From Project Management to Project Production Management – Use Cases & Experiences in the Application of PPM & OS

[00:00:00] Gary Fischer, PE: Chevron’s been on the production management journey for quite some time now. And it’s had some ups and downs along the way, and we’re really privileged today to have Craig Evans. Come on up, Craig. Who’s going to who’s a senior advisor for operation science for Chevron’s capital projects function, supporting all aspects of operation science application within Chevron’s global capital project portfolio.

[00:00:24] Gary Fischer, PE: Previously, he was the project production performance manager with project resources company deployed to the future growth. and wellhead pressure maintenance project in Kazakhstan. So he’s been on the front lines of trying to make this work. He spent 30 years in Chevron in capital projects and held a variety of roles.

[00:00:42] Gary Fischer, PE: He has an MBA from Deakin University and an artificial intelligence program at the University of Oxford. Just recently completed. Yep. So Craig, I’ll turn it over to you.

[00:00:53] Craig Evans: Thanks. Morning everybody. So I do actually have one little item. Director of Execution. I’m currently Senior Execution Advisor.

[00:01:01] Craig Evans: Awesome. I wish to have those job titles during the French Revolution. I think that would have been great. An opening thought. So Professor Brian Cox is an astrophysicist. He sells out stadiums globally and does this great show and stuff like that. But science is the art of looking at the evidence and removing your prejudice.

[00:01:19] Craig Evans: So I think it lines up a little bit this morning with that Elon Musk video as well. What is the possible? out there at this time. So I’m going to go through a few slides today around some applications of where we’ve done project production management operation science applications. Then Gary and I are going to have a little chat around a few questions around that and I’ll try and get us back on schedule as well.

[00:01:38] Craig Evans: The first example we’ve got here is this is an ongoing project currently in Australia at one of our LNG facilities Class A nature reserve. It’s on an island. We did this, so this is essentially 15 kilometers of underground cable installation, 33 KVA cable across the Class A nature reserve where we’re limited in the amount of land we can use.

[00:02:00] Craig Evans: And there’s five, five fiber optic cables in there and a few other things as well that we have around that. But the journey on this project really started back in 2022, or 2024, where we awarded the contract for this. And we awarded the contract, we actually brought the contractor into the room and started modeling their work that we’re going to do.

[00:02:19] Craig Evans: In a simulation model, so we can actually understand where were the bottlenecks in the system. And everyone’s going, it’s the trencher, it’s the trencher. They’re using a rock trencher to go across the island. When we modelled the work, it was like, no, it’s not the trencher, it’s the backfill, kind of thing.

[00:02:31] Craig Evans: So before we even started the work, we knew where the problem was going to be. At the time crushing material, getting it back to the site, stuff like that. So we knew that was going to be the problem. So they said, OK let’s start planning around that and started optimizing it, making sure we had the right number of trucks, the right crushing, and the process.

[00:02:47] Craig Evans: One of the advantages we have with this is being on a class A nature reserve, we were able to control the WIP by the current environmental regulations. We’re not allowed to have more than two kilometers of trench open at a time. because the critters fall into the trench and they can’t get out of the trench.

[00:03:00] Craig Evans: So we’ve got to have two columns. So we were lucky. We had a rule that was already in place that we couldn’t have any more than two kilometers of whip at a time. So what we ended up doing, we actually ended up having smaller batches at the end of the day as well. So that was one of our advantages.

[00:03:12] Craig Evans: Then before we got out there, we got into this daily planning process. The PPC process, and we brought the contractor on board on that very early and got out there and they started from day one doing it. And so that process was really good. The contractor would come into the office every day what are you going to do today, what did you get done today, what are you going to do tomorrow, what didn’t you get done, and why.

[00:03:32] Craig Evans: And then they put in their continuous improvement process as well. They didn’t just take the data and do nothing with it. That’s always been one of the biggest challenges we’ve had, is get that continuous improvement process going in there as well. And then after that. So that was like the work on that.

