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105 views

Multi-Project Program Management

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Uploaded by

M Refaat Fath
Copyright
© © All Rights Reserved
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ESD.

36 System Project Management


+

Lecture 18
Multi-Project Program Management
Instructor(s)

Prof. Olivier de Weck

Outline

Program Management

Definition, Distinction from Project Management


Example Program (BP Azerbaijan)

Project Portfolio Management

Project Selection Process


Example Portfolio (PreQuip)

Concept Question 1

What is the largest number projects you


have worked on or managed at the
same time (in parallel)?

Dec 1, 2009

1
2
3
4
more than 4
3

Programs

PMBOK Definition

Program. A program is a group of projects managed in a

coordinated way to obtain benefits not available from


managing them individually.

Many programs also include elements of ongoing operations. For example:

The XYZ airplane program includes both the project or projects to


design and develop the aircraft as well as the ongoing manufacturing and
support of that craft in the field.

Many electronics firms have program managers who are responsible for
both individual product releases (projects) and the coordination of multiple
releases over time (an ongoing operation).

Programs may also involve a series of repetitive or cyclical


undertakings, for example:

Utilities often speak of an annual construction program, a regular,


ongoing operation which involves many projects.
Many non-profit organizations have a fundraising program, an ongoing
effort to obtain financial support that often involves a series of discrete
projects such as a membership drive or an auction.
4

Scale-based Product Families

Develop a product platform that


can be scaled or stretched in
one or more dimensions to
satisfy a variety of market niches

Boeing 737 is divided into


3 platforms:

Initial-model (100 and 200)


Classic (300, 400, and 500)
Next generation (600, 700,
800, and 900 models)

The Boeing 777 has also


been designed knowing
that it will be stretched

Aerospaceweb.org. All rights reserved. This content


is excluded from our Creative Commons license. For
more information, see http://ocw.mit.edu/fairuse.

Airbus Aircraft Program


Airbus A3XX Family: common height, width, cockpit

The A330 cockpit is common to all other Airbus types


while Boeings 767-400 cockpit is common only with
the 757. This enabled the A330-200, a less efficient
shrink of a larger aircraft, to outsell Boeings 767400ER, a more efficient stretch design of a smaller
aircraft.

Sample Program: BP ACG

(Azerbaijan)

BP Caspian. All rights reserved. This content is excluded from our Creative
Commons license. For more information, see http://ocw.mit.edu/fairuse.

Capex: $9bn total / $6m / day


90,000 te topsides
90,000 te jackets
1000 km offshore pipelines

One of worlds largest terminals


7 years of execute
74 million man-hours total so far
Over 3 million man-hours/month

80% of man-hours in Azerbaijan


20% across another 10 countries
New Workforce - 9000 Azeris
Source: Adrian Luckins, BP

ACG Reservoir Size

ACG Full Field Development - Production

1200

1000

mbd

800

Phase 3
Phase 2

600

400
Phase 1
200
Chirag
0
2002 2004 2006 2008 2010 2012

2014 2016 2018 2020 2022 2024

Geographical Challenges

D rillin g E q u ip m e n t,
N o rw a y

T ra n sp o rt ro u te s:
B y T ra ile r

L iv in g Q u a rte rs
F a b rica tio n , S w e d e n

B y Rail
By Sea

E n g in e e rin g &
P ro cu re m e n t, U K

L o g ist ics

D rillin g
C o n stru ctio n (W A /
E A ), H o lla n d

Ba k u

5 0 0 0 Traile r t rip s
6 0 0 0 rail t rip s

D rillin g
C o n stru ctio n (C A ),
F ra n ce

2 0 0 rive r b o at s

Ja cke t P re F a b rica tio n , Ita ly


In sta lla tio n
D e sig n ,
C ro a tia

C & W P / te rm in a l pre fa b rica tio n , T u rke y

T o p sid e s P re F a b rica tio n , D u b a i

T o p sid e s F a b rica tio n , Ja cke t


F a b rica tio n , T e rm in a l C o n stru ctio n ,
E n g in e e rin g D e sig n , A ze rb a ija n

