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do you need special training course in Oil & Gas? see this and contact me for more info: sadegh.yazdani@ nodoc. eu
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Cost Management
Training &
Certification
Catalogue 2013
Tailore-Made
Tailor-made Courses
Tailor-made courses are designed to meet the specific requirements of your staff and organization. They can be delivered at your preferred location and date(s), and are thus a very cost effective solution if there is a large group of staff to be trained. They can take several forms:
A training course focusing on the specific situation, challenges and opportunities facing your organization
Combining modules from our different standard courses to meet your unique learning and development requirements
Develop a completely new course to precisely address your development requirements
for more information
Contact [email protected] or visit www.nodoc.eu
Dione Oil Co.
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1. An Introduction to Dione Oil Cost Management Model
In the project development cycle several engineering tasks
like design, procurement and construction have to be
executed. The execution of these tasks mainly involves
information processing and decision-making. Because costs
are an important factor in project management, adequate
information about costs is extremely valuable for all
engineering tasks. Therefore, a cost training programme for
the enhancing of cost knowledge for cost management and
cost control, integrated in the project development cycle, is
required. The Oil & Gas Project Costing Reference Model developed
at Dione Oil Co., is based on the use of a central information
management kernel that facilitates both the availability and
the accessibility of meaningful representations of the
evolving project information. This reference model is
designed especially for the integration of practice,
knowledge, technology and art for the development of the
cost management system.
Within the Oil & Gas Project Costing Reference Model,
generic cost management architecture has been developed.
The architecture consists of six functional modules arranged
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around the information kernel of the model that are: Cost
Models, Cost Determination, Cost Control, Cost Monitoring,
Cost Reports, Risk Analysis, Data Analysis and Data Tuning.
The Cost Model module is used for the definition and the
management of cost models. Multiple cost models can be
defined in order to support all engineering tasks and to be
able to compare cost models.
Based on a cost model, the Cost Determination module
calculates the costs. A cost model can be selected based on a
specific cost model, or an integration of several cost models,
the required accuracy or the available information.
Cost Control, Cost Monitoring and Cost reports can be
created with the Cost Report module.
Information about the quality, the accuracy and the
sensitivity of the costs has to be provided by the Risk
Analysis module.
The analysis of (historic) data is a task for the Data Analysis
module, while the Data Tuning module has to tune data. A
new method for variant based cost estimation is proposed
and positioned in the architecture.
The cost models are defined based on the cost structure. With
the aid of the cost structure, costs can be defined for any
object causing costs. Because cost structures can be attached
to the information structures related to the Oil & Gas Project
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Costing Reference Model, the costs can be calculated for any
object at any aggregation level. Additionally, the cost
structure enables the differentiated storage of cost
information. Based on the information structures and the cost
structures, cost views can be constructed.
The cost models are defined based on the cost structure. With
the aid of the cost structure, costs can be defined for any
object causing costs. Because cost structures can be attached
to the information structures related to The Oil & Gas
Project Costing Reference Model, the costs can be calculated
for any object at any aggregation level. Additionally, the cost
structure enables the differentiated storage of cost
information. Based on the information structures and the cost
structures, cost views can be constructed. These cost views
visualize the differentiated costs for the user.
The cost architecture and the cost structure enable the use of
four cost control loops: the engineering and planning
feedback loop, the order acceptance feedback loop, the
production feedback loop and the accounting feedback loop.
Some parts of the cost architecture have been implemented
in a prototype system. The prototype system is demonstrated
by means of an example from the project development cycle
in the project domain. Generative and variant based cost
management is used to demonstrate cost support and cost
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control. For generative cost management two distinct cost
models, direct costing and activity based costing, are used.
2. The Cost Management Training Module (Tailor-made)
This module has been developed specifically for úú based
on the requisition datedú ..
The training based is based on the Oil & Gas Project Costing
Reference Model. The programme is to be aimed at the
development of specific competencies of specialists engaged
in Cost Control.
The training module has the following specification:
2.1 Training Title:
Cost Engineering and Cost Control for oil & Gas Projects
2.2 Training Description:
The Oil & Gas projects Cost Management, what is it and
why should we follow it? This training will define costs and
identify its components to implementing management and
control process. Participants will gain skills, strategies,
techniques, and methods, by practice and knowledge
development to implementing cost control in his own
projects.
