Nature: All

Project Cost Growth vs. Standardized Practice Index

Pro

ject

Cos

t Gro

wth

8.5%



.10

.08

.06

.04

.02

-.00

-.02

-.04

-.06

-.08

-.10

n=32 n=33 n=30 n=33






.10

.08

.06

.04

.02

-.00

-.02

-.04

-.06

-.08

-.10

n=32 n=33 n=30 n=33n=32 n=33 n=30 n=33







Pro

ject

Cos

t Gro

wth

8.5%

Cost SavingsCost Savings

$10.9MM – Cost of average building $10.9MM – Cost of average building projectproject

x 8.5% – Cost growth savingsx 8.5% – Cost growth savings

$926K – Potential savings for $926K – Potential savings for typical typical

projectproject

Schedule ReductionsSchedule Reductions



.60

.50

.40

.30

.20

.10

0.00

-.10

-.20

n=28 n=30 n=29 n=22



Project Schedule Growth vs. Standardized Practice Index

Pro

ject

Sch

edu

le G

row

th

31.7%



.60

.50

.40

.30

.20

.10

0.00

-.10

-.20

n=28 n=30 n=29 n=22






.60

.50

.40

.30

.20

.10

0.00

-.10

-.20

n=28 n=30 n=29 n=22n=28 n=30 n=29 n=22







Pro

ject

Sch

edu

le G

row

th

31.7%

Schedule ReductionsSchedule Reductions

28 Month – Total duration of average 28 Month – Total duration of average buildingbuilding

projectproject

x 31.7% – Schedule growth savingsx 31.7% – Schedule growth savings

8 Month – Potential savings for 8 Month – Potential savings for typical typical

projectproject

Project Budget Factor= Actual Total Project Cost (Initial Predicted Project Cost + Approved Changes)

Cost Performance (Project Budget Factor) vs. Constructability

0.9525

0.9682

0.9941

4.8091

4.5081

3.8769

0.91

0.93

0.95

0.97

0.99

1.01

1.03

1.05

<= 6 yrs 7 -12yrs >12 yrs

Co

st

Per

form

anc

e(P

roje

ct B

ud

get

Fac

tor)

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

Co

ns

tru

ctab

ilit

y

BF

CNT

Safety Performance (RIR)vs. Zero Accident Tech.

7.0572

4.9222

3.4775

8.0988

8.47699.1021

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

<= 6 yrs 7 -12yrs >12 yrs

Saf

ety

Pe

rfo

rma

nce

(RIR

)

3

4

5

6

7

8

9

10

Zer

o A

ccid

ent

Tec

hn

iqu

es

RIR

ZAT

Gap AnalysisGap Analysis

-0.20

-0.15

-0.10

-0.05

0.00

0.05

0.10

Ver 11996

Ver 21997

Ver 31998

Ver 41999

Ver 52000

Ver 62001

Questionnaire Version and Year

Pro

ject

Co

st G

row

th

Time

Project Outcome

Δ Opportunity

CII Average Practice UseCII 1st Quartile Practice Use

The Effects of Best Practice Use by Industry Sector – Project The Effects of Best Practice Use by Industry Sector – Project Cost ImpactCost Impact

Infra.Infra. Bldg.Bldg.

ContractorContractor

H.I.H.I. Infra.Infra.H.I.H.I.Bldg.Bldg. L.I.L.I.

Team BuildingTeam Building

Zero AccidentZero Accident

TechniquesTechniques

Design / Info Design / Info

TechnologyTechnology

Change MgmtChange Mgmt

Constructability Constructability

Pre Project Pre Project PlanningPlanning

BestBest

PracticesPractices

OwnerOwner

L.I.L.I.

Low Low Low Low Low High Med Low

Low Med Low Med Med Med Med Med

Low Low Low Low Low Med Low Low

High High High Low Low High Low Low

Med Med Med High High Med Low High

High High Low High Low Med High Low

Comprehensive AssessmentComprehensive AssessmentImpact on Cost PerformanceImpact on Cost Performance

Comprehensive AssessmentComprehensive AssessmentImpact on Schedule PerformanceImpact on Schedule Performance

Infra.Infra. Bldg.Bldg.

ContractorContractor

H.I.H.I. Infra.Infra.H.I.H.I.Bldg.Bldg. L.I.L.I.

Team BuildingTeam Building

Zero Accident Zero Accident TechniquesTechniques

Design / InfoDesign / Info

TechnologyTechnology

Change MgmtChange Mgmt

ConstructabilityConstructability

Pre Project Pre Project PlanningPlanning

BestBest

PracticesPractices

OwnerOwner

L.I.L.I.

Med High Low Low Low Low High Low

Low Low Med Low Med High Low Low

High Med Low Med High Med Low High

Low Low High Low Med Med Low Low

Low High Low High Low Low Med Med

Low Med High Med Low Med Med Low

The Effects of Best Practice Use by Industry Sector – Project The Effects of Best Practice Use by Industry Sector – Project Schedule ImpactSchedule Impact

The ResultsThe ResultsSafety PerformanceSafety Performance

Owners & ContractorsOwners & Contractors

8.809.509.90

10.60

11.8012.20

13.1013.0014.2014.30

8.60

1.591.602.302.663.003.44

4.315.32

6.127.19

1.67

0

2

4

6

8

10

12

14

16

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

325 413 477 497 527 613 644 770 518 765 995

Year and Work-hours (MM)

Record

ab

le I

ncid

en

ce R

ate

Industry

CII

Note: Industry based on OSHA SIC 15-17

8.30

1.03

2000

936

2001

Est.7.28

1.02

1,115

BenchmarkingBenchmarking

• Is critical to continuous improvement Is critical to continuous improvement

process.process.

• Requires senior management commitment.Requires senior management commitment.

• Requires continual analysis and Requires continual analysis and

assessment.assessment.

• Requires a structured approach.Requires a structured approach.

• Is not resource-intensive.Is not resource-intensive.

• Is available now.Is available now.

• Is important to the “bottom-line.”Is important to the “bottom-line.”

Get InvolvedGet Involved

Measure Your PerformanceMeasure Your Performance• Attend a Benchmarking training session to Attend a Benchmarking training session to

get your password to Project Central – CII get your password to Project Central – CII Benchmarking’s websiteBenchmarking’s website

• Add your project data to Project Central at Add your project data to Project Central at http://cii-benchmarking.orghttp://cii-benchmarking.org

AssessAssess• Evaluate your performanceEvaluate your performance• Determine the gapDetermine the gapImproveImprove• Use the Benchmarking and CII tools to Use the Benchmarking and CII tools to

improveimprove

http://cii-benchmarking.org/

You Need To Benchmark!

benchmarking the value of best practices cpi conference september 30, 2002 austin, texas

Documents

benchmarking program

effective benchmarking

types of projects data

collection of data essential

data collection infrastructure

support cii research

zimmerman intljames

eli lilly