32nd National Energy & Environmental Conference

September 19, 2005

Benchmarking the Engineering & Construction

Industry

Benchmarking the Engineering & Construction

Industry

Benchmarking DefinedBenchmarking Defined

Benchmarking is the systematic process of measuring one’s performance against recognized leaders for the purpose of determining best practices that lead to superior performance when adapted and utilized.

- CII, 1995

Determine What to Benchmark(Critical Success Factors)

Define the Metrics

Develop Data CollectionMethodology

Collect Data

Identify Performance &Practice Use Gaps

Identify Reasons for Deficiencies(Root Cause for Gaps)

Develop Action Plan(Select Practices to Narrow Gaps)

Integrate Best Practices intoProject Delivery Processes

Institutionalize as Part ofContinuous Improvement Program

Benchmarking RoadmapBenchmarking Roadmap

Adapted from Robert C. Camp

Essential Elements of Benchmarking

Essential Elements of Benchmarking

• Process (structured/systematic)

• Best practice oriented

• Part of a continuous improvement process

• Understanding what is important to your organization (critical success factors)

• Measurement, comparison, gap analysis against leaders

• Adapting practices to your organization

MetricMetric

A quantifiable, simple, and understandable measure that can be used to compare and improve performance.

Attributes of a Good Metric

Attributes of a Good Metric

• Quantifiable – objectively or subjectively• Simple, unambiguous, and understandable• Reliable and consistent• Verifiable• Timely• Cost-effective• Meaningful to users• Drives the appropriate action

NYSOT 2003 and AFSC 1990

Principles of MetricsPrinciples of Metrics

• Provides value to stakeholders• Focused on continuous improvement• Establishes objective targets• Are ones we have the ability to

influence• Should be kept to the critical few

What Metrics are NOTWhat Metrics are NOT

1. Charts – Charts graphically display metrics, but the chart itself is not a metric.

2. Schedules – Schedules can be used to produce metrics, but the schedule itself is not a metric.

3. Goals, Objectives, Strategies, Plans, etc., although these can be measured, they are not metrics, but rather they can be stated in terms of metrics.

4. Snapshots or one-time status measures as displayed in pie charts. Comparisons of status over time can be a metric.

1Adapted from AFSC - 1990

Improve Efficiency Of A Business Unit

Improve Performance Of A Single Project Or A Group Of Projects

Improve Efficiency Of Overall Project System

Improve Selected Performance Metrics (e.g. Productivity)

Benchmarking Levels of Use

Benchmarking Levels of Use

Measuring PerformanceMeasuring Performance

Cost PerformanceCost Performance

Planned vs. Actual?

Total Installed Cost?

TIC/SF?

Soft Cost/Hard Cost?Total Installed CostProcess Equip. Cost?

Schedule PerformanceSchedule Performance

Planned vs. Actual? Days,Weeks?

DurationSF

Procure Forms

5

5

Mobilize

10

3

Layout Exc 1

15

4

Forms Conc 1

30

3

Set BasePlate1

35

1

Layout Exc 2

20

4

Forms Conc 2

40

3

Set Base Plate 2

50

1

Layout Exc 3

25

4

Forms Conc 3

45

3

Set Base Plate 3

55

1

SS0

SS2

FS2

FS2

SS2

FS2

Procure Forms

5

5

Procure Forms

5

5

Mobilize

10

3

Mobilize

10

3

Layout Exc 1

15

4

Layout Exc 1

15

4

Forms Conc 1

30

3

Forms Conc 1

30

3

Set BasePlate1

35

1

Set BasePlate1

35

1

Layout Exc 2

20

4

Layout Exc 2

20

4

Forms Conc 2

40

3

Forms Conc 2

40

3

Set Base Plate 2

50

1

Set Base Plate 2

50

1

Layout Exc 3

25

4

Layout Exc 3

25

4

Forms Conc 3

45

3

Forms Conc 3

45

3

Set Base Plate 3

55

1

Set Base Plate 3

55

1

SS0

SS2

FS2

FS2

SS2

FS2

?Phase DurationTotal Duration ?

Safety PerformanceSafety Performance

TRIR?Total Recordables?

DART Rate?

EMR?Fatality Rate?

Change PerformanceChange Performance

Scope Changes?

Development Changes?

Cost Impacts?

Schedule Impacts?

Cost of ChangesTotal Installed Cost?

Rework PerformanceRework Performance

Dollar Cost?Rework Cost

Construction Cost?

Schedule Impact?

Productivity Impact?

Productivity PerformanceProductivity Performance

Cy/Hr? Tons/Hr?

Directs vs. Indirects?

Engineering orConstruction?

Measuring Practice Use

Measuring Practice Use

Best Practice UseBest Practice Use• Pre-Project Planning

• Constructability

• Change Management

• Team Building

• Zero Accident Techniques

• Planning for Startup

• Materials Management

• Automation/Integration Tech

• Quality Management

• Alignment

• Risk Assessment

• Design for Maintainability

Quantitative or

Qualitative?

