Battling the Enemy of Predictable Projects

This presentation focuses on advancing project predictability in construction through production control, demonstrating how operational science effectively manages project variability.

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Overview

The presentation centers on the pivotal role of managing variability in construction project management. It critiques the limitations of traditional project management in the face of complex, modern construction projects, which often leads to unanticipated budget overruns and schedule delays. The speaker advocates for a strategic shift towards production control methods, inspired by operational science principles, to better handle these uncertainties. This approach is presented as more adept at providing detailed insights into project dynamics, allowing for more informed decision-making and proactive problem-solving. The adoption of production control, as argued in the presentation, significantly reduces project variability, thereby enhancing predictability and success rates in project outcomes. It’s a compelling argument for the construction industry to integrate these methodologies for more reliable and efficient project delivery.

Transcript

[00:00:00] Gary Fischer: I want to take a few minutes and reflect on what I think every project manager’s dream, at least it was my dream, is to know where we were going, to have a predictable project, to be able to have confidence that, you know, at the end of the day, you’re going to deliver the goods. Man, I leaned in hard on project controls, trending, you know, cost and schedule, all with an effort to try to, you know, get that, where are we going?

[00:00:25] Gary Fischer: Do I need to do something different today to change the trajectory of that project? And, you know, the suspense for me was just a killer. In fact, I kind of got burned out on projects, because I couldn’t handle the suspense. It was so, it was so stressful. But first, I have a request of you. If this is your, kind of one of your first times you’ve been exposed to project production management an operation science.

[00:00:48] Gary Fischer: I’ve got a request for you. So recently I got to hear Adam Stelzer, who is NASA’s Mars key player in the NASA Mars rover expedition, okay? He said, the curious mind stays agile, innovative, and competitive. So if you want those things, my ask of you is to be curious today. Instead of saying kind of like you will judge what you’re gonna hear today.

[00:01:14] Gary Fischer: I have no doubt about that. Okay, but at least for today set aside Your judgment and be curious. Thanks I want to start by telling a story and we were building a large onshore gas processing plant on a real type budget So we had this strategy of well, let’s spit big chunks of work Let’s put a lot of space between our contractors so that the handoff is one clear really clean to the next so we didn’t have all these interference claims and All the stuff that happened on past projects.

[00:01:45] Gary Fischer: So on this project we said we’re going to put those spaces You know those fire breaks between the contractors. So we’re about ready to embark on the piling We wanted to get all the piling done all done and dusted so that when we turn it over the foundation contractor There was no excuses, right and we would get bids on Uninterrupted work the key strategy to our cost cost savings.

[00:02:11] Gary Fischer: We wanted to get Really good vids. Well, we had the same philosophy for the piling contractor. In fact, we went out and bought all the piles in advance, their concrete piles had to be coated. You can see those little black lines up at the top right hand corner. That’s all the piles just waiting for action.

[00:02:27] Gary Fischer: Two years later, this is what the site looked like. Thing of beauty, huh? We were patting ourselves on the back saying, Hey, this was actually pretty good until we kind of, all the bills came in and we were doing some reflection and saying, you know, you know, this wasn’t such a good idea because we ended up spending 30 percent more than our budget and defeated it.

[00:02:52] Gary Fischer: Well, how did that happen? This was repeated work, right? Well, the piling was out of sequence with the engineering. So, we had to adopt a, a carpet piling strategy, which was more expensive. And the foundation costs, this doesn’t even include the foundation costs that were resulting from that. That piling that we bought in advance, all that coating, had a shelf life.

[00:03:15] Gary Fischer: Set out too long, had to throw them away. If you go out to the facility today, you’ll see those piles all around the roads. They’re kind of like guardrails on the roads. They, they made use of them, but it wasn’t the intended use. So we had to have more More piling casts, more, and recoded, and that caused delays.

[00:03:34] Gary Fischer: We had design changes that just ate our lunch. We have, there’s 500 piles out there under the sand that only a, well, a small handful of us actually know about. We couldn’t keep up with the piling contractor’s capacity, so we had to pay them standby charges, end disruption claims, and then we had all kinds of engineering workarounds that resulted from this.