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2.3 Training Objectives
As a result of this training, participants will be able to:
Define Costs
Classify of Costs
Split Costs to its Components
Manage the Costs using various Techniques
Analyze Production Costs
Manage the Costs
Report the Cost for decision making
Doing Planning and Scheduling
Monitoring the Costs by Variances
Regular Achievement Analysis
2.4 Duration Of the training:
Five 5 days + 1 day for closing summary and evaluation
2.5 Training form
Workshop
Presentation
Project practice
Discussion
Brain Storm
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2.6 Assessment by result of the Training:
Knowledge test
Practical application
Project work
Reports on participants� progress will be issued after each
module
2.7 Number of participants in one group:
15 employees
2.8 Training time schedule:
Following table show the training time schedule that describes
what will teach during the training period.
2.9 Training Material
The participants will be provided by handouts, Dione oil & gas
projects Cost management handbook and a DVD including
sample projects.
2.10 Training place
The training is assumed to be placed in Kazakhstan however it
could be placed in UAE or UK.
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2.11 Course Trainers
Our expert trainers of this course have minimum 20 years
experience on cost engineering, cost management and cost
control field. They are graduated from well-known colleges and
had background on costing of the oil & gas projects in three
sectors: upstream, midstream and downstream both offshore and
onshore. They have 2,400 hours experience on training the
attendees of such courses for more than 400 oil & gas
organizations, entities and institutes.
2.12 Certification
Successful Participants will be granted valuable certificates at
the end of the training course after appraisal the customer.
2.13 Training Fee
For this special course the trainng fee is Euro ..... per
participant.
50 % of the fee should be paid to Dione Oil Co. account as
advanced payment.
The balance should be paid to that account at the end of
the training.
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Day Time Content Outline Presentation Methods Handouts/Material
Day 1
9:00 - 10:30
Welcome and Introductions Introduction of instructor and participants. Review Training Objectives
Introductions: Briefly introduce self, training objectives for training session, and training agenda. Exercise: Large Group Discussion: discuss the elements of costs that they have faced before.
-
Give background information about Oil & Gas Project Cost Management and Cost Definition The Essence of Cost Management: 1. Cost Management means taking into account everything we know about how project develop and learn and matching that to the content and strategies planned for the executer. 2. Cost Management means treating project as an individual, not as a cohort group. 3. Cost Management means treating project with respect—recognizing changing capabilities and having faith in project's capacity to grow and produce the desired product.
Exercise: Small Group: Divide participants in three-four groups. Each group will select a project to complete handout 1 and share the results. • Identify three attributes of project in their classrooms and explore the teaching practices they think will support these attributes. Large Group: reporters share one project attribute and the related costs and identified by the group.
Presentation 1: definition of Costs Handout: project cost definition
10:30 – 11:00 Break
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Day Time Content Outline Presentation Methods Handouts/Material
11:00- 13:00
Experiential learning. Cost Classifications:
according to the accountant standards: Capital Costs / Operating Costs
according to Nature or elements: Material Cost/Labor Cost/Expenses
according to Function: Production Cost/Selling & Distribution Cost /Administration Cost /RD Cost
according to Identifiably: Direct Cost/Indirect Cost
according to Behavior: Fixed/Variable/semi, fixed Variable
according Association with products: Product Cost/Period Cost
according to controllability: Controllable Cost/ Uncontrollable Cost
according to normality: Normal Cost/Abnormal Costs
Small Group: participants will consider the practices they identified further. Asking the following questions: 1. Is this practice in keeping with what I know about Costs? 2. Does this practice take into account project’s needs? 3. Does this practice demonstrate project? Large Group: facilitate a summary discussion of the experience, focusing on how much information and understanding the group’s questioning created.
Presentation 2: costs Classifications Handout: sample project cost classifications
13:00- 14:00 Lunch
14:00-16:00
Continue Classification of costs:
according to time: Historical Cost/Predetermined Cost
according To Relevance: Opportunity Cost/Relevant Cost/Sunk Cost/Shut down Cost/Differential Cost/Imputed Cost/Out of Pocket Cost / Marginal Cost and replacement Costs
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Day Time Content Outline Presentation Methods Handouts/Material
Day 2 9:00 – 10:30
Experiential learning. Components of Costs Components of costs or cost elements are a hierarchical of costs that presents top-down (down- top) approach for budgeting, costing and finally decision making process. The participants will examine this topic in a real and live oil & gas project by gaining following knowledge. The four main components of costs are: (a) Prime Cost, (b) Works Cost, (c) Office Cost and (d) Total Cost.
Prime Cost: It consists of costs of direct material, direct labor and direct expense specifically attributable to the job. This is also known as flat, direct or basic costs.
Works Cost: It comprises of prime cost and factory overheads, (cost of indirect material, indirect labor and indirect expenses related to factory works). This cost is also known as factory cost, production or manufacturing cost.
