I was in a warm bed and suddenly I’m part of a plan!
Woody Allen ”Shadows and Fog”
Introduction
The old adage “Plan the work and then work the plan” is central to a project’s success,
i.e. maximising the value of the opportunity. The planning of a project has two elements:
- Strategy Formation and
- Work Planning.
Strategy Formation considers what the nature of the opportunity really is and develops
the strategies for its realisation. It is addressed in 3.1, Strategy Formation, and is one of
the fundamental project management processes. Once the strategy, including the
contracting strategy, for realising the opportunity has been developed then Work
Planning is needed to develop the activity networks, time line (schedules) and required
resources for the strategic plan’s realisation. Work Planning feeds from and back into the
ORP Roadmap which is the opportunity’s highest work plan document.
There is a difference between “planning” and “scheduling” as shown by their definitions:
Planning The laying out of a course of action to achieve the desired objective.
Scheduling The incorporation of time and resources into the plan to form a schedule
network from which the desired control mechanisms can be derived.
From the above, it follows that the term “Work Planning” includes both planning and
scheduling as the derivation of the activity network is a planning activity and the
addition of the time line to the network is a scheduling activity.
The two activities form part of the Activity Management Loop (AML) as shown in Figure 4.1.1. The AML applies not only to the whole of the Opportunity Realization Process but also to each phase in the process and to each activity within each phase, (Figure 4.1.2). The scheduling stage of the AML involves all actions necessary to schedule and obtain funding for the activities about to be executed. The execution stage includes resource mobilization and doing the work.
The analysis stage examines the outcomes and the lessons learned from each activity/phase so as to provide feedback for future opportunity/project teams.
Whatever the level of the scheduling activity, whether at Level 1 ORP Roadmap or whether at more detailed Levels (2, 3 or 4) it is essential that the outcome is benchmarked against Company and external experience.
Work Breakdown Structure
The Work Breakdown Structure (WBS) is the basis of the Work Planning structure besides leading to decisions on contracting strategy and organizational structure. Steps for developing a WBS matrix are:
Step 1
Divide the assets to be delivered by the project into their major components. In the example shown in the Figure 4.1.3, the ‘highest’ level of asset (Level 0 – planned at the Roadmap level) is a single development, named ‘Lucy’. This can be subdivided into three major components, namely, a drilling platform, a production platform and the pipelines, called Level 1.
These in turn can be divided into their main components at Level 2, and then into systems at Level 3, and finally into tagged equipment items at Level 4, (Figure 4.1.4) Branches need only go to the level of detail necessary for effective management of the work. An asset breakdown to Level 3 in the table would normally be adequate. However the breakdown to tagged equipment items is useful for Capex and Opex cost estimating/reporting purposes and for planning and scheduling procurement and construction.
Step 2
Identify the activity types which need to be done on each asset to realise the objectives. The EP Business Model defines the activities which are undertaken in an EP OU. These can be used for the activity breakdown and grouped, where necessary, to reduce the size of matrix, refer to Figure 4.1.5.
Step 3
The resulting intersection between the assets and the activity types in the WBS matrix identify the unique activities which need to be managed.
Figure 4.1.6 shows the intersections between the example asset and activity breakdowns in Steps 1 and 2 above.
Step 4
The lowest level of unique activities in the WBS are the individual work packages of the total
activity scope.
By following a methodical, consistent asset and activity breakdown the EP94.2000
classifications and structures facilitate management of activities and work in accordance
with the accountabilities and data structures advanced by the EP Cost Management
System (EP/COMS).
WBS applies not only to engineering facilities projects. For example, the development of
a new computing system, could be broken down as shown.
Estimate Cost, Time & Resources (CTRs)
Having established the extent of the activities as outlined in the hardware/function matrix
and the business activity matrix, the next step is to estimate the resources required to
undertake the activities in line with the proposed execution strategies, and to assess the
planned time and cost for each of the defined activities. CTR sheets should be developed
for each activity and combined into a CTR Catalogue , which will form the basis for
monitoring and controlling
the work at a later date.
These can be prepared as
successively lower levels of
the WBS, when required.
Figure 4.1.8 shows an
example of a CTR sheet.
