rework: anticipating what may go wrong

Curtin University is a trademark of Curtin University of Technology

CRICOS Provider Code 00301J

Rework: Anticipating What Might Go WrongProfessor Peter ED Love PhD FRICS 25th August 2011



Anticipating What Might Go Wrong

1. Introduction

2. Introspection

3. Nature of Rework

4. Costs

5. Causes

6. Rework Reduction



Research Process

Observation

Interviews

Questionnaires

Case Studies

Construction

Engineering

Offshore

Mining



Preparation

A

B

C

D

E

F

G

H

J

K

L

M

Ap

pra

isa

l (B

rie

fin

g)

Str

ate

gic

Brie

f

Budget (Bt)

Design

Ou

tlin

e P

rop

osa

l

Sch

em

e D

esig

n a

nd

Pla

nn

ing

De

taile

d D

eig

n

Pro

du

ctio

n o

f In

form

ation

Te

nd

er

Do

cu

me

nta

tio

n

Te

nd

er A

ctio

n

Pro

ject P

lan

nin

g

an

d M

ob

iliza

tio

n

Construct

Op

era

tio

ns to

Pra

ctica

l

Co

mp

letio

n

Pra

ctica

l

Co

mp

letio

n

Feedback

Use

Original

Contract

Value (OCV)

Actual

Contract

Value (ACv)

ACVOCVBt

Overrun

𝐴𝑐𝑣 − 𝐵𝑡

𝐵𝑡

𝐴𝑐𝑣 − 𝑂𝑐𝑣

𝑂𝑐𝑣



Construction Projects

12.6%

52%

Cost Overrun

Schedule Overrun

Rework contributes to:

20.7%



Civil Engineering Projects



Offshore Projects

Mean cost overrun for offshore

construction programs 35%

Mean schedule overrun 7 months

Source: DNV 2011

The International Energy Agency (IEA) has indicated worldwide energy infrastructure

is projected to reach US$17 trillion by 2039.



Unnecessary effort of re-doing a process or activity

that was incorrectly implemented the first time



Structure of Rework

Mistakes

Non-

compliance

Slips

Lapses

Errors

Incubation P

eriod

Rework

Failure Accidents

Economic,

environmental &

social impacts

Latent

Conditions

Cognitive

Failure



http://commandsafety.com/files/2011/07/F03W_St_81.jpg



Pathogens

Pathogens are latent

conditions and lay dormant

within a system until an error

comes to light

People are unaware of the

impact of decisions, practices

or procedures can have



Qualities of Pathogens

Stable phenomena and have

been in existence for a

substantial time before the

error occurs

Before the error occurs they

would not have been seen as

obvious stages in an

identifiable sequence failure



Learned Behavior

Individuals may repeat practices

such as taking short cuts and not

follow due processes.

When a practice provides an

outcome that is satisfactory, then

this practice is used again, even it

is unsuitable for that task/process.



Types of Error

Mistake - rule or knowledge based

Non-compliance – decides not to carry out a task

Slips and lapses of attention – forgetfulness, habit, etc



Statistic Value Percentile Value

Sample Size 276 Min 0.5

Range 79.5 5% 1

Mean 11.30 10% 1.5

Variance 162.6 25% (Q1) 3

Std. Deviation 12.75 50% (Median) 7

Coef. of Variation 1.128 75% (Q3) 15

Std. Error 0.767 90% 28.6

Skewness 2.287 95% 35.45

Excess Kurtosis 6.520 Max 80

Total Rework Costs



Contract Value

(A$m)

N Value (A$) Mean Original

Contract

Mean % Rework

Construction 161 25,521,927 12.03

<1 14 513,546 19.43

1 - 10 70 3,874,368 9.49

11 - 50 60 21,860,966 12.86

51 - 100 12 66,883,333 16.89

>101 8 216,000,000 6.81

Civil Engineering 115 22,092,965 10.29

1 -10 61 8,136,604 10.28

11 - 50 43 24,906,930 10.99

51 - 100 7 77,285,714 8.16

>101 4 165,250,000 4.38

Total 276 24,093,193 11.30

Mean Rework Costs



Rework and Contract Value

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

0.00 100.00 200.00 300.00 400.00 500.00

Rew

ork

% o

f OC

V

Original Contract Value (OCV) (A$)Millions



Goodness of Fit Test

)(,1

)(max1

iini

xFn

i

n

ixFD

n

i

ini xFInxInFin

nA1

1)(1)()12(1

2

Kolmogorov-Smirnov statistic (D) expressed as (Eq.1):

Anderson-Darling statistic (A2) (Eq.2):

Compatibility of a random sample with a theoretical probability distribution.



