The Construction Industry Institute (CII)Wayne A. Crew, DirectorConstruction Industry Institute

Saudi ArabiaOctober 6, 2010

Today’s Presentation

• Who is The CII?

• What does The CII do?

• What is The CII’s value?

• Summary.

• A consortium of leading owners, contractors & suppliers, and academia working to improve the constructed project and the capital investment process.

• An organized research unit of the Cockrell School of Engineering at The University of Texas at Austin

History

Established as a recommendation from The BusinessRoundtable Construction Industry Cost Effectiveness (CICE) Project to address:

- construction research

- fragmentation of the industry

Founded at The University of Texas at Austin in 1983 by 28 companies; now over 100 members.

First structured owner-contractor-academic research collaboration for the constructed project.

The industry forum for the engineer-procure-construct process.

Mission Enhance business effectiveness and sustainability of the

capital facility life cycle

Expand the global competitive advantage of its members through:

– active involvement & participation

– effective use of CII research findings, including CII Best Practices

PurposeTo measurably improve the delivery of capital facilities.

CII Principles

Place a premium on safety, ethics, continuousimprovement (cost, schedule and quality), and leadership.

Owner/contractor member balance.

Lead industry improvement through an engaged membership.

Provide leadership development through member participation.

Promote a high level of knowledge transfer.

Owner MembersAbbott

Air Liquide

Air Products and Chemicals

Ameren

American Transmission

Anheuser-Busch InBev

Aramco Services

Archer Daniels Midland

Barrick Gold

BP America

Bristol-Myers Squibb

Cargill

Chevron

CITGO Petroleum

ConocoPhillips

Dow Chemical

DuPont

Eastman Chemical

Eli Lilly

ExxonMobil

GlaxoSmithKline

Hovensa

International Paper

Irving Oil

Kaiser Permanente

Marathon Oil

NASA

NAVFAC

NOVA Chemicals

Occidental Petroleum

Ontario Power Generation

Petrobras

Praxair

Procter & Gamble

Progress Energy

SABIC

Sasol Technology

Shell Global Solutions US

Smithsonian Institution

Southern Company

Teck Resources Limited

Tennessee Valley Authority

TransCanada Corporation

U.S. Architect of the Capitol

U.S. Army Corps of Engineers

U.S. Dept. of Commerce/NIST/Building and Fire Research Lab

U.S. Dept. of Energy

U.S. Dept. of Health & Human Services

U.S. Dept. of State

U.S. General Services Administration

Contractor MembersAker SolutionsAlstom PowerAMECAZCO Baker Concrete ConstructionBateman EngineeringBechtel GroupBentley SystemsBIS Frucon Industrial ServicesBlack & VeatchBowen EngineeringBurns & McDonnellCB&ICCC GroupCDI Engineering SolutionsCH2M HILLCoreworxCSA GroupDay & Zimmermann

Dresser-Rand CompanyEmerson Process ManagementeProject ManagementFaithful+GouldFlad & AssociatesFluorFoster Wheeler USAGrinaker-LTA/E+PCGross Mechanical ContractorsGS Engineering & ConstructionHargrove Engineers +

ConstructorsHiltiJacobsJMJ AssociatesKBRLauren Engineers & ConstructorsM. A. MortensonMcDermott International

Mustang OmniwareOracle USAParsonsPathfinderPegasus Global HoldingsS&B Engineers and

ConstructorsThe Shaw GroupSiemens EnergySNC-LavalinTechnipURS CorporationVictaulic CompanyWalbridgeWanzek ConstructionWorleyParsonsZachryZurich

Membership

CII Organization

Board of Advisors

Communities of Practice

Product Review Board

Knowledge Creation Knowledge Dissemination

Implementation Strategy

Committee

Professional Development Committee

Benchmarking & Metrics

Committee

Knowledge Management Committee

Special Functions

Branding Implementation

Committee

Conference Committee

Finance Committee

Membership Committee

Nominating Committee

Alliances

Research Teams

Academic Committee

Breakthrough Strategy

Committee

Research Committee

KnowledgeAssessment

KnowledgeManagement

Executive Committee

Strategic Planning

Committee

Standing Committees

Industry-Sector Benchmarking

CII Executive Committee

• David McKinney, Southern Co (Chairman)

