Construction of the Urucu/Manaus (PETROBRAS)...

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Construction of the Urucu/Manaus (PETROBRAS) Pipeline

Application of SDPM, Critical Chain and Portfolio Project

Management PrinciplesRussell D. Archibald

Peter Berndt de Souza MelloJefferson Guimarães



Presentation Outline



Introduction

Description of the Project• 670 km (402 mi) along the Amazon river• Capacity 4.7 million cubic meters of gas/day• Replace diesel and fuel oil for electric power

production in the region• Enormous economic & environmental gains• 24 river crossings, torrential rains, remote

location, difficult access, challenging schedule



Geographic Overview (Amazon, Brazil)

http://maps.google.com/maps?hl=en&lr=&q=urucu+manaus+petrobras&ie=UTF8&ll=‐3.683373,‐62.259521&spn=83.82272,221.132813&t=h&z=3&om=1



Introduction



Introduction

Situation in 2006

• Many independent contractors• Heavy rains, difficult access,

unforeseen problems caused serious schedule delays

• Decision to apply advanced project management methods to recover to schedule as much as possible



Advanced PM Methods AppliedIntroduction

• Success Driven Project Management/SDPM– Proven Russian methods– Includes Critical Chain principles

• Portfolio Project Management– Pipeline viewed as a portfolio of mini

projects for optimum resource allocation



Success Driven Project Management (SDPM)

SDPM

• Planning Stage:– Calculate finish dates & costs with the required

probabilities of their successful achievement

– Set target dates, costs & other restrictions

– Calculate success probabilities

– Determine contingency reserves



Success Driven Project Management (SDPM)

SDPM

• Execution and Control:– Calculate current probabilities of achieving goals

– Track success probability trends

– Manage contingency reserves



SDPM

Resource Critical Path/RCP• True (resource) critical path must reflect

ALL schedule constraints: resource, finance, supply, calendar, & imposed dates

• All constraints must be considered in both forward & backward passes



SDPM

Success Probability

1. System forecasts resulting required resources & contingency reserves based on user defined acceptable probability of success to meet specific scope, schedule & cost targets

2. System calculates the probability of meeting imposed targets (success probabilities)



SDPM

Eight Integration Methods Used1. Systematic scope definition (indentured structures)2. Network planning3. Resources:

• Consumable, renewable, utilized & produced• Units, teams/crews, interchangeable units or

crews• Assigned to project activities• Constraints in both forward & backward passes



Eight Integration Methods (Cont’d)

SDPM

4. Activity durations calculated: scope or volume ÷rate

5. True (resource) critical path calculated:• Logical & schedule constraints• Resource, financial & supply limitations in both

the forward and backward passes




SDPM

6. Risk & uncertainties simulated: probability distribution for main project results (project & its main phases finish dates, costs, resource requirements)

7. Actuals reported & compared, contingency reserves tracked




SDPM

8. Current probabilities of success calculated and trends determined for:

• Schedules

• Costs

• Resources



SDPM

Methods Unique to SDPM• Multiple breakdown structures• Resource information & analysis• Activity duration calculation or estimation• Resource critical path, resource floats, &

resource contingency reserves• Risk simulation & success probability analysis• Success probability trends



SDPMCommon Features:

SDPM & Critical Chain Method/CCM• Resource critical path is the same as Critical

Chain if we add financial and supply constraints

• CC “project buffer” is analogous to SDPM “contingency time reserve”

• “Resource float” is analogous to CC “feeding buffers”

• Both approaches recommend using optimistic estimates to set schedule



SDPM

Differences With Critical Chain

• Don’t agree that “one should always avoid multi-tasking”

• Don’t accept CC assumptions that:– “Critical chain never changes”

– Only one “project drum [critical] resource” exists

• Our experience: critical resources change in different project phases



SDPM

Differences With Critical Chain

• CC more qualitative than quantitative

• Time & cost reserve usage evaluation:– SDPM: Success probability trends show if

reserves expended faster or slower than planned; more effective than:

– CC: Qualitative judgment whether buffers were properly utilized



Results



Results

A New Project ManagementInformation System

• Initial planning started in 2004 with a segmented view of the project, with several separated set of schedules for different regions (geographic division) and different areas (scope, costs, logistics and supplies).



A New Project ManagementInformation System

• A new Project Management Information System was put in production from October 2006 to February of 2007.

• A common repository and new WBS integrated over ten separated schedules

Results



Results

Setting New Project Goals• Initial estimates created for the project took

in consideration the productivity found in some pipeline constructions in many parts of Brazil but were not enough to predict the reduced ability of the teams to work under continuous tropical rain.

– As an example, some drained areas of the construction in the first semester of any given year would simply be found to be under 12 meters of water in the following semester.



Results

Setting New Project Goals

• The lack of a model that would evaluate the project in three estimates (pessimistic, optimistic and most probable) had produced a schedule that soon proved to be completely unrealistic.

