Finding the Repeatability in One-Off Projects to Improve Performance

Abstract

Project teams generally believe that large oil and gas capital projects typically have unique scope and are comprised of highly customized elements. For this reason, when they hear about new technical frameworks, such as Project Production Management (PPM) (Shenoy & Zabelle, 2016), sometimes described as "applying manufacturing techniques to projects", it leads them to believe such methods only apply in scenarios with highly repeatable and predictable conditions in tasks and processes. Consequently, many experienced project professionals find it difficult to see how to apply PPM. They mistakenly believe that PPM implies a "manufacturing approach" and reject it as appropriate for the work activities in capital projects. We show that large capital projects in oil and gas have a lot of inherent repeatability, using a well-known analysis of processes and products called the Product-Process Matrix (Hayes & Wheelwright, Link Manufacturing Process and Product Lifecycles, 1979) (Hayes & Wheelwright, The Dynamics of Process-Product Lifecycles, 1979). We use this observation to show Project Production Management applies to the execution and delivery of all projects, large or small, customized or standardized, and will improve upon prior conventional project management practices. Project Production Management is based on the operations research foundation of production systems. We elaborate upon this foundation underpinning the PPM framework, showing how it allows one to take advantage of repeatability occurring in project work activities in different forms – knowledge, process and products. We start by identifying the assumptions of repeatable knowledge implicit in the disciplines used in conventional project management. We review the prior literature and taxonomy of a production system. All manufacturing systems are production systems. However, not all production systems are manufacturing systems. Manufacturing systems are but one type of production system. We explain that the belief that PPM is a simple application of line flow – also known as high volume manufacturing – is an overly simplistic characterization of PPM. A deeper analysis of the work activities of projects shows different types of production systems embedded within a typical project. Describing the work activities encountered in a project as a set of inter-connected production systems makes them amenable to the modeling and analysis tools of PPM, such as Little's Law and Kingman's Formula, which can be used to predict the limits of project execution and where best to manage variability by the strategic allocation of buffers such as capacity, inventory and time. We illustrate the concepts by identifying examples of repeatability present in an actual oil and gas capital project, an offshore rig.