Director, Portfolio Value Leadership
In part one of this series, we confirmed that to improve the asset, a project actually has to be completed and handed over to Operations. We noted that an aging asset might need hundreds of these completions just to improve the odds that it can meet its business plan requirements.
In part two, we used the concept of Bang for the Buck for two purposes:
to pick the year’s slate of project ideas, and
to bring order to what is, most likely, a growing backlog of work requests.
This keeps everyone focused on getting the most asset improvement for the resources available.
Once we have the business plan “pulling” the best ideas from the backlog, how do we increase the pace of completion, upping the odds that we can improve this aging facility faster than it’s wearing out?
At many facilities the backlog is growing, projects are taking longer, and schedule performance seems to be worse than cost performance. What’s going on?
Every organization has a certain capacity for work. A simple indicator of that capacity is counting Operations Acceptance milestones. How many asset improvements did we complete last year? Why didn’t we finish more?
Let’s use an arbitrary illustration of 120 completions – an average of ten per month. Each of these ten projects, relying on a shared pool of very busy people, will have to pass through the standard gates and approvals. For 120 annual completions this equates to, on average: ten financial approvals, ten Process Hazard Assessments, ten IFA package reviews, and so forth every month. Every month! If each project is like a car, we clearly have a traffic problem.
It’s actually more complicated than just a traffic problem. Any brownfield project shares its resources with dozens of other projects, and no two teams are identical. We have a traffic problem AND a coordination problem synchronizing all these people with all those different tasks. And when people get really busy, all the unchecked multi-tasking leads to interruptions and task-switching costs. It’s a hidden killer of productivity, quality, and satisfaction.
The remedy is not tighter progress measurement and schedule controls. Neither brownfield tasks nor brownfield people can be made predictable enough to perform like machines.
If multi-tasking is the disease, what’s the cure? The first step is to accept that we are here to improve the asset, not just to “do projects”. That means we need to value finishing over starting, to use Operations Acceptance milestones as the indicator of asset improvement. (If most Operations Acceptance milestones occur together at the end of major shutdowns, use a milestone such as IFC, denoting the end of a phase other than Turnaround where multi-tasking causes the most waste).
Traffic engineers control access to freeways to prevent traffic jams. All we have to do is to start fewer jobs than we are finishing. Watch the milestone counts rise as a result.
Embrace the simple truth that to complete more projects we must begin fewer. This may be a tough sell in an organization accustomed to a “drop everything” style. It’s not a coincidence that these organizations also complain that everything costs too much and takes too long.
Successful portfolio managers already know this. They value focus and discipline over responsiveness and multi-tasking, because they want more asset improvement sooner, for less.
As we dial back on the multi-tasking, coordination gets easier and we’ll see every milestone count go up. There will most certainly be a few stubborn milestones, which won’t improve much without increased coordination (hint: they usually require Operations input), management oversight of processes, and interfaces to relieve the bottleneck.
We can do the following to improve traffic flow:
Be proactive and coordinate resources. Project Controls can use its talent and systems to look ahead at the next few weeks and coordinate shared resources across projects more than measuring the previous month’s progress within projects.
Spread the start dates. Break up the start dates on the backlog of pending projects over the next several quarters, in quarterly bin sizes that are smaller than today’s quarterly completion rate. Put the highest Bang for the Buck work in the nearest quarters. And start work only when the resources are available to advance it.
Recognize there are two kinds of target date. Not all dates are created equal, and the difference between them is not about Bang for the Buck.
Some pending projects have true drop-dead target dates. They may have to catch a major turnaround, meet a regulatory deadline, or satisfy some other external commitment that isn’t negotiable. Those dates must be taken seriously, and just like emergency vehicles, those projects have priority on the ‘highway’.
In a brownfield portfolio, many jobs don’t have drop-dead dates. Operations or Maintenance usually has some kind of workaround, allowing it to cope with whatever plant problem the project is supposed to solve while waiting for the Project Group to finally finish. By managing activity levels and decompressing pinch points, we can increase the pace of completion and deliver more asset improvements in less time.
We’re portfolio managers. We listen to the voice of the asset, pick the slate of projects with the most bang for the buck, and deliver them with the right timing and the best pace that our limited resources will allow. We take surprises and changes in stride.
If this sounds like something your aging asset could use, let’s connect.
For more information, contact Stuart Elliot: email@example.com.
Director, Portfolio Value Leadership