Project Schedules
2001
1H

ACG Phase 1

BTC

2002

2H

1Q

2Q

3Q

2003
4Q

1H

2H

2004

2005

2006

ACG Phase 3

2008

1st Oil

Define

Execute

Operation
Select

Define

Execute
1st Oil
West Azeri

ACG Phase 2

2007

Select

Define

Appraise

Execute

Select

Define

Execute

1st Oil
East
Azeri

1st Oil

2009

Production Line Strategy Development

C&WP
C
&W P
C&

E&P

CA
C
A jacket
jac k et
CA
CA
CA
CA

W
A
WA

EA
EA

KBR/
AIOC

topsides
top
s id es

top
s id es
topsides

top
s id es
topsides

C
&W P
C&WP
C&

jacket
jac
k et

WA
W
A jacket
jac k et

EA jacket
EA
jac k et
DUQ
topsides

top
s id es
topsides

PCWU
topsides

ATA Yard

Ter
m inal
Terminal

Ter
m inal
Terminal

Ter
m inal
Terminal

tr
trains
1&2
ains 1&
2

tr
ains 3&
trains
3&4
4

Shah
eniz
Shah DDeniz

Terminal
trains 5&6

Pip
elines :
Pipelines:

Pip
elines :
Pipelines:

Pip
elines :
Pipelines:

Pip
elines :
Pipelines:

30"
30"

28"
28"

Shah
DDeniz
eniz
Shah
30"

30"
30"

Objectives :
Learning Curve Benefits Faster,
Cheaper
Elimination of Inefficiency
Continually Reduce Unit Costs

DUQ
jacket

PCWU
jacket

MCCI
Yard

BOS
Yard

Key :
ACG Phase 1
ACG Phase 2

AzTf
Pipelines:
ACG 3

ACG Phase 3
Shah Deniz

MCCI

Strategy :
Standardization
Contracting Natural Choice at Right Price
Organisation People Continuity
Right Pace for capital efficiency

Project Challenges ACG & Shah Deniz

Phase 2

Phase 1

CA-PDQ
Topsides
Detail 42 Mhrs Per Tonne
Design

CA- C&WP
Topsides
Detail 21 Mhrs Per Tonne
Design

Copied Building Block

Phase 3

Phase 4

WA-PDQ

EA-PDQ

DWG-DUQ

CB-PDQ

50% Copy
31 Mhrs Per Tonne

95% Copy (WA)


11 Mhrs Per Tonne

60% Copy (WA/EA)


28 Mhrs Per Tonne

30% Copy
30 Mhrs Per Tonne

DWG-PCWU
20% Copy (C&WP/WA)
19 Mhrs Per Tonne

Seed Building Block To Develop

New Design

Benefits realised through


standardisation: Engineering

Engineering Benefits
Production Facilities
Engineering Costs

CA
(42)

40

30

Phase 3 (Manhours /
te
DWG: 29 contract
25 stretch
DUQ: 28
PCWU: 20

CA
(54)

WA
(31 )

DWG
(29)

CWP
(21)

20

EA
(11)

10

Phase 1

Phase 2

Phase 3

Direct Man-hours/te

Direct Man -hours/ te

50

Drilling Facilities Engineering Costs


(Eiffel/KCA)

WA
(30)

EA
(8)

Phase 1

Phase 2

DWG
(8)

Phase 3

Benefits realised through


standardisation: Fabrication

Fabrication Benefits
Jacket Fabrication
Costs

Topsides Fabrication
Costs
$/te
units

$/te
units
$6181/te

$18042/te
100
-10%

$16122/te

100
-7%

$5751/te
-4%

-6%

$5521/te
$15228/te

Phase 1

Phase 2

Phase 3

Phase 1

Phase 2

Phase 3

Concept Question 2

In our organization we pursue mainly:

