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Volume 5

  • Key Points Productivity trend graphs are often used to track progress (or lack thereof) for labor productivity improvement in various industries over a span of several decades. This article offers a broader perspective on the magnitude of the productivity problem in the ‘construction industry’ that has existed for over a hundred years ago by analyzing… Read more

  • Does Contracting Strategy Matter?

    Executive Summary Few topics evoke such controversy among project leaders, both owners and contractors alike, as much as contracting strategy. Deeply held beliefs reinforced by structural foundations drive decisions on contracting strategy regardless of what actual performance data suggest. Owners and contractors are not inherently misaligned. Owners want competitive, predictable cost, schedule, safety and production… Read more

  • Stage Gate – What Are the Implications?

    The stage gate project development approach1, as adopted by the engineering and construction industry, was designed as a business process both to meter spending prior to the investment decision and yield predictable outcomes. It has been widely implemented across industrial capital project sectors such as energy, mining, infrastructure, chemicals and pharma. While it can deliver… Read more

  • Does Agile Apply to Capital Projects?

    Key Points Based on reported success using Agile for software development in their IT Departments, executives are looking at more widespread application of Agile in their companies. One such application is the design and construction of capital assets. However, software development projects and capital projects are fundamentally different for a myriad of reasons. Capital project… Read more

  • Are Your Supply Chains Resilient?

    Key Points The COVID-19 global pandemic has highlighted shortcomings and risk of supply chain decisions made with the aim to reduce cost. Specifically, how the adoption of “Just in time” by manufacturers has driven reduction of intermediate storage and “global sourcing” has driven supply from distant low-cost sources. The current upheaval in supply chains has… Read more

Volume 4

  • Editor’s Letter

    As this Edition of the Journal goes to press, several events since the last Journal signal the increasing growth of the Project Production Institute. Our December 2018 Annual Symposium was the most successful yet, with a full capacity audience attending sessions ranging from an Introduction to PPM, accompanied by case examples presented by industry practitioners,… Read more

  • Westwood Global Energy Group (Westwood) and PPI White Paper This white paper advocates cycle time analysis for assessing the efficiency of unconventional field development program by operators.Higher returns and increased cash flow can be achieved by decreasing the cycle time and optimizing the amount of work-in-process (WIP)in onshore field development programs. The Delaware basin was… Read more

  • One of the primary underlying tenets of Project Production Management (PPM) is that operators can and should be calculating the appropriate level of inventory required within and between each task in their project. While almost all operators track inventory, or WIP, few to none know what that inventory should be. In addition, there is... Read more
  • “Factory” Models in Oil and Gas Field Development
    During the past few years, oil and gas executives have begun to profess they use a “factory” or “manufacturing” approach to field development. Terminology such as “factory” or “manufacturing” is intended to connote a sense of improved operational efficiency, compared with what was achieved with previous approaches to field development. What is meant by... Read more
  • US Unconventional Operators are Leaving Billions of Dollars of Value on the “Factory” Floor
    Over the period 2014 to 2018, US unconventional operators reduced well breakeven costs in response to oil prices falling from a median price of $76/barrel in 2014 to just under $50/barrel in 2018. As oil prices begin increasing again, investors question whether these cost reductions are genuinely sustainable, achieved by long term structural changes... Read more
  • Understanding Supplier Production Systems
    Supplier production and on-time delivery of material is a vital element of any major capital project’s success. Project management teams are often ignorant of supplier operations management practices and thereby suffer loss of major opportunities to improve project performance. In this paper, we provide insight for project management teams into approaches in operations management... Read more
  • How Autonomous Vehicles Will Disrupt Logistics and Create New Business Opportunities
    Autonomous vehicles—on the road, in the air, or over the water—are expected to disrupt business processes, operating costs, and economic models. Logistics and supply chain operations will be deeply affected, as will the relationship between service providers and customers. If autonomous vehicles are to come into wide use, an array of complementary services and... Read more
  • Concurrent Digital Engineering for Capital Projects
    Ongoing analysis of efficiency in construction compared to other industries indicates construction continues to fall further behind. There are several reasons for this, but one that is most prevalent is the difference in approach to design and engineering between advanced industries such as aerospace, automotive, etc. and the construction industry. Over the past several... Read more
  • Digital Technology and Project Production Management – What is the Relationship?
    The 2018 PPI Symposium incorporated significant discussion about the role of digital technology including artificial intelligence, machine learning, IoT sensor and autonomous in support of Project Production Management (PPM) as the means to achieve better project outcomes. Though the relationship is obvious for many, the connection is not apparent to others. This situation is... Read more
  • Differentiating Production Processes from Functional and Administration Processes
    The effective implementation of Project Production Management (PPM) requires a clear understanding of production processes within a given project production system – how they transform information and materials into outputs using capacity contributors (labor, equipment, space) and based on specific objectives, policies and requirements. This brings not only a necessary process perspective to production,... Read more
  • PPI Process Mapper
    The delivery of a project is most often planned and controlled using a schedule. Though common, this approach focuses on the demand side only. By this, we mean that the customer (owner, program manager, construction manager, etc.) sets forth what is needed from the network of service providers (designers, engineers, fabricators, contractors, etc.) to... Read more
  • Cycle Time Formula Revisited
    Herein we describe a refinement of the well-known Cycle Time Formula, introducing two new components into the formula. One component describes the “wait-to-match” time of different routings in a production system converging at a single point, such as in an assembly operation. The second component accounts for “planned time buffers” – the time that... Read more
  • Little’s Law in Production Systems with Yield Loss
    The basic relationship, WIP = CT x TH known as Little’s Law has wide application in both production systems as well as projects [1]. However, when some parts/tasks are never completed because they are either scrapped (yield loss) or have become obsolete (as in a project), the application becomes a bit more complex. This... Read more

