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Project Management National Conference 2011 PMI India

SYNCRONIZATION AND FOCUSED
APPROACH –“KEY TO MANAGING
COMPLEX PROJECT”

Abhinav
Materials Manager (Projects), Indian Oil
Corporation Limited

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Application of Select Tools of Psychology for Effective Project Management


Contents

1.1 Abstract...........................................................................................................................4
1.2 Keywords........................................................................................................................5
1.3 Introduction ....................................................................................................................5
1.4 Pipelining .......................................................................................................................5
1.5 Buffering ........................................................................................................................5
1.6 Buffer Management.........................................................................................................6
1.7 Critical Analysis of Critical Chain .................................................................................8
1.8 THREE PRECEPTS OF CRITICAL CHAIN................................................................8
1.9 Conclusion ....................................................................................................................13
1.10 References ..................................................................................................................14

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1.1 Abstract

Most of the capital intensive projects, especially in oil & gas, involving a large
number of stakeholders, are affected by project overruns, due to lack of
synchronization among the stakeholders and focused approach by the personnel
managing the project. Unforeseen requirements are a regular feature in oil & gas
projects where the project scope often undergoes repeated changes resulting in
changes in engineering and related resources.

The three major constraints in project execution are: uncertainties, limited
resources, and project complexity.

During execution, local priorities set in, which over shadows the original project
plan. It is like nobody knowing after all whose baby the project is and
playing of waiting games begins. A quick look at the delayed projects indicates
‘failure in resolving associated issues’ as the prime reason.

Synchronized Execution and Focused approach are the critical success
factors for managing such complex projects through:

• Focusing on fewer tasks at a time instead of keeping people busy.

• Re-align thinking to finish the project on time instead of finishing tasks on
time.

• Task prioritization rather than detailed schedules.

Synchronization ensures availability of desired resources, inputs (approval,
clarity in scope of work and specification) and timely decisions to mitigate
uncertainty; while Focused approach will help in constantly looking for an
opportunity to optimise the resources based on incremental benefits.

A Synchronized Execution and Focused approach takes care of real time
uncertainties and can be regarded as game changer where the best of
planning and tracking mechanisms cannot guarantee project success rate.

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1.2 Keywords

Critical chain, Pipelining, Buffering, Buffer management

1.3 Introduction

Most of the complex project especially in oil & gas sectors require detailed
design and engineering at the initial stages of the project which under goes
repeated changes, once the execution starts, due to mismatch in the designing
layout and the actual, which sets the ball rolling for real time uncertainty and
resource crunch.

The other major problem with the large scale complex project is the weak matrix
organisation which causes the local priorities set in and each functional
department will fight for their cause instead of completing the project on time.

Delay in timely decision to resolve the issues, consumes a large chunk of project
time. When uncertainties sets in, it opens many fronts leading to managers
losing control and taking more safety cushion in their approach, causing situation
more worse.

“Critical Chain” (CC) Methodology suggested by Dr Eli Goldratt to synchronize
execution by way of Pipelining (limiting no. of work stations for better resource
utilization), Buffering (Focus of project deadline rather on task by aggregating
buffers available), Buffer management( Focus on task which consumes buffer
faster) gives managers more thinking time and synchronization in execution. [1]

1.4 Pipelining

Figure 1: The first rule of synchronization is to limit the number of projects
in execution at any given time. [1] “Reprinted with permission from the Institute
of Industrial Engineers, copyright 2011. IIE is located at 3577 Parkway Lane,
Norcross, GA 30092.”

1.5 Buffering

Figure 2: The second rule of synchronization is to replace “hidden” buffers
with aggressive project plans and global buffers. [1] “Reprinted with
permission from the Institute of Industrial Engineers, copyright 2011. IIE is
located at 3577 Parkway Lane, Norcross, GA 30092.”

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1.6 Buffer Management

Figure 3: The third rule of synchronization is to prioritize tasks and look for
early warning signs by monitoring buffer consumption. [1] “Reprinted with
permission from the Institute of Industrial Engineers, copyright 2011. IIE is
located at 3577 Parkway Lane, Norcross, GA 30092.”

Major Areas of Concern in Complex project

The following are the Major Areas wherein indecision occurs as evident from
recently finished projects which gives headache to Managers and ultimately led
to delays :-

1. Technical Area:

• Scope change;

• Engineering and design change.