Typical examples of the type
and extent of resources
required to execute an
activity might be the need for
materials, offshore vessels,
seismic crews, drilling rigs,
design engineers, welders,
draftsmen, etc. The type and
units of resource should be
compatible with the available
cost database, e.g. barge days,
man-hours.
The cost and time duration
for each activity are usually
based either on experience of
similar activities in the past, or on a best assessment for new activities. After completion
of the activity, it is important that the actual costs, duration and use of resources should
be recorded and retained on a corporate database for future cost estimating purposes.
Each Activity CTR should identify the cost, the manhours (or other resources) and the
duration of the activity. The following are a few points to watch if CTRs are to be used
effectively in controlling the master schedule:
• CTRs need to be at the appropriate level of detail for the planning of the activity.
• The approval process should have their own CTRs, e.g. if there are statutory or
given periods for government or partner approvals.
• At lower planning levels, roll-up of data to higher planning levels is an important factor.
Each CTR sheet should have an identified activity executor with single point
responsibility for executing the scope defined in the CTR sheet. In due course the
activity executor will be required to buy-in to the estimates in the CTR sheet.
The estimating process includes the following key steps:
- Estimate the cost of each component in the WBS.
- Add allowances and contingencies to obtain the requisite accuracy level.
- Add up the individual costs to obtain the total cost estimate.
- Phase the cost estimate using the activity schedule.
- Benchmark the estimate.
- Identify major value drivers for potential value improvement studies.
The availability of activity specific data, the degree of definition of the scope of the
activity, the number and nature of the building blocks, and the method used to estimate
the cost of each individual block will all impact on the overall accuracy of the estimate.
The need to formalise and document the estimating methods and to define the
individual building blocks is therefore crucial. This ensures cost estimates are both
consistent and reliable, with an accuracy commensurate with the purpose for which the
estimate is performed. All major assumptions relating to the estimate should be recorded
in the CTR catalogue. The CTR cost and schedule estimate should be benchmarked
against previous estimates and/or recent actual experience.(This is mandatory for projects greater than $US 100 million). This benchmarking provides a reference against which project plans
can be objectively judged and provides a consistent basis for the comparison of similar
project activities. Observed differences between similar projects or sub-activities can highlight
where an estimate of the cost, time or resources may be too optimistic or too conservative.
Benchmarks can also be used to define industry norms against which performance
shortfalls can be identified. This helps to identify the project targets to be set, in order to
achieve a ‘first-class’ performance. The benchmark quantities should be a measure of
efficiency, e.g. a ratio of “expenses” (i.e. inputs) over results. They have to be simple and
direct parameters, which can be developed for quick, high level project analysis.
Produce Activity Network
Having established an execution strategy, and a list of activities, with an estimate of the
cost, time and resources needed, the next step is to determine a preferred sequence for
carrying out the activities-the Activity Network. This should incorporate all known
dependencies and constraints between the activities.
The network is the model of the project, it provides the link between the strategic plan
and the schedule. It also provides the framework against which assumptions and ‘whatifs” can be tested.
It is one of the most critical documents
produced
by the
project and
it
needs wide understanding and
ownership if the
project team is to fully understand
its
role in the
development and
execution of the
project.
The most common scheduling constraints come
from the dependencies existing
between
activities (and
lower
level sub-activities and
tasks). The dependencies are usually easily
identified. Some activities will be sequential, i.e. one must finish before the next starts.
Other activities may be parallel, i.e. both are initiated and are required to be completed
at the same time. Some may partially overlap, i.e. an event part way through an activity
triggers off a new one. Other constraints; such as resource availability, weather windows
and contract considerations may also prevent an activity from starting or finishing until
some other requirements have been met.
Planning software packages are available which allow the interdependencies of the activities
to be modelled.
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In these packages, the duration and resources per activity can be programmed to provide
an overall activity duration and resource profile. Once the model is created, ‘what if ’
scenarios can be tested and optimisations easily performed, such as resource levelling and
critical path analysis.
Figure 4.1.10 and 4.1.11 show a typical precedence network and a linked bar chart
resulting in a schedule for a stand-alone project. At this stage the schedule can include
assumptions with regard to constraints from the interaction with other activities or
known resource constraints, in order to reflect the most likely schedule should the
project proceed to plan. (The constraints are detailed further in 4.1.5 following, when
the schedule is dove-tailed with all other approved activities in an integrated activity plan.)
