Optimizing Mega Project Execution with Integrated Interface Management and Project Scheduling
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1 Optimizing Mega Project Execution with Integrated Interface Management and Project Scheduling By: Sandra MacGillivray VP, Product & Marketing
2 Introduction In today s mega projects, implementing a collaborative interface management program is critical to achieving alignment between project stakeholders and to reduce interface-related project risk. Best practices have been established for the systematic identification of interface points and interface agreements (see Figure 1), and the collaboration between contractors for the management of interfaces throughout the project lifecycle. Similarly, project controls for interface management have matured such that a project owner and each of the major contractors involved in an integrated interface management program can easily monitor scope, progress, quality and change requests. The next level of maturity for a collaborative interface management program is to achieve systematic monitoring of schedule impact by all project stakeholders. The best strategy to achieve this level of control is to enable each project stakeholder to integrate high risk interface points, managed in the Interface Management Solution (IMS), as milestone activities within its respective organization s project schedule. Properly executed, this ensures Figure 1: Interface Elements Managed Throughout the Project Lifecycle that interface-related schedule risk can more easily be identified by each contractor and the project owner, and that an efficient process exists to resolve interface-related schedule issues. This strategy also standardizes the project controls used to monitor unresolved interface-related schedule issues by Interface Managers and Project Planners at each stakeholder s organization. This paper will outline how interface management programs and project scheduling can come together to significantly reduce interface-related project risk. The Problem The contracting strategy used by project owners of today s mega projects normally results in the multiple scope packages being awarded to multiple contractors that are geographically dispersed. This is executed with the objective of minimizing both technical and delivery risk to the overall project. Consider a deepwater gas field project as outlined in Figure 2. The main scope packages typically include: Topsides development of the superstructure of the production facility Subsea hookup of subsea installations, tiebacks, risers, etc Onshore facilities Offshore Pipelines Figure 2: Example of Deepwater Gas Field Project 1 Page 2
3 Interface Management in mega projects starts with the identification of interface points early in the project life cycle, and identifying these project interfaces for each scope package. These may be physical, commercial or environmental in nature. Interface points can be internal to a scope package, or external (existing between different contractors and scope packages). External iterface points normally represent higher risk to the project because of the increased coordination required to establish and execute the associated interface agreements. Therefore, external interface points should normally be tracked in a project schedule. A master project schedule is managed by either the project owner, or commonly by a project management consultant (PMC) representing the owner, who is experienced in managing mega projects with international contractors. Despite significant advances in integrated project management practices, separate project schedules are almost always maintained by every contractor involved in the mega project. This increases the complexity of identifying the schedule impact of interface points, since schedule issues could arise in the master project schedule, or in any of the contractors involved with an interface point. Without a strategy that allows each stakeholder to easily integrate their interface points into their respective project schedule, and communicate interface-related schedule risk with other project stakeholders, substantial reduction in interface-related risk through schedule integration is difficult to achieve. The Solution If the project owner adopts one system of record for their Interface Management program that is shared by the contractors responsible for all major scope packages, high risk interface points can be identified, and schedule risk can be easily monitored by each stakeholder that is impacted. For maximum impact, every project stakeholder maintaining a project schedule with dependencies on interfaces should follow this general process: 1. Identify High Risk Interface Points. Throughout the project life-cycle, each impacted stakeholder (the project owner or PMC and all contractors) will monitor their interface points and may at any time flag an interface point as high-risk. A typical interface breakdown structure (IBS) includes: Level 1 - the interface point Level 2 - the project phase (e.g. design, procurement, construction, commissioning) Level 3 - the interface agreement that rolls up to an interface point, and relates to a specific phase of the project. Interface Manager Project Planner Integrating Interface Management & Project Scheduling Identify High Risk IPs Export IP Schedule Import IP Schedule New IP Milestones? No Yes Identify IP Milestone Dependencies Create IP Milestone dependencies Perform Critical Path Analysis Legend IP Need Date Changes Required? Review Schedule Variance Report Activity Changes Required? Update Activity Details Scheduling Software Figure 3: Integration of Interface Management & Project Scheduling Solutions Create Change Requests Monitor IP s with rejected change requests Monitor activities & milestones with schedule issues Interface Management Software While there is no universal agreement on how the levels of a project work breakdown structure (WBS) are defined, in general, level two of the IBS aligns well with level three of the WBS in a project schedule. This means monitoring the forecasted finish date of an interface point for a specific phase in the project schedule. Focusing on interface agreements would require integration at a level five or six in the project WBS, with substantially more maintenance to integrate your IMS and your project schedule. Page 3