• Material requirement planning

2. Financial Area

• Improper estimation

• Statutory Risks

3. Organizational Area:

• Too many decision makers / conflicts

• Contractors failure

• Suppliers failure

• External Pressure

The factor scope change has been identified as the most vulnerable for the
project as it has high probability of occurrence as well as high severity. If
there is a change in scope of any of the work packages, there will be

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considerable implications on design, planning and implementation program.
These will cause considerable time and cost overrun in project. Implementation
methodology, fund risk, improper estimate and materials risk are rated as
medium with respect to probability of their occurrence as well as severity The
factors like land acquisition, technology selection, engineering and design
change, contractor's capability, vendor's capability and abnormal calamity are
also rated as medium probability but with less severity, as adequate planning for
the project under study prompts the executives to perceive these factors as less
vulnerable. However, project will experience major time and cost overrun, if any
of the above factors occur during project implementation. [2]

Most of the capital intensive, Oil and Gas projects, got delayed due to multiple
changes in scope, design & engineering. This is mostly attributed to insufficient
research / ground work done in execution related issues by OWNER / Project
Management Consultant (PMC) during detailed planning which leading to
improper estimation of job / scope, work packages not well defined and Improper
Scheduling. This causes heartburn at the execution time with fronts not available
to contractors, rerouting of the process line and more Material Take off (MTO).
This will finally results into resources not being available or idling of contractors
resources. The situation gets more compounded with delay in getting change
orders approval from top management (too many decision makers) which
requires elaborate explanation and justification as a safeguard against any future
audits/investigation.

A quick look at the delayed projects indicates ‘failure in resolving associated
issues of local priorities during execution’ as the prime reason for project
overruns. The issues may be diversion of resources allocated for a specific work,
delay in issuance of work-permits etc. At ground zero, indecision galore as
managers afraid of being targeted try to build in more time lag for their activities
and play waiting games by blaming others for their misfortunes instead of
synchronizing and focusing on completing the task in proactive manner. This
ultimately has a cascading effect on the project timeline.

Critical analysis of Synchronization and Focused approach

Synchronized execution and Focused approach based on “Critical Chain” (CC)
concept helped in increasing the rate of project execution by at least 20-30%.
Critical Chain based on Theory of constraints (TOC), focuses on the constraint
that blocks achieving the goal of company. Synchronization challenge is to get
the resources, decision, corrective actions available at right time at right place
throughout the project life cycle to avoid Project overruns. It is easier said than
done in a complex project. [3]

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1.7 Critical Analysis of Critical Chain

The Analysis of three precepts of critical chain will highlight its usefulness and
also its limitations in addressing the synchronization challenge.

1.8 THREE PRECEPTS OF CRITICAL CHAIN

• PIPELINING: To Limit the number of work-streams in execution to reduce
high work-in-progress (WIP) to concentrate resources on fewer streams of
work at a time. [3]

Resources multitask more if there are more work-streams and effective utilization
of resources without any proper control will be difficult; conversely if the work
streams are fewer resources can be channelized in a focused way. This will
partially meet the objective of synchronization challenge to get the resources
some time but not always.

The actual challenge lies in how you limit the work streams. Prioritization of tasks
should be based on schedule of work planned, resources available and critical
activity in the path. Contractors are given a time frame to complete their jobs and
fronts to be made available to them. Contractors also sub-contract for manpower,
equipment (crane), materials from suppliers, requires drawing approval from
PMC/ Owner to keep them going. Project review meeting revealed that major
issue during execution at site is the front availability. As a Project manager, the
major challenge becomes how you sequence the activities of contractors so that
they do not have any lean period or resource crunch rather limiting work–
streams.

Pipelining precepts will work for oil and gas complex project effectively only with
the focused approach, wherein the managers will be constantly looking for an
opportunity to optimise the resources based on incremental benefits.

• BUFFERING: Discard local schedules and measurements, and use
aggregate buffers to protect against uncertainties. Instead of finishing tasks
on time, focus on finishing the project on time. The final project deadline is
the only deadline that really matters. [3]

This is useful when work-break down structure is well crafted and activities slack
are well thought and everything is going as per plan. The precedence–successor
relationship followed in a focused way. Managers know that a task can be
performed early (early start) and focusing on its early completion of non-critical

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activities is necessary to meet the schedule date. Buffering uses “late start” and
feeding buffers provide an explicitly sized buffer to protect the overall project
schedule from late completion of the feeding paths; this maximizes the
advantage to the project, ensuring project schedule protection. The idea here is
to focus on aggregate buffer and focus on project deadline. Delhi Metro Rail
Corporation (DMRC) project [5], [6] is an example of such approach.

Remember there are critical activities with no buffer (Slack). Any delay / risk
inherent on these activities will lead to the project overruns. So without planning /
crashing for critical path activities, the Synchronization challenge objective will
be defeated. Continuous Focused tracking of the critical activities is the way
out. Known-Unknowns and Unknown-Unknowns are the order of the day in a
complex project which consumes contingency and management reserves
beyond the magnitude specified for the project. Qualified and Quantified key risk
Indicators for the critical activities and its early warning signals to be monitored
closely for possible risk mitigating strategies. Any activity which is not envisaged
critical might turn out to be critical during the final stage of project if not finished
in time.