Volume 3

  • PPI Position Paper: Understanding the True Cost and Impact of Inventory
    One of the most significant differences between conventional project management and Project Production Management is the view of inventory. In large capital projects, a usual practice is to amass as much inventory as possible, because “schedule will be met if everything needed is already onsite”. Almost no consideration is given to the potential implications... Read more
  • Reprint: CONWIP: a Pull Alternative to Kanban
    This paper describes a new pull-based production system called CONWIP. Practical advantages of CONWIP over push and other pull systems are given. Theoretical arguments in favour of the system are outlined and simulation studies are included to give insight into the system’s performance. Reprint of this article is available only in physical version of... Read more
  • Systems Engineering and the Project Delivery Process in the Design and Construction of Built Infrastructure
    How can a systems engineering approach be applied to the project delivery process in the design and construction of built infrastructure? First, this paper articulates how infrastructure can be seen as a system of interest, a complex production system that is operated and delivered through enabling production and work systems. Second, it considers systems... Read more
  • A “Gap” in Current Project Management and The Impact on Project Outcomes
    An article in a previous edition of this Journal outlined the evolution of project management over three distinct Eras. Eras 1 & 2 encapsulate conventional project management thinking, while Era 3 describes a Project Production Management framework that views projects as temporary production systems and applies Operations Science to optimize project delivery. In this... Read more
  • PPI Position: The Limitations of Capital Project Benchmarking
    Over the last thirty years, the practice of benchmarking capital projects and performing statistical analyses to infer trends and best practices, has become a standard for the evaluation of capital project performance. Over that period, despite the emergence of many recommended best practices to improve project performance derived from benchmarking, major capital project outcomes... Read more
  • Rethinking the Product-Process Matrix for Projects
    The Product-Process Matrix, first proposed by Hayes and Wheelwright, is a fundamental concept in Operations Science. Products made in production systems vary in complexity, ranging from highly customized low volume products to commodity, standard high-volume products. The Product-Process Matrix describes how certain types of production processes are more naturally matched for some product-volume mixes... Read more
  • Unintended Consequences of Using Work-In-Process to Increase Throughput
    The first volume of the PPI Journal included a tutorial article on Little’s Law, explaining the fundamental relationship between throughput, cycle time and work-in-process (WIP) for all production systems, including those that are contained within capital projects. For those new to Operations Sciences, a more naïve interpretation of Little’s Law leads novices to infer... Read more
  • The Efficacy of Project Production Control
    For years now, project managers have been applying a methodology called Project Production Control (PPC) to assist them in delivering projects on time and under budget. While there have been several papers on how PPC is different from traditional project management methods, none have described these from a probabilistic/statistical viewpoint. This paper seeks to... Read more
  • Operations Science View of Value Stream Mapping
    Value Stream Mapping (VSM) is a term that describes a family of popular techniques used to analyze production systems. Popularized in the 1980s by Womack and Jones [1] and the Lean movement, VSM is a staple tool associated with lean practitioners. Modern day practice of VSM, heavily influenced by the book by Rother and... Read more
  • Managing Work at the Point of Installation
    A significant gap exists around how to manage work at the frontline, or the point of installation. The inability to effectively manage execution of work is a key reason projects continue to suffer from cost and schedule overruns along with the associated claims. The Institute’s principals have come to this conclusion through conversations with... Read more

