The Construction Industry Institute (CII)
Wayne A. Crew, Director
Construction Industry Institute
Saudi Arabia
October 6, 2010
Today’s Presentation
• Who is The CII?
• What does The CII do?
• What is The CII’s value?
• Summary.
• A consortium of leading owners, contractors
& suppliers, and academia working to
improve the constructed project and the
capital investment process.
• An organized research unit of the
Cockrell School of Engineering at
The University of Texas at Austin
History
 Established as a recommendation from The Business
Roundtable Construction Industry Cost Effectiveness (CICE)
Project to address:
- construction research
- fragmentation of the industry
 Founded at The University of Texas at Austin in 1983 by 28
companies; now over 100 members.
 First structured owner-contractor-academic research
collaboration for the constructed project.
 The industry forum for the engineer-procure-construct process.
Purpose
To measurably improve the delivery of capital facilities.
Mission
 Enhance business effectiveness and sustainability of the
capital facility life cycle
 Expand the global competitive advantage of its members
through:
– active involvement & participation
– effective use of CII research findings, including CII Best
Practices
CII Principles
 Place a premium on safety, ethics, continuous
improvement (cost, schedule and quality), and leadership.
 Owner/contractor member balance.
 Lead industry improvement through an engaged
membership.
 Provide leadership development through member
participation.
 Promote a high level of knowledge transfer.
Owner Members
Abbott
Air Liquide
Air Products and Chemicals
Ameren
American Transmission
Anheuser-Busch InBev
Aramco Services
Archer Daniels Midland
Barrick Gold
BP America
Bristol-Myers Squibb
Cargill
Chevron
CITGO Petroleum
ConocoPhillips
Dow Chemical
DuPont
Eastman Chemical
Eli Lilly
ExxonMobil
GlaxoSmithKline
Hovensa
International Paper
Irving Oil
Kaiser Permanente
Marathon Oil
NASA
NAVFAC
NOVA Chemicals
Occidental Petroleum
Ontario Power Generation
Petrobras
Praxair
Procter & Gamble
Progress Energy
SABIC
Sasol Technology
Shell Global Solutions US
Smithsonian Institution
Southern Company
Teck Resources Limited
Tennessee Valley Authority
TransCanada Corporation
U.S. Architect of the Capitol
U.S. Army Corps of Engineers
U.S. Dept. of Commerce/NIST/
Building and Fire Research Lab
U.S. Dept. of Energy
U.S. Dept. of Health & Human
Services
U.S. Dept. of State
U.S. General Services
Administration
Contractor Members
Aker Solutions
Alstom Power
AMEC
AZCO
Baker Concrete Construction
Bateman Engineering
Bechtel Group
Bentley Systems
BIS Frucon Industrial Services
Black & Veatch
Bowen Engineering
Burns & McDonnell
CB&I
CCC Group
CDI Engineering Solutions
CH2M HILL
Coreworx
CSA Group
Day & Zimmermann
Dresser-Rand Company
Emerson Process Management
eProject Management
Faithful+Gould
Flad & Associates
Fluor
Foster Wheeler USA
Grinaker-LTA/E+PC
Gross Mechanical Contractors
GS Engineering & Construction
Hargrove Engineers +
Constructors
Hilti
Jacobs
JMJ Associates
KBR
Lauren Engineers & Constructors
M. A. Mortenson
McDermott International
Mustang
Omniware
Oracle USA
Parsons
Pathfinder
Pegasus Global Holdings
S&B Engineers and
Constructors
The Shaw Group
Siemens Energy
SNC-Lavalin
Technip
URS Corporation
Victaulic Company
Walbridge
Wanzek Construction
WorleyParsons
Zachry
Zurich
Membership
CII Organization
Board of Advisors
Executive
Committee
Knowledge Creation
Research
Committee
Academic
Committee
Breakthrough
Strategy
Committee
Strategic
Planning
Committee
Knowledge Dissemination
Implementation
Strategy
Committee
Professional
Development
Committee
Knowledge
Assessment
Knowledge
Management
Benchmarking
& Metrics
Committee
Knowledge
Management
Committee
Special
Functions
Branding
Implementation
Committee
Conference
Committee
Research
Teams
Product
Review
Board
Industry-Sector
Benchmarking
Communities
of Practice
Finance
Committee
Membership
Committee
Nominating
Committee
Alliances
Standing Committees
CII Executive Committee
•
•
•
•
•
•
•
•
•
•
•
•
David McKinney, Southern Co (Chairman)
Richard Haller, Walbridge (Vice Chairman)
John Dalton, Mustang
Glenn Doran, ConocoPhillips
Glenn Gilkey, Fluor
Clair Gill, Smithsonian
Joseph Gionfriddo, Procter & Gamble
James Harlan, Eastman Chemical
John Lambert, Eli Lilly
Keith Manning, Zachry
Michael McAreavy, Day & Zimmermann
Wayne Crew, CII (ex-officio)
Today’s Presentation
• Who is The CII?
