Focused CCPM Implementation with the Project Execution ... · with the Project Execution Maturity...

TOCICO 2014 Conference

Focused CCPM Implementation with the Project Execution

Maturity Matrix

Presented By: Christoph Lenhartz, MBA, TOCICO certified, JonahGeneral Manager Europe, Middle East & Africa, Pinnacle StrategiesPast Chairman of the Board of TOCICODate: June 10, 2014

Objectives

• Understand the need for a CCPM-Based Project Execution Maturity Model and the flaws of benchmarking-based models

• Explore a case to understand details and benefits of focused CCPM implementation

CCPM Changes an Existing System

Goal/objectives and necessary conditions Procedures, processes, applications People, organization, management Measurements, performance

Performance Is a Function of Capability

BusinessCapabilities

Project Management Capabilities

BusinessMaturity

Business Project Management Maturity

Project ManagementMaturity

Ability Behavior Result

BusinessPerformance

ProjectPerformance

Project Management Maturity Models

• Purpose: Evaluate, compare and improve project management performance

• Over 30 different models, based on various paradigms• Rarely defined, but seem to be useful

» A Maturity Model is a special competence model defining different maturity levels in order to evaluate how a competence object fulfills the generally defined requirements for a class of competence objects«*

* Ahlemann, F., Schröder, C. & Teuteberg, F. (2005). Kompetenz- und Reifegradmodelle für das Projektmanagement: Grundlagen, Vergleich und Einsatz (Arbeitsbericht Nr. 01). Osnabrück: ISPRI - Forschungszentrum für Informationssysteme in Projekt- und Innovationsnetzwerken. P. 15

From Planning to Process Maturity

• Maturity models have emerged into more general process improvement approaches.

• Modern models are based on existing best practices• Using a maturity model should enable an organization to

− Determine what is and what isn’t working− Establish a case for action− Develop a plan for improvement

• The critical role of execution remains underdeveloped

Looking for a Breakthrough?

Today’s high-speed trainis not

the result of benchmarkingamong steam locomotives!

Capabilities Drive Business Value

Delivery Excellence

Maturity Model based on capabilities required to achieve a logically derived ideal state of execution effectiveness and efficiency.

Understand the Existing System

Case Study: FMC Technologies

FMC Subsea:• Leading global provider of technology solutions

for the energy industry• 16,000 employees, 27 production facilities in 16

countries• Site: Kongsberg (Norway)Business Situation: • Growing customer demand and delivery

expectations• Need to rapidly improve throughput and lead

time for its master control station (SCU) products.

• Lead time should improve from 24 to 14 months

About the Product Line

HydraulicActuators

InjectionChemicals

HydraulicPower unit

XmasTree

SubseaDistribution

Umbilical Cross Section

ElectricCables

Umbilical

MasterControlStation Electric

Power Unit

TopsideGateway

Hydraulic and Chemical Lines

SubseaControl

Unit (SCU)

SCUs (sometimes called master control stations) are the

hardware/software units that sit on the surface and control all of the subsea

oil & gas equipment on the ocean floor.

Source: FMC Technologies

What to Change

Average lead time: 24m

Best case lead time: 18m

Quoted lead time: 14-17m

Requested lead time: 8mRequired improvement:

minimum 7-10m

Demand Is Growing

Even higher need to improve throughput

Operational Challenges

Start early, without full kit and scope SCUs delay projects Dependencies with other systems and resources Rework

Resource shortages Statoil does “fast track projects” Tried everything…

Project Execution Maturity

Order Promising

Delivery Date MgtDelivery Date Mgt

Managing Bottle-necks

ManagingSchedule

RiksRemote

CollaborationRemote

Collaboration

PriorityControlPriorityControl

Collaborative Execution

ControlWIP

Functional AlignmentFunctional Alignment

ProbabilisticPlanning

Subcontractor Management

Capacity Management

TOC in One Word

Doing what should be done. Not doing what not should be done.

A Step-by-step Improvement

Ground Floor: Base Coordination

ControlWIP

Near term Work before you Team before you The process you own

1 – Functional Alignment

ControlWIP

1 2 4 3

“Show me how you measure me,I’ll show you how I’ll behave.”

(“If you measure me in an irrational way, don't complain about irrational behavior.”)

Eli Goldratt

Metrics are the backbone of the performance management system and align the team:1. What is the behavior we want?2. How do we know it is happening?3. What is acceptable and unacceptable?4. How to encourage/discourage behaviors?