• Richard Haller, Walbridge (Vice Chairman)

• John Dalton, Mustang

• Glenn Doran, ConocoPhillips

• Glenn Gilkey, Fluor

• Clair Gill, Smithsonian

• Joseph Gionfriddo, Procter & Gamble

• James Harlan, Eastman Chemical

• John Lambert, Eli Lilly

• Keith Manning, Zachry

• Michael McAreavy, Day & Zimmermann

• Wayne Crew, CII (ex-officio)

Today’s Presentation

• Who is The CII?

• What does The CII do?

• What is The CII’s value?

• Summary.

CII Knowledge Processes

Knowledge

Management

Knowledge

AssessmentKnowledge

Dissemination

Knowledge

Creation

Research to define best practices, breakthroughs, & industry norms.

Dissemination through publications, implementation guides, educational materials, workshops, and conferences.

Assessment of the impact of CII practices through benchmarking.

Organization, and assessment of the 500-plus CII documents and publications. Communities of Practice

CII Research Team Process

CII Practices (Research Findings)

Project Planning Phase

• Attract and Maintain Skilled Workers

• Automated Identification

• Effective Use of Global Engineering Workforce

• Environmental Remediation Management

• Equitable Risk Allocation

• International Project Risk Assessment

• Leader Selection

• Modularization/Preassembly

• Organizational Work Structure

• Project Delivery and Contract Strategies

• Project Security

• Project Teams

• Technology Implementation

• Value Management

• Work Process Simulation

Design/ Construction/ Startup Phases• Craft Productivity Practices• Design for Maintainability• Design for Safety• Engineering Productivity Measurement• Piping Design

Project Life• Cost & Schedule Control• Employee Incentives• Fully Integrated & Automated Project

Processes (FIAPP)• Management of Education & Training• Managing Workers’ Compensation • Project Health Assessment• Small Projects Execution

Best Practice

A process or method that, when executed effectively, leads to enhanced project performance.

To qualify, a practice must be sufficiently proven through extensive industry use and/or validation.

• Front End Planning

• Alignment

• Constructability

• Lessons Learned

• Materials Management

• Team Building

• Planning for Start-Up

• Partnering

• Quality Management

• Change Management

• Disputes Resolution

• Zero Accidents Techniques

• Implementation of Products

• Benchmarking

ImplementBest Practices

MeasureResults

Identify Opportunitiesto Improve

Select Implementation

Tools

ConductTraining

Compare toCompetition

CII Is Continuous Improvement

Research Reports

• Reports to CII.

• Written by principal investigators.

• Target audience: researchers, academics.

• Final edit by CII technical writer/editor.

• Available online.

Research Summaries

• Reports from CII; short, concise.

• Target audience: executive management.

• Written by team members for industry view.

• Edited by CII technical writer/editor.

• Reviewed by CII Product Review Board (PRB).

• Printed; also available online.

Implementation Resources

• Reports from CII; “how to” guides

• Target audience: implementers, users, PMs, managers.

• Primarily written by research team members.

• Edited by CII technical writer/editor.

• Reviewed by CII Product Review Board (PRB).

• Printed; also available online.

Project Procedure

xxx

Project Procedure

xxx

CII Best PracticeIncorporated

Company Procedures CII Best Practices Guide

IR 166-2Implementation Model + Knowledge Structure Guide

• Provides a “Jump Start Kit.”

• Use CII Implementation Model to drive your implementation program.

• Use the CII Knowledge Structure to identify CII Best Practices to adapt within your organization.

IR 166-3CII Best Practices Guide

• All 14 Practices Described.

• Assesses Implementation Level of a Best Practice.

• Benefits of Using Each Best Practice.