• What does The CII do?
• What is The CII’s value?
• Summary.
CII Knowledge Processes
Organization, and
assessment of the
500-plus CII
documents and
publications.
Communities of
Practice
Assessment of the
impact of CII
practices through
benchmarking.
Knowledge
Assessment
Knowledge
Creation
Research to define best
practices, breakthroughs, &
industry norms.
Dissemination
through publications,
implementation
guides, educational
materials,
workshops, and
conferences.
Knowledge
Management
Knowledge
Dissemination
CII Research Team Process
CII Practices (Research Findings)
Project Planning Phase
• Attract and Maintain Skilled Workers
• Automated Identification
• Effective Use of Global Engineering Workforce
• Environmental Remediation Management
• Equitable Risk Allocation
• International Project Risk Assessment
• Leader Selection
• Modularization/Preassembly
• Organizational Work Structure
• Project Delivery and Contract Strategies
• Project Security
• Project Teams
• Technology Implementation
• Value Management
• Work Process Simulation
Design/ Construction/ Startup Phases
• Craft Productivity Practices
• Design for Maintainability
• Design for Safety
• Engineering Productivity Measurement
• Piping Design
Project Life
• Cost & Schedule Control
• Employee Incentives
• Fully Integrated & Automated Project
Processes (FIAPP)
• Management of Education & Training
• Managing Workers’ Compensation
• Project Health Assessment
• Small Projects Execution
Best Practice
A process or method that, when executed effectively, leads
to enhanced project performance.
To qualify, a practice must be sufficiently proven through
extensive industry use and/or validation.
• Front End Planning
• Partnering
• Alignment
• Quality Management
• Constructability
• Change Management
• Lessons Learned
• Disputes Resolution
• Materials Management
• Zero Accidents Techniques
• Team Building
• Implementation of Products
• Planning for Start-Up
• Benchmarking
CII Is Continuous Improvement
Implement
Best Practices
Conduct
Training
Select
Implementation
Tools
Measure
Results
Compare to
Competition
Identify Opportunities
to Improve
Research Reports
• Reports to CII.
• Written by principal investigators.
• Target audience: researchers,
academics.
• Final edit by CII technical writer/editor.
• Available online.
Research Summaries
• Reports from CII; short, concise.
• Target audience: executive management.
• Written by team members for industry view.
• Edited by CII technical writer/editor.
• Reviewed by CII Product Review Board (PRB).
• Printed; also available online.
Implementation Resources
• Reports from CII; “how to” guides
• Target audience: implementers,
users, PMs, managers.
• Primarily written by research team
members.
• Edited by CII technical writer/editor.
• Reviewed by CII Product Review Board (PRB).
• Printed; also available online.
Company Procedures
CII Best Practices Guide
CII Best Practice
Incorporated
Project
Procedure
xxx
IR 166-2
Implementation Model + Knowledge Structure Guide
• Provides a “Jump Start Kit.”
• Use CII Implementation Model to
drive your implementation program.
• Use the CII Knowledge Structure
to identify CII Best Practices to
adapt within your organization.
IR 166-3
CII Best Practices Guide
• All 14 Practices
Described.
• Assesses
Implementation Level of
a Best Practice.
• Benefits of Using Each
Best Practice.
• List of CII References for
Each Best Practice.
Fall Performance Improvement Workshop
Focused on:
• CII Product
Implementation
• Best Practices
Houston, Texas
November 8-10, 2010
• New Practices
• Case Studies
• Networking
CII Professional Development
• Executive Leadership Course
• Education Modules
• Best Practice Graduate Class
and Continuing Education
• Online Education and
Web Seminars
CII Benchmarking & Metrics
• 2,000+ Projects Entered Since 1996, > $110 Billion
• Confidential
• Inexpensive
– General Program included with CII Membership
– Self Evaluation, No Consultants
• Compelling Metrics
– Unique Measures of Best Practices & Productivity for
Engineering and Construction
– Not a ‘Black Box’ – Easy to Comprehend
– External Performance Benchmarks of Cost, Schedule, Safety,
Change, and Rework
CII Standard Metrics
Performance
• Cost Performance
• Schedule Performance
• Safety Performance
• Change Performance
• Rework Performance
• Construction Productivity
• Engineering Productivity
Practice Use
Practice
Use
• Front-End Planning
• Alignment
• Team Building
• Partnering
• Project Risk Management
• Change Management
• Constructability
• Zero Accident Techniques
• Planning for Startup
• Proj. Delivery & Contract Systems
• Benchmarking
CII Sector-Specific Research
• Current
– Pharmaceutical
– D/S Oil & Gas
– Oil Sands (COAA)
– U/S Oil & Gas
• Future
– Healthcare Facilities
– Others
Do Industry Specific Metrics Work?
