9 Common Project Controls Mistakes Companies Make That Cost Them Millions In Lost Wrench Time

WRENCH-TIME [average hours/shift that a craftsperson spends directly working to execute construction, maintenance or shutdown activities]. Its estimated that a worker spends on average only 3.5 hours actually working during a ten-hour shift; this is a startling figure. With industry already lacking in skilled labor, wouldnt it make sense to try and increase worker performance? The savings of indirect support (travel, tools, safety, living allowance, etc.) in themselves would save millions in cost over-runs, not to mention a lower risk factor that comes from employing fewer people on the lease, people with the skills to perform the work safely. If you think its a union/labor attitude problem, think again. This type of thinking has gotten us nowhere in the past. So what is the problem? Well, in most cases, its a lack of management support. If you dont buy that, try this: its a lack of management understanding. We need to start looking at how management can employ the tools, training, supervision, and planning to help workers increase wrench-time. This means getting workers to a safe work environment as efficiently as possible and providing the tools, directions, materials, equipment and support as effectively as possible to allow workers to perform their assigned activities. All too often a worker is not provided with a timely work permit, safe work meeting, tools, materials, equipment or instructions sufficient to execute the work. They spend time waiting, looking for tools, looking for materials, waiting for support resources and getting frustrated with the management of the project. Add in coffee breaks, lunches, safety meetings, cleanups and youve just reduc ed the amount of time a worker spends on the tools by more than sixty percent.

So what is the solution? Ive spent hundreds of hours with Management Teams and Workforce Resources educating and coaching them in the development of strategies for defining work, planning work, scheduling work and coordinating field supervision with execution personnel. Ive found that in most cases the willingness to perform quality work is prevalent with all sub-contractors and trades. They are often as frustrated with not meeting performance targets as their clients. What is lacking is a relationship built on clearly defined expectations and trust. Contracts are often deficient in scope definition and performance indicators. A first-quartile company (best-in-class) does this by establishing a formal process for project management and control backed by best-practices in the form of policies, procedures, guidelines and management tools. Everyone from contract resources to in-house management personnel is educated in their purpose and use. Leadership and accountability comes from a Management Team that is established in the very early stages of the project to assist in defining the scope, determining the risks and establishing the key performance targets for safety, quality, worker performance, cost, and schedule duration. Through effective planning, contracting, procurement and scheduling, they can determine the correct number of indirect and direct resources required to execute the work. By establishing a projects controls group (as opposed to a projects monitoring group which is often the case), a company can drive a project schedule on a shift-by-shift basis, measure performance, trend data and make the necessary adjustments as required to control the outcome. This is referred to as dynamic schedule management. All too often projects go off the rails due to a lack of effective project controls. Here are the 9 project controls mistakes that always lead to lost wrench time. Companies DO NOT 1. .Use a formal project or turnaround management process that allows senior management to verify milestone completions at pre-determined stages prior to signing-off. This is often referred to as a Milestone Schedule or Project Gated Process.

2. .Establish a Management Team consisting of Senior Management (Leaders), a Project Manager who reports to Senior Management and a Core Team of Managers who represent each stakeholder department, i.e. Maintenance, Operations, Contracting, Administration, QA/QC, Materials, Procurement, Safety/Environment, Engineering, Logistics, etc. 3. .Use a formal risk/cost benefit analysis tool to determine project scope of work. In the case of a facility shutdown/ turnaround the development of the work-scope should be done by an Asset Management Team consisting of an Operations Manager, Technical/Engineering Manager and a Maintenance Manager. 4. .Develop the preliminary budget based on the scope of work determined by the risk/cost benefit analysis tool. The preliminary budget should be developed with estimates of direct wrench-hours, supported by indirect resource estimates using industry standard benchmark data. Typically indirect support is 115% of direct wrench-hours. 5. .Establish a formalized Management of Change process to limit scope growth and manage any changes in the budget. 6. .Establish realistic key performance targets for safety, quality, worker performance, cost, and schedule duration. Focusing on safety and worker performance will ultimately allow you to be successful in meeting the quality, cost, and schedule duration performance targets. 7. .A formal management process must allow for early identification of work followed by contracting and procurement. 8. .Most importantly, involve field execution supervision in the planning and scheduling process early in the project planning phase. Use of independent field execution supervision is also recommended. Remember, planning, scheduling and coordination are not positions, they are functions. Each function needs to be assigned to the appropriate resources, or teams, to manage. A team made up of independent or inhouse field execution supervision, safety personnel, operations personnel, and planning and scheduling personnel will deliver the best results when it comes to executing the work and meeting the key performance targets.

9. .Establish effective project controls and dynamically schedule your planned activities based on regular status intervals; i.e. shift-by-shift or daily for turnaround projectsweekly for construction projects.

total lost profit = lost revenue + costs incurred in reducing your loss - expenses normally incurred Lost revenue is calculated by subtracting the actual revenue earned in the claim period from the revenue you would have expected to earn if the disputed event had not occurred. Costs incurred in reducing your loss are costs incurred as a result of measures you took to minimize your losses, e.g. extraordinary use of your mobile phone or additional advertising. Expenses normally incurred are expenses that you would normally have incurred in conducting your business, e.g. commission for sales that would have been made, packaging for goods that would otherwise have been sold, cost of labor that would have been needed if business was able to function as normal.