Dec 1, 2009

Programs sets of directly related projects


Portfolios sets of indirectly related projects
Individual single projects
Not applicable

16

Portfolio of Projects

A portfolio of projects is a collection of


projects owned or managed by the same
organization that are only indirectly related

Projects may not be directly related to each other, as


in a program, i.e. outputs from one dont
necessarily feed into the other

Usually no or only minimal commonality and standardization

Portfolio is chosen with diversity of projects, some of


them may be negatively correlated
Mix of large scale potentially less risky and small
risky projects that act as pathfinders
Project portfolio may not have a single manager
17

Project Portfolio Planning


1

Advanced
R&D Projects
Product Changes
New Core
Product
Next
Generation
Product
Addition to
Product Family
Add-ons and
Enhancements

Source:
(Wheelwright
& Clark, 1992)

Process Changes
Next
Single
Tuning
Generation Dept.
and
Process
Upgrade Incremental

New Core
Processes
2

Breakthrough
Projects
Platform 3
Projects
4

Derivatives
(Enhancements,
Hybrids, and Cost
Reduced Versions)

Aggregate Project Plan


Classifications

Advanced R&D Projects

Projects provide a base for a product and process family that can be
leveraged over several years

Derivative Projects

Projects that involve significant change in the product and process establish a
new core product and process

Platform Projects

Innovations and technology development that provides a precursor to


commercial development

Breakthrough Projects

Source:
(Wheelwright
& Clark, 1992)

Cost-reduced versions of an existing product or platform or add-ons or


enhancements to an existing production process

Allied Partnerships

Partnerships in any of these project areas to leverage development resources


and activities

Project Planning at PreQuip Part 1

R&D

PreQuips Development Projects (30)


before the Aggregate Project Plan
Breakthrough
projects

Mass spectrometers
Liquid chromatographs
Gas chromatographs
Platform projects

Derivative
projects

Data processing and handling products


R&D

Allied and Partnership


projects
Breakthrough

Platform

Adapted from: Wheelwright, S.C. and Clark, K. B.,


1992, Creating Project Plans to Focus Product
Development, Harvard Business Review, 70(2), pp. 7082.

Derivative

Aggregate Project Planning Part 2

R&D

PreQuips Development Projects (11)


after the Aggregate Project Plan

Breakthrough
projects

Mass spectrometers
Liquid chromatographs
Gas chromatographs
Platform projects

Data processing and handling products


R&D

Derivative
projects

Allied and Partnership


projects
Breakthrough

Platform

Adapted from: Wheelwright, S.C. and Clark, K. B.,


1992, Creating Project Plans to Focus Product
Development, Harvard Business Review, 70(2), pp. 7082.

Derivative

Concept Question 3

What is the most challenging issue you have


encountered working in a multi-project
environment?

Conflicts due to financial resource contention


Inefficiency due to multi-tasking
Staffing dynamics (trying to get the A team)
Friction between program and project manager
Enforcing standard work procedures
Ensuring commonality at the parts and module level
Other
22

Portfolio Management Issues

Risk Correlation across Portfolio


Constraints on Shared Resources

Late and over-budget projects delay rampup of downstream projects


Shared resources (e.g. test facilities) can
also create bottlenecks
Staff working simultaneously on multiple
projects create inefficiencies and delays

Typically dealt with via exogenous inputs to


single-project models, or via portfolio models
23

Program Manager Challenges

Creating a vision for the program as a whole


Scheduling and prioritization of individual
projects in the program
Dealing with project interdependencies

Program Manager is a very different and


more strategic role than project manager

Dec 1, 2009

Resource contention, CAPEX phasing


Staffing, avoid firefighting
Ensuring learning and commonality across projects

Typically requires more strategy and diplomacy


than individual project management
24

Discussion / Q&A

25

MIT OpenCourseWare
http://ocw.mit.edu

ESD. 6\VWHP3URMHFW0DQDJHPHQW
Fall 2012

For information about citing these materials or our Terms of Use, visit: http://ocw.mit.edu/terms.

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