CII Pharmaceutical and Biotech Performance Research
Cost Performance
Schedule Performance
6% Less
26% Less
Productivity Hierarchy
• Piping Engineering
Project-Level Productivity Example
• 11% Improvement (2nd to 1st Quartile)
1Q
Good
2Q
3Q
4Q
Poor
• 26% Improvement (4th to 1st Quartile)
Benchmarking Conferences & Workshops
• Essential for implementation of
reliable benchmarking process
• Updates improvements in the
online system
• Explains new metrics &
interactive reports
• Delivers annual training needed
to stay in tune with
improvements
• Ensures greatest benefit from
this valuable CII resource
CII PAL Global Network
Upstream O&G
Downstream O&G
Pharma / Biotech
Healthcare
General Program
Oil Sands
High Tech
Chemicals
Food / Beverage
Metals & Mining
FUTURE
Power
Aviation
Performance Assessment Laboratory (PAL)
• University-Based
– Industry, Faculty, and Students
– Economical
• Transparent Performance Norms
– Quantitative Performance Data
– 24/7 Access to Data
• Sector-Specific Research
– Regional Focus (PAL)
– Global Focus (CII Platform / Members)
CII Communities of Practice
Where We Were
Now
Knowledge Access
Knowledge Exchange
• Codified
• Stored
• Tends to be static
• Centrally available
Knowledge
Structure
• Created in Communities of
Practice
• Interactive and dynamic
• Driven by productive inquiry
LEARNING
Communities of
Practice
Current CII Communities of Practice
• Safety (March, 2007)
• Sustainability (May, 2007)
• Globalization (December, 2007)
• Partnering (June, 2008)
• Modularization (August, 2008)
• Information Management (June, 2009)
• Front End Planning (July, 2009)
• New Board of Advisors (June, 2010)
• Next Generation Leaders (June, 2010)
2011
Annual Conference
Chicago, Illinois
July 25-27, 2011
Keynotes ▪ Research Findings ▪ Case Studies
CII Web Portal
39
Today’s Presentation
• Who is The CII?
• What does The CII do?
• What is The CII’s value?
• Summary.
CII Leadership - Safety Performance
16
Industry*
14.30 14.20
Total Recordable Incidence Rate
14
CII
13.00 13.10
12.20
12
11.80
10.60
10
8
9.90
9.50
8.80 8.60
8.307.90
7.10 6.80
6.40 6.30
7.19
6.12
6
5.32
4.31
4
3.44 3.00
2.66 2.30
2
1.60 1.59 1.67
1.03 1.02
5.90
5.40
4.7
1.23 1.16
0.88 0.72 0.58 0.68
0.57 0.63
0
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
325
413
477
497
527
613
644
770
518
765
995
936
1,117 1,073 1,129 1,195 1,333 1,297 1,766 2,085 2,386
Year and Work Hours (MM)
*OSHA Construction Division, NAICS 236-238 (SIC 15-17)
Reflects OSHA Reporting Change
CII Leadership - Safety Performance
8
Industry*
DART (LWCIR) Incidence Rate
7
6.80
6.79
CII
6.10
6
5.80
5.50
5.50
5
4.90
4.50
4
4.40
4.20 4.10 4.00
4.00
3
3.80
3.60
3.40
3.40 3.20
2.80
2.50
2
1.90 1.55
1.45 1.14
0.63 0.81
1
0.55 0.45 0.31 0.41
0.27 0.26 0.23
0.46 0.36
0.33 0.25 0.21 0.23 0.20 0.16
0
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
325
413
477
497
527
613
644
888
591
763
1,122
936
1,117 1,073 1,129 1,301 1,419 1,100 1,724 1,969 2,359
Year and Work Hours (MM)
*OSHA Construction Division, SIC 15-17
*OSHA Construction Division, NAICS 236-238 (SIC 15-17)
Reflects OSHA Reporting Change
Reflects OSHA Reporting Change
An Owner’s Results
The membership of CII represents some of the most
successful companies in the world. Having a forum for
researching and sharing best practices from our industry
makes participation in CII a tremendous advantage.
The vision for CII is improvement of the
capital facilities sector, and CII member
companies are helping to drive that
success.