Volume 2

  • Project Production Management (PPM) is sometimes described as “applying manufacturing techniques to projects,” implying that PPM only applies to scenarios with highly repeatable and predictable conditions.  Consequently, many experienced project professionals mistakenly believe that PPM denotes a “manufacturing approach” to capital projects. To the contrary, evidence shows that PPM applies to the execution and... Read more
  • Consequence of Lead Time on Capital Project Outcomes
    The ever-increasing lead time for products (including materials and permanent equipment) required to deliver a capital project results in increased project delivery costs and operating costs for owners, not to mention the associated loss of revenue and related lost opportunity cost. This paper outlines the cost of long lead time and provides the reader with... Read more
  • PPI Position Paper: A Comparison of Lean Construction with Project Production Management
    Project Management aims to address the myriad technical, human, organizational and managerial issues encountered during project execution [1]. Over the past two decades, different variants have emerged, including Lean Project Management, Agile Project Management, Scrum, Theory of Constraints and Extreme Project Management, to name a few. Lean Construction [2,36,54] utilizes concepts originally from Lean... Read more
  • Reprint – To Pull or Not to Pull: What Is the Question?

    MANUFACTURING & SERVICE OPERATIONS MANAGEMENT Vol. 6, No. 2, Spring 2004, pp. 133–148 ISSN 1523-4614  EISSN 1526-5498  04  0602  0133 DOI 10.1287/MSOM.1030.0028 © 2004 INFORMS® The terms pull and lean production have become cornerstones of modern manufacturing practice. However, although they are widely used, they are less widely understood. In this paper, we argue that… Read more

  • Technical Tutorial: Optimal Level of WIP in a Production System
    In the previous edition of the Journal, we featured a tutorial article on Little’s Law, which is a fundamental relationship between Throughput (TH), Cycle Time (CT) and Work-In-Process (WIP). These core variables are found in all production systems, including those that are contained within capital projects. A naïve interpretation of Little’s Law frequently leads... Read more
  • What is a Production System? Different disciplines, ranging from manufacturing to civil engineering and construction to project management and Lean, refer to the term, but few define it. One can only assume its meaning is generally taken to be self-evident from the constituent words. However, for purposes of Project Production Management, as with other scientific... Read more
  • Research Digest: Preliminary Investigations into Capital Projects Supply Chain Management
    In the previous edition of this Journal, we outlined a three-phase research program to explore ordering and scheduling practices that lead to earliness and delays in materials and equipment delivery in capital projects. Usually, owner-operators and their EPC’s look to minimize the risk of schedule delays due to late materials and parts delivery by... Read more
  • Infrastructure Project Performance: There Must Be a Different Way
    In the United States, one of the few areas of political confluence appears to be around the need to address the country’s crumbling infrastructure. As priorities in governmental spending have shifted toward social objectives, investment in infrastructure over the past several decades has been woefully inadequate, not only in terms of expansion to keep... Read more
  • The Shape of Things to Come: Transforming the Delivery of Infrastructure
    In the first three months of 2017, three important reports were published on the future of the construction industry and the delivery of new infrastructure [1 – 3]. These reports highlight the distinct challenges we face in developing our economic and social infrastructure, and the woeful performance of the global construction industry over the... Read more
  • How to Unlock & Capture Value in Project Supply Chains
    Supply process flows are critical to the successful delivery of infrastructure projects and associated key business drivers (growth, reduced costs or lead times, reliability, etc.). Implementing a Project Production Management (PPM) structured approach with suppliers is essential to capture value within the supply network, extending beyond conventional procurement practices. We illustrate this by examining... Read more
  • Adopting Production Control: The Example of Onshore Field Development
    Since 2010, Hess has led the oil & gas industry in the application of Project Production Control to the execution of oil & gas operations. Using methods and techniques originally developed for optimizing manufacturing and production processes to work execution in oil & gas operations, the company has achieved both significant cost reductions and... Read more