Using the software package, various optimisations of the schedule can be performed, if
required. The most common is a review of the Critical Path to see if the activities on
the critical path can be further optimised to reduce the overall schedule. Also by
adjusting the start dates of activities in relation to the preceding network activity (i.e.
starting the next activity before the previous activity is fully complete or by inserting a
delay before it can start) can assist in optimising the schedule and/or resource
constraints. (Note that reduction of the critical path may change the actual activities on
the critical path)
What is Critical Path in Project Management?
Critical Path – the activities
that define the overall
duration of the network
activities. The critical path
will pass through asset
commissioning and start-up
activities. Far too often,
insufficient attention is paid
to those activities until too
late in the planning
process with a consequent
dislocation between
design, construction and
commissioning activity
needs. Commissioning and
start-up drive the activity
network from the back-end
of the project.
Instead of a single duration estimate, a pert analysis can be performed to assess the early
and late finishing dates for a project. For this type of analysis, estimates for the
optimistic, most likely and pessimistic duration for each activity are fed in and the
program one will calculate a probability distribution for the project completion date.
Activities can have one of four logical relationships with each other:
• None – totally independent of each other.
• Start-Start – can only start once the other activity has started.
• Start-Finish – can only start once the preceding activity has finished.
• Finish-Finish – can only be completed when the other activity is complete.
What is pert analysis?
Pert Analysis meaning – Planning, Evaluation and Review Technique.
The key to successful scheduling is the accuracy of the logic relationships of the
activities. The skill of the engineer and supporting planners in defining these
relationships is a critical success factor in scheduling.
What is meant by Schedulling?
As mentioned on several
occasions previously, not
only do the technical
activities need to be
captured in the network,
but so do the business
activities.
Milestone Events
Project progress is often reported against liquidated manhours in an S-curve. It is
essential that milestones be developed in the network as a cross-check on the accuracy of
progress reporting. Milestones can usually be defined at node points where a number of
activities reach completion at the same time.
Resource Histogrammes
The development of the network and the CTRs enables the calculation of resources to be
made. These histogrammes can then be used as part of the reiterated scheduling process
to challenge the network logic and to reanalyse planning assumptions so that a smoother
and more optimum schedule of resources can be achieved.
Schedule Activities
Introduction
The logic and scheduling of the Activity Network for a hydrocarbon project will be driven by
start-up and commissioning requirements (and, for existing assets, opportunities for access to
perform modifications) as well as by the scope of work and execution and contracting strategies.
What are contracting Strategies?
Activity network and
scheduling activities are
often carried out by
”planners” who are
engineers and are not
responsible for work
execution. While the
planner can perform a lot
of the detailed work and
bring valuable experience
to bear, it is imperative
that the responsible
engineer is fully involved
in, understands and owns
the scheduling outcomes.
Scheduling takes the Activity Network and adds times to each activity. The schedule then
provides the project with a framework to:
• understand
• approve
• monitor and control
• identify and assess risks.
Ideally, there should be one project plan, i.e. contractors’ plans should be included in the
project plan. While this is the ideal and for some projects it may be essential it may not be essential for others and careful thought is needed as to what goes into the master
schedule and what hangs outside it.
Planning links between
module fabrications and
hook-up need especial
consideration given the
possibilities of incomplete
modules being delivered
to the hook-up site.
Activity planning levels
Activity Plans (Schedules) for controlling and monitoring large activities are produced to
different levels of detail.
A hierarchy of several levels is needed for management to control a large activity (project) or a
series of smaller activities (projects), either of which may have more than 50,000 sub-activities.
Planning the Opportunity
Level 0 Overall Activity Summary. Includes all major milestones from start to
completion, for the total duration of the activity. This should be presented in
the form of the ORP Roadmap although it may have a supporting barchart.
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Level 1 Summary Schedules. Includes the main functional activities (e.g. design,
procurement, fabrication, construction, commission) for the total duration of
the activity for the main hardware items (e.g. platform or pipelines or onshore
plant) as well as significant business activities (e.g. approvals, strategy
formation, marketing etc.)
Level 2 Contract (or Work Packages) Schedules. The activity is broken down
into manageable work packages (e.g. substructure design/procurement/
fabrication/installation etc.) which are executed by various responsible parties
(contractors, internal resources, etc.), and reflect the chosen contract strategy.