Cost of Production (Office Cost): It is the sum total of works cost and office and administrative overheads <Cost of indirect material, indirect labor and indirect expenses related to office works>. This cost is known as office cost.
Small Group: participants will identify the costs of sample project by its components. Asking the following questions:
1. Is this practice in keeping with what I know about Costs components? 2. Does this practice take into account project’s specifications? 3. Does this practice demonstrate project's needs?
Large Group: facilitate a summary discussion of the experience, focusing on how much information and understanding the group’s questioning created.
Presentation 3: costs Classifications Handout: sample project cost Components
10:30 – 11:00 Break
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Day Time Content Outline Presentation Methods Handouts/Material
11:00-13:00
Project Cost Management and Techniques: Project cost management includes the processes involved in estimating, budgeting and controlling costs so that the project can be completed within the approved budget.
Cost Estimation: For estimating the cost of oil & gas EPCF projects we need to have some data on hand such as:
o Enterprise environmental factors o Organizational Process Assets o Project scope statements o Cost breakdown structure vs. Work Breakdown
Structure o Project Cost management plan
Some of the Techniques that will be explain in the workshops are: o Analogous estimating o Determine recourse cost rates o Bottom-up estimating o Parametric estimating o Project management Tools o Vendor bid analysis o Reserve analysis o Cost of quality
Discussion: Participants will discuss key components in the DVD that displayed sample project techniques. Identify key aspects of cost management. Discuss any misconceptions they may have about cost management. Exercise Using the video segment and previously identified attributes as a reference, participants will identify a classroom problem or issue that needs attention and develop a plan of action to correct. Ask for participants to share their problem/issue and plan of action to correct understandings.
Presentation 4: cost Management Handouts :
1. Applying the Essentials of Cost Management (Sample)
2. Applying the
Essentials of Cost Management (Practice)
Materials:
DVD Pre-printed sample projects Cost management
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Day Time Content Outline Presentation Methods Handouts/Material
13:00- 14:00 Lunch
14:00-16:00
Continue Cost Estimation: Using the inputs and techniques, some other objects will obtain that are used in the next step of cost management, cost budgeting. Cost Estimation outputs are presented based on the method of estimation. For example followings are the outcomes:
Activity based cost estimates
Resource based cost estimation
Parametric cost estimation
Analogy cost estimation
Activity cost estimate supporting detail
Requested changes
Cost management plan (updated)
Participants will estimate the cost of sample oil & gas project and will discuss in groups about the estimated costs and will compare the results estimated by different groups.
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Day Time Content Outline Presentation Methods Handouts/Material
Day 3 9:00 – 10:30
Cost budgeting
Cost budgeting involves aggregating the estimated costs of individual cost elements in the cost centres or work packages to establish a total cost baseline for measuring project financial performance. In this step with some input information obtain from previous step (cost estimation) and applying the tools and techniques, budgeting will be done. For budgeting we need at least following Inputs:
Project scope statement
Work breakdown structure
Cost Breakdown Structure
Activity cost estimate supporting detail
Project schedule
Recourse calendars
Contract
Cost management plan
Using following techniques: Cost aggregation
Reverse analysis
Parametric estimating
Funding limit reconciliation
Participants will budget the cost of the sample oil & gas project and will discuss in groups about the project budget and will compare the results budgeted by different groups.
Presentation 5: cost Budgeting
Handout: Review the example to illustrate the activity that is presented in a DVD
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Day Time Content Outline Presentation Methods Handouts/Material
10:30 – 11:00 Break
11:00-13:00
Continue Cost Budgeting Using the input information and techniques, some other objects
will obtain that are used in the next step of cost management, i.e.
cost controlling.
Cost Budgeting outputs:
Cost baseline
Earned value
Project funding requirements
Cost management plan (updates)
Requested changes
13:00- 14:00 Lunch
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Day Time Content Outline Presentation Methods Handouts/Material
14:00-16:00
Cost controlling Cost controlling involves influencing the factors that create cost variances and controlling changes to the project budget. Cost controlling will also be done using some other input information obtains from previous step (cost budgeting) and applying the tools and techniques listed below: Necessary Inputs Information:
Cost Baseline
Project funding requirements
Performance reports
Work performance information
Approved change requests
Project management plan
Presentation 6: cost Controlling Handout : Review the example to illustrate the activity
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Day Time Content Outline Presentation Methods Handouts/Material
Day 4
9:00 – 10:30
Continue Cost Controlling Techniques:
Cost change control system
Performance measurement analysis
Forecasting Project performance
Reviews Project management software
Variance management Output information obtains from cost controlling step are listed below:
Cost estimate (updates)
Cost baseline (updates)
Performance measurements
Forecasted completion
Requested changes
Recommended corrective actions
Organizational process assets (updates)
Project management plan (updates)
Participants will calculate the variances between planned and actual cost of the sample oil & gas project and will discuss in groups about the variances
Presentation 7: Cost Controlling Handouts: Comparing the outputs of a controlled cost project sample that is delivered in DVD.