[00:03:54] Gary Fischer: And then later on, we had some design changes. So we had to go in amongst those, those piles and those foundations and use non piled foundation concepts and they were super expensive and very time consuming. So, but that’s not the whole of it. The real bad part of this is we tied up the cash that the company could have used somewhere else on another project making an investment would have generated revenue.

[00:04:23] Gary Fischer: Now we didn’t care. It’s like not on our radar screen, not our problem. So Werner could have been, his business unit could have been spending that money on, you know, short term investment to make more money for Chevron. So we thought this strategy of space things out, give ourselves room between the contractor, was a winning strategy.

[00:04:44] Gary Fischer: And we busted our budget and schedule in the process, eh? So what’s going on here? Why did that happen? That’s what I’m going to talk about. So, kind of back up. Projects are really unstable and unpredictable. I mean, they’re really kind of fragile. Is it because our teams aren’t working together? I don’t want to offend anybody, but, you know, there’s always room for teamwork, but it’s not going to solve the problem.

[00:05:12] Gary Fischer: Because our contracting strategy is not good, well, a whole bunch of different contracting strategies could be tried at that. I don’t think that’s the answer to our problem. Is it because we don’t know where we are in the project? Is it our project controls? Eh, maybe a little bit. Do we have gaps in our risk management?

[00:05:25] Gary Fischer: Well, I don’t know. Can’t estimate the cost of the work. Can’t schedule the work. Those are all the things that I would have been thinking about as a project manager. The root causes are this unpredictability, but I contend there’s something much deeper going on here that makes projects by their very nature unstable, unpredictable, and fragile.

[00:05:45] Gary Fischer: And who’s been on a project that got off track and you tried to right the ship? Yeah. Did it work? Eh, no, it hardly ever works. You know, it’s really difficult once you get off track. So, I contend That that deeper answer isn’t something called variability. And variability is something I’ve kind of learned personally over this last year.

[00:06:11] Gary Fischer: It deepened my understanding of how can variability be a lever? How can it be something that could be controlled? Because, hey, it’s stuff that happens, right? So, you know, the kind of classic definition or the almost classic definition of variability is things are dissimilar by design in the process, or things happen different than the norm or plan.

[00:06:29] Gary Fischer: Well, let me illustrate really quickly. Some of you probably flew here. I flew here. I looked on my map app, housing and how long is it going to take to get from the airport to the hotel, it said 37 minutes. Okay, well, how long did it really take? All depends, right? There’s some things under my control, and some things not under my control.

[00:06:52] Gary Fischer: So what would be in my control? The route I chose to take, the form of transportation. The time of day I travel, right, could make a difference. Number of stops I plan. Those are all things I, decisions I could have made. The radio phones, how long that 37 minutes was actually going to take. But there are a whole bunch of stuff that was out of my control.

[00:07:10] Gary Fischer: Like, you know, accidents, road congestion, get behind some, some knucklehead that’s, you know, driving 10 miles an hour in the fast lane with his in his pickup. Flat tire, car broke down. I mean, all kinds of things could happen. That were unplanned, unforeseen, really unlike control. So how long it took was really a combination of those two things, right?

[00:07:33] Gary Fischer: Control and uncontrol. The projects are no different than that driving example. I always limited my thinking on variability to stuff that’s happening to me on my project. The bad stuff, right? But I was really not thinking about and realizing the impact that I was having on the distinctive, the things in my control that were generating or were causing variability.

[00:07:59] Gary Fischer: That’s what I want to really try to focus on today. So, there is positive variability. Did you, sometimes you come up with a construction method that’s better than the plan, and it’s faster and cheaper, and hey, that’s really good. Or you have designed invariability. Let’s say you have a large residential development.

[00:08:18] Gary Fischer: You’re gonna build 3, 000 houses. Well, what if you offered one model home? They may not sell so hot, right? So instead you’re going to offer 12 model homes, or whatever the number is, which are introducing variability in the equation for an intended business purpose, right? So let’s, let’s tackle each one of these things.