[00:03:46] Craig Evans: So the results of this is, they’re going to say around 10 to 12 percent of the contract value, we think it’s actually going to be a little bit more than that. Ten million dollar schedule improvements, they’re going to be ten million. Ten months, sorry, ten months ahead of time. It came off the critical path.

[00:04:01] Craig Evans: And we removed HES risk. I think sometimes that’s one of the things we don’t think about a lot when we do this stuff. When you reduce hours or get work done in sequence or get work done on time, we’re taking HES risk away. When I’m doing work I didn’t plan to do on a certain day, you’re adding risk to that environment.

[00:04:16] Craig Evans: So that’s one of the things we really look in this environment as well. The great thing with this project is I have a control point to measure it against that’s currently ongoing on the same island and essentially a very similar scope. So the other scope on the island is 50 kilometres of trench with 110kv cable going through it and fibre optics.

[00:04:34] Craig Evans: So that’s currently going on simultaneously. This project, you can see the results, they started early. The other project said no, we’ve got this, all good. The other project’s behind schedule and over budget. So it’s I’ve got this perfect control mechanism, so here’s the difference. That other project is now pulling this team over and saying, how can you help us with the next scope of work?

[00:04:52] Craig Evans: We’ve got civils and undergrounds, above ground, electrical work within the plant. Sometimes it’s going, we’ll probably talk about it a little bit later, going with the team who want you, prove it, and then the others will follow, in a way, around that. But this is a really good example in that.

[00:05:05] Craig Evans: Another example we’ve got going on at the moment is a long term mine reclamation project in New Mexico. So this is going to go on for about the next 20 years. So this one started out with more, they just started doing the daily planning. And I think this started back, I think it was like 2020, 2019, around that?

[00:05:23] Craig Evans: They just started out with a daily planning process. And they were looking where their bottlenecks were in the system, where the problems were occurring and stuff like that. They then started to see what we were doing with our sort of project system planning. And they went back and started looking at the system.

[00:05:34] Craig Evans: So they mapped out the entire project plan and all the roads and the routes and everything like that. Put the trucks on there and the speeds and all this kind of stuff, and they started mapping the system. And then they started optimising within the system in a different process by taking the data that they were getting from the daily planning, they knew what the process was, pulling it into the actual simulation model, simulating it, going, hang on, we can improve this.

[00:05:55] Craig Evans: Now, it doesn’t seem like a big improvement, that 6 percent increase in productivity. But over 20 years, that’s over 200 million dollars, over the next 20 years, in mine lacrimation costs in there, just by changing that one little bottleneck, what they call a staircase, so essentially an intersection, and saying let’s change the traffic route, yes we’re doing more kilometres or more miles, but we’re getting increased throughput around that by just changing the route.

[00:06:19] Craig Evans: These guys are getting down to the extreme now. They’re looking at, I think you guys call them Portaloos, or we call them Portajohns, we call them Portaloos. They’ve even modelled putting more Portajohns out in different locations to reduce the time it takes the guy to go have a break and come back again.

[00:06:33] Craig Evans: And they’ve said that even improves productivity out there as well. So they’re actually looking at very detailed because of the duration of the project over time. Around that. The modeling part, I like, I can’t put too much up here about this, but that’s one of the things where we’re getting a lot more pull in the early phases of our projects, or our opportunities, is modeling project systems before we go out there and do something.

[00:06:53] Craig Evans: Modeling the supply chain on a lot of our biofuel projects that were out there. We’re, that was some of the first stuff we did is the supply chain, that’s very complex when you’re taking soybeans and soil oil and all this other stuff from Iowa through the system, through barges, stuff like that.

[00:07:08] Craig Evans: CCUS. Modeling shipping routes coming from Asia, when we’re trying to collect CCUS from overseas, bring it into another country and inject it, things like that whole supply chain system. And then how much capacity do I actually need for the ramp up of that as well. So that’s where we’re seeing a lot of we have one project that we’re at NIJV in, I can talk to it, that they’re planning on bringing, I think, 8 million tonnes a year of CCUS into Australia, so liquid CO2 into Australia.

