SUCCESSFULLY MANAGING ALLIANCE CONTRACTS

THROUGH VISUAL MANAGEMENT OF COMPLEX COMMERCIALS

Business Case

With 5% of the project value dependant on a series of KPIs defined by the customer and the prospect of any under-performance resulting in the Alliance not being invited to participate in future work packages, the lead contractor had recognised a need to introduce new methods to enable effective performance management of the sophisticated commercial terms. The customer had also mandated the development of a Continuous Improvement and Innovation (CI&I) culture within the Alliance that would also be measured.

Scope

ORBIZ were initially engaged during the bid phase to conduct a system review of the current approach to project control to identify and recommend improvements that would meet the requirements of the prospective commercial terms of the Alliance contract.

With the Alliance contract successfully secured, ORBIZ were engaged to develop an operating system based on Lean principles with an integrated earned value management software solution that would enable effective management of the complex commercial aspects of the contract, whilst supporting the development of a culture of CI&I.

Project Summary

The initial system review highlighted a series of opportunities that would support the Alliance to meet the contract requirements whilst also generally improving overall project performance:

  • Implement a short interval control strategy to increase efficiency at the package and activity level
  • Implement visual management centres to increase performance transparency and accountability
  • Implement CI&I strategies underpinned by robust frameworks and procedures
  • Streamline the reporting process to improve flow of information and increase project governance

During the project mobilisation phase the Alliance introduced the Quantivia earned value management software package to oversee the progress and performance of each work package from engineering through to construction.

A Visual Management Centre (VMC) incorporating data from Quantivia was developed to enable effective management of the project by the Alliance Management Team through weekly governance meetings. This project VMC would also provide oversight of the full set of sophisticated KPIs defined by the customer through a series of customised charts that visualised each data set in a manner that was simple to interpret and manage.

Further VMC was then developed to oversee the performance of Engineering and Construction utilising a detailed level of data from Quantivia to create short interval control system and a catalyst for CI&I through a forum of performance monitoring and problem solving.

CI&I and 8D+ problem solving techniques were introduced with training being delivered to the CI&I champions who would lead the facilitation of innovation hubs and CI workshop.

Results

  • Alliance performance in full control with an increase in gain share anticipated through reward system
  • Earned value performance of each activity is transparent and controlled on a short interval basis
  • Progressive approach to managing commercial aspects through VMC has been commended by customer