Volume 1

  • The Project Production Institute increases industry awareness and facilitates a shift in thinking to support the application of Project Production Management theory and methodologies to major capital projects. PPI funds research and disseminates knowledge about the application of operations management and systems theory for the delivery of complex and critical projects. Specifically, PPI: Provides: A… Read more

  • The Institute has established a number of steering committees to guide its agenda. The Technical Committee consists of academics and industry experts respected in the technical disciplines that comprise the Project Production Management body of knowledge. It provides input into the research agenda, guidance on technical issues and domain expertise related to Project Production Management…. Read more

  • New Era of Project Delivery – Project as Production System
    Project management can be viewed as having developed over 3 distinct time frames, or Eras, in response to the evolving nature and needs of projects over time. Viewing project management through the framework of the 3 Eras provides a number of useful insights described in this article. Conventional project management, as codified by the... Read more
  • From Factory Physics® to Project Physics
    Project managers want projects delivered on time and under budget. Unfortunately, most project managers are handicapped by flawed, or plain wrong, decision-making models for controlling the complexity and variability inherent in project management. The history of project management has been a progression of focus on cost and schedule using ever-newer concepts and computer software.... Read more
  • Reprint: Little’s Law as Viewed on Its 50th Anniversary

    OPERATIONS RESEARCH Vol. 59, No. 3, May–June 2011, pp. 536–549 ISSN 0030-364X EISSN 1526-5463 11 5903 0536 DOI 10.1287/opre.1110.0940 © 2011 INFORMS Fifty years ago, the author published a paper in Operations Research with the title, “A proof for the queuing formula: L = λW” [Little, J.D.C. 1961. A proof for the queuing formula: L = λW. Oper. Res. 9(3) 383- 387]. Over the years, L = λW has become widely… Read more

  • Little’s Law – A Practical Approach to Understanding Production System Performance
    Since it was first published over 50 years ago, Little’s Law has been applied, with great success, to numerous fields such as telecommunications networks, retail supply chain management, logistics and manufacturing. But is it applicable to project delivery? If so, how can we benefit from its use? In the first of what is intended... Read more
  • Contrasting Project Production Control With Project Controls
    The primary purpose of this paper is to first define and then differentiate Project Controls and Project Production Control. The paper also provides a brief historical perspective and examples of the application of each discipline. The paper concludes that although the two disciplines are distinct, each plays a different and important role in Project... Read more
  • From Construction to Production: New Delivery Models for Infrastructure

    The United Kingdom is in a new era of infrastructure development. Our infrastructure is mature and in need of renewal. Most investment is in existing networks and facilities, where it competes for space with the delivery of services to customers. And infrastructure is becoming more integrated and more reliant on digital technologies to provide new… Read more

  • “Advancing” Advanced Work Packaging (AWP)

    Introduction Advanced Work Packaging (AWP) refers to an approach for planning the delivery of capital projects that aims to maximize productivity at the work face by aligning the deliverables of engineering design with what is needed in construction. The term Advanced Work Packaging was coined only a few years ago, and industry implementation to date… Read more

  • A Method to Optimize Onshore Drilling Rig Fleet Size and Schedule Considering Both Reservoir Management and Operational Objectives
    Some of the most important and expensive activities in onshore oil and gas field development involve the use of drilling rigs. Using a production systems perspective, this paper presents a method to optimize onshore drilling rig fleet size and schedule considering reservoir management and operational objectives, namely maximizing production volume, meeting production targets and/or... Read more
  • Conceptual Frameworks Underpinning Project Delivery and Implications for Optimizing Project Outcomes
    Optimizing project outcomes requires that current conceptual thinking and frameworks associated with project delivery are understood. This research proposes that delivery of projects can be best understood through three primary historic eras: Era 1 – Productivity, Era 2 – Predictability and Era 3 – Profitability. These eras, which directly correlate to the development of modern operations... Read more
  • The Cost and Impact of Earliness and Delays in Materials and Parts Delivery
    The aim of this project is to explore, in a qualitative sense, the practice of earliness and delays in materials and parts delivery during the delivery of a capital project. We hypothesize that this current practice exists because available tools are limited: project managers have limited knowledge of trade-offs and limited incentives to effectively... Read more