WorkFace Planning is Here.
It's considered a Best Practice of the Construction Owner's Association of Alberta.
It's about getting the right things to the right people at the right time to save money and improve productivity in your large-scale construction projects.
Take a few minutes to click through this website and get an overview & executive summary of WFP as well as in-depth information about the WFP model and processes (from high-level theory to practical application) with implementation guides and sample WFP-specific document templates and reference sheets.
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The Construction Owners Association of Alberta (COAA) is committed to examining the issues facing the Alberta construction industry today and delivering practical solutions to safety, workforce and project challenges that can be implemented by all construction stakeholders. One of these issues is cost overruns on large oil and gas construction projects. It is not uncommon for large construction projects to experience cost overruns of up to 100% of the original cost estimate. While these projects are normally successful from an operational standpoint the cost overruns are a cause for concern.
COAA commissioned a study to investigate productivity deviations in heavy industrial construction projects (Strategic Services Division, Alberta Human Resources and Employment 2004). The study found that projects up to $300 million were considered relatively easy to manage and for that reason large projects will be defined as greater than $300 million. While there is no reason to believe this model would not work on smaller projects the recommendations are directed at large projects.
There is no single cause for cost overruns on large oil and gas construction projects. The Construction Industry Institute have identified many reasons for cost overruns including but not limited to; front end planning, design, procurement, start-up and operations, human resource issues, organization, project processes, and project controls. A study conducted for the Alberta government by McTague & Jergeas (2002) also found that cost overruns on large construction projects were the result of many factors.
COAA members have identified insufficient planning as a possible contributing factor to cost overruns. In an internal study of a large construction project, crews were observed and the time spent actually building was only 37%. The remaining time was spent waiting for materials and equipment, traveling to the area, taking early breaks, and planning how to do the work. When crews do not have all the necessary tools, equipment, materials, labour, drawings and information, then the productivity will suffer. This is a systems problem and not a labour issue.
On a typical large oil and gas construction project, 40% of the total cost is normally due to direct and indirect labour. A COAA focus group reviewed the productivity losses due to wait time, travel time, early break time, and planning time and estimated that up to 25% of the lost time could be recovered through more detailed execution planning.
Alberta Oil Sands
Alberta oil sands are recognized as one of the largest reserves in the world, at 174.4 billion barrels (CERI Report page 5 reference 1), and this places Canada’s reserves as second only to Saudi Arabia at 261.8 billion barrels (CERI Report page 5 reference 2). Current production is 1 million barrels a day and based on current projections will reach 4 million barrels per day by 2017 (CERI 2004). With oil at more than $100 US a barrel and recent instability in the world oil supply, there is considerable economic pressure to develop the heavy oil resources of Alberta. According to the Department of Alberta Economic Development (2008), there is over $150 billion in large oil and gas related projects either planned or under construction.
There are two main types of heavy oil production; mining and in situ production. When the reserves are close to the surface it is possible to mine them however when the reserves are deeper, generally about 75 meters, in situ production is required. In situ production involves methods such as steam injection through vertical or horizontal wells (CERI report).
Commercial production of heavy oil in Alberta began in the late 1960’s with the first commercial mining project completed in 1967 and operated by Great Canadian Oil Sand (GCOS), now Suncor Energy Inc. Syncrude had the next commercial mining project which was completed in 1978. The first in situ operation was completed in 1983 by Imperial Oil Resources. Early developments were focused on reserves close to the surface that could be mined but since 1995 in situ production has increased and, as of 2002, surface mining accounted for 64% of production and in situ for the remaining 36% (CERI report page 1 ref 3). In situ recovery is expected to increase since 90% of the oil sands in Alberta are too deep to be mined (CERI Report page 17).
It is important to understand that while oil sands represent 174.4 billion barrels of reserves, all existing Canadian conventional reserves are estimated at only 6.9 billion barrels (CERI Report page 5 reference 1). While the Alberta oil sands represent a large source of reserves, they are more costly to produce than conventional sources and require a price of at least US$18/b to be commercially viable (CERI Report page xviii). With oil prices of US$50, Alberta oil sands are an attractive investment opportunity. However investors may be unwilling to invest in new projects because of recent cost overruns on current projects (CERI Report page 2).
As stated earlier, according to the Department of Alberta Economic Development (2008) there are over $150 billion in large oil and gas projects planned or under construction These projects are all at least $300 million dollars and according to the study conducted by the Strategic Services Division, Alberta Human Resources and Employment (2004) are more difficult to manage and at higher risk of experiencing cost overruns.
Breaking Down Projects
The concept of breaking down projects into manageable work packages is one of the fundamental concepts behind the Project Management Body of Knowledge. The Project Management Institute (PMI) recommends using work breakdown structures (WBS) to subdivide a project into smaller manageable pieces (PMBOK 2004). These recommendations are expanded in the “Practice Standard for Work Breakdown Structures” (PMI 2002) and a section of this document was devoted to WBS level of detail.
PMI recommend that the WBS development process should achieve “…increasing detail until a level is reached that provides the needed insight for effective project management” (PMI 2002 page 15). To assist in applying this standard, PMI (2002) has developed 15 questions to aid in determining the appropriate WBS level of detail. The Construction Industry Institute (CII) also recommended breaking projects down into manageable work packages in their report “Work Packaging for Project Control” (CII 1988).
In 1987 the Construction Industry Institute (CII) developed a report “Work packaging for project control”. It had three main purposes (CII 1987 page 1):
1) Describe systems used in industry for defining work packages during design, procurement and construction.
2) Provide guidelines for using work packaging for project control.
3) Provide a framework for integrating work packages across design, procurement, and construction phases.