• List of CII References for Each Best Practice.

Fall Performance Improvement Workshop

Focused on:

• CII Product Implementation

• Best Practices

• New Practices

• Case Studies

• Networking

Houston, TexasNovember 8-10, 2010

CII Professional Development

• Executive Leadership Course

• Education Modules

• Best Practice Graduate Classand Continuing Education

• Online Education and Web Seminars

CII Benchmarking & Metrics

• 2,000+ Projects Entered Since 1996, > $110 Billion

• Confidential

• Inexpensive– General Program included with CII Membership

– Self Evaluation, No Consultants

• Compelling Metrics– Unique Measures of Best Practices & Productivity for Engineering

and Construction

– Not a ‘Black Box’ – Easy to Comprehend

– External Performance Benchmarks of Cost, Schedule, Safety, Change, and Rework

• Cost Performance

• Schedule Performance

• Safety Performance

• Change Performance

• Rework Performance

• Construction Productivity

• Engineering Productivity

Practice Use

• Front-End Planning

• Alignment

• Team Building

• Partnering

• Project Risk Management

• Change Management

• Constructability

• Zero Accident Techniques

• Planning for Startup

• Proj. Delivery & Contract Systems

• Benchmarking

Performance Practice Use

CII Standard Metrics

CII Sector-Specific Research

• Current

– Pharmaceutical

– D/S Oil & Gas

– Oil Sands (COAA)

– U/S Oil & Gas

• Future

– Healthcare Facilities

– Others

Do Industry Specific Metrics Work?

CII Pharmaceutical and Biotech Performance Research

Cost Performance

6% LessSchedule Performance

26% Less

Productivity Hierarchy

• Piping Engineering

Project-Level Productivity Example

Poor

Good 1Q

2Q

3Q

4Q

• 11% Improvement (2nd to 1st Quartile)

• 26% Improvement (4th to 1st Quartile)

Benchmarking Conferences & Workshops

• Essential for implementation of reliable benchmarking process

• Updates improvements in the online system

• Explains new metrics & interactive reports

• Delivers annual training needed to stay in tune with improvements

• Ensures greatest benefit from this valuable CII resource

CII PAL Global NetworkUpstream O&GDownstream O&G

Pharma / BiotechHealthcare

PowerAviation

High TechChemicals

General ProgramOil Sands

Food / BeverageMetals & Mining

FUTURE

Performance Assessment Laboratory (PAL)

• University-Based

– Industry, Faculty, and Students

– Economical

• Transparent Performance Norms

– Quantitative Performance Data

– 24/7 Access to Data

• Sector-Specific Research

– Regional Focus (PAL)

– Global Focus (CII Platform / Members)

Where We WereKnowledge Access

•Codified•Stored•Tends to be static•Centrally available

Knowledge Exchange

• Created in Communities of Practice

• Interactive and dynamic• Driven by productive inquiry

Knowledge Structure

Communities of Practice

LEARNING

Now

CII Communities of Practice

Current CII Communities of Practice

• Safety (March, 2007)

• Sustainability (May, 2007)

• Globalization (December, 2007)

• Partnering (June, 2008)

• Modularization (August, 2008)

• Information Management (June, 2009)

• Front End Planning (July, 2009)

• New Board of Advisors (June, 2010)

• Next Generation Leaders (June, 2010)

Keynotes ▪ Research Findings ▪ Case Studies

2011 Annual Conference

Chicago, IllinoisJuly 25-27, 2011

CII Web Portal

39

Today’s Presentation

• Who is The CII?

• What does The CII do?

• What is The CII’s value?

• Summary.

CII Leadership - Safety Performance

*OSHA Construction Division, SIC 15-17 Reflects OSHA Reporting Change

CII Leadership - Safety Performance

An Owner’s Results

The membership of CII represents some of the most

successful companies in the world. Having a forum for

researching and sharing best practices from our industry

makes participation in CII a tremendous advantage. 

