KPI ’ s for Measuring & Controlling STO Projects

1. KPI’s for Measuring & Controlling STO Projects E.J. (Ted) Lister Lister Management Inc.

2. Agenda • Project Controls / Project Management • Definitive Definitions • The 4+ Key Performance Indicators • Measuring Performance • Trending, Forecasting • Questions

3. Project Controls / Project Management Overview… • You must be able to measure, in real-time, the status of your project based on KPI’s and their set Targets • Projects need to be both controlled and managed • It’s important to understand what you can control, and what you cannot; what you can manage, and what you cannot • A method of measuring needs to be established for both controlling and managing the project

4. Project Controls / Project Management Overview – cont’d… • Establish Project Controls at project kick-off • Work-list / Work-scope • Budget • What-if scenarios / Risk Management • KPI’s and Targets • Project Management begins at Work-list cut-off • Work Management (Direct) • Resource Management (Indirect)

5. Definitive Definitions • Planned Value • Estimate of Wrench-hours for an activity • Earned Value • % complete of a planned activity based on field status • Actual Value • Cost measurement; also used to measure worker performance • Longest Job • Zero-float, determines the duration of the outage • Not to be confused with critical path, which accounts for risk

6. Definitive Definitions – cont’d • S-Curve • Chart of values distributed along wrench-hour/time x y axis • Baseline • A snapshot of the initial plan/schedule before feed-out • Performance • Earned vs. Planned, Actual vs. Earned, Actual vs. Planned • What-if Scenarios • Leveling a programmed plan to determine the best case scenario based on cost, schedule duration, and wrench-hours

7. The 4+ Key Performance Indicators In Order of Magnitude… • Safety, Health & Environment • Worker Performance • Wrench-time (76.7% direct in a 10 hour shift) • QA/QC (rework) • Schedule (earned vs. planned) • Cost (actual vs. planned) • Direct • Indirect

8. The 4+ Key Performance Indicators Setting Key Performance Targets… • Safety, Health & Environment = +5000 points • Worker Performance • Wrench-time (Direct) = 75% • QA/QC = 0 Rework • Schedule (Feed-in – Feed-out) = 31 Days • Cost = $41.2M • Direct (Wrench-hours x $45.00/h) = $18.7M • Indirect (115% of Direct) = $21.5M • Planning, Pre-Work, Post, Contingency = $1.5M

9. The 4+ Key Performance Indicators Safety, Health & Environment… • Set positive targets for SH&E • Earn points each shift for 0 incidents (150 points) • Earn points for ProAct card reporting (150 points) • Earn points for audits (200 points) • Lose points for recordable incidents • A lost-time incident takes you into the negative with no chance of recovery • Incentives are based on positive numbers

10. The 4+ Key Performance Indicators Worker Performance… • Set realistic direct wrench-time for worker performance • No more than 75% • Remember, once you determine direct wrench-hours all indirect resources and logistics are based on this number • If you don’t use strategic planning to support this number your chances of achieving this target will be diminished • Use productivity factors based on: season, location, worker experience, resource availability (inspectors, cranes, etc.)

11. The 4+ Key Performance Indicators Schedule… • Establish a schedule in your planning software with a clearly defined WBS (Work Breakdown Structure) and Phase • The WBS is a vertical hierarchy of physical locations • The Phase is a horizontal section of work types • Use What-if Scenarios to determine the longest job (series of planned activities with no float) • Control the longest job; manage the remaining tasks

12. The 4+ Key Performance Indicators Cost… • The cost is based on Work-scope + Indirects + Contingency = Budget • Costs can only be controlled through Work-scope changes • Costs are managed, not controlled, through performance • Costs need to be measurable based on direct and indirect; found and added; WBS and Phase

13. 100% Or Total Planned Man-hours Original Man-hour Overrun Schedule Slippage STATUS = % COMPLETE or MHRS Schedule Variance New Scheduled Man-hours New schedule affected by activities not completed as per schedule plus added and extra work Original Baseline Scheduled Man-hours Earned Man-hours Original Target Current Day New Target Focus on Work Ahead History TIME Measuring Performance Project Performance S-Curve… • Baseline Planned • Earned Value - WP • Actual Value - $ • Found/Added Work • Historical Trend • Forecast

14. Measuring Performance • Baseline… • Save your project as a baseline comparative project just prior to feed-out • Use the baseline for variance reporting and historical reference

15. Measuring Performance Updating… • It imperative that field status reporting is done prior to the end of each shift for each scheduled activity • The programmer will update the project in the planning software as a percentage complete (earned value) • Actual hours can be tracked in the planning software, or accounting software, from timesheets • The programmer must advance the project to the current status date and time

16. Measuring Performance Updating – cont’d… • No uncompleted work can ever appear behind the status date line • Use earned value % complete; do not try to capture actual start and finish times

17. Trending and Forecasting Using S-Curve Data… • Trending performance should begin between day 3 – 5 to establish data to forecast probable target completions • Use trending and forecasting to control the project Work-scope

18. Trending and Forecasting Reporting… • A daily one-page report should be generated to illustrate the status of each KPI • Additional information can also be included: • New Critical, All Critical • Found Work, New Work, Delays • Weather, POB, etc.

19. E.J. (Ted) Lister Lister Management Inc. akaboreese@hotmail.com