– By the time the SDPM team was set to create a new integrated schedule, the construction had reached 50% of the original planned time with a Schedule Performance Index (SPI) under 15%



Results

Setting New Project Goals

• Through the simulation of work performance, schedule and resource constraints, the SDPM team has helped Petrobras to set new goals with the contractors.

– For some critical phases, resources were increased by 50% and now the project has surpassed 7,000 workers, against an original mobilization of 5,000 people.



Results

WBS – Project Details• For the true adoption of SDPM a WBS for the

project should contain information about resources.

• As original planning was not detailed to the resource level, the SDPM Team put together several weekly plans into a larger schedule, creating a bottom-up WBS.



WBS – Project DetailsResults

• The resulting integration of several weekly plans made it possible to measure trends and to create new resource-critical-schedules with incremented level of details.



Results

WBS – Project Details

• By adjusting the necessary resources in the lowest level of the WBS we then build a fragnet that is used to build a model for the larger project.



Results

A Bit of History

• Although the first stages of the project are dated in 2004, real project activities started only in July 2006, after the military engineering brigade had opened the first roads through the jungle and established camping sites for storing many tons of pipe.



Results

A Bit of History

• One of the biggest challenges is the fact that Petrobras in fact administers several separate contractors and each one must be convinced of the benefits of better scheduling through the use of SDPM and Critical Chain concepts.



Results

Slowing Down to Speed Up !!• What is expected with the adoption of

Success Driven Project Management is the ability to identify what phases of the project should be delayed to make critical resources available to other critical phases, thus expanding the productivity in areas of greater working dependencies with other teams.



Results

Slowing Down to Speed Up !!

• SDPM includes a risk analysis of different segments of the project

• By using optimization of the scheduling with resource restrictions and the Russian tool Spider Project, it is feasible to improve general productivity.



Results


• Example: Transferring resources from the opening of new construction roads to the transportation of pipe will delay the first phase of the project, but it will speed up the second phase. The challenge is to optimize the distribution to increase global results.



Results


• When such logistics are carefully planned we have an increase in general productivity, as we can see in the following figures.



Results


• In the example, while the “green team” kept working 720 hours, the “red team” had an increase in 25% in its productivity and the “blue team” reached 65%.



Results

Fragnets• Fragnets are modeled

phases of the project that are carefully planned to be applied to the whole project.

• One example is the modeling of “one km of pipeline”



Results

Fragnets• By using automated

scheduling optimization and simulation, activities in each fragnet are reorganized to such order in which we may increase global production.



Fragnets

800 mper day

1150 mper day

Results



Scheduling optimization in a few words

Results

• Almost any network of activites can be improved if we simply try the alternatives.– Jane takes 4 days to write a quality plan and 2

days to write a communication plan for the project.

– If both plans are reviewed by her boss, who spends 3 days for each document, how long does this project take ?



9 DAYS

10 DAYS



Results

The Near Future• Information gathered by the SDPM team and

organizational changes in the project has already imposed a new rhythm for the project.

– By the time this paper will be presented in the PMI Global 2007, Cancún, actual data extracted from the field will give the general audience a broader view of the advantages of integrating Project Portfolio Management, Success Driven Project Management and Critical Chain concepts.



Results

The Near Future• We shall not forget that the expansion in the level

of details planned, scheduled, and controlled by the project managers with the help of the SDPM team will provide a set of learning lessons that will improve other new and ongoing projects in the region.



Results

The Near Future• Besides the limited application in actual contracts,

top management has understood the advantages of truly integrated data (scope/time/cost/risk) and it has demanded that future planning for all projects for PETROBRAS/IENOR should be addressed by the SDPM Methodology.



The Near Future• The subproject SCADA

(Securing Control System) is one of the new projects in the portfolio that is adopting from its very beginning the SDPM concepts.

Results



References



A Few Useful Links• http://www2.petrobras.com.br/ingles/index.asp• http://x25.com.br/• http://www.spiderproject.ru/aboutus_e.php• Liberzon, Vladimir, and Russell D. Archibald, “From Russia

with Love: Truly Integrated Project Scope, Schedule, Resource and Risk Information,” PMI World Congress- The Hague, May 24-26, 2003; download at http://www.russarchibald.com/ [go to ‘author>recent papers’]

http://www2.petrobras.com.br/ingles/index.asp

http://x25.com.br/

http://www.spiderproject.ru/aboutus_e.php

http://www.russarchibald.com/



Russell ArchibaldPrincipal - Archibald Associates, [email protected]

Peter Berndt de Souza MelloDirector - X25 Treinamento e Consultoria, [email protected]

Jefferson GuimarãesSenior Project Engineer - Concremat/Petrobras, [email protected]

Contact Information

Construction of the Urucu/Manaus (PETROBRAS)...

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