[00:08:37] Gary Fischer: First, let’s look at the stuff that’s not really in our control. Everybody knows that, you know, bad stuff’s going to happen on your project. I just, yeah, I’m building an house. I just got a call yesterday from my roofer. Did you know that the scale on your drawing doesn’t match the dimensions on your drawing?

[00:08:59] Gary Fischer: So when we scale off the and did our take off on the number of shingles we need, we’re 30 percent short. So you’ve got to be kidding me. Yeah, well it must be some software, you need to talk to your designer. Well guess what? So we’re short shingles, it’s about ready to start reading again. And I had treated all kinds of problems for me.

[00:09:20] Gary Fischer: So forget my schedule because my schedule was to have that roof on that house by the end of next week. Well, that’s out the window, right? So in general my experience is most of the time we publish the schedule on project. By the time we got published it was already out of date. We’re already out of date because all the stuff that happened on the project while we’re taking the time to massage and and generate that schedule.

[00:09:45] Gary Fischer: We’ll never forget as a project manager, you know, you have these life moments where you You never forget where you were when you got bad news, right? I will never forget the call I got. You know your compressed, your your big 15, 000 horsepower motor, yeah? No, this was the heart and soul of the process plant that I was project manager of.

[00:10:07] Gary Fischer: And it was being shipped from the East Coast to the West Coast. You know, your your motorway, well, we got some bad news for you. See, the, the train made a left hand turn in your car. Kept going straight over and back in that we’d been working on that model for two years. I was a real believer in critical pass schedule.

[00:10:28] Gary Fischer: You can tell that that’s when my personal flip switch said. You know, CPM doesn’t work. Who would have envisioned this? Bad stuff is going to happen on the project. Well, so what can you do about that? Well, the only effective thing I’ve seen is the ability to plan and re plan in a very rapid way. And I’m not talking about re baselining the project.

[00:10:53] Gary Fischer: Because that was a typical, you know, plan A, you get behind, you have a mess, We re baseline and add per pack and add more people, right? That was always a standard thing. The goal there, the end goal never changed. All right, well, re baselining is just a complete waste of time. All you said, you know, you tried to right the ship on a disastrous project.

[00:11:13] Gary Fischer: Did re baselining help? Yeah, my experience is it’s just a total waste of time. It’s a, it gives you, you know, you feel warm and fuzzy for a little while till you realize you’re not even on your re baseline plate. So the only effective means I’ve seen is something called production control. And you’re going to hear quite a bit about that today.

[00:11:31] Gary Fischer: And it’s really different than project controls. That’s, I’m not talking about project control. As I told you before, you know, I, I mean in really having project control, cost and schedule trending, our value of progress, we understand where we are, all that stuff. And looking back now, I can see, you know, it didn’t give me the insight I needed.

[00:11:49] Gary Fischer: It didn’t tell me where we were going. It was like It was like I was in a car with my foot on the accelerator looking in the rearview mirror and I was going full reverse. The data we’re getting were two to three months old. It was inaccurate on where we were because we gave ourselves partial, all kinds of partial credit for things that really didn’t matter because it masked the underlying issues that we really had.

[00:12:11] Gary Fischer: So production control on Remington provides a real time understanding of the work that needs to be done, what’s done, what’s not done. And if it’s not done, why didn’t it get done? So that leaders can focus on solving the problems that prevent the planned work, the important work, from being done.

[00:12:33] Gary Fischer: So when we show up on a project, typically, and this happened when I worked, when I worked with Chevron as well, we asked a really simple question. What do you, what do you plan on doing tomorrow? Then we come back and actually say, well, how much of that did you get done? Now if you, if you’re well versed in production management, you, you, you better get this right.

[00:12:58] Gary Fischer: If nu I just want you, I wanna hear what you think. We’re gonna rather quick poll. So if you have your bolts and go to that bar code, it should pop up a website and just go in and put your answer on, on average what percentage of crap work One day advance is actually completed.