2 – Control Work in Process (WIP)

ControlWIP

1 2 4 3

• Establish a Visual Board to expose all WIP and existing bottlenecks

• ‘Freeze’ half of all projects in work and apply freed up capacity to ‘active’ projects

• As projects complete, selectively ‘unfreeze’

• Start new projects as late as possible• Establish a ‘Release Control Manager’

to full kit new projects

1. Reduce overland2. Control release of work3. Eliminate multitasking4. Match capacity and demand

Visual Project Board (VPB)

Based on value stream map and additional interviews,first visual project board posted after 2 weeks

VPB and Metrics

Project Progress – Total Completion Major Impact Issues

Fixing Problems as they are Identified Failure to Escalate Early

3 – Priority Control

ControlWIP

1 2 4 3

Common Situations:• Matrix organizations with multiple

reporting structures• Shared resources left to decide

priorities for themselves• Functional goals of team members

differ• Friendships & favors• Weak leadership / absence of guidance

1. Educate organization2. Empower priority manager3. Convey priorities

4 – Collaborative Execution

ControlWIP

1 2 4 3

Working together to achieve shared goals:• Provide visibility• Focus on the future: Stop blaming

and get moving• Focus on the right things• Bust bottlenecks• Establish common goals• Solve the team’s problems

1. Accurate and shared assessment of the situation

2. The right people in the room3. Acting to achieve the goal

Second Floor: Improved Coordination

Move beyond local execution to other, remote teams Emphasis on flow and velocity Schedule risk-based priority system Deliver on time Medium term

Order Promising

Delivery Date Mgt.Delivery

Date Mgt.Managing

Bottle-necks

ManagingSchedule

RisksRemote

CollaborationRemote

Collaboration

4 1 2 3 4

Improved Coordination Steps

Order Promising

Delivery Date Mgt.Delivery

Date Mgt.Managing

Bottle-necks

ManagingSchedule

RisksRemote

CollaborationRemote

Collaboration

4 1 2 3 4

• Reliable delivery promises• Consider impact of shared resources• Monitor & manage interdependen-

cies within/across projects• Understand critical chain and

schedule risk

• Manage the uncertainty• Ambitious targets + strategic

buffering and buffer management

• Five Focusing Steps

Top Floor: Integrated Planning & Execution

Strategic focus: manage the portfolio/business Go beyond own borders Future-oriented – planning for and managing risks

and resources, and developing process capability for ongoing improvements.

Capacity Management

1 2 ./.

Integrated Planning & Execution Steps

Capacity Management

1 2 ./.

• Consistent planning methodology for consistent results

• Accommodate variations• Align project requirements & portfolio needs• Absorb shifting resource availability

Align interests• visibility into suppliers’ workflow to

enable early identification of problems• collaboration to synchronize supplier

and project work

Re-assessment Results

Tracking 54% improvement

AverageQuoted Lead Time

Results after 10 Weeks

Engineering Lead Time reducedNew estimate: 11 months from historic average of 24 months

54% improvement in engineering lead time at

little variation

Financial Impact*To

ct: ≥

*All figures: annual bottom line impact in million USD, conservative estimates

SCU impact with additional

sales• “More with same”• New sales

= new projects + aftermarket1.4

CDU impact with additional

• “More with same”• New sales

= new CDM projects + SCU aftermarket• What would be impact of

next bottleneck?

1.9 to 2.8

Improved effectiveness &

efficiency• “Same with less”• 27% reduction of project lead

times translated into cost savings2.1

Preserve and Grow the Good

» The struggle of maturity isto recover the seriousnessof the playing child. «

Friedrich W. Nietzsche (1844-1900)

The Project Execution Maturity Model

• Acknowledge existing system as constraint for any improvement

• Compare current capability to ideal state, based on logically derived CCPM execution model

• Focus on creating desired execution behaviors• Identify maturity levels per element• Prioritize focused implementation steps from least mature

element in lowest level upwardsResults:• Fast and effective implementation• Preserve and reinforce existing strengths• Higher maturity = Better operational and financial

performance

Questions & Answers

About the Presenter

Christoph Lenhartz, MBA, Jonah, TOCICO-certified, Certified Consultant (bdvb)is a Board Member and Past Chairman of TOCICO.In over 20 years he has acquired a wide-ranging, international experience inindustry, as a successful entrepreneur and a leader of management consultingteams in high complexity TOC implementations. Having lead strategic,business transformation, supply chain management and IT projects, hisexpertise also includes post-merger integration of supply chain operationsfor major international groups.As one of the leading TOC and management experts in Europe he is the General Manager Europe, Middle East and Africa for Pinnacle Strategies, a pioneer in operational excellence consulting based on TOC principles.The author of several articles on TOC and management topics in journals such as “Quality Progress”, he has translated and (co-)authored TOC-books. He is an appreciated speaker and enjoys teaching TOC and related topics.Christoph holds an MBA from Clemson University (USA), he graduated from the University Essen (Germany) as a Diplom-Kaufmann and has pursued post-graduate studies at Washington State University (USA).Christoph can be reached at clenhartz@pinnacle-strategies.com or toc@lenhartz.de

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