[00:07:37] Craig Evans: To do that, they need 740, 000 tonnes of CO2. ships on continual rotation to be able to do that volume. Interesting thing. They want 2020, not one of those ships currently exists at the moment.

[00:07:54] Craig Evans: So they need to build them. Shipyards are full ones designed. It’s been certified by DMV. The largest ship at the moment is a 10, 000 cubic meter ship. So you try and look at the viability of these investments as well. Is the other part where we’re looking at taking one of the things is Chevron taking more of an investor mindset.

[00:08:07] Craig Evans: So we’ve taken operation science and PPM. Back into the front end of projects to help us make investment decisions as well by looking at some of that stuff. A few other things though around knowledge work. So we talk a lot about construction at times. Knowledge work, this is the other area. So we use it in all different areas.

[00:08:23] Craig Evans: Concept selection, feed, detailed design regulatory. This is one of the biggest areas where understanding the actual flow of work and what it takes to actually get work done by the people doing the work. This is a simple loop diagram. I think simple, yes. Seven steps to get a loop diagram done.

[00:08:43] Craig Evans: It’s actually 200 steps to get the loop diagram done across three different countries in different engineering offices. So at the end of the day, when you actually map this out, you can look at, okay, what do I really need to do? Is it the right way to do it? Should I be doing work across three different engineering?

[00:08:59] Craig Evans: Three different engineering centers in three different countries. Even silly things like it was going from one country to another just to go through document control. Why don’t they just issue it from that particular country at the time? So you can take these steps out, but understanding the work by the people doing the work is very important in that.

[00:09:16] Craig Evans: Looking at different scales. I’ll say that this is the knowledge work results we found that standard work processes, there’s a lot of standard work processes out there within engineering and knowledge work. Procurement’s another great example of it. A lot of the work we’d be doing this in the the daily production planning sessions that you do in engineering.

[00:09:34] Craig Evans: Again, we’d be modelling supply chains, so we’d be modelling procurement. Cycle times for procurement around that. Another example we had is we had all the data from doing a couple of projects in the Gulf of Mexico, and the average cycle time from, I think, a RFI out to a, getting a PO was like 145, 150 days that had taken us on two previous projects.

[00:09:54] Craig Evans: We took that data, we went to the next project and said hey you guys got 90 days, what are you going to be doing differently to do, go from 145 days average on the past two projects to the 90 days? And again it was like, I know, we’ve got this, don’t do it, we go back and measure a little bit later where are they?

[00:10:12] Craig Evans: 145 days, 150 days cycle time, around that. So they’re not doing anything different. I want to give you the good, bad and the ugly, it’s we can go to people with change but you can’t make them change at the end of the day. So we can see both sides of it at the moment. Scalability as well is very important.

[00:10:27] Craig Evans: We talk about big projects trying to do a lot of procurement, a lot of engineering drawings. This is just 1, 500 isometric drawings that needed to be done in like a four or five month period. So we used some some simulation modeling here again. So analytic model on this. Worked out where the issues were in resources and capacity.

[00:10:46] Craig Evans: So I think they needed I think it was like six designers. I think eight designers and I think three engineers to do this work. I think it was something around that. They went out with six and two, six designers, two engineers, you can see they started to fall behind. They added an extra resource, so they added to seven, and eventually they came back where we predicted they were going to be at the end of the day on this one.

[00:11:08] Craig Evans: So you’re actually able to use it for different things, it’s not just for tracking work on a daily basis. You can take it for modeling and go, okay, I don’t have the right capacity and the people out there to get the work done in this space. The other one is some past use cases we’ve got. So some of you may or may not have seen this.

[00:11:23] Craig Evans: But using WIP as a measure of work out there. So this is on the same construction site. It’s really had five different projects going on at the same time. I’m comparing like project A to project B on this one. But you can see how they controlled the WIP in this. So the way they controlled the WIP in this location was the guy issuing the permits wouldn’t issue a permit to a certain area until you’d finished work in the previous area.

[00:11:45] Craig Evans: It was simple as that. It wasn’t like I was saying, no you can’t start that work, you can’t start, it was just, don’t issue the permit. Can’t go do the work. So that’s how they control the work. So you have the number of open work there. 17 percent of IWPs that were available were open. So that’s taking IFC, IWPs, how many, what percentage is open.

