Over the next few months I will publish a series of articles discussing how to respond to a petrochemical fire / explosion .. based on my experience in fire rebuilds as a Project Manager I have developed some thoughts on how to approach the organization, scope development and execution of these "ultra fast-track" projects. One thing I learned is that there is no manual on how to manage a fire rebuild project, but hopefully some of my ideas may help.
I will break down the discussion into four areas;
1. Project Development2. Project Management
3. Project Objectives
4. Scope Development
5. Project Controls
This entry will discuss the first two topics .... as always, these are just my opinions.
Fire Rebuild Project Development
In normal operations, an organization will fully develop a project through a well defined and thought out exercise, risks have been identified early, plans have been made to mitigate these risks and the PMT has a clear expectation for the project and final post-project condition.
However, in the unfortunate event of an explosion and fire, these operating “norms” for project development become extremely compressed. It would be an understatement to categorize the compression as “fast track.” More accurately, the recovery effort will be conducted at a “killing pace” where all phases of project planning and preparation are overlapped in such as manner that the boundaries between them are not visible.
In the initial stages of a fire rebuild interests are often divergent; the initial focus is on unit decontamination, remediation of environmental concerns, unit isolation and gas-freeing to make the unit safe for entry.
Focus then transfers to the incident investigation, Insurers needs for potential subrogation activities as well as the concerns of Local, State and Federal authorities. Each party has their own list of priorities, area of responsibility, interests to protect and expectations for the project.
These competing interests are a major distraction to the Owner organization’s efforts in developing the project with any sense of normalcy; such as identifying project requirements, establishing clear and achievable objectives while balancing the competing demands for quality, scope, time and cost.
Eventually the interests become aligned over time as the number of stakeholders decrease to the Owner organization and the Insurer. At this time the project requirements become simplified; to proceed safely, to rebuild a reliable unit and to rebuild the unit as quickly and efficiently as possible. Typically the Owner will align all other objectives towards these goals. Even though the Insurer announces that they will be aligned to these goals, their focus is typically limited to demands for scope, cost and schedule control.
A normal project life cycle would allow for a disciplined phase approach that would ensure alignment prior to proceeding to the next phase of the project. However, the natural time line for balancing competing demands and conflict resolution becomes too time consuming for a fire rebuild project. Thus creating a competition between the costs for the repair of property damage and mitigating business interruption.
Further compounding this complexity is that the cost profile for a fire rebuild project is exponentially more aggressive than a “normal” project and the time window of influence is much narrower.
Although there is no single “best” way to manage a project, all projects should apply project management skills and process to achieve the desired performance. Just because the project is "fast track" and someone believes a particular process is not required doesn’t mean that it is not neccesary. It is the responsibility of the Project Management Team to address every process and ensure that all required processes are implemented as well as the level of implementation for each process.
This aspect is especially true in the case of a fire rebuild effort; the decisions made earliest in the project will have the greatest impact on the final outcome of the project. The window for these decisions is critically narrow due to the time compression of the project life cycle.
As the organization progresses through the various phases of the fire rebuild categories of risk are identified and are either eliminated or plans are made to mitigate the risks. The ability of the organization to affect any impact on these risks is in direct proportion to the influence; risk management capabilities decrease as the timeline progresses.
Missing this window of influence is usually manifested in cost and schedule creep.
Typical “fast track” projects are a method of implementation where construction and design are overlapped to expedite completion of the project. It is not only an activity that is done fast, but more than that, refers to an overlap on stages of design and / or construction before the preceding stage is complete. Fast tracking of projects has become popular in the industry and can bring advantages such as;
1. Realize investment opportunities more quickly2. Reduced time for implementation
3. Lower cost
4. Reduced burden on Owners by single source contracting for EPC
On the other hand, fast track projects have inherent challenges;
1. Timeline is compressed for procedural approval2. Transfer of information, feedback and evaluation of documents
3. Requires strict cash flow, prompt payment and extensive capital resources
4. Requires strong and experienced manpower resources, especially in project management
5. Influence window is severely reduced
6. Higher risk profile for scope, cost and schedule creep
Fast track projects are also inherently unstable because construction has begun before engineering and design is complete. The risk profile for increased cost due to design delays, errors, omissions, scope growth through discovery is extremely high.
In the case of a fire rebuild project, executed at an ultra-fast track basis (where even the normal luxury of planning for a normal fast-track project is absent), the organization does not have the luxury of time to focus upon a fully developed, risk free plan that satisfied the interests of all stakeholders.
The Owner and Insurer organizations must understand that a fire rebuild is no normal operating condition and they will not be able to fully develop the project through a well defined exercise; where all risks had been identified early, plans had been made to mitigate these risks and all stakeholders have a clear expectation for the project and final post-project condition.
The Owner and Insurer organizations must accept the known risks and potential risks of an ultra-fast track fire rebuild project and make preparations to establish processes that would mitigate these risks.
The project must have clearly stated objectives, widely published and understood and all decisions must be balanced against the objectives.
Project Management
There are a series industry accepted best practices, tools, techniques, methodologies, resources and procedures used to manage a project. Most organizations consolidate these sets of process in to a unified, integrated comprehensive plan called the Project Execution Plan, Project Management Plan, Project Management System, or some other similar designation. For this report we will refer to the set of process as the Project Management Plan (PMP).
The PMP dictates how the project will be managed and serves as an ongoing aid in effectively managing a project to completion; it defines how the project will be executed, monitored, controlled and finalized. The PMT agrees that this is the set of guiding principles for the control and maintenance of the project.
The PMP documents the collective input of the Stakeholders and in part includes;
• The various project management process selected by the PMT• Level of Implementation of each selected process
• Descriptions of the tools and techniques used to accomplish each process and interactions with other process
• How the work will be executed to meet the project objectives
• How changes will be monitored and controlled
With a fire rebuild, the Project Management Team must develop a plan that will balance the demands of scope, time, cost, quality, resources and risk. The Owner and Insurer should develop a joint project management plan (Loss Management Plan) which identified the critical areas to address and protocols for tracking and reporting.
While the Owner should rely on as much in-house processes as possible, they may have to rely on their main mechanical contractor to augment their processes and procedures for the fire rebuild effort.
This is a perfectly reasonable approach and reliance upon contractor management capabilities is actually a very prudent category to include in contractor selection. Many Owner organizations will contract these skill sets but maintain management oversight. The Owner will soon realize that they do not have enough resources within their in-house organization with the requisite experience to solely manage an effort of this size and chose to rely on their main mechanical contractor to provide a significant portion of project management tools for the rebuild project with the Owner continuing to maintain management oversight.
Most experienced project managers know that there is no single “best” way to manage a project as each applies their own knowledge, experience, skills and processes in different order and degrees of rigor to achieve project goals. However, this is not to say that there aren’t certain categories of project management principles that should be taken into account for all projects regardless of size, complexity or timeframe for execution, such as;
1. What is the objective of this project?2. How will we develop the scope of work to meet this objective?
3. Once we know our scope of work, how will we design, execute, manage, monitor and control the project work?
4. What processes will we use to identify, track and control changes to the project?
5. How will we report the project?
These processes must be decided upon and implemented early in the project. The expectations for timing, level of accuracy, processes, roles, responsibilities, etc must be widely communicated and understood.
My next post will discuss how to develop the project objectives and conduct fire rebuild scope development.