[00:13:24] Gary Fischer: So believe works. Does that work? Okay. Them you get that little near this, this morning on this. I’m just pull it, get it and I’ll slip it off down. I’m like,

[00:13:47] Gary Fischer: bitch. Now, I’m, I’m pleased to see, given our audience, that this, this is good, as we’ve had, you know, under and above 50%. It’s hard to think about time bound banning. We have work planned well in advance, and only about half of it actually gets done. And we say we can forecast a project five

[00:14:12] Gary Fischer: to ten years down the road, and say we want it done. Well, we can’t even forecast how much we’ll get through the next day. Just look at CP and my wife is starting to understand this. I go, that’s, that’s, that’s not good. No, oh, I’m sure we can’t keep it. No wonder we can’t do it, I pray. So, you know, variability, as I said before, is that the plant killer, the only effective way I’ve seen of dealing with that uncontrolled, you know, I don’t like control variability.

[00:14:46] Gary Fischer: This is the rapidly piling, and you get that number from 50 percent up to 80 to 90%. I only have more of a stable working plan. I have more of a rhythm. I cannot get anything done. And I’m falling apart to implement the media work. And you can tell it, right? And so you’re going to hear a lot more about production control later on.

[00:15:05] Gary Fischer: So I’m not going to dive into the steps of how to get control. So, you know, hang on to that thought. Be curious about that. We have some other folks that are going to talk about that group that had a lot of success. In dealing with variability and driving project performance using motion control. Now we find, focus on the stuff that we do control, actually it’s like, far more interesting.

[00:15:28] Gary Fischer: Nothing the other wasn’t interesting, this is stuff like, this was a real eye opener for me. Human nature causes us to protect ourselves from variability. So, I can give you a response, so this, this is all you have to know. I was the Instructure Manager, I’m the head over at Regex. And I had accountability.

[00:15:48] Gary Fischer: Or time and cost of that construction work. And, yeah, and time and overhead operations for sort of a So my strategy was, I want all my stuff. I want all my materials. I want all my drawings. I want I want to be able to pick and choose what we work on. Unencumbered. And I was just a crazy man on that project.

[00:16:13] Gary Fischer: Tried to drive everybody to get that done. With some success. So if I did anything, you know, I didn’t want anybody to see impacting me. I was accountable for construction, I was accountable for the overall project, so I sat down with my father. My father was, what was that, asked how long it was. So my focus on the, what I was accountable for, and I did, I focused on that.

[00:16:37] Gary Fischer: So what was the net effect on the problem? Well, I had to build, and wire, some substantial warehouse capacity, and all that was in the budget. We spent a significant amount of money on a project of 500 trips, but earlier we actually didn’t. And it sat there, you know, for quite a while. Well, it was way too small.

[00:17:05] Gary Fischer: And then I had to maintain and protect all this stuff. For some reason, I put my seat belt on. And, you know, operations says, you know, this isn’t working today. Hey, you need the app. Well, let’s go rummage through there. We’re out of salts and balsam. All kinds of things struck us, period. Engineering, you know, we pushed them hard, and it was good on the right edge.

[00:17:23] Gary Fischer: Quality was not so hot. We had a lot of rework because of that. And we missed a lot of opportunities for optimization to kind of save the overall project substantial. I bet he goes, I worked hard for that. We gotta get on, we gotta schedule me. So, did my strategy work? Well, it sort of worked. Took construction all out.

[00:17:43] Gary Fischer: Yeah, it was manly. That, it seemed like very tiny. You’re trying to get something done, so systems that are talking are always missing something. You know where’s that widget? Well, we ordered it, and instead of we got it here, we can’t find it. It’s not like we just literally couldn’t find it. So, stop.

[00:18:00] Gary Fischer: We’re TGLs, perhaps. So, it seems like we’re always kind of missing the important things that we needed. Yes, we had to buy new stuff. Some of these engineering parts, it was just too late, so we had to totally buy new stuff. And we lost, like I said, we lost a lot of value for rushing this engineering. So, as looking at it, I stepped back and looked at the project as a whole.

[00:18:25] Gary Fischer: I didn’t, I drove things that were good for construction, but detrimental to the overall project. Listen, my actions, that project ended up costing more, and taking longer, than it would have otherwise. Isn’t that a good thing? And again, with idle cache, the company could have used early in that process of altering the system upon short return crashing.