David McKinney
Southern Company
Cost Growth (Owner)
Average budget = 44 million, n = 127 (submitted after 2002)
25%
Cost Growth
Better
20%
15%
10%
5%
15.4%
0%
-5%
-10%
0
1
2
3
Minimal
Implementation
4
5
6
7
8
9
11
12
Robust
Implementation
CII Best Practice Usage
(Best Practice Index)
10
13
14
15
Schedule Growth (Owner)
Average planned duration = 131 weeks, n = 155 (submitted after 2002)
60%
Schedule Growth
Better
50%
40%
30%
20%
28.8%
10%
0%
0
1Minimal
2
3
Implementation
4
5
6
7
8
9
10Robust
11
12
Implementation
CII Best Practice Usage
(Best Practice Index)
13
14
15
A Contractor’s Results
CII is absolutely the best resource available for
continuously improving a project delivery system.
Participation by either an owner or contractor organization
in CII brings with it the valuable opportunity
for rapid personnel development—people
develop and execute projects, CII exposes
people to ever-improving project results.
Bernard C. Fedak
Aker Solutions
Value of CII Best Practices – Budget
(Contractors)
Average budget = 58 million, n = 81 (submitted after 2002)
120%
Budget Factor
Better
110%
100%
18.9%
90%
80%
70%
60%
1 Minimal
2 3
Implementation
4
5
6
7
8
9
Robust
10
11 12 13 14 15 16
Implementation
CII Best Practice Usage
(Best Practice Index)
Value of CII Best Practices – Schedule
(Contractors)
Average planned duration = 109 weeks, n = 81 (submitted after 2002)
Schedule Factor
Better
110%
105%
100%
5.6%
95%
90%
1 Minimal
2 3
Implementation
4
5
6
7
8
9
10 Robust
11 12 13 14 15 16
Implementation
CII Best Practice Usage
(Best Practice Index)
An Academic’s Experience
I have experienced first-hand the truly remarkable
collaboration between owners, contractors, and academics
at CII. Their efforts have produced new knowledge
and useful products that positively affect the industry.
The most valuable legacy of CII’s first
25 years has been the outstanding
personal and professional development
of the thousands of volunteer participants.
Edd Gibson
Arizona State University
# of Journal Article Publications of CII
Products
• 100 articles (sources: Web of Science, ScienceDirect, Engineering Village, Emerald,
EBSCO, and PI Input) – CII Research
12
# of Publications
10
8
6
4
2
0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
50
Non CII Research Referencing CII
Research
(# of Journal Article Citations of CII Products)
• 343 articles (sources: Web of Science, ScienceDirect, Engineering Village, Emerald,
EBSCO) – Non-CII Research
45
40
35
# of Citations
30
25
20
15
10
5
0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
51
Today’s Presentation
• Who is The CII?
• What does The CII do?
• What is The CII’s value?
• Summary.
Value of Best Practices
Theoretical Relationship
Performance
0.4
0.3
0.2
Better
0.1
0
-0.1
-0.2
4th Quartile
Low
3rd Quartile
2nd Quartile
Practice Use
1st Quartile
High
Project Budget Factor vs. Practice Use Index – Contractor
All Industries Global Data
Project Budget Factor=
N=73
Actual Total Project Cost
Initial Predicted Project Cost +Approved Changes
N=74
N=71
N=75
Practice Use Index
Increased Use of Best Practices
Performance Gap
Potential Cost Savings
Average project cost =
$81 MM
4th Quartile Use to 1st Quartile Use
0.0790
$6,400,000
3rd Quartile Use to 1st Quartile Use
0.0313
$2,500,000
2nd Quartile Use to 1st Quartile Use
0.0057
$500,000
4th Quartile Use to 2nd Quartile Use
0.0733
$5,900,000
Net Value Add for the Industry
 Measurable improvement in:
–
–
–
–
Safety
Cost
Schedule
Quality
 Predictable and sustainable capital project delivery
performance
– Reduced variability in project outcomes
 Improved life-cycle capital management
Net Value Add for the Member Company
 Improved capital delivery
 Transparent methodology to measure progress
– Best Practice Use
– Productivity
– Industry
 Smarter, more confident, better prepared employees
 Implementation tool set
 Forum for company to company and company to
academia relationships
 Industry intelligence and knowledge
 Recognition for employees
Net Value Add for the Member’s Employee
 Builds:
–
–
–
–
Knowledge
Leadership skills
Confidence
Industry intelligence
 Builds trusting relationships with customers and potential
customers
 Grows the employee’s peer group – owners, contractors
and academics
 Increases employee value to member company
 Forum for self actualization – accomplishing something
for the greater good
 Satisfy professional development requirements
Net Value Add for The University of Texas
and the Academic Community
 Research $ and topics
 Technical publications
 Graduate student support
 Access to industry leaders
 CII class instructors
 CII staff expertise
Thank You.