[00:12:04] Craig Evans: So they’re roughly sitting around 17%. Everyone else, think about 50 percent of their IWPs open, incomplete at the same time. You can see from like a traditional measure of PF, I’m not a fan of PF, but you can see it there the difference. One was getting ahead of plan, one’s falling further behind on that.

[00:12:21] Craig Evans: And if you’re looking at progress, that’s another way of looking at it as well. This other one, like looking at throughput of hours, so this is coming down a little bit to batch size as well. So different measures within sort of operation science. So you have project A, a little star project smaller batch size, project B, larger batch size, and then with the duration as well around that.

[00:12:43] Craig Evans: So 22 days. 22 days is a long time for a foreman to start thinking ahead. They can think about what, they can know what’s a week in front of them and they start planning a little bit for the week after it. Trying to get that three weeks is okay, that’s what the P6 planners do in the background with the three week lookaheads around that.

[00:12:58] Craig Evans: So this is like an example of saying, yep I’ve got, I’m getting my work done faster or on time through smaller batch sizes as well. And we see this across the board in multiple areas trying to take it back down to something very pipewise and construction. So direct labour capacity reduced while making it the same.

[00:13:18] Craig Evans: So a lot of the time we have labour capacity issues, Todd talked about it before in that. Are we getting increased throughput? No, not really. But I’m using less labour to do it in this scenario. It’s about 20 percent less labour after a few months to get the same throughput through the system. Just through efficiency and planning and doing those daily work processes, that continuous improvement taking those those issues that are out there from the workers as well.

[00:13:42] Craig Evans: And also probably using the workers to plan the work a lot more would be the other thing here as well in that place. I think that might be it for me to go through my slides, because I went through pretty fast, and I’m Australian, and I talk fast, but I got us back on time, Gary. Did you notice, step back and think for a minute, did you hear his language? The things he was saying and talking about? Production modeling, managing WIP, daily planning, production control, understanding the workflows. This is exactly what we mean. When we say we want PPM to be the way work gets done.

[00:14:25] Gary Fischer, PE: The way project professionals are thinking about the work. He’s been changed forever. I’ll never see a project the same way as he used to see it. So we got a few minutes for some questions for Craig. I’ve got a mic here. If you got a question, if you don’t have one, I’ve got some.

[00:14:42] Gary Fischer, PE: Okay. We got a question back here.

[00:14:44] Audience Member: Hi, Craig. Appreciate the presentation. I’m an owner. So we’re looking to start implementing this in a few projects next year. I’m really curious about, you talked about your daily your daily planning process. So walk through with me how does that conversation work?

[00:15:01] Audience Member: You said you’re reviewing data and making changes. Could you just expound on what that interaction is? Who leads that effort? Who’s pulling the data together and reviewing it?

[00:15:11] Craig Evans: So I’ve seen it done different ways. So the one I showed you, the example, the XIT one. There, that’s being led by a couple of Chevron people and they’re bringing everyone into the room.

[00:15:20] Craig Evans: And they’re just really facilitating the conversation at the moment. It’s only a couple of junior guys, junior construction engineers. We call them the bots, the robots, cause they’re really good at that. But they do that process. We went down to a place called V Lot yesterday. And again, I think it’s a, it’s again, it’s a Chevron led, I think on that one or Brightmark led on that one.

[00:15:40] Craig Evans: But the contract is all in the room and it’s a multiple conversation. We’re about to stand up another team. We’re going to rotate the leadership, so it’s going to be like five contractors in the room over five weeks. One week you lead it, one week another team leads it, one week another team leads it.

[00:15:54] Craig Evans: That way they own it. So getting the contractor to buy in and own it is very good. But I think with the change in process, as an owner, we need to lead the way in that. And then try and take the trainer approach and bring them into the system with us. But that way you get the buy in.

