Schedule Risk Analysis
for
Large Capital Construction Projects
Overview
3 Case Studies Using @Risk for MS Project
Commercial BioPharmaceutical Expansion
Greenfield BioPharmaceutical Site
Power Plant Forced Outage
3 Client Perspectives
Construction Management Firm
Gl b l Pharmaceutical
Global
Ph
ti l Manufacturer
M
f t
Mutual Company (Insurer)
3 Key Benefits of @Risk for MS Project
3 Lessons Learned for using Schedule Risk Analysis
©2008 Wachter Consulting LLC
Case Study 1: BioPharm Facility Expansion
©2008 Wachter Consulting LLC
Case Study 1: BioPharm Facility Expansion
Situation
Engagement
g g
Initiated @ Month 20 of 48 Month
Schedule (through product approval)
Owner lacked Integrated Schedule
AE in USA (Engineering and Procurement)
CM in NL (Construction and Commissioning)
Owner in
i USA and NL ((Qualification,
ifi
i
ProVal and RA))
Pressure put on CM because project was trending
later than originally planned (thought to be +2
months)
Owner did not realize the impact
p
of their decisionmaking in the Engineering and Procurement
processes
©2008 Wachter Consulting LLC
Case Study 1: BioPharm Facility Expansion
Approach
Develop
p Integrated
g
Schedule Risk Analysis
y Model
(SRAM) to clarify key interdependencies and
convergence milestones (short and long term)
Evaluate all project deliverables to understand actual
status – not reports (the proof is in the details)
Interview integrated Project Team members to
understand their issues, their perspective and their
recommendations
Present findings and recommendations to the Owner
Executive Management and Project Team
©2008 Wachter Consulting LLC
Case Study 1: BioPharm Facility Expansion
Results
Initial results (p
(predicted results 4 to 6 months late))
Owner “shock” – finger-pointing and search for blame
Take a break / Focus on facts / Get Executive Commitment
Rally to Team Integration – “Partners Pull Together”
Executive commitment and direction to Project Team
Scenario planning
Evaluated Multiple Scenarios for the Business
Quarterly evaluation of options and probability of success
Achieved Original Aggressive Project Objectives for
Product production and approvals (-2 weeks)
satisfying patient demand
©2008 Wachter Consulting LLC
Case Study 2: BioPharm Greenfield Facility
©2008 Wachter Consulting LLC
Case Study 2: BioPharm Greenfield Facility
Situation
Engagement
g g
Initiated @ Month 0 of 60 Month
Schedule (Business Case though product approval)
Owner understood and valued Integrated Schedule
and Schedule Risk Analysis
Owner wanted to use Schedule Risk Analysis as input
to key decision-making
decision making processes
Business Planning
Site Selection ((Fastest to Market Approvals)
pp
)
Project Planning
Contract Strategy
Tactical Project Execution Planning (EPCCQ)
Tech Transfers (PIII Development through Regulatory Approvals)
©2008 Wachter Consulting LLC
Case Study 2: BioPharm Greenfield Facility
Approach
Work with the Owner from outset to develop
p SRAM
and steer Integrated Project Schedule development
for top down (Level 1/2 to more detailed L3/4/5)
Focus Project Team on Short Term Milestones on WIN
Initiate 100 day planning workshops (Interviews, Risk
Identification Workshop Mitigations,
Identification,
Mitigations Expert
Recommendations)
Celebrate Short Term Successes and use this ritual as
a team-building sessions w/o calling it such
©2008 Wachter Consulting LLC
Case Study 2: BioPharm Greenfield Facility
Results
Initial results – Project Team was almost overwhelmed
Is the Schedule Objective achievable?
“How do we eat the elephant”?
100 day SRAM cycle established
Rhythm established for the Project Team(s) (Facilities and
Product Development)
E t bli h d connection
Established
ti
with
ith E
Executives
ti
and
d TTeam – followf ll
through on key issues where support was required
Milestones achieved and question answered – “One bite at
a time”
ti
”
Achieved Original Aggressive Project Objectives for
production and
Product transfer and commercial p
approvals (-10 weeks – original P20) satisfying patient
demand
©2008 Wachter Consulting LLC
Case Study 3: Power Company Forced Outage
©2008 Wachter Consulting LLC
Case Study 3: Power Company Forced Outage
Situation
Engagement
g g
Initiated @ Month 8 of 14 Month
Schedule
Owner built L4/L5 Integrated Schedule but Executives
lacked visibility of L2 milestones for key decisionmaking milestones (Precision does not equate to
y)
accuracy)
Surety wanted to use Schedule Risk Analysis as input
to planning for Reserves and feedback to Owner
Owner was “reluctant participant”
©2008 Wachter Consulting LLC
Case Study 3: Power Company Forced Outage
Approach
Translate 10,000 activity
y shutdown schedule into a
L2/L3 SRAM with milestones to communicate key
“convergence” milestones to Owner Executives
Interview Project Team and Surety Consultants to
understand current planning, relative benchmarks
and risks
Provide feedback to Owner and Surety
Help
p Owner improve
p
the schedule or mitigate
g
schedule
extensions
Provide input to Surety for Reserve Planning
©2008 Wachter Consulting LLC
Case Study 3: Power Company Forced Outage
Results
Initial results
Owner “shock” – 0% chance of schedule achievement and
P90 +8 weeks
Denial of impact
p
of convergent
g
paths
p
Surety planned to P90 results
30 Day cycle established
Owner established
O
t bli h d milestone
il t
ttracking
ki
Owner resistance to SRAM results and mitigations
Subsequent confirmation of predicted results
Project Completed 55 days later than plan at time of
engagement and at P90 of original model results
Surety had adequate reserves planned 2Q before
results were achieved
©2008 Wachter Consulting LLC
3 Benefits of @Risk for Project
1. Easy to Use
User Friendly - Table input
Easy to apply rules for factoring duration estimates
Easy to create Scenarios
Easy
y to evaluate impact
p
of Risk Mitigations
g
2. Excellent Communication Formats
Executives – “Get It by seeing it”
P j t Team
Project
T
Members
M
b
– facilitates
f ilit t ffocusing
i
P
Project
j t TTeams on
“What’s Important Now” (WIN) Milestones to deliver against
the overall Project Objectives
3 Great
3.
G
t Value
V l
for
f Money
M
Product Cost
Product Features
Flexibility for multiple applications
©2008 Wachter Consulting LLC
3 Lessons Learned
1. GIGO
Team Ranging Sessions alone are “Fantastic”
Individual Interviews are a Safe Haven for Input
Use multiple inputs including benchmark data
2. The Tool is Just one of Many Tools
Combined tools yields results
O
One
off many decision-making
d ii
ki
iinputs
t
Convergence milestones provide focal points
3 Owner Executive Buy-in
3.
Buy in is a Pre-requisite
Pre requisite
Owner Executives set the tone
Without
ou Buy-in
uy – it iss a
an acade
academic
c exercise
e e c se
Teams Commit when Executives Buy-in
©2008 Wachter Consulting LLC