[00:18:49] Gary Fischer: So why was I trying to be a, why did I do this? We’re simple, give it nature. I was trying to let myself really, things that impacted me and my stroke. So with those eyes, I’m looking at other things we’ve done. This is a, a big offshore project being an l and u plan for nor sharp mount stru and we have a, a sailing date and you know, the pressure ceiling things, right?

[00:19:18] Gary Fischer: So you’re sitting here. Yeah, I know that pretty. And you just call on Gene Brazil, okay? So, and we, we assessed the completeness of the work. Okay, we’re good. Yeah, we can sell it. Let’s go. So we put everything out there, got it in place. Then it really fell on its back when we found the old cow. Let’s go up here.

[00:19:37] Gary Fischer: There was so much work. We had to re modelize a full cow that we had just demobilized. And it took six months to complete, and it barely got done. At the process, it was just barely. So we almost got it in control. So, this is the kind of things that we do, decisions that we make, that generate variability.

[00:20:01] Gary Fischer: And it’s usually, when I think about this, it’s usually done in the pursuit of low cost. It’s equivalent to saving money. When we’re doing these things, and it has an unmethodic offset by creating more variability. Variability, all these degrees to perform per year, all these degrees of performance. So, let me illustrate another real life example, how we do it on.

[00:20:29] Gary Fischer: This is another big project in Kazakhstan. We had a strategy were a low cost development approach. So we’re going to have a heavy marginalized approach, big margin. You get some history there. Difficult working environment, weak craft capability, and just really extreme busts. Really cold weather type, really long winters, really hot, so, I mean, really extreme.

[00:20:57] Gary Fischer: So we were, let’s protect ourselves and all that with a big module strategy. But we implemented that. We had the injury that was done in Europe. We sourced all the equipment in Europe. We found a great shipyard that made modules, process modules in Korea. Got good pricing from them. I really got here good pricing.

[00:21:20] Gary Fischer: All right. So we need to ship them all the stuff we bought from Europe, Korea. The Koreans didn’t source the regular stuff like Ike and Gable, Gable, Pringle, all that just regional. I guess some of these giant options, these are huge. I was like the size of this building, half the size of this building. Very large amount of ships.

[00:21:41] Gary Fischer: Then we ship them on the ocean transporter back to Europe. And they were too large to get through the waterways that would lead you into Caspian Sea to overlook the canal. So we had to take a lot of those and cut them apart. We had to build transhipment yards, where we could offload these big modules, take them apart, through the little modules.

[00:22:02] Gary Fischer: We had to build a fleet of made for purpose arches to go down the canal system. And then towards Caspian Sea we did an airport, so we had to build a big port there. So we had to offload the module. We offloaded them there, we got a 200 kilometer haul road that we had to build up to the job site. We drug the lodgers up there, and they had to re stack it.

[00:22:26] Gary Fischer: They had to put them back together. So we re stacked it, and then we moved them on site. It was a better location. Low cost. The city. A bit. They’d be probably telling me they’ll put their building back. Excuse me. What was the application? We had a huge impact on the interior. When you tackle a modularized job, you change, first of all, you change the sequence a bit It’s a lot of work.

[00:22:52] Gary Fischer: And if you’re not mindful of that, what it does to the engineer, heaven help me, you’re gonna have a disaster. So, the interesting thing about this job, it’s only about, in reality, only about half of the kit could be modulized. The other half had to be stick filled, for additional light. We ended up with two different projects inside.

[00:23:11] Gary Fischer: The engineering for the modules, the engineering for the stick, using the process piping here, whether it was in a module or a stick tool. No. So that created a lot of complication of, well, how do you, how do you do? How do you do the accelerated engineering work of modules? And then, I have bad news, I’ve created the apps.

[00:23:34] Gary Fischer: So we struggled with Intune. As you can imagine, we had to buy all the equipment really early. I’m not sure if all of you would really work on it. Eat it. Actually, early, prep all the, all kinds of stuff for the project to support the module strategy. In fact most of the warranties are expired, even for, is instead currently not operating, but most of the warranties on the clip are actually expired.

