“You shouldn’t expect that they [projects that build assets valued greater than one billion dollars] will go bad ,” he says. “You should expect that quite a large percentage will go disastrously bad,” Dr. Bent Flyvbjerg in the February 2, 2023 Wall Street Journal article, The Lego Approach to Building the World’s Largest Projects.
The following blog post is a synopsis of a December 5, 2018 presentation titled “Engineering PPM Journey” given by Jim Craig of Chevron to the Project Production Institute’s 2018 symposium. The team at PPI were the first in the Engineering and Construction industry to understand and successfully apply operations science concepts to multi-billion dollar engineering and construction projects. PPI has provided abundant justification that the concepts of operations science apply as a general science to any type of operations.
Engineering work for major capital projects such as semi-conductor fabs, skyscrapers, bridges, solar farms, wind farms, oil rigs and liquefied natural gas (LNG) facilities usually involve hundreds, if not thousands, of people all working together to design a typically massive and complex asset. Chevron has successfully demonstrated the application of operations science to resolve many of the problems that the Wall Street Journal article describes. As Craig points out, the problems that accompany engineering efforts for large projects are daunting.
— Complex projects with long durations
— Lack of clarity on engineering work processes
— Poor understanding of constraints and sources/effects of variability
— Contracting strategies dilute control of work
— Earn and burn mentality, focus on getting any work done regardless of correct sequence
— Work not synchronized in an integrated production system
Applying operations science to projects requires framing the projects as production systems. This is a secret hidden in plain sight for the vast majority of project managers. Project managers typically confuse project controls, such as schedules and status reports, with project control, which means managing a project’s production system behavior according to the laws of operations science and thereby achieving predictable, repeatable outcomes.
The HVAC layout to the right is a typical example. Management was monitoring the work as a seven step process. Mapping the process as a project production system resulted in documentation of about 200 steps. One can say that’s too much detail but if that is how complex the work is, understanding and control of that level of detail is the only way to achieve predictable and repeatable outcomes. Much too often, the top approach is taken with managers “whistling past the graveyard” when looking at high level status reports.
This difference in approach opens up a complete new world for project managers once they see it. The concept is illustrated nicely by the PPI graphic below. Most managers are so focused on the dependent variables, or the outcomes, such as scope and quality, schedule attainment, and resource productivity that they completely miss the underlying drivers (independent variables) that determine project outcomes.
Operations science is applied in project management world in a number of ways but Chevron used Project Production Control (PPC) to achieve major successes in its Front End Engineering Design work for major capital projects.
Encourage and inspire employees and sustain your operations success over the long term with a common language and operations management grounded in operations science. No software or consulting required. Contact us at the Operations Science Institute and get started on the road to long-term success.