Pareto Distribution

General Pareto

Kolmogorov-Smirnov

N 276

Statistic 0.1941

P-Value 1.43E-09

α 0.2 0.1 0.05 0.02 0.01

Critical

Value0.0646 0.0736 0.0817 0.0914 0.0981

Reject Yes Yes Yes Yes Yes

Anderson Darling

N 276

Statistic 3.0801

α 0.2 0.1 0.05 0.02 0.01

Critical

Value1.3749 1.9286 2.5018 3.2892 3.9074

Reject Yes Yes Yes Yes Yes



Probability Distribution

Rework % Gen. Pareto

Percentage of Total Rework80726456484032241680

Pro

babi

lity

of T

otal

Rew

ork

0.8

0.72

0.64

0.56

0.48

0.4

0.32

0.24

0.16

0.08

0

Gen. Pareto (0.17368; 9.1321; 0.25273)

Percentage of Cost Overrun5248444036322824201612840

Pro

ab

ility o

f C

ost O

ve

rru

n

0.11

0.1

0.09

0.08

0.07

0.06

0.05

0.04

0.03

0.02

0.01

0

Construction and engineering projects Gen. Pareto

Percentage of Cost Overrun80726456484032241680

Pro

ab

ility

of C

ost

Ove

rru

n

1

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0

0)(

exp1

0)(

11

)(

/11

kx

kx

k

xF

k

0)(

exp1

0)(

11

)(

/1

kx

kx

k

xF

k

Cumulative probability distribution (CDF)

Probability density distribution (PDF)

Probability density distribution: Histogram

CDF expressed as (Eq.3):

PDF expressed as (Eq.4):

k = 0.173 σ = 9.132, μ = 0.250

79% (n=218) < 16% Ocv



Probability by Point

P(X1) P(X < X1) P(X > X1)

5% 0.66 0.34

10% 0.85 0.15

15% 0.92 0.07

20% 0.95 0.05

25% 0.97 0.03

30% 0.98 0.02

Probability > 5% rework is 34%

Probability < 10% rework is 85%



Probability by Contract Range

Construction projects > $A101m (M=6.81%) the probability

of rework is:

P(X < X1) = 0.85, P(X >X1) = 0.15.

Civil engineering projects with a contract value in the range

of $A11-50m (M= 10.99%) the probability of rework is:

P(X < X1) = 0.66, P(X >X1) = 0.34.



FPSOTension Leg Platform Semi-Submersible

Spar Fixed Platform



Offshore: Rework Costs

Con. FPSO: 55%

New Build FPSO: 10 -15%

TLP: 20 – 25%

Expected and „norm‟: 10%



Pathogen and Omission Errors

311Violation

Slip

Inoperability with CAD software

applications (no checking for

inconsistencies)

Simplification of tasks and neglect for

other aspects of design

Pathogens arising from a

characteristic of a technical

tool

Tool

524Violation

Violation

Re-use of existing specification and

design solutions

Failure to adhere to new company

polices

Pathogens arising from

standards and routines

Convention

212Violation

Lapse

Low design fees meant tasks were

deliberately left out

Schedule pressure result in some tasks

not being recalled at the appropriate

time

Pathogen arising from the

situation or environment the

project is operating in

Circumstance

452Slip

Violation

Engineer failed to detect and corrects

an omission in design documentation

Schedule pressure resulted in

disproportionate time allocation for tasks

Pathogens arising from the

nature of task being

performed

Task

171719Violation

Violation

Failure to undertake design reviews

Distribution of tentative design

documents

Pathogens arising from

people‟s deliberate

practices

Practice

Construct(n=31)

Mining

(n=26)

Oil /Gas

(n=28)

Failure

Type

(e.g)

Omission Error

Cause ExamplesDescriptionPathogen

Category



Causal Chain: Example

Pathogen

Practice of designing

work on tentative

information

Practice of departing

from project protocols

Practice of under

estimating the time

required for design

Extract

Example: “……….The

electrical engineers simply

went ahead with designing

the cable tray without

talking to us and explaining

their problem. It cost us

hundreds of thousands of

dollars to rectify this

problem”.

Information

overload and

higher demands

based on electrical

engineer –design

check step missed

Planned departure

from standard

operating

procedures

Omission Error

Effect

↑ Stress

↑ Conflict etc

↑ Cost



“There‟s always going to be

figures that don‟t match up. It‟s a

fact of life, and we normally sort

out any problems that arise with

the contractor”.

What an Engineer Said



“It‟s cut throat out there. Fees

are very tight and clients are not

willing to pay us what we

require. I understand that

documentation is sometimes

poor, but we also don‟t have

enough time to prepare it.

Client‟s expectations have

increased, but fees have not.

They think that we can design

overnight sometimes”.

What an Architect Said



Observation 1: “No one had a clue, they had different

understandings of the same event”

Observation 2: “People filter out most of the information

around them”

Observation 3: “Cultural differences increase the likelihood

of different interpretations of the same event”

Observation 4: “Problems arise when the goals of people in

the same organisation start to diverge”

View From the Field



Observation 7: “People make

mistakes. Organisations make it

possible for them to be really

serious”.

Observation 6: “People‟s

decisions are a trade-off between

the available information and the

available time”.

Observation 5: “People break

rules to make work more

efficient”.

View From the Field



Dynamics of Rework

The „+‟, and „-‟, respectively, classifies positive and negative consequences of an increase of

the original variable on the relying variable.

Uncertainty in scope may arise

when a clients perceptions of

market conditions change or

when capital is required to push

ahead with a project even when a

reservoir has not been fully

defined

If rework is required

then activities and

processes may be

subjected to

acceleration

Alliances between engineering contractors and offshore

fabricators can improve interfaces. The client/operator can

reduce costs and interparty claims between engineering

contractors and fabricators.



Rework Reduction

Measures designed to limit the occurrence of errors



Learning to reduce

rework: anticipating what may go wrong

Documents