• BUFFER MANAGEMENT: Instead of creating plans, focus on task
prioritization –use the rate of project buffer consumption to measure
execution, and give highest priority to tasks that are consuming buffer at the
fastest rate. Buffer-based priorities not only are synchronized, but they also
cause project status to be reliable, giving managers actionable information
they can use to focus resources on the tasks that are causing the biggest
delays in project completion. [3]. Ensuring availability of Critical resources and
their Management through optimized allocation to facilitate scheduling of
prioritized tasks are considered key performance indicators of a successful
project management.

This process measures drive actions that move the project toward the goal.
Buffer index which is the ratio of % of work completed and % buffer consumed
will help to focus on critical activities and resources can be diverted to these
activities.

Scheduling Issues in CC [4]: - One of the most controversial issues in CC is the
buffer calculation. The project buffer is conventionally set at one half of the length
of the critical chain and the activity estimates have 50% safety margins which
results in a shorter baseline schedule and an organized approach to protecting
the schedule against uncertainty.

Another problem is that CC is not stable during execution. While the CC includes
resource and precedence dependencies into account, the feeding buffers which
are supposed to protect the CC, are based only on network topology

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(Precedence relationships). This may be a problem as delay sets in with a
cascading effect that delays the start of a critical chain activity.

Behavioural Issues in CC [4]: - The planning tactics of CC assume that
behaviours can be modified and addresses two specific behaviour that increase
lead times. They are the students syndrome, meaning that humans with time
buffers start their tasks later and waste safety margins, and Parkinson’s law,
meaning that humans tend not to finish their tasks ahead of time even though
they have chance to do so. It is contented that student syndrome and
Parkinson’s Law tend to make milestone “self-fulfilling prophecies”. This causes
late start of activities resulting in higher risk of delays and loss of time
advantages, because early finish dates are not reported.

Synchronization and Focused Approach Success

Despite of some limitations; Synchronization and Focused Approach will remain
the key and critical success factor for managing complex projects.

This can be substantiated by the recently concluded Indian Oil Corporation Ltd
(IOCL) -Panipat Refinery Additional Expansion Revamp Project (PRAEP) to
augment the capacity of Panipat Refinery from the existing 12 to 15 MMTPA,
regarded as the fast track project, got delayed midway due to more shutdown
days (Critical for Project Viability as longer shutdown will lead to huge
production loss) envisaged during detailed engineering as compared to initial
engineering, is a perfect example of how the Synchronized execution and
Focused approach brought the project back on track.

The site execution including shut down was very complex due to the fact that the
execution required working with utmost safety as the revamp was being done
with the existing running units and any delay in hooking up the new units during
shut down would lead to huge production loss.

The revamp project execution involved two stages with revised configuration to
keep the initial envisaged shutdown days.

• Pre shutdown: For enabling jobs like piping hook ups and pipe rack structural
jobs.

• Shutdown: For completion of the entire project.

The PRAEP project had applied the idea behind the three percepts of critical
chain to a certain extent by prioritizing the tasks related to revamp of existing
mother units CDU (Crude distillation Unit) / VDU (Vacuum Distillation unit) as the

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shutdown was planned for these units in comparison to other units involved in
this project. Based on the final project deadline the resources were channelized
to expedite the following critical activities in CDU/VDU:-

• Underground & Aboveground piping drawings.

• Welding and Radiography of Piping.

• Extension of original pipe-rack by one more tier to lay pipelines so that
welding work continued during running of mother units.

The project was in conventional mode with EIL as the PMC. The complete
synchronization and focused approach of the Project team, PMC and Suppliers
helped the completion of procurement well within time, which was around 80-
85% of project cost. Project team and PMC ensured timely approval of drawings,
resolving issues and constraints across the board with suppliers, timely
payments of bills ensuring smooth cash flows to suppliers which ultimately
helped the suppliers owning the project to ensure timely delivery of materials.

The successful site execution of the project only happened due to the full
involvement of the Project team, contractors, PMC and other stakeholders with
no major hiccups in front availability. Focused approach based on incremental
benefits help the front line managers to strategise, innovate, and optimize
resources. The major activity involved in the complex PRAEP Revamp Project
was huge quantum of welding load (measured in terms of Inch-Dia for
piping). Based on Strategic, innovative and cost benefit analysis 90% load of
shutdown was shifted to pre-shutdown. Piping Circuits were reviewed with core
group/ Process and clearances were obtained to allow welding in running plant
with due safety precautions to reduce Shut Down welding quantum. This enabled
the shut down within the stipulated time frame avoided the production loss. [7]

The idea here is to explain that this project required best of planning and tracking
mechanisms due its complexity but its success could be guaranteed only by the
synchronized and focused approach of various stake holders.

