Productivity

CAPITAL PROJECTS COST CONTROL

January 19, 2017 By George T McLaughlin PMP CCM

In light of the 2017-2018 Construction Forecasts, Capital Projects Cost Control is paramount and one to take a more acute focus.

In Project Execution, Field Labor Shortages Represent The Highest Risk To Achievement Of Time & Cost Objectives Large And Complex Projects.

Major Shortages in Construction Field Labor Will Influence (Negatively) US Construction Costs.

In Execution (After Stage Gate Three), A Major Risk to Project Cost Management Resides in Labor Cost (overruns),

The Highest Risk to Achieving Project Cost Management Occurs In Execution – After Stage Gate Three/Full Funding.

Driven By A Long History of Cost and Schedule Overruns, Managerial Thinking Now Prioritizes Cost Certainty.

On Complex Capital Projects, Cost Certainty Has Become a Compelling Objective.

McLaughlin & McLaughlin has assisted numerous Major Capital Projects successfully over the years by providing cost effective business solutions and recovery plans.

What makes McLaughlin & McLaughlin unique from the others is that we not only perform project management services but dispute resolution as practitioners.

It is important to note that McLaughlin and McLaughlin Project and Dispute Consulting LLC [M&M] is not a law firm and is not intending to provide legal advice. M&M is a consulting firm providing (among other services) non-legal expertise in construction claims, dispute resolution and litigation support. For further information on M&M services, please see www.McLaughlinandMcLaughlin.com.

Filed Under: Featured, General, Productivity, Project Planning, Projects Tagged With: Best Practice, Capital Projects, claims and disputes practitioners, Construction claims and disputes, Construction Field Labor Productivity, Cost and Schedule Certainty, Craft labor Shortages, Dispute Resolution, Field Labor Productivity, George T. McLaughlin PMP, large and complex industrial projects, PMI, Project Execution Plan, Project Management Institute (PMI), Time Management Strategy, Troubled Projects, www.mclaughlinandmclaughlin.com

LABOR OVERRUNS

January 13, 2017 By George T McLaughlin PMP CCM

As the increase of projected Major Capital Projects for 2017-18 emerge with all its implications troubled projects are a likely result. LABOR OVERRUNS are a typical component in troubled projects.

LABOR OVERRUNS – impact several project baselines. Cost, Schedule and Progress are at risk.

LABOR OVERRUNS – Labor Overruns are a major risk in any project with a significant labor component.

LABOR OVERRUNS – Early detection, correction and management require use of proper KPI’s.

LABOR OVERRUNS – Use of thoughtful KPI’s facilitate early/proactive corrective action.

LABOR OVERRUNS – Labor Shortages in 2017 and beyond will lead to upward pressure in labor rates.

LABOR OVERRUNS – Labor shortages in 2017 and beyond will lead a man-hour overruns (poor productivity).

McLaughlin & McLaughlin has assisted numerous troubled Major Capital Projects successfully over the years by providing cost effective business solutions and recovery plans.

Filed Under: Claims, Featured, General, Productivity, Project Planning, Projects Tagged With: AACE International, Business solutions, Capital Projects, Construction claims and disputes, Cost Certainity, Field Labor Productivity, George T. McLaughlin PMP, Labor Overruns, Labor Productivity, McLaughlin & McLaughlin, Progress, Project Execution Planning, Schedule Certainty, Troubled Projects

CAPITAL PROJECTS MANAGEMENT – US Gulf Coast

January 8, 2017 By George T McLaughlin PMP CCM

Capital project construction forecasts (US Gulf Coast) concur regarding robust project activity and growth for calendar years 2017 and 2018. These glowing forecasts are tempered with forecasts of craft labor, field supervision and project/construction management shortages. Demand for experienced project resources is expected to exceed supply. This is similar to Venezuela (post-nationalization), Canada (oil sands expansion) and other marketplace imperfections. M&M has evaluated these forecasts and rationalized the supply and demand implications as well as professional managerial options and paths forward. This is an emerging and dynamic managerial, consulting and legal business opportunity. M&M’s recent and extensive work in the field at active job sites of large and complex projects confirms the emerging situation. Here are a few topics, questions and/or observations:

Skilled, experienced and dynamic management will be required.
Cost and/or Schedule Certainty is clearly at risk regardless of the development and delivery system (PMI, CMAA, CII, AACE, IPA, proprietary or other systems).
Construction schedules will be driven or constrained by human resource shortages (field labor, engineering, project management).
Managerial planning and management must focus on:
- Acquisition of adequate supervision and field labor force
- Optimization of your field labor (and engineering labor).