[00:23:58] Gary Fischer: Low handle. So you’ve got hands free sharp. We had, as you can believe, we had module fab issues, landing engineering, transportation issues. The only thing that kind of didn’t happen is we didn’t drop the deoxy. As has happened before, we didn’t drop one in the ocean. We didn’t drop one in the canal. The Russians said they shut us down due to political air affairs.

[00:24:20] Gary Fischer: So that was like most of the people that did it. Everything else you can imagine. That could go and kind of go wrong, kind of, kind of let fall. Like you, what did we do with our cash flow? Well, our unproductive capital for years is still there as unproductive capital, by the way. It’s very So looking back, I always kind of try to look back at my old projects and say, What would I have done differently?

[00:24:47] Gary Fischer: Now, like, I have a better understanding of variability. What if we did this kind of approach? I still think some degree of modulation strategy was good. Just building in the wintertime there is super expensive. It’s very difficult. It’s very dangerous. It’s very difficult. So I would have found a consulate partner, develop a tax office, create a new business, invest in businesses all the time.

[00:25:11] Gary Fischer: Created this new leisure area, buying equipment in Europe, ship it to the site using conventional lease. Armed with radial trucks, air balloons out of it, more like it, we did that. I might still have to build a fort, I don’t know. But it wouldn’t have been the fort that we built out there to do that.

[00:25:29] Gary Fischer: archers. And so, ship everything in, have it delivered to the Montreux FAB site. Build the modules, and then have them delivered to the site, so there’s no restacking, and they fit in the sequence of construction that’s often more the completion of the facilities, the support startup. So this team, hopefully you can see, has scoreless.

[00:25:53] Gary Fischer: No sweat. Easy. I’m not saying it’s easy. But far less their abilities than the one we chose to have low cost. And the project is at anything but low cost, let’s put it that way. Plus they’re the Republic. Would have had a boo boo business. They could have supported the entire wind and gas industry if we put a location for that fan shop.

[00:26:15] Gary Fischer: Then, in a good, get a slot that’s efficient. So, what are the implications of this priority transition? I, you know, I said that I’ve seen, driving a lot of change in the in the energy sector. How veritably disadvantaged are these projects, especially how we generate, well, how open we have a lot to do with the performance.

[00:26:37] Gary Fischer: Now, most everything I’ve seen here slim volumes. I mean, these are not. Water burner economics. Yeah, and I see if I’m really jealous of these things. I mean, it’s all in the making. Hydrogen from water to aluminum. I’ll stop leaking about this stuff. They wrap solids, liquids, gas, all synchronized in a batch and continue this whole process.

[00:26:55] Gary Fischer: I mean, this is making my head hurt. You see, think about it. Who’s going to do that? Any of you out there doing a lot of work with hydrogen, biofuels, natural gas, LNG, solar, nuclear, I’m kind of just curious, are you touching the energy transition today and your work is being seen by a lot of people on it?

[00:27:15] Gary Fischer: So, we’re observing, it’s really interesting, there’s kind of two kinds of energy transition projects I found here. One is the big data project. That would be mapped, you know, very large high definition kind of development. The technology would be non existent to do it at that scale. And then we have all these other things that are distributed tended to be repeatable.

[00:27:39] Gary Fischer: So a lot of art in your own projects, so very large projects. Very similar projects in one location or another. We’re calling those point in the path projects. And they have some very unique characteristics that we’re going to talk about here. So what we observed, they have a lot of things to come. Yep, largely, they all have marginal economics, a lot of storage, without capabilities, commercial audits declares, a little trouble innovating, right?

[00:28:09] Gary Fischer: High product demand, low owner contractor capacity, competition for sector, for most sectors, see if you, if you lower control center or some batteries or something like that, the whole, you’re out in the meeting of all A’s in our world, right? For, for the kit that you need to do your facility. And private equity in 60 packet terms, you have all over it.

[00:28:32] Gary Fischer: Expectations are what a high expectation creates. A pious reaction. Let’s move this thing forward. I have to tell you from personal experience, new technology coupled with a pious reaction, you’re gonna, you’re gonna waste a lot. So how do these two classes differ? If you think about it, they only give you sale, one location, one jurisdiction, and in a lot of ways they’re far more.