[00:16:11] Craig Evans: One of the comments yesterday as well, and then leverage of the success two different contractors in the room yesterday. One of the contractors said to the other, said, look, we love this process. This is really great. We need to go forward with it. We can see the advantage of it. So getting those sort of, those positive people in there and doing it, you are going to have your resistors, your negative people in there.

[00:16:32] Craig Evans: I always put my attention to the people that want us to have there now. And if you leave them behind, they eventually want to come along. In that process, you can tell you’re walking into the room, you have the person with their arms folded and they don’t want to talk. It’s yeah, that’s the person I don’t talk to anymore.

[00:16:44] Craig Evans: You talk to the people who want you to be there.

[00:16:47] Gary Fischer, PE: Another question standing between you and a break. So Craig, when you were in Kazakhstan, you saw the importance of, and the differentiation of leadership project a versus the other four projects. Tell me a little bit, tell us, tell our audience a little bit about.

[00:17:08] Gary Fischer, PE: The criticality of clear, supportive leadership to do something different.

[00:17:14] Craig Evans: Yeah, I can’t emphasize how it’s important that I’m still in rehab after Kazakhstan. But no, it’s leadership. And I think my lead slide on the on the XIT example was leadership led that. So I had a PM on that project that said, I want something different from the beginning.

[00:17:31] Craig Evans: I had Construction manager that said he wanted leadership something for the was actually I don’t know if you guys remember him, Steve Girardi. He was actually on Gorgon doing it and then he went and did it on the kettles and he’s done it before. So he knew he was like leadership, let it and they supported it going through that process.

[00:17:46] Craig Evans: Then on the Kazakhstan example we had one project manager on one side saying, yep, he’d read some books, factory physics, the goal and stuff. I said, I want it on the other side. It was no, we’ve got this so leadership is critical. You’ve got to get that support. In there as well.

[00:18:02] Craig Evans: I also think the other part there is don’t eat the elephant in one bite, like you gotta take small chunks at a time and show a little bit of success and then move it and move it. And then that way, leaders will look at other leaders and go, Hang on, they’re doing something that I’m not getting the same results.

[00:18:15] Craig Evans: And leaders have egos. They want to be at the front of that as well.

[00:18:19] Gary Fischer, PE: That’s good advice. Any other questions?

[00:18:20] Pedro Franco: Yeah. Hi, Craig. I’m Pedro Franco. My question is around change management. And it sounds as you were effecting all of the all of the changes, you had to win hearts and minds and get people to start thinking differently about how they do their work.

[00:18:38] Pedro Franco: So my question is the following, when you came up against any resistance what was that resistance like? What was the nature of it? And what specifically were the things that were done to get people on board?

[00:18:50] Craig Evans: You bring up a really good point, like I said earlier, you can bring people change, you can’t make them change.

[00:18:55] Craig Evans: At the end of the day. We started out in Chevron with a mandated process, and it probably doesn’t work in Chevron very well, a mandated process, or it was not very successful in that process. I think that’s a starting small little bit in that, but the change management where you get the resistance you can tell it straight away.

[00:19:13] Craig Evans: There’s a part like going through a bit of education at times I can tell you, like, when I first started doing a bit of this back in 2017 for the first couple of months, I was going, Huh? I don’t get it. Kind of thing, right? And then I’ve always been a bit of an innovative thinker, a bit forward thinking.

[00:19:27] Craig Evans: So eventually you got it. And I think sometimes it’s also giving people some examples that they’re already doing a lot of this already, and they just don’t know it at times. Like somebody who’s controlling permits and saying, I don’t want them to start work over there yet, they’re controlling WIP in a way.

[00:19:40] Craig Evans: They didn’t even know they were really doing it. I go back to an example. I worked in a shipbuilding career back in the early 2000s, 2003. Great. And I put together like a little chart, I was thinking about this the other day. I had isoproduction equals so many spills. Spill production, spill installation, hydrotesting.

[00:19:56] Craig Evans: Kind of thing, right? It’s a simple lines of balance, but you don’t even think about it as being a lines of balance. It’s just, it’s a production system of, from isoproduction all the way through to hydrotesting at the end of the day. So it’s like a little mini system. So it’s bringing leadership, sometimes those examples and saying, it’s not super different from things you are already doing at times.

