Date: 1/12/2011 to 1/15/2011
Location: Walt Disney World Swan Hotel - Orlando, FL
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E. Mitchell Swann, P.E., of MDCSystems® & James W. Haile Jr., C.P.M., of JWH & Associates

Over the past 9 – 12 months or so many parts of the world have been rocked by unforeseen events – "black swans" – which have called into question some of the ideas or principals we've centered much of our business planning around.  Most notable of these in my mind is the Tohoku Japan earthquake and tsunami and the resulting Fukushima Nuclear Plant meltdown.   One of the things that Tohoku did was take out a significant swath of Japan's specialty automotive parts industry as the earthquake and tsunami affected regions were noted for being a hub for auto parts manufacturing for both Japanese and global car companies and those parts manufacturers were off line.  What this means is that their link in the supply chains of an important global industry was cut.  In the aftermath, many manufacturers have re-evaluated their supply chain strategies and are considering a broader diversity of suppliers both in number and regions. Many are also looking at the potential impact of 'just in time' production strategies and their supplier matrix.  Last year MDC published in its Advisor an article written by James Haile on the importance of having a robust supply chain and how to consider the various aspects of same.  In light of the Tohoku earthquake and how it put a glaring spotlight on the sensitivity of global economic productivity to what are local or regional impacts, MDC felt that it might benefit our readers to re-publish that article.  Nothing teaches like experience and the Japanese earthquake, tsunami and power plant meltdown provided a very teachable moment (more like 6 months of moments) on the impact of black swans and the value of systems-based thinking. 

Robert C. McCue, P.E.
MDCSystems®
Consulting Engineer

If you are seeing a rise in problem projects and difficult work-outs, take steps now to inoculate your project team for success and profitability.  Basic PMBOK training is certainly necessary but not entirely sufficient to ensure success in today's fast-paced project environment.

Your team should be alert for the following warning signs of impending project trouble:

Robert C. McCue, P.E.
MDCSystems®
Consulting Engineer

MDCSystems® has been providing Forensic Project Management (FPM®) services for over forty years for industrial, transportation and institutional capital projects. Using this extensive knowledge base, MDC®, develops and conducts seminars for the public and private sectors on many topics including the topics of Complexity and Systems Thinking, Sustainability, CPM scheduling, Claims Avoidance and Green Buildings.

Robert C. McCue, P.E.
MDCSystems®
Consulting Engineer

MDCSystems® has been providing Forensic Project Management (FPM®) services for over forty years for industrial, transportation and institutional capital projects. Using this extensive knowledge base, MDC®, develops and conducts seminars for the public and private sectors on many topics including the topic of Complexity and Systems Thinking.

James W. Haile Jr.
C.P.M., of JWH & Associates
April 2010

Over the last several years, supply management professionals have been spending a majority of their time in creating, implementing and managing Business Continuity Planning (BCP) for critical products, materials and services. BCP is a strategic management process that focuses on insuring continuity of supply. The main objective is to identify and minimize or eliminate business interruptions in the event of a catastrophic event or major incidents occurring within the supply chain that can lead to adverse consequences for your business. Ten to twenty years ago, supply disruptions were caused by major snow storms, truck breakdowns, labor strikes, fire or explosions, electrical outages, machine breakdowns or even a truck driver making an unscheduled social visit.
In today’s global business environment, business supply disruptions have greatly expanded in scope. They now include and are not limited to the following:

Daniel J. Sporer
MDCSystems®
Consultant

You are a month and a half into construction of a planned one year project. It’s a new client and if you do well, you are in line to construct his future projects. However, the Engineers’ drawings don’t quite match the existing site conditions; there is already an inordinate amount of Requests for Information (RFIs), and the Client is very involved with your construction means and methods. No change orders have been written because 1: You “worked-around” the site layout problems; 2: There is still time to resolve the unanswered RFIs and 3: The finish milestone on the project has not been affected because you used float in the schedule. In any event, you don’t want to “nickel and dime” the new client.

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Thomas Hundertmark, Andre Olinto do Valle Silva, and Jeff A. Shulman
June 2008

Stephen M. Rymal, P.E., Esq.
MDCSystems®
Consulting Engineer

Construction is as timeless as the pyramids. As a result, the most common construction risks have already been identified and allocated in the terms and conditions of standard form contracts. These are published by a multitude of professional associations such as the Construction Management Association of America (CMAA) and the American Institute of Architects (AIA). This article discusses the practical aspects of risk management and how to convert a potential problem to work to your advantage.