Formats for ComparisonFormats for Comparison

Formats for Comparison

Individual Projects – Performance

Formats for Comparison

Individual Projects – Performance

Formats for Comparison

Individual Projects – Performance

Formats for Comparison

Individual Projects – Performance

Formats for Comparison

Individual Projects – Practice Use

Formats for Comparison

Individual Projects – Practice Use

ContractorDomesticLarge Projects

Formats for Comparison

Data Mining

Formats for Comparison

Data Mining

Legend

1st Quartile2nd Quartile3rd Quartile4th QuartileMean

Legend

1st Quartile2nd Quartile3rd Quartile4th QuartileMean

Quantifying Value of Best Practices

Quantifying Value of Best Practices

Quantifying Value of Best Practices

Quantifying Value of Best Practices

Pe

rfo

rma

nc

e M

etr

ic(S

cale

Met

ric

Dep

end

ent)

Better

BetterPractice Use Metric

0 1 2 3 4 5 6 7 8 9 10

What is the relationship?

Is it significant?

How good is the fit?

How to analyze the relationship?How to analyze the relationship?

Pe

rfo

rma

nc

e M

etr

ic(S

cale

Met

ric

Dep

end

ent)

Better

Practice Use Metric0 1 2 3 4 5 6 7 8 9 10

Better

Pe

rfo

rma

nc

e M

etr

ic(S

cale

Met

ric

Dep

end

ent)

Better

Practice Use Metric0 1 2 3 4 5 6 7 8 9 10

Low Use

High Use

How to analyze the relationship?How to analyze the relationship?

Better

Value of Best Practices

Theoretical Relationship

Value of Best Practices

Theoretical Relationship

High

0.4

0.3

0.2

0.1

0

-0.1

-0.24th Quartile 2nd Quartile 1st Quartile

Practice Use

Perf

orm

an

ce

BetterBetter

3rd Quartile

Low

Improvement PotentialImprovement PotentialP

erf

orm

an

ce

Me

tric

(Sca

le M

etri

c D

epen

den

t)Better

Better

Practice Use Metric0 1 2 3 4 5 6 7 8 9 10

Low Use

High Use

AveragePerformanceImprovement

Accessing the Online System

Accessing the Online System

Project CentralProject Central

Project CentralProject Central

CII Benchmarking Database

A Total Of 1420 Projects of which 194 are Small;10 Years in Development!

CII Benchmarking Database

A Total Of 1420 Projects of which 194 are Small;10 Years in Development!

177

616

531

960

50100150200250300350400450500550600650

Domestic International

Project Location

Nu

mb

er

of

Pro

ject

s

Owner

Contractor

Current CII Benchmarking Systems

Available

Current CII Benchmarking Systems

Available

• Large Project

• Small Project

• Pharmaceutical

• Productivity

Small or Large?

Large or Small Projects?

Large or Small Projects?

• TIC $100K-$5M

• Duration ≤ 14 mo.

• Site Wk-Hrs ≤ 100K

• Full-time PM resources not required

Small ProjectQuestionnaire

• TIC $5M

• Duration 14 mo.

• Site Wk-Hrs 100K

• Full-time PM resources required

Large ProjectQuestionnaire

SummarySummary• Best Practices can improve

performance.

• Benchmarking helps you to:– quantify performance and practice use.

– establish improvement goals.

– achieve “best in class performance.”

AvailabilityAvailability

• Free to member companies.

• $7500 for non-member access*

*Limit of 10 projects per year

Questions?

Questions?

BackupsBackups

Cost GrowthActual Total Project Cost - Initial Predicted Project Cost

Initial Predicted Project Cost

Cost Performance Metrics

Cost Performance Metrics

Delta Cost Growth

| Cost Growth |

Budget FactorActual Total Project Cost

Initial Predicted Project Cost + Approved Changes

Delta Budget Factor

| 1- Budget Factor |

Phase Cost Growth

Actual Phase Cost - Initial Predicted Phase Cost

Initial Predicted Phase Cost

Phase Cost Factor

Actual Phase Cost

Actual Total Project Cost

Schedule Performance Metrics

Schedule Performance Metrics

Schedule Growth

Actual Total Proj Duration - Initial Predicted Proj Duration

Initial Predicted Proj Duration

Delta Schedule Growth

| Schedule Growth |

Schedule FactorActual Total Proj Duration

Initial Predicted Proj Duration + Approved Changes

Delta Schedule Factor

| 1- Schedule Factor |

Phase Schedule Growth

Actual Phase Duration - Initial Predicted Phase Duration

Initial Predicted Phase Duration

Phase Schedule Factor

Actual Phase Duration

Actual Total Proj Duration

Safety Performance Metrics

Safety Performance Metrics

TRIR Total Number of Recordable Cases x 200,000 Total Site Work-Hours

DARTTotal Number of DART Cases x 200,000

Total Site Work-Hours

Change Performance Metric

Change Performance Metric

Change Cost Factor

Total Cost of Changes

Actual Total Project Cost

Rework Performance Metric

Rework Performance Metric

Total Field Rework Factor

Total Direct Cost of Field Rework Actual Construction Phase Cost

Productivity MetricsProductivity Metrics

Construction Productivity Engineering Productivity

• Concrete• Structural Steel• Piping• Instrumentation• Equipment• Electrical• Insulation

• Concrete• Structural Steel• Piping• Instrumentation• Equipment• Electrical

Examples

Work-hours / Qty Installed Design-hours / IFC Quantity