[00:29:03] Gary Fischer: Less complex, because you’re dealing with one spot, one privet, or one pile of privets. Usually have a single lead contractor, your contractor’s a little more stable deployment. You got multiple locations, multiple jurisdictions. Think about it, if you’re trying to do the same thing in China, America, the U. S.,

[00:29:20] Gary Fischer: you might as well act on the same. They’re all different. Basically, you can’t just cut any impediment to the site. I think that’s the value of design, but numerous permits, many suppliers, being numerous locations, which is a complexity, but also an opportunity if you manage your work as appropriate. And so you have a new job to manage, a deployment program for your company, right?

[00:29:48] Gary Fischer: Now I’m in trouble. What can you do? Well, before I dive into that, I want a little bit of groundwork with you all. And if you get only one thing out of what I’m talking about, other than I’m really talking about time, the reason would be this. This is so extremely important. I just, I just got planned this.

[00:30:09] Gary Fischer: Using traditional project management methods is not going to result in much of a good, I just gave you all these examples. This is everything I did. It’s nothing unusual about any old system. Both the standards and the instruments. Managing variability and producing predictable projects can only be done when you see the production side of the project.

[00:30:33] Gary Fischer: Or my thought. We all have schedules, right? Schedules of the meat, potatoes, potions. But the schedule is only the demand of what we call a production system. So it’s like placing an order for takeout food. You call a restaurant. You initiate a demand. Your order. To activate capacity, cooks, stop out of the freezer, stop out of the kitchen to assemble your food, help carry your food.

[00:30:59] Gary Fischer: And then to activate the driver capacities, to pick up your food and deliver it. What happens if the restaurant gets more orders than they can handle? Well, you wait. Wait here, wait till they finally get down the queue. Are projects any different? No, this is exactly what happens with our profits. The schedules of the band is the signal to activate capacity.

[00:31:26] Gary Fischer: The act of doing the work with people, the equipment, the materials, the time, the space, the margins, the shifts. That’s the supply for the production system. The variability can’t be managed through the schedule. I just gave you all those examples of that, right? It can only be managed through that production system, using the cellulars.

[00:31:48] Gary Fischer: The Dredge Promotion, you’re going to hear a lot more about that today. So at that backdrop, you know, there’s some strategists that we’d recommend whether you’re in charge of oil as an acquired private. I’m not a slide reader, so it’s probably harder than that to slide now, but I want to get to that very last one.

[00:32:05] Gary Fischer: Matt, model a patrol portfolio of similar investments. One hot date. This one’s just like such an ah ha for me. If he told me that it was possible to model a project after it, so I’d know where we’re going, where it’d be done, I would have walked across hot coals to get my hands on it. And I told you about how I’m less of a lead in the partnership controls to get that understanding.

[00:32:33] Gary Fischer: I have no idea that there was actually a technology existable. I dreamed of getting it. So if you can only hear two things from my remarks today. What was the first one? Curious. Well, be curious. All done. Well, that’s a good one. Yeah. Projects have production systems. So the second, these production systems can be that.

[00:32:59] Gary Fischer: Model. Using operation size query. This is a blank slide, so that’s all it is. To predict the outcome and re available levers that I have as the owner to change the trajectory of the blockchain, okay? And there’s a lot of things I’m telling you about teaching the account. Very good. Very skeptical. First thing you heard is it’s going to be outright.

[00:33:23] Gary Fischer: Yeah, sure. I’m like a consultant. Well, I want to give you another quick example. This is one we had within the company before IVRs. And this is a large, complex FPSO, free FIB. We did a production model to help us anticipate and mitigate production and schedule risk. So they, they get it with the analysis of the project.

[00:33:47] Gary Fischer: I made this slide in this way, and I’m also going to read it so you don’t miss any points. So just hang tight. We mapped and modeled for the plans, where they were at the time, to get all the way through completion of the project. On the left, we found two really critical things. On the left is the readiness of the engineering to support the group the AFC app, if it’s committed.

[00:34:07] Gary Fischer: A whole bunch of things had to come together to support the AFC method. On the right were all the top side modules that had to be delivered to the assembly yard. The assembly right in the sequence is not, is unforgivable by FBSO because you’re stacking things inside a hole. You have to know that they have to go in, in the right sequence of design.