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Robert N. Kennedy, P.E.
MDCSystems®
Former Consulting Engineer

Interview with Joe Gionfriddo, Global Construction Process Owner of Proctor & Gamble

MDC®’s Mitchell Swann met with Joe Gionfriddo at this year’s McGraw-Hill Global Construction Summit in Beijing, China in April 2006.  Mr. Gionfriddo, the Global Construction manager – Corporate Engineering at P&G, was a part of a Panel Program entitled "What Do Global Owners Need?"  which featured speakers form a number of  global owners.  We thought his comments and viewpoints were very insightful and would be of value to our Advisor readers. Below is a short interview we conducted with Joe Gionfriddo.

Using Project Management Modeling Tools to Quantify, Analyze and Reduce Exposure to Risk

Some project histories are very complex and traditional schedule and damage analysis methods are not able to quantify the impacts of events that have occurred over the life of the project. In these situations MDC® has relied upon more sophisticated mathematical and system based models to attribute impacts to particular events. The usual methods of determining and reducing risk on construction projects include schedule forecast, cost forecasts and change review analysis performed by the project team. However, sometimes these techniques do not allow for an overview that properly adds the effects of many individual events. On these occasions the project team needs more powerful and sophisticated tools that can include multiple project factors including resource availability, site conditions, environmental factors and productivity levels for both planned and actual conditions on the project to date, all factors that cannot be completely comprehended by the project manager without the aid of analysis.

John P. Sieminski, Esquire
Burns, White & Hickton, LLC
December 2005

Information Explosion

The world is going digital and the business world is no exception. It is estimated that over 90% of new information is created on an electronic device in digital form. Of that electronic information, it is also estimated that approximately 30% is created, used, maintained, stored or destroyed without ever being printed to paper. The construction industry is no exception to this trend. The industry has embraced the use and exchange of information that, fifty years ago, would invariably have been created and used in the traditional form of paper drawings, specifications, letters, memos, and other traditional forms. For the reasons discussed below, electronic mail is a form of digital information that has achieved particular prominence and deserves special attention. In addition, the sheer volume of information created in business and non-business settings is staggering. Researchers at the University of California at Berkeley estimated, for the year 2003, that five exabytes of new information were created and that the amount of new information is growing each year. (One exabyte is 1,000,000,000,000,000,000 bytes OR 1018 bytes.)

Robert C. McCue, P.E.
MDCSystems®
Consulting Engineer

Risk and risk sharing means different things to different people. It may not be possible to eliminate all risk in undertaking capital projects. Owners will attempt to shift risk onto contractors through contract provisions, while contractors will attempt to share risk among the subcontractors and suppliers. Nevertheless some risk remains for all and cannot be eliminated. However, it is possible to recognize and limit risk for the overall project by implementing effective planning and execution strategies during the conceptual stage of the project.

Robert N. Kennedy
MDCSystems®
Former Consulting Engineer

The benchmarking process is one where a project's general scope using key metrics is compared to other similar projects. This general metric/scope includes such items as total gross square feet, net square feet, rentable square feet, net-to-gross ratio, number of occupants, the number of particular spaces (i.e. number of rooms in a hotel), general configuration (footprint and/or number of stories), location of project, and timeframe. If this initial comparison doesn't illuminate a projects cost and/or schedule similarities or peculiarities, then one must delve deeper into the project scope to determine any or all differences. This means the stakeholders must understand the projects detailed scope parameters such as type of structure, assumed number of interior spaces, the level of finishes and specialties, the vertical transportation needs, the requirements of the mechanical and electrical systems, and site specific differences (roads, utilities, parking, etc.). Once this type of comparison is completed, a proposed facility should be fully benchmarked against its peers.

Daniel J. Sporer
MDCSystems®
Consultant

On a large multi-million dollar project, it shows up in the cost reports. On a smaller project, the schedule may start to show specific activity schedule slippage. The same estimator developed the bid, the project scope has not changed and your most trusted foreman says he has excellent crews. You might be experiencing labor inefficiencies and probably don’t know it. The cost reports and schedules might tell you that it occurred, but it will require additional data / analysis to determine why it has occurred and who has caused it to prove entitlement and to calculate your recovery costs.

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The primary goal in construction recordkeeping is to manage crucial information to facilitate decision-making. A secondary goal is to document key aspects of the project to provide an audit trail or comply with legal or regulatory documentation requirements. Frequently project participants lose sight of these two important goals; and resort to “wall-papering” the project office with reams of useless documents.