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Filed Under: Featured, General, Productivity, Project Planning, Projects Tagged With: AACE, CII, CMAA, Cost Certainity, Craft Labor, George T. McLaughlin PMP, IPA, Labor Productivity, Labor Shortage, McLaughlin & McLaughlin, PMI, Project Management, Schedule Certainty, US Gulf Coast

Labor Productivity

December 27, 2016 By George T McLaughlin PMP CCM

Project Professionals a blog by McLaughlin & McLaughlin Project and Dispute Consulting LLC will be offering a few project tips regarding Project Management and Labor Productivity over the next few weeks.

Labor Productivity – Productivity Factor (PF) according to #AACEI equals Actual Productivity divided by Baseline or Planned Productivity.

Labor Productivity – Performance Factor (PF), according to Schwartzkoff equals Estimated Unit Rate divided by Actual Rate.

Labor Productivity – A simple KPI is the ratio of Planned Man-Hours divided by Actual man-hours – “Earned over Burned.”

Labor Productivity – There are several KPI’s that can be used for project/construction management.

Labor Productivity – Use of labor productivity KPI facilitates proactive project management.

Labor Productivity – As a leading Indicator, Labor Productivity represents an excellent management tool.

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Filed Under: Featured, General, Productivity, Project Planning, Projects Tagged With: AACE International, Best Practice, George T. McLaughlin PMP, KPI, McLaughlin & McLaughlin, Productivity, Productivity Management, Project Management Institute (PMI), www.mclaughlinandmclaughlin.com

Labor Productivity Problem Recognition

December 12, 2016 By George T McLaughlin PMP CCM

Project Professionals a blog by McLaughlin & McLaughlin Project and Dispute Consulting LLC will be offering a few project tips over the next few weeks.

Today’s focus lists a few key points to recognizing the problems associated with Labor Productivity issues. Problems from the issues may lead to owners and contractors achieving cost uncertainty and schedule uncertainty.

Negative Cash Flow on Project/Contract/Job.
Labor Force (Histogram) Peak Later Than Planned.
Field Labor (Crew Size) Peak Greater than Planned.
Low Quantities Installed Per Man-Hour Actual/Expended.
Abnormally/Unexpectedly High Field Labor Turnover Rate.
Billing less than Planned.
High Number of New Revisions to Scope Documents.

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Filed Under: Featured, General, Productivity, Projects Tagged With: Best Practice, Construction Contract Planning and Scheduling, Cost Certainty, George T. McLaughlin PMP, Highly experienced, McLaughlin & McLaughlin, Productivity Management, Project Manager PMP, Schedule Certainty, Trouble Project Recogntion, Troubled Projects

CONSTRUCTION CLAIMS and DISPUTES – Subject Series Summary – Update 11-Nov-2014

November 11, 2014 By George T McLaughlin PMP CCM

Just as the businesses and economies have cycles, capital projects (particularly engineering and construction) have recurring cycles. The pendulum swings back and forth within the bounds of the capital project cycle. In capital projects, the cycle can be three to five years, depending on the economy, size and complexity of the projects and other factors.

At this time, the market seems to be transitioning from project planning and early execution into middle to later-stage execution with emergence of disputes. As the claims and disputes marketplace intensifies over the next several years, Construction Claims and Disputes will become an increasingly commonplace and a relevant topic for capital project management professionals.

Construction Claims and Disputes continues to be the most popular subject on Project Professionals. Further, it is the most requested line of services provided by McLaughlin & McLaughlin. M&M are project management practitioners (in the field) and, yes, we practice what we preach. Further, our choice of topics for Project Professionals posts is driven by and reflective of practical and current issues. This is not esoteric, academic or hypothetical “stuff”.

This summary update provides readers with an overview of prior posts and provides a baseline for future posts that will follow on a timely basis. Initially, this Subject Series, Construction Claims and Disputes, was posted during January 2011 through July 2014. During the past several years, greater than 25% of views by visitors have been to this Subject Series.

