Post on 12-Apr-2018
About Me
George Baskin
• Over 30 years of Experience
• Burns & McDonnell since 1999
• Principal, Project Development
• PhD, Engineering Science
– Mechanical Engineering
– Industrial Engineering
• St. Louis, MO
• Personal Life
– Wife & 4 kids
– Church musician
• Setting the Stage
– The life of a project
• Project Planning & Definition
– How are we going to do this?
– How fast can we do this?
– How much does it cost?
• You Need a Well Oiled Machine
– Developing & keeping team alignment
Topics
• Business Planning Phase *
– Identify a business need and plan how to satisfy.
• Front End Planning Phase *
– CAPEX allocation ready plan for project execution.
• Project Execution Phase
– Execute project design, procurement and installation.
• Operation Phase
– Start-up through decommissioning, dismantling, or other
disposal.
Project Lifecycle Phases
Stages & Gates
• What will be the product?
• How are we going to produce the product?
• How much product will we produce?
• What is the product market value?
• What is our anticipated revenue stream?
• What are our CAPEX and OPEX goals?
• Can we make a profit?
• Does this appear to be a viable business venture?
Business Planning Phase
Identify and Define the Business Case
• What will be our anticipated OPEX?
– Staffing plan - Rolling stock plan
– Materials sourcing plan - Maintenance plan
• What will be our required CAPEX?
– Facilities - Plant equipment
– Process control - Project bulks
• Is the project plan CAPEX allocation ready?
• Is the Business Case still valid?
Front End Planning Phase
Validate or Disprove the Business Case
0 Feasibility 1 Concept 2 Detailed Scope Design &
Construct
3
Feasibility Report
PDRI 1
Filter Options
Generate
Options
Initiate Phase
Project Definition
Package
PDRI 3
Cost & Schedule
Control Estimates
Finalize Scope
Definition
PDRI 2i
Preliminary Reviews
Preliminary
Design/Eng.
Initiate Phase Initiate Phase
PDRI 2
Concept Phase
Report
Evaluate and
Select Best
Alternatives
Conceptual
Scopes and
Estimates
Analyze
Alternatives
• Stage 1 Purpose
– Evaluate Feasibility
– Initial validation of the Business Model
• Stage 1 Package
– Conceptual Scope Definition
– +50/-30% Capital Cost Estimate
– Gate review to align the project team on deficient project
definition areas that need to be addressed during the next stage.
Pre-Project Planning Stages
• Stage 2 Purpose
– Evaluate and select technology alternatives
• Intermediate gate may be used to help select “the” alternative to
develop to final stage 2 level.
• Stage 2 Package
– Preliminary Scope Definition
– +/-25% Capital Cost Estimate
– Gate review to align the project team on deficient project
definition areas to be addressed during the next stage.
Pre-Project Planning Stages
• Stage 3 Purpose
– Fully define project scope
– Allocate personnel, resources and capital required to execute the
project
• Stage 3 Package
– Detailed Scope Definition
– +/-10% Capital Cost Estimate
– Gate review to identify deficient project definition areas that must
be addressed before the conclusion of stage 3 and CAPEX
allocation.
Pre-Project Planning Stages
• Improved predictability
• Safe construction and operation
• On schedule
• On budget, maybe even under
• Successful startup and operation
• May reduce the project total lifecycle cost
by as much as 25% to 30%.
Why Bother?
So, how do we get our
team aligned and
keep it aligned?
Alignment is achieved when the project team is
working toward common objectives.
A Well-Oiled Machine
Alignment is based on well-developed and
well-understood, common objectives.
Alignment is…
• Important for any project in any company
• Reduces miscommunication
• Builds and maintains team motivation
• Promotes cost efficient application of resources and capital
Especially critical for newer organizations with a
developing corporate identity and minimal legacy.
Alignment
• Conflicting Values and Goals
– Different team members bring the values, attitudes and goals
characteristic of their origin.
• Project Complexity
– Complexity can obscure objectives and raise the risk of selecting
an inappropriate objective.
• Conflicting Objectives
– Develop balance of objectives that reflects the owner’s interests
and is acceptable to team.
• Conflicting Guidance
– Project team members may be influenced by stakeholder /
managers from their functional group who provide guidance in
support of goals that conflict with the project objectives.
Barriers to Alignment
• Projects seldom evolve throughout their development
without surprises that require revisiting the balance of
objectives relating to cost, schedule, quality and safety
Changing Project Drivers
• Formation
– Owner resp.
– Business goals and
limitations
• Communication
– Written objectives to the
team
• Integration
– Negotiation
• Agreement
Setting Objectives
• Project objectives should be
formed early.
• Influence on cost and schedule
fades rapidly as the project
matures and details become
more rigidly defined and
resources committed.
Set Objectives Early
• Business/Financial (image, fundraising, burn rate)
• Marketing (turndown, quality, $/unit)
• R&D/QA (purity/quality, process control & flexibility)
• Technology (established, serial #1)
– Identify IP “crown jewels” that need protection
– Develop a project IP protection plan
• Capital Projects (design rate & CAPEX)
• Operations & Maintenance (safety, up-time & OPEX)
Rank the drivers honestly!
What Are the Drivers?
• Is it specific and identifiable?
• Is it oriented toward single-ended results?
• Is it set against a deadline?
• Is it attainable?
• Is it responsive to organizational needs?
• Is it controllable?
• Is it assignable to responsible parties?
• Will it be used to evaluate the success of the
project?
Objective Agreement Test