[00:20:15] Craig Evans: something to relate to as well. The other thing I’d say as well is, if you think about our workers who actually do the work, and Todd brought this up before, we don’t think about the people doing the work a lot. They’re actually down, if you go down to them and talk to them, how do you want to do the work, right?

[00:20:28] Craig Evans: That will give you something completely different than what’s in your P6 schedule typically. And getting down to them and them getting into the system and getting them saying we want to see the value in this as well that’s where I see the value coming out and then the leaders will follow.

[00:20:42] Craig Evans: very much. Around that. Thanks Doug.

[00:20:45] Audience Member: Hi, Craig. Quick question. You’ve worked, obviously, and you’ve worked with big EPCs, and then they have subs, etc. And the frontline worker typically works for the subs. Do you want to talk a little bit about how you, as an owner, Have been able to influence or get connection with the frontline worker when you have an EPC layer or maybe a GC, whatever in between you.

[00:21:08] Craig Evans: So first things like sometimes we think the easiest way is to put it in the contract and it’ll happen. We have contract exhibits. It doesn’t happen. I think it’s engaging from the EPC and finding the path to the sub at the time of saying, Hey, which sub do I want to go and do it?

[00:21:29] Craig Evans: Like I know we had in Kazakhstan, we had. We had CB& I who were a sub to somebody and they were building all the tanks. And people talk about it as being impossible to put on lump sum contracts. This is not true. CB& I was lump sum contracts for us. And they said, no, let’s have a look at this, let’s do it, let’s adopt it.

[00:21:44] Craig Evans: So it’s finding that sub that wants to do it as well. And then they find the other sub to get in there. I think Roberto said when we were in the fabrication yard in Shinhan in Korea, right? It was like they were all subcontractors in the yard, kind of thing. And essentially the subs, we got into the subs and we started doing daily planning sessions with the subs.

[00:22:00] Craig Evans: And they were like, they were all over it, they loved it. Shinhan let us through and said go and do this kind of thing. But they were the ones that were saying we keep getting, and they were bidding these modules on lump sum as well. But they kept hitting interfaces with each other. So by as soon as they started doing this, they were reducing the number of interface clashes with each other, and they started to see their productivity or their throughput increase, and get that.

[00:22:21] Craig Evans: So they were yep, we can see the value in this as well. So I just wanted to show them the value in that. The closer we got to

[00:22:31] Gary Fischer, PE: the work, the easier it was to implement. Good. The hard part was getting through the upper layers of management, but once we peeled our way and got down into where the people doing the work, engineers or craft really appreciated clear direction, knowing what to do on a daily basis or a weekly basis, what the priorities were not being overwhelmed, not being jerked around, run over here and run over here or work on this and now drop this and work on that is the resistance fades away.

[00:23:00] Craig Evans: I give it like probably that was back on. the island back in early just October, I was up there for a site visit and I walked into the site hut for the contractor and the guy came up to me and just shook my hand straight away. I was like, Craig, thank you so much for bringing this to us. It was like, that was like one of the proudest moments I’ve had in the past few years in doing what I’ve been doing, like trying to implement this.

[00:23:18] Craig Evans: When you’ve got somebody that walks on the site and just says, Hey, this is value added to them. And then we went through, had their monthly update meeting while we were on site. And when I then went to a monthly update meeting where they’re talking about getting better, not trying to catch up. It was the last time we went to an actual progress meeting and said, Hey when versus, Hey, how do we get better?

[00:23:37] Craig Evans: How do we optimize versus, Oh, we’re behind schedule catching up. Like it was a completely different environment in that. So it’s that kind of behavior that you see. It’s there’s safety records to answer itself as well in that team and the attitude and the feeling on site. So it’s you’re creating that ecosystem on site as well, that you’re going to get more productivity, not just from the PPM stuff and the operation science stuff, you’re going to see other value.

[00:24:01] Craig Evans: Well Craig, thank you for coming all the way from Australia to share your thoughts with us.