Ideally this Subject Series provides a starting point to investigate best practice on many planning and execution features of construction claims and disputes. [Read more…]

Filed Under: Claims, Featured, General, Productivity, Projects, Uncategorized Tagged With: Best Practice, claims and disputes, Construction Claims Management, Construction Contract Claims, George T. McLaughlin PMP, McLaughlin & McLaughlin, Notice of Recognition, PMBOK, Productivity Management, Progress, Progress Assessment, Project Management, Project Management Institute (PMI), Project Management Plan, Recognition, Schedule Specification, Scope of Work, Scope of Work Management, www.mclaughlinandmclaughlin.com

CONSTRUCTION CLAIMS and DISPUTES – (Part 8)

January 27, 2014 By George T McLaughlin PMP CCM

Scope of Work – Impacts

This McLaughlin and McLaughlin (M&M) Project Professionals post is the eighth in a Subject Series Construction Claims and Disputes.

Recent posts (Parts 6, 7) address scope of work within the overall subject of Construction Claims and Disputes. Claims and disputes regarding scope of work are a widespread problem and represent the most common issue. Perhaps 75 to 90% of all engineering and construction claims and disputes involve contract scope of work. However, this is not confined to engineering and construction.

Direct compensation for a scope of work change may merely be the proverbial “tip of the iceberg.” What about the rest of the story? Is the contractor missing many other costs or schedule impacts? Often, this is the case. This issue may be broader that an added piece of equipment, redesign to avoid a conflict or similar events.

Scope of work disputes are building blocks to other claim elements in the dispute.

Delay – Changes can add work to the project critical path. If so, this would cause the forecasted project completion date to be extended (potentially later than planned).
Progress – Changed work adds to the overall project work content, thereby changing the progress measurement and reporting (Earned Value).
Disruption / Productivity – Changed work impacts field labor productivity, a major risk to contractors.
Overheads / Indirects – Changed work may add requirements for additional construction support, supervision, insurance and other indirects.
Terms and Conditions – The cost of bonding, insurance, warranties, guarantees, and many others can be impacted by changed work.
Profit / Fee – proper compensation in this area can be challenging.

The majority of the discussion will address entitlement to recovery (rather than pricing or quantum). For pricing (or quantum), please see McLaughlin & McLaughlin’s Project Professionals Construction Claims and Disputes Part 4 and Part 5. [Read more…]

Filed Under: Claims, Featured, General, Productivity, Project Planning, Projects Tagged With: Change Orders, Construction claims and disputes, construction claims damages, Construction Claims Management, Construction Claims Management Plan, construction claims pricing, Construction Claims Quantum, Delay, Disruption, Disruption/Productivity Impacts, Field work orders, George T. McLaughlin PMP, McLaughlin & McLaughlin, Plans and Specifications, Scope of Work Claims, Time Impacts, www.mclaughlinandmclaughlin.com

PROJECT PROFESSIONALS POSTING RESUMPTION

January 2, 2014 By George T McLaughlin PMP CCM

McLaughlin and McLaughlin [M&M] is pleased to announce that they will resume postings at their blog, Project Professionals. Since mid-2013, M&M has been heavily involved with several large assignments [Construction claims regarding several power plant projects]. Now that workload permits, new blog postings will be offered.

M&M wishes to remind followers (new and ongoing) that there are many offerings at the Project Professional site. They are organized by what we call Subject Series.

These Subject Series are:

M&M will resume with additional posts in the Subject Series Construction Claims and Disputes. This Subject Series focuses on methodologies, process, reference resources, techniques and other practical advice regarding the preparation, evaluating and managing construction claims and disputes.

We hope that you will find these existing and new posts informative and relevant.

We wish you the best of luck in this New Year.

Please note that McLaughlin and McLaughlin [M&M] is not a law firm and is not intending to provide legal advice. M&M is a consulting firm providing (among other services) non-legal expertise in dispute resolution and litigation support. The Resource Center is for the convenience of blog visitors and M&M does not offer this for commercial purposes. For further information on M&M services, please see www.McLaughlinandMcLaughlin.com.

