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    Delivery of Major Capital Projects:: And, The Very The Good. The Bad. Very Ugly!

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    The document discusses lessons learned from delivering major capital projects over 113 years as a contractor. It outlines seven key lessons: 1) have a robust planning process from business case to execution; 2) decide key project details upfront before design; 3) set clear scope, execution plan, schedule and culture before project launch; 4) 80% of outcomes are determined in the initial 20% of planning; 5) properly manage contingency funds; 6) select contractors early based on capabilities rather than just price; 7) develop a collaborative project culture. It then describes examples of projects that exhibited "the good, the bad, and the very, very ugly."

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    Delivery of Major Capital Projects:: And, The Very The Good. The Bad. Very Ugly!

    Uploaded by

    RRHH
    104 views15 pages
    The document discusses lessons learned from delivering major capital projects over 113 years as a contractor. It outlines seven key lessons: 1) have a robust planning process from business case to execution; 2) decide key project details upfront before design; 3) set clear scope, execution plan, schedule and culture before project launch; 4) 80% of outcomes are determined in the initial 20% of planning; 5) properly manage contingency funds; 6) select contractors early based on capabilities rather than just price; 7) develop a collaborative project culture. It then describes examples of projects that exhibited "the good, the bad, and the very, very ugly."

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    Bechtel Group

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    The document discusses lessons learned from delivering major capital projects over 113 years as a contractor. It outlines seven key lessons: 1) have a robust planning process from business case to execution; 2) decide key project details upfront before design; 3) set clear scope, execution plan, schedule and culture before project launch; 4) 80% of outcomes are determined in the initial 20% of planning; 5) properly manage contingency funds; 6) select contractors early based on capabilities rather than just price; 7) develop a collaborative project culture. It then describes examples of projects that exhibited "the good, the bad, and the very, very ugly."

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    104 views15 pages

    Delivery of Major Capital Projects:: And, The Very The Good. The Bad. Very Ugly!

    Uploaded by

    RRHH
    The document discusses lessons learned from delivering major capital projects over 113 years as a contractor. It outlines seven key lessons: 1) have a robust planning process from business case to execution; 2) decide key project details upfront before design; 3) set clear scope, execution plan, schedule and culture before project launch; 4) 80% of outcomes are determined in the initial 20% of planning; 5) properly manage contingency funds; 6) select contractors early based on capabilities rather than just price; 7) develop a collaborative project culture. It then describes examples of projects that exhibited "the good, the bad, and the very, very ugly."

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    of 15

    Delivery of Major

    Capital Projects:
    The Good. The Bad.

    and, The Very Very Ugly!

    Riley
    RileyP.P.Bechtel
    BechtelChairman and CEO
    Chairman Bechtel
    and CEOGroup, Inc.
    Bechtel Group, Inc.
    10/6/2011 1
    and a bit about Mining & Metals
    World HQ for M&M: Brisbane
    > 400 major M&M projects completed on 7 continents
    - 42 major copper projects
    - 26 aluminium smelters
    - 200 mtpa of installed iron ore production
    - 36 major coal projects
    Ports, export facilities, slurry-concentrate pipelines
    Gold, nickel, zinc, cement, uranium, glass, diamonds, TiO2
    Over 1300 major studies
    Lunar mining & ocean manganese mining (PPPP...FS)

    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.


    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.
    10/6/2011 2
    Major Projects:
    Lessons learned for Owners over 113
    years as their Contractor...

    and learned
    and learned
    and

    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.


    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.
    10/6/2011 3
    1. Ready, aim, fire
    Natural/inviolate order to great projects!
    Business case
    Option analysis
    Definition + Lock-down
    Go!
    Stay on course!
    Back-end AFTER front-end
    Beware: fast-track, schedule-driven, concurrent
    EPC

    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.


    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.
    10/6/2011 4
    2. Decide what you want!
    Process
    Size
    Location
    Expandability
    Operability/maintainability

    before you start any


    detailed design

    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.


    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.
    10/6/2011 5
    3. Set four pillars before project
    launch/approval

    Scope Execution Schedule Culture


    (quantified) Plan +
    Estimate
    (detailed) (including
    contingency)

    1 2 3 4
    Set with the people accountable for execution
    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.
    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.
    10/6/2011 6
    4. 80% of outcome is determined in
    the first 20% of the project

    Four pillars (firmly set)


    Requisite team
    Clear, consistent objectives
    Culture, Culture, Culture...
    Knock-on effects of changes!!

    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.


    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.
    10/6/2011 7
    5. Project contingency
    Most misused/abused concept in project development
    Is for expected unknowns
    Most will likely be spent
    Should be transparent & jointly managed by owner &
    contractor
    Is NOT for:
    scope additions
    schedule changes
    force majeure events
    premature release

    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.


    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.
    10/6/2011 8
    6. Contract and Contractor
    Consolidate scope (physical and functional) AMAP
    Allocate risk and rewards sensibly: reasonable,
    balanced
    Motivate success
    Select early, for the duration (absent failure to perform),
    and based on evaluated (not just bid) contribution to
    project NPV
    demonstrated values
    demonstrated capability and capacity
    price

    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.


    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.
    10/6/2011 9
    7. Project culture
    The key to project success
    Led by owner executive & team
    Usually defeated by contracted gun-for-hire
    Must embrace mutual dependency for success,
    transparency, objectivity, respect
    Organic, dynamic...must nourish
    Learning organisation: support the crafts!

    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.


    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.
    10/6/2011 10
    So
    ...to The Good.
    The Bad.
    And The
    (Very) Ugly!

    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.


    10/6/2011 11
    The Good
    Well defined + robust objectives, plan, culture (4 pillars)
    Strong, mutually dependant teams w/ evident mutual
    respect & strong project culture, well nourished
    Good, timely decision-making with well-embedded swim
    lanes
    War on changes!
    Traction + momentum!
    Very strong ES+H performance against zero harm goal
    Quality outstanding
    Milestones well understood, embraced, met
    All stakeholders engaged
    Periodic, zippered health-checks by execs

    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.


    10/6/2011 12
    The Bad
    Pillars dont fit together and at best wobbly
    Plans unduly aggressive (to meet hurdle)
    Small contract packages, many seams
    Contractor selected late w/ low rates + high risk Xfer
    Contingency running low early
    Contractor under-manned/equipped
    Crossing swim lanes if any
    Change not discouraged
    Bad news managed

    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.


    10/6/2011 13
    The Very, Very, Ugly!
    Plan: 3 months < best ever on planet (to meet hurdle)
    Youll bring us another rock, then well decide
    Basic design changes during detailed design/construction
    Owner team (poorly) led by gun-for-hire
    Contractor directed not to use trend program
    Contingency spent by 50% construction complete
    Mushroom treatment of bad news
    Teams mainly throwing rocks at each other
    Safety abysmal, progress milestones a joke
    Labour revolts
    Hostile local community
    Contractor walks &/or becomes insolvent

    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.


    10/6/2011 14
    Questions?

    Riley P. Bechtel Chairman and CEO Bechtel Group, Inc.


    10/6/2011 15

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