10:30-11:00 Break
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Day Time Content Outline Presentation Methods Handouts/Material
11:00-13:00
Production Costs
Production costs can be divided into two categories:
VARIABLE COSTS (direct) which are proportional to production. For followings are the items that are proposed as variable costs:
Raw Material
Direct Labor
Supervision
Maintenance
Utilities
Supplies
Royalties and Patents
Packaging & delivery
Participants will separate the production costs, split them to the components of production cost of the sample oil & gas filed and will discuss in groups about the production costs.
Presentation 8: Production Costs
Handouts: review DVD of sample production costs of the sample production costs.
13:00-14:00 Lunch
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Day Time Content Outline Presentation Methods Handouts/Material
14:00- 16:00
Continue Production Costs
FIXED COSTS which are independent of production such as:
Depreciation
Property Taxes
Insurance
Credit (Financing)
Other Obligations
General Expenses
Research and Development
Public Relations
Accounting and Auditing
Legal Advice and Patents
Administration and management costs
Sale and distribution costs
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Day Time Content Outline Presentation Methods Handouts/Material
Day 5 9:00 – 10:30
Monitoring by Variances
Variances tell us whether we are going in correct direction or we in wrong direction. Two types of variances in cost management are Schedule Variance (SV) and Cost Variance (CV).
Schedule Variance (SV): Schedule Variance tells us that how much we are ahead of or behind the schedule. Schedule Variance (SV) is a measure of schedule performance on a project.
Cost Variance (CV): Cost Variance tells us that how much we are over or under the budget. Cost Variance (CV) is a measure of cost performance on a project.
Participants will monitor the cost of the sample oil & gas project and will calculate and will discuss in groups about the variances and will compare the results in different groups.
Presentation 9: Monitoring by Variances
Handouts: preparation of variances for the sample project submitted in a DVD
10:30-11:00
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Day Time Content Outline Presentation Methods Handouts/Material
10:30-13:00
Understanding Planning and Scheduling The project management team uses a planning process group to plan and manage a successful project for the organization. The planning processes develop the project management plan and also identify, define and mature the project scope, project cost and schedule the project activities. The planning process group facilitate project planning across multiple processes. The following list identifies the processes the project team should address during the planning process to decide if they need to be done, and if so, by whom. The planning processes are listed below:
Develop project management plan
Scope planning
Scope definition
Create WBS
Activity definition
Activity sequencing
Activity resource estimating
Activity duration estimating
Schedule development
Cost estimating
Cost budgeting
Quality planning
Human resource planning
Communication planning
Small groups will plan and schedule the sample project activities and will discuss if they have differences within
groups.
Presentation 10:
Understanding Planning
and Scheduling
Handouts: Review the
planning and scheduling of
a sample project delivered
in a DVD
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Day Time Content Outline Presentation Methods Handouts/Material
Risk management planning
Risk identification
Qualitative risk analysis
Quantitative risk analysis
Risk response planning
Plan purchases and acquisition
Plan Contracting
13:00- 14:00 Lunch
14:00- 16:00
Cost reports and decision making
Reporting the cost of a project could be based on the project:
cost components
Cost types
Budget
Phase
Location
WBS
Cost Centers and elements
Risks
Resources
Factors
The participants divide to groups and prepare the reports for the sample oil & gas project. The reporter of each group presents the project cost report and others issue challenges to the reports.
Presentation 11: cost reporting Handouts: DVD that contains sample reports
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Day Time Content Outline Presentation Methods Handouts/Material
Day 6
9:00 – 10:30
Closing Summary
Review the purpose and content of the training. Ask participants what they learned as a result of the training and how they will be able to use what they learned. Determine if there are still areas of misunderstanding and clarify where necessary.
Materials:
Learning materials
10:30 – 11:00 Break
11:00-12:00
Assessment: Each participant will be given a written assessment and will be expected to achieve 80% to receive training certificate.
Have participants complete the Participant Evaluation Form. Collect
Materials Learning Assessment Materials Participant Evaluation Form
Evaluation Regular Achievement Analysis
Personal Effectiveness module
18:00-21:00 Goodbye Party