1. 25th August 2011 Professor Peter ED Love PhD FRICS

2. Anticipating What Might Go Wrong 1. Introduction 2. Introspection 3. Nature of Rework 4. Costs 5. Causes 6. Rework Reduction

4. Research Process Case Studies Construction Offshore Mining Engineering

6. A Budget (Bt) Bt ACV OCV B C Appraisal (Briefing) Difference from Bt D Strategic Brief Overrun E Original Contract Value (OCV) Outline Proposal Preparation F Detailed Deign G Scheme Design and Planning Actual Contract Value (ACv) H Production of Information Difference from OCV Tender Documentation J Tender Action K L Operations to Practical Completion Project Planning and Mobilization Design M Practical Completion Feedback Use Construct

7. Construction Projects Cost Overrun 12.6% 52% Rework contributes to: 20.7% Schedule Overrun

8. Civil Engineering Projects

9. Offshore Projects Mean cost overrun for offshore construction programs 35% Mean schedule overrun 7 months The International Energy Agency (IEA) has indicated worldwide energy infrastructure is projected to reach US$17 trillion by 2039. Source: DNV 2011

10. Unnecessary effort of re-doing a process or activity that was incorrectly implemented the first time

11. Structure of Rework Errors Economic, environmental & social impacts Non-compliance Rework Mistakes Incubation Period Failure Accidents Latent Conditions Slips Lapses Cognitive Failure

13. Pathogens Pathogens are latentconditionsand lay dormant within a system until an error comes to light People are unawareof the impact of decisions, practices or procedures can have

14. Qualities of Pathogens Stable phenomena and have been in existence for a substantial time before the error occurs Before the error occurs they would not have been seen as obvious stages in an identifiable sequence failure

15. Learned Behavior Individuals may repeat practices such as taking short cuts and not follow due processes. When a practice provides an outcome that is satisfactory, then this practice is used again, even it is unsuitable for that task/process.

16. Types of Error Mistake - rule or knowledge based Non-compliance – decides not to carry out a task Slips and lapses of attention – forgetfulness, habit, etc

17. Total Rework Costs

18. Mean Rework Costs

19. Rework and Contract Value

20. Goodness of Fit Test Compatibility of a random sample with a theoretical probability distribution. Kolmogorov-Smirnov statistic (D) expressed as (Eq.1): Anderson-Darling statistic (A2) (Eq.2):

21. Pareto Distribution

22. Probability Distribution Cumulative probability distribution (CDF) Probability density distribution: Histogram 79% (n=218) < 16% Ocv Probability density distribution (PDF) k = 0.173 σ = 9.132, μ = 0.250 CDF expressed as (Eq.3): PDF expressed as (Eq.4):

23. Probability by Point Probability > 5% rework is 34% Probability < 10% rework is 85%

24. Probability by Contract Range Construction projects > $A101m (M=6.81%) the probability of rework is: P(X < X1) = 0.85, P(X >X1) = 0.15. Civil engineering projects with a contract value in the range of $A11-50m (M= 10.99%) the probability of rework is: P(X < X1) = 0.66, P(X >X1) = 0.34.

25. Fixed Platform Spar FPSO Semi-Submersible Tension Leg Platform

26. Offshore: Rework Costs Con. FPSO: 55% New Build FPSO: 10 -15% TLP: 20 – 25% Expected and ‘norm’: 10%

32. Simplification of tasks and neglect for other aspects of designPathogens arising from a characteristic of a technical tool Tool

33. Causal Chain: Example Pathogen Practice of designing work on tentative information Extract Practice of departing from project protocols Omission Error Example: “……….The electrical engineers simply went ahead with designing the cable tray without talking to us and explaining their problem. It cost us hundreds of thousands of dollars to rectify this problem”. Information overloadand higher demands based on electrical engineer –design check step missed Planned departurefrom standard operating procedures Practice of under estimating the time required for design Effect ↑ Conflict etc ↑ Stress ↑ Cost

34. What an Engineer Said “There’s always going to be figures that don’t match up. It’s a fact of life, and we normally sort out any problems that arise with the contractor”.

35. What an Architect Said “It’s cut throat out there. Fees are very tight and clients are not willing to pay us what we require. I understand that documentation is sometimes poor, but we also don’t have enough time to prepare it. Client’s expectations have increased, but fees have not. They think that we can design overnight sometimes”.

36. View From the Field Observation 1: “No one had a clue, they had different understandings of the same event”Observation 2: “People filter out most of the information around them”Observation 3: “Cultural differences increase the likelihood of different interpretations of the same event”Observation 4: “Problems arise when the goals of people in the same organisation start to diverge”

37. View From the Field Observation 6: “People’s decisions are a trade-off between the available information and the available time”. Observation 5: “People break rules to make work more efficient”. Observation 7: “People make mistakes. Organisations make it possible for them to be really serious”.

38. Dynamics of Rework Alliances between engineering contractors and offshore fabricators can improve interfaces. The client/operator can reduce costs and interparty claims between engineering contractors and fabricators. Uncertainty in scope may arise when a clients perceptions of market conditions change or when capital is required to push ahead with a project even when a reservoir has not been fully defined If rework is required then activities and processes may be subjected to acceleration The ‘+’, and ‘-’, respectively, classifies positive and negative consequences of an increase of the original variable on the relying variable.

39. Rework Reduction Measures designed to limit the occurrence of errors

40. Learning to reduce