The vision for CII is improvement of the

capital facilities sector, and CII member

companies are helping to drive that

success.David McKinneySouthern Company

Cost Growth (Owner) Average budget = 44 million, n = 127 (submitted after 2002)

Bet

ter

Schedule Growth (Owner)Average planned duration = 131 weeks, n = 155 (submitted after 2002)

Bet

ter

Bernard C. FedakAker Solutions

A Contractor’s Results

CII is absolutely the best resource available for

continuously improving a project delivery system.

Participation by either an owner or contractor organization

in CII brings with it the valuable opportunity

for rapid personnel development—people

develop and execute projects, CII exposes

people to ever-improving project results.

Value of CII Best Practices – Budget (Contractors)

Average budget = 58 million, n = 81 (submitted after 2002)

Bet

ter

Value of CII Best Practices – Schedule (Contractors)

Average planned duration = 109 weeks, n = 81 (submitted after 2002)

Bet

ter

An Academic’s Experience

I have experienced first-hand the truly remarkable

collaboration between owners, contractors, and academics

at CII. Their efforts have produced new knowledge

and useful products that positively affect the industry.

The most valuable legacy of CII’s first

25 years has been the outstanding

personal and professional development

of the thousands of volunteer participants.Edd GibsonArizona State University

# of Journal Article Publications of CII Products

• 100 articles (sources: Web of Science, ScienceDirect, Engineering Village, Emerald,

EBSCO, and PI Input) – CII Research

50

0

2

4

6

8

10

12

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

# o

f P

ub

licati

on

s

Non CII Research Referencing CII Research(# of Journal Article Citations of CII Products)

• 343 articles (sources: Web of Science, ScienceDirect, Engineering Village, Emerald,

EBSCO) – Non-CII Research

51

0

5

10

15

20

25

30

35

40

45

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

# o

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Today’s Presentation

• Who is The CII?

• What does The CII do?

• What is The CII’s value?

• Summary.

Value of Best PracticesTheoretical Relationship

High

0.4

0.3

0.2

0.1

0

-0.1

-0.24th Quartile 2nd Quartile 1st Quartile

Practice Use

Perf

orm

an

ce

BetterBetter

3rd Quartile

Low

N=73 N=74 N=71 N=75

Practice Use Index

Actual Total Project CostInitial Predicted Project Cost +Approved ChangesProject Budget Factor=

N=73 N=74 N=71 N=75N=73 N=74 N=71 N=75

Practice Use Index

Actual Total Project CostInitial Predicted Project Cost +Approved ChangesProject Budget Factor=

Increased Use of Best Practices Performance GapPotential Cost SavingsAverage project cost =

$81 MM

4th Quartile Use to 1st Quartile Use 0.0790 $6,400,000

3rd Quartile Use to 1st Quartile Use 0.0313 $2,500,000

2nd Quartile Use to 1st Quartile Use 0.0057 $500,000

4th Quartile Use to 2nd Quartile Use 0.0733 $5,900,000

Project Budget Factor vs. Practice Use Index – ContractorAll Industries Global Data

Net Value Add for the Industry

Measurable improvement in:– Safety– Cost– Schedule– Quality

Predictable and sustainable capital project delivery performance

– Reduced variability in project outcomes

Improved life-cycle capital management

Net Value Add for the Member Company

Improved capital deliveryTransparent methodology to measure progress

– Best Practice Use

– Productivity

– Industry

Smarter, more confident, better prepared employees Implementation tool setForum for company to company and company to academia

relationships Industry intelligence and knowledgeRecognition for employees

Net Value Add for the Member’s Employee

Builds:– Knowledge– Leadership skills– Confidence– Industry intelligence

Builds trusting relationships with customers and potential customersGrows the employee’s peer group – owners, contractors and

academics Increases employee value to member companyForum for self actualization – accomplishing something for the greater

goodSatisfy professional development requirements

Net Value Add for The University of Texas and the Academic Community

Research $ and topics

Technical publications

Graduate student support

Access to industry leaders

CII class instructors

CII staff expertise

Thank You.