Filed Under: Claims, Featured, General, Productivity, Project Planning, Projects Tagged With: Best Practice, Best Practices, Construction Claims, Construction claims and disputes, Construction Contract Planning and Scheduling, Engineering and Construction Disputes, Forecasting, McLaughlin & McLaughlin, Notice of Recognition, PMBOK, Productivity, Productivity Management, Progress, Progress Assessment, Project Execution Plan, Project Execution Planning, Project Management, Project Management Institute (PMI), Project Management Planning, Recognition, Schedule Specification, Stakeholder Management, Stakeholders, Ways of Working, www.mclaughlinandmclaughlin.com

A View from the Field Project Execution / Contracting Strategies Large and Complex Industrial Projects

May 6, 2013 By George T McLaughlin PMP CCM

This article from the Division 1 of the ABA Forum on the Construction Industry Newsletter “The Dispute Resolver” represents George T. McLaughlin’s “View from the Field” formed throughout the course of his 30+ year career in the industrial marketplace.[1] His article is broken into four parts. Part 1, below, describes the evolution of the delivery systems in large and complex industrial projects[2]. The remaining sections, which we will publish in our next three newsletters, will discuss the legal implications (Part 2), impact on claims, disputes, and resolutions (Part 3), and prevention and corrective processes (Part 4).

Part 1 of 4 – Framing the Issue

When the earth’s tectonic plates shift, unless there is a resulting earthquake, it goes unnoticed. The movement is not perceptible. Nevertheless, major changes are occurring. In large and complex projects, with three to five (or longer) year schedules, industry shifts may not be perceptible. Nevertheless, major changes and related impacts may be in progress. Trends and changes in project execution and contracting strategies are similar. These trends, however gradual and unnoticed on a daily or monthly basis, cause major impacts on existing and future projects. While industry experts cite or drive these changes, the impact on the field may be delayed or go unrecognized by many, if not all stakeholders. The business motivations driving the trends discussed below are varied and complex. Perhaps, the central theme is risk tolerance or management. The large worldwide prime contractors (typically Engineer Procure Construct) migrated toward limiting major risks by limiting scope of work, insisting on reimbursable cost (as opposed to fixed price) commercial terms, or both. Owners chose to limit or compartmentalize risks by breaking scope of work into smaller packages and seeking fixed price on these smaller packages. Construction Contractors retained a willingness to work on fixed price commercial terms; but, increased their tendency toward claims and disputes processes in order to manage their risks. Collectively, we see a myriad of fixed price scope of work packages being pieced together to form a complete project. Formerly, this mosaic of work scopes was under one Prime Contract. [Read more…]

Filed Under: Claims, Featured, General, Productivity, Project Planning, Projects, Uncategorized Tagged With: Construction Claims, Construction Contract Claims, Construction Contract Planning and Scheduling, contracting strategies, Disruption, George T. McLaughlin PMP, large and complex industrial projects, Large and Complex Projects, McLaughlin & McLaughlin, megaprojects, Productivity Management, Project Execution Plan, Time Management Strategy

PROJECT PLANNING (Part 4)

February 15, 2013 By George T McLaughlin PMP CCM

Summary of Posts

This summary update provides readers with an overview of prior posts regarding Project Planning and provides a baseline for future posts that will follow on a timely basis.

There are two applicable Subject Series. One Subject Series, PROJECT MANAGEMENT CHALLENGES was posted during June through September 2011. Since that time, blog readership has increased very significantly.

The other Subject Series, PROJECT PLANNING was started in late 2012. This Subject Series is ongoing and new posts will occur in the upcoming weeks and months. Readers are encouraged to subscribe to automatic update notification.

This summary is very brief and simply serves as an index for readers to follow. Of course, detailed descriptions are contained in the individual posts.

Ideally these Subject Series provide a starting point to investigate best practice on many planning and execution features of project management. [Read more…]

Filed Under: Claims, Featured, General, Productivity, Project Planning, Projects Tagged With: Best Practice, Best Practices, Construction Contract Planning and Scheduling, Earned Value Management, Forecasting, George T. McLaughlin PMP, GSA Construction Claims, McLaughlin & McLaughlin, Notice of Recognition, PMBOK, Productivity Management, Progress, Progress Assessment, Project Execution Plan, Project Execution Planning, Project Management Institute (PMI), Project Management Plan, Project Planning, Recognition, Schedule Specifications, Stakeholder Management, Stakeholders Management, www.mclaughlinandmclaughlin.com

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