4 2. Export Interface Point Schedule from the IMS. On a regular basis, each stakeholder s Interface Manager exports their high risk interface point list, along with the interface point s forecasted finish date by phase. This is provided to the stakeholder s Project Planner. 3. Import Interface Point Schedule into the Project Schedule. On a regular basis, each stakeholder s Project Planner will import the interface point schedule updates and perform the following: a. Add new milestones for interface point phases. Any new milestones created are reviewed with their Interface Manager to identify dependencies with other project activities (Figure 4). b. Update interface point milestones in the project schedule. The interface point s phase forecasted finish date is assigned as the milestone finish date. c. Assess impact to the critical path. As part of the Project Planner s regular analysis of the critical path, any impact cause by an interface point, or impacting an interface point is identified, assessed and reported back to their Interface Manager. Figure 4: IP Milestone Schedule 4. Identify Project Schedule Issues. The stakeholder s Interface Manager must evaluate options to avoid or mitigate the schedule impact of an interface point discrepancy with their project schedule. This starts by drilling down in the IMS to understand the specific interface agreements within the project phase that are impacted, or into the project schedule to understand the specific project activities that are impacted. The stakeholder s Interface Manager will attempt to resolve schedule issues within their internal project team. 5. Initiate a Change Request in the IMS. When interface-related schedule issues cannot be resolved by the contractor, their Interface Manager will initiate a request to change the interface agreements need date in the IMS to align with their project schedule (being maintained separately from the project s master schedule). If the change request is approved by the other contractor, the interface agreement need date is updated. If it is rejected, the interface agreement need date remains unchanged, but the schedule risk is fully disclosed to all parties, and the risk can easily be monitored in the IMS. 6. Monitor Schedule Discrepancies in the IMS. Each stakeholder s Interface Manager uses the IMS dashboard to monitor all rejected change requests that pose risk to their organization s project schedule. 7. Monitor Schedule Issues in Project Schedule. Each contractor s project planner will monitor interface points, by phase, with unresolved schedule issues such that interface-related risk is reported and stewarded in the standard project schedule reports. Page 4
5 The Impact The following two scenarios represent typical interfaces in an industrial mega project. Both demonstrate the positive impact of collaboration on interfaces between contractors, as well as the value of integrating high risk interface points with each stakeholder s project schedule. 1. Design Phase Interface Scenario During design phase, the delay in completion of a key interface agreement impacts a critical path activity for another contractor. Interface Breakdown Structure Level 1 Interface Point Level 2 Phase Level 3 Interface Agreement An interface point is being managed for a terminating pipe that spans two scope packages. Two contractors are involved one for each scope package that the pipe spans. Design A key interface agreement is created for Contractor A to confirm their specifications for the high pressure titanium piping material for Contractor B. A need date is agreed upon early in the design phase. The interface agreement s need date is the latest in the phase indicating the forecasted date of completion for the interface point s design phase. If Contractor A does not complete the interface agreement by the need date, Contractor B s Interface Manager is automatically notified by the IMS. The Project Planner for Contractor B can identify the schedule slippage related to the interface point through the IP Schedule update and determine the impact on dependent project activities including procurement of the long lead time titanium piping. Impact Without integration of Contractor A s interface point milestone dates into Contractor B s project schedule, and identification of the dependencies at the interface point, Contractor B s project planner would never have been aware of the schedule impact of this subtle, but critical Interface agreement to confirm piping specifications. By immediately identifying a delay, Contractor B s Project Planner can notify their Procurement contact of this schedule impact on procurement of the long lead time titanium. Procurement can contact their Interface Manager to discuss how to expedite completion of the interface point with Contractor A. 2. Commissioning Phase Interface Scenario During commissioning phase, the delay in material delivery for Contractor A results in a delay of an interface point that impacts Contractor B. Scenario An interface point between two scope packages at a flanged joint is identified as high risk in the IMS by both Contractor A and Contractor B. The Interface Managers for both contractors have worked with their respective project planners to add this as a milestone into their organization s project schedule. Late in the construction phase, the delivery of required piping material is delayed for Contractor A. The schedule variance report created by Contractor A identifies that this delay will impact the interface point milestone and reports the issue Interface Breakdown Structure Level 1 Interface Point Level 2 Phase Level 3 Interface Agreement An interface point is being managed for testing of a flanged joint on piping between two scope packages. Two contractors are involved one for each scope package the pipe spans. (Figure 5) Commissioning Several interface agreements are created for the commissioning phase, including one where Contractor A and Contractor B agree upon the need date and details of how each contractor will complete commissioning tightness testing for the flanged joint. Page 5
6 to their Interface Manager. Contractor A s Interface Manager investigates this issue and identifies the specific interface agreement that will be impacted and requests the change to the need, including details of the procurement delay that is driving the change request. Contractor B s Interface Manager reviews the change request, approves and the interface agreement s need is updated. Figure 5: Piping interface Impact Without integration of the IMS and the contractor s project schedule, Contractor A would not have even been aware of the impact on the Interface Agreement in time to initiate a change request and disclose the schedule issue Contractor B. Conclusion Significant reduction in interface-related project risk in mega projects can be achieved by integration of your interface management and project scheduling solutions. However, it requires the commitment of all stakeholders. The critical success factors to achieve this goal include: Alignment of all project stakeholders on the importance of identifying high risk interface points, monitoring for interface-related schedule issues, and collaborating to resolve these. Integration with all project schedules - the project owner or PMC, and each major contractor. Selecting a manageable level of integration between your projects IBS and each stakeholders WBS. Creating a standard operating procedure on how an Interface Manager and Project Planner work collaboratively to monitor and resolve interface-related schedule issues. About Coreworx A proven web-based enterprise software system, Coreworx enables EPCs and owner-operators to automate best practices, mitigate business risk and improve performance to budget throughout the entire project lifecycle. Coreworx solutions integrate with existing systems for accelerated project stand up to quickly ensure the controlled distribution of information, management of asset integrity, design control and configuration management. Real-time analysis ensures accurate, predictive project data to keep projects on schedule, accurate and within scope. Founded in 1997, Coreworx services a portfolio of projects valued at over $500 billion across more than 50 countries, on more than 600 capital projects with nearly 70,000 users and offices in Kitchener, Calgary, Halifax, Houston (USA) and Perth (Australia). CWXPS 2013/03 Page 6
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