[00:34:27] Gary Fischer: We found these two. Really key points for a number of safe converts like this that present a high risk theory. So let me take a quick poll. So we asked folks again, What is it the probability, Looking out on the Y? What was the probability that the sub assimilation of the Y could have a fusion guard being tied up to the sequence of the integration?

[00:34:58] Gary Fischer: Got it? So most people are picking cameras. As soon as the phones go down, we’ll start to get the results, you know.

[00:35:12] Gary Fischer: We’ve got a smart crowd here, and that’s cool. Chuck Zongoli said, I need to utter, absolutely everything. I want to read you right out of a report book, Sid. Well, we’ll make it together. Given the taste of all those perfect, reliable floats, the probability to arrive at the fabrication yard just in time and ready for integration is getting a 40 percent chance of failure.

[00:35:35] Gary Fischer: However, we know supply to develop reliability is not 99%. Probably ranges between 50 percent to 70 percent waiting for results and a near 0 percent probability that we could make that happen. This was good news. We found this out pre FID. Instead of later on when you didn’t do anything about it. So in this project, as a result of this, we achieved this work, achieved the capacity, achieved the on track case strategy, we even changed all the operating floor guides.

[00:36:06] Gary Fischer: To improve our odds of success. And get these unmoved up. And removed some of these difficult. So, and then after designing the pre app ID, you know, system, we put the project at the engineering under production control. Instead of getting it completely worked on time, that is one of a hundred projects that we have that actually completed our week for you.

[00:36:32] Gary Fischer: I hope you will find like, it was way different. So, okay, after your attention now, HL will launch your site. I will be regressing and pointing out that, you’re going to use this one of the five levers. You’re going to hear more about the five levers today. I’m not going to go on saying these things work together.

[00:36:48] Gary Fischer: These are the levers based on operational science that you have. This is project version. Or an operation person to change the trajectory of the project. And when you do this all five of these levels, as soon as you solve them, you stagger. Well, it consists of, consists of, we see a reduction of 30 or 50 percent in project outcome when you do this.

[00:37:12] Gary Fischer: Think about that. That’s huge. And if I don’t do it, we’d waste it, but that’s, that’s another story. So, I figured I’d take that, I know I’m way over time, but I want to circle back to that first project I talked about. What would I have done differently if I was doing that? I would have taken a completely different approach, would have, would have had a model site, I didn’t even know what my production system was, where I would have created flow across this job site, started the, started the, the ILE contract or a one in, figured out using the science, how far behind you the pile of property needed to be, using the science to figure out how far behind that, this long the underground pipe needed to be, you just had this, where these waves were, I had a kilometer of work, plenty of space, you I’d have these waves of successive work going off the job site, and then just continue on for the rest of the jobless.

[00:38:01] Gary Fischer: I estimate, you know, five years ahead, so we could have taken two years off our schedule. That, that’s a substantial amount of time. And to stick off the revenue associated with a big oil and gas plant, with two extra years of that issue. So, with that, I’m totally cool with that. I’ll, we’re probably, I’ve never been long in the state of the other electric charges.

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Gary Fischer, PE

Project Production Institute

Gary Fischer, PE

Project Production Institute

Gary Fischer is the Executive Director of the Project Production Institute (PPI) and Chair of the PPI Energy Working Group.  He has over 40 years of experience in all aspects of capital project development and execution across downstream, chemicals and upstream in Chevron.  As GM of Chevron’s Project Resources Company, he was responsible for Chevron’s project management system, a supporting team of subject matter experts, an early concept development group, and Chevron’s decision analysis function.  Before retiring he took a special assignment to deploy Project Production Management and digital transformation across Chevron’s global portfolio of capital projects.  Gary’s prior experience includes project leadership roles in engineering, construction, and project management spanning across all segments and many locations. He also served as the upstream director of capital projects for Eurasia, Europe, and a gas to liquids venture with Sasol.

Gary holds a Bachelor of Science Degree from Colorado State University and is a licensed Professional Engineer.