Level 3 System Breakdown. The work is broken down into the various systems e.g.
Production Separation, Production Testing, Power Generation, Power
Distribution etc.
Levels 4&5 Levels usually within the contractors domain, for planning, executing
and controlling the work. Used for detailed planning, such as the scheduling
of work to be implemented during a plant shutdown. Typically on a daily
basis over a few weeks duration.
Activity planning tools
Computerised planning systems are available for the management of multiple project activities.
The Engineering Work Management System (EWMS) was specifically developed for the
management of engineering activities in a multi-activity environment. It has been
implemented in most of the major OUs but is now being superseded by SAP planning
systems as discussed in 4.7.5, Work Management Systems. The objective of both systems
is to provide project engineers with a tool to enable them to directly plan, manage and
control their own activities. They do this by enabling data to be shared between
scheduling, finance and procurement systems. In addition, they give the management of
multi-activities a direct insight into the status of their portfolios. This allows scenario
planning and sensitivity testing to be readily done in order to set priorities that will meet
the OUs business objectives.
Scheduling Checks
The following checks should be applied when performing scheduling activities:
• Check that the project objectives are clearly stated and understood by those preparing
the schedule (e.g. project policies, strategies, philosophies, objectives and constraints).
• Are the approval processes defined, both Company and Statutory?
• Is there an appropriate WBS – is it logical and does it avoid overlapping activities?
• Does each activity have an associated CTR sheet(s)?
• Is the critical path logic correct?
• Will small changes in duration alter the critical path?
• Are there any changes that can be made in assumptions that would
shorten/lengthen the critical path?
• Are there marked short-lived peaks in resource histogrammes?
• How does the overall duration and intermediate durations benchmark against
Company and external experience?
Scheduling Steps
The following steps are needed when scheduling the Activity Network:
• Identify activities at lower levels consistent with the hardware/function matrix adopted for the major activities.
• Determine activity data – define the scope of each activity in detail; calculate/estimate the cost, time and resources.
• Record the data for each activity on a CTR sheet.
• Combine all activity sheets into CTR catalogues.
• Derive a Level 1 (management) network.
- aggregate activity data up to Level 1 from lower level networks
DO NOT SPLIT ACTIVITY DATA DOWN TO LOWER LEVELS FROM LEVEL 1!- it is recommended to use precedence networks in preference to arrow diagrams
- concentrate on activities (not events)
- limit Level 1 activities to a maximum of 150
- keep the schedule simple
- Resource-schedule the network to reflect resource limitations, e.g. manpower, construction equipment and other resources.
- Smooth the resource peaks and troughs.
- Time-analyse the network to determine the critical activities (critical path) and the float on non-critical activities.
- Revise/optimise the network.
- If a different completion date is required than that given by the network logic, the network logic may need to be revised/optimised by re-scheduling sequential activities into activities parallel with each other wherever this is practicable.
- Re-analyse for resources and time.
- Produce control mechanisms, such as: milestone charts, S-curves, manhours, Value of Work Done and percentage completion.
Detail Execution of Schedule
Prior to commencement of work, it is necessary to prepare a detailed work programme
stating what, how, when and by whom the work activities will be executed, including the
necessary work permits.
This is the detailed task planning, which is usually done by the contractor involved in
the work. These detailed work programmes are typically at Level 4-5 and should be
planned such as their reporting fits into the overall project reporting structure.
Aspects such as quality assurance and control, permits and HSE need to be addressed by
the contractor and independently reviewed, if the activity is critical for the project.
Update CTR Catalogue and Cost Estimates
Update CTR Catalogue and Cost Estimates to reflect the ‘integrated’ execution plan.
The cost estimates should be updated and sufficiently detailed for an execution budget
proposal. Having developed the individual activity execution plans, the definition of the
scope and timing has improved. This should be reflected in the cost estimate, especially
in the required level of project allowances and contingency.
For example in development activities, the estimate would be a Level 3 estimate with an
expected accuracy of +15%, -10%.
Seek Release of Funds
Once all detailed planning is complete, the plans and cost must be submitted to the asset
holder for approval to commit funds and proceed with the work. How this is done in
practice will vary depending on the type of project and on OU procedures.
