Earlier this month, Coreworx hosted its 6th annual Project Excellence conference in Calgary. The conference has become the flagship event for Coreworx in Calgary, delivering useful insights on how Coreworx clients and partners are improving the management of their major capital projects. This year, we were pleased to have speakers from The Highland Group, Suncor, and Enbridge to present their thoughts.
A diverse audience joined us at Fort Calgary with attendees representing many Calgary-based EPCs and
owners. Participants included project experts from organizations including Enbridge, Suncor, URS, Kinder Morgan, TransCanada, Nexen, Fluor, Statoil, and Cenovus, as well as a number of other up and coming oil and gas companies.
To start the morning, Chris Lange from The Highland Group discussed how changes in process can improve major capital projects. Chris provided comparisons between early mining projects and SAGD developments, explaining how the latter managed to reduce their cost overruns by becoming process-oriented. By taking a modular approach to design and construction, as well as implementing repeatable and standardized processes, SAGD projects saw a 32% cost overrun in comparison to the 65% overrun seen in mining.
Chris asked, “Where do you start process improvement?” His answer being that it’s complex, fraught with areas for miscommunication, and, if you have labour turnover in your project, you run into repeatability problems. This seems easy enough to solve by adding automated software to manage communications, change orders, and scheduling, as well as providing standardization so established processes don’t walk out the door during labour turnover.
Mark Croucher from Suncor presented information on how they are managing construction using interface management on their joint venture Fort Hills project. This could be considered a continuation of Kamil Sheik’s presentation from last year where he talked about pre-construction design with interface management. Mark shared some startling numbers from Independent Project Analysis Inc.’s (IPA) 2012 report: 78% of megaprojects were over budget by 33% and over schedule by 30%, and 65% had experienced long term operational difficulties. “We don’t have it nailed down yet, how to deliver a megaproject.”
Mark went on to explain how Fort Hills is now leveraging their existing interface management program (from design) to provide contractors with clarity on their roles and responsibilities before awarding construction contracts. His contractors are informed on exactly what they will be delivering and are provided schedule details so they are accountable for on-time or early delivery. As the client, Fort Hills has total oversight on changes throughout construction with the ability to accept or reject any changes and measure against dates in the project schedule on who is hitting dates and who is behind.
As the solution provider for the Fort Hills interface management program, it is rewarding to see Coreworx Interface Management in action and how different stages of construction are putting our solutions into use. Fort Hills has a thorough understanding of how to use interface management as a discipline and its benefits are starting to become exceedingly clear.
Shane Calder from Enbridge Energy closed the conference with his talk titled “Getting ahead of project show stoppers.” His message boiled down to the need for formalized communication. Shane explained that when you consider the number of stakeholders brought on to a major capital project and the vast number of potential communication pathways, you can run into a disconnect of common goals. By implementing an interface management program, organizations are formalizing business communication. They avoid breakdowns caused by lack of information and unclear accountabilities and ensure business needs are clearly communicated.
Shane also touched on how interface agreements can improve decision making. The interface agreement outlines the decision made, each party’s responsibilities, as well as all agreed upon deliverables or expectations. In Shane’s example, engineering specifications define a specific type of instrument to be installed, but due to design configuration or availability of product, this instrument would not give operations the information they require and, as a result, an alternative is installed. An interface agreement would capture all the required information to complete the change. If a new person was attached to the project, they could understand what was agreed to and why the change occurred. Essentially, these agreements can avoid gaps in expected deliverables during a project.
It was fulfilling, but not surprising, to see interface management emerge as the driving theme throughout the morning. Over the years, Coreworx has been committed to promoting the discipline by engaging in research with the Construction Industry Institute (CII) and the University of Waterloo, in addition to working with industry experts to develop the Interface Management Handbook. I look forward to seeing how complex projects change in the coming years; especially those projects that are adopting interface management strategies into their operational processes.