One of the success factors of this project is attributable to the retention of most of
the members of project team who were earlier involved in the successful
commissioning of similar project at Panipat Refinery.

A deep insight into the some of the delayed projects in oil and gas sector
indicates that one of the main reasons for lack of synchronization and focused
approach at later stage of project is how company organizes its project initially.

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An analogy between delayed projects in oil and gas sector and successful
DMRC project [5], [6] gives a fair idea of such distinction in organizing a project.

Figure 4: Different Approaches in Organization of project

Lessons learnt for Enabling Synchronization and Focused approach

• Project Organization: - For any high value and complex project, it should be
formalized as pure project organization and as a separate entity .

• Selection of Project Manager: - A full time dedicated with proven track
record Project Manager should be chosen, if required from outside the
organization with no chopping and changing.

• Selection of Project Team: - Create Heavy Weight Team with personnel
who are having past project experience, conflict resolver, team builder.

• Sacrosanct Targets: - Complex Projects should fix up the realistic targets
instead of benchmarked targets of similar projects.

• Autonomy for Decision making and Conflict Management will help in
resolving the issues and taking risks in the larger interest of project.

• Change of Corporate culture: - “We mean business” attitude is required.

• Detailed Engineering taking care of execution constraint will avoid repeated
engineering changes

• Clarity in scope of work and specification will reduce the rework.

• Micro level planning for execution is required to ward-off unknown risks.

• Quality Man Power and Vendor Availability: - For remote located projects,
development of Ancillary industries and training schools should be part of pre
project activities.

• Contractors as partners: - Timely payment to contractors and considering
contractors as partners with risk sharing.

• Boundary Management: - Boundary management with all the stake holders
to ward-off any future problems.

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• Lean organization: - Done away with TOP heavy structure in projects.

• Time is money:- “Time saved is money saved”

• Reward and recognition to personnel.

• Development of core competency in executing projects

Above all Top leadership commitment is must for the success of complex
project and how you manage synchronization of “soft part” of the project.

1.9 Conclusion

The failure of various projects affected by overruns like Common Wealth Games
2010 and success of project like Delhi Metro only highlights the fact that
Synchronized and Focused execution is the way forward against the traditional
way of doing the project which involves wastage of time due to waiting game
syndrome.

Lack of accountability, Governance and risk mitigating strategies as evident from
the fiasco of Common Wealth Games 2010 brings the two invaluable facets of
project management, Project Governance and Project risk management, at
the fore front. The role of project governance is to provide a decision making
framework that is logical, robust and repeatable to govern an Organizations
capital investments while the role of risk management helps the professionals to
recognize the benefits of formally documenting, objectively analyzing and
transparently managing risk. Organizations are now grooming frontline managers
(a kind of bottom up approach) to get them well versed with tools and
techniques of project management. “Synchronization and Focused approach
is like icing on the cake for the project success”.

Synchronized and Focused approach helps in conflict resolution among
stakeholders by focusing on the bigger issue of completing the project in time as
a well-knit unit instead of competing with each other. A Synchronized and
Focused approach is indeed a game changer for managing complex projects
and ensures timely payback.

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1.10 References

1. Gupta, Sanjeev, “Synchronized execution for speedy projects”,
Industrial Management, Jan2010, Vol. 52 Issue 1, p14-18, 5p, 1 Color
Photograph, 3 Diagrams, 1 Chart; (AN 47732463)

2. Dey Kumar, Prasanta, “Decision support system for risk management”,
Management Decision. London: 2001. Vol. 39, Iss. 8; pg. 634, 16 pgs

3. Gupta, Sanjeev, “More Success In Managing Pipeline projects”,
PIPELINE AND GAS JOURNAL –HOUSTON , AUGUST 2010 VOL 237 NO.
8

4. Lechler, Thomas G.; Ronen, Boaz; Stohr, Edward A, “Critical Chain: A
New Project Management Paradigm or Old Wine in New Bottles?”,
Engineering Management Journal, Dec2005, Vol. 17 Issue 4, p45-58, 14p;
(AN 19794883)

5. Ramachandran, Ramesh, “On the fast track”, published in Spectrum
magazine of The Tribune of June 2, 2005.
http://www.tribuneindia.com/2005/20050102/spectrum/main1.htm

6. “The Delhi Metro Project: Effective Project Management in the Indian
Public Sector”: a Case study of IBS Centre for Management Research
(ICMR), 2006, 21p; Case code :PROM0052006
http://www.icmrindia.org/casestudies/catalogue/Project
%20Management/PROM005.htm

7. Inputs from Project team of IOCL-PRAEP project (Author was also a part of
the project team)

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