The asset holder is the budget holder for the asset and has to authorise release of funds
to commence work. This may involve a single authorisation of all necessary funds or it
may involve a sequential release of funds (commitment control) for different phases of
the project.
Reporting and Control Steps
Reporting it a fundamental prerequisite for control. Accurate reporting is a necessity for
successful project execution.
- Make a plan.
- base the plan on measurable output, e.g. cubic metres of concrete, tonnes of steel, etc.
- simplify the measured parameters as much as possible
- Measure and report the output on a regular basis (usually weekly but monthly at least).
- Compare measured progress with planned progress.
- Report: Are we or are we not doing as planned?
- are we on schedule?
- how can we remedy the situation if not?
- Effective reports should:
- be action based,
- lead to decisions,
- be current,
- be clear and be indisputable.
Existing Assets and Multi-Activity Planning
Optimize Activity Schedule (Existing Assets)
When implementing a project on an existing asset, the Project Management task is to
integrate the new project activities together with all of the other approved activities to be
executed on the asset, taking account of resource constraints, and to prepare the detailed
execution procedures.
The main steps are:
These steps are not necessarily consecutive, i.e. finishing one before starting the next.
They interact with each other and so some may be parallel or overlapping activities.
The purpose of listing them here as distinct steps is to highlight the content of each
activity which needs to be undertaken.
Each of these above steps lead to the development of a Work Schedule, which details
how, when and by whom project activities are to be undertaken and controlled within
the overall activity programme and resource constraints. Asset holder approval is then
required in order to secure internal and external approvals to commence the work,
together with the required funds and resources for the work.
Prioritise activities
The three parties involved in compiling an integrated plan for an existing asset (the asset
holder, the activity manager and resource asset holder) will each have their own different
goals and targets (Figure 4.1.13). Thus in order to agree on an ‘optimum’ integrated
project, or activity plan they need to establish criteria for prioritising approved activities.
Commonly used priority ranking criteria (not necessarily in order of importance) are:
- impact on income (e.g. production deferment)
- HSE benefits
- technical integrity
- increased oil/gas production
- prospect UTCs (e.g. $/BOE)
Setting priorities allows planners to fit projects into the overall asset, resource and activity work
plans. Once the priority of the project has been established, the project activities have to be
assigned, and activity milestones identified. Also the use of resources has to be optimized in the
context of total cost of ownership, e.g. balancing resource utilization with shutdowns and costs.
The integrated activity plan for each asset can in turn be reviewed and amended by OU
management to align the asset integrated activity plan with corporate strategies,
objectives and overall resource constraints. During these reviews, if it is often necessary
to make changes to the integrated activity plans, this will in turn force changes
to ripple down through the hierarchy of individual plans. Thus the integrated planning
process is a “bottom-up, followed by a top down” process.
Creating a multi-activity plan allows a manager to roll-up and integrate a number of
individual activity plans, each of which incorporates, different constraints. This manager
could be a project manager, who has a number of smaller projects to manage and
control. Alternatively, it could be the functional asset manager, who has to control
various maintenance, drilling and engineering activities on a facility. Or it could be the
resource asset manager, controlling the activities of a limited resource pool (e.g. seismic
interpreters, or drilling rigs). The multi-activity plan can be used to smooth resource
usage or to assess ‘what if … ?’ scenarios.
The steps involved are an extension of those previously discussed under “Scheduling
Steps” in 4.1.5 above for preparing an activity network:
- Time analyse the activity networks to determine the critical activities, and the float on non critical activities.
- Revise or optimise the network for a different completion date. This may require some sequential activities to be re-scheduled into parallel activities.
- Re-analyse the network for resources and time, using different combinations of activities and logic until the required resource/time constraints are met, refer to Figure 4.1.14.
- Discuss and agree the multi-activity schedules with affected asset holders.
- Once agreement is reached, produce a project baseline schedule for the new project(s), (Figure 4.1.15). These can include projections such as milestone charts, and S-curves of man-hours, vowd (Value of Work Done), percentage completion, etc., against which progress will be monitored and controlled.
The multi-project plan reflects the boundaries and constraints within which the project
manager has to execute the project. Approval of the project plan (and thus the integrated
plan) has to be obtained via the asset holder, who is normally responsible for obtaining all
internal and external approvals and securing the necessary resources and finance to undertake
the work.