Mba Project Report M00328327 (1)

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A Study on increasing Operational efficiency in EPC Projects using ‘Lean’ Principles October 14 2011 A Consultancy Project Report - For Dodsal Engineering & Construction Ltd., Dubai Venkatesh Kumar Subburaj M00328327 MBA4800-Project Report Middlesex University Business School ACKNOWLEDGEMENT I owe debt of gratitude to all those people who have helped me with this study. First, I would like to thank my professors at University of Middlesex who helped me in understanding the concepts of management and creating a way to develop myself as a potential leader. Special thanks to Prof. Simon Speller and Dr.Vinaya Shukla, who has significantly influenced my thinking about consultancy in Operations Management and guided me in the successful completion of this text. I extend my thanks to Dr. Anjali Bakhru who refined my thoughts for choosing this study in the initial stages. I owe a massive debt of gratitude to people in Dodsal, Dubai, UK, who were the respondents in the interview process and helped in identifying, solidifying the concepts required for the study. I would also like to thank my family and friends for supporting and encouraging me throughout the course of study. 2 Declaration of Originality I hereby declare that this project is entirely my own work and that any additional sources of information have been duly cited. I hereby declare that any internet sources, published or unpublished works from which I have quoted or drawn reference have been reference fully in the text and in the contents list. I understand that failure to do this will result in a failure of this project due to Plagiarism. I understand I may be called for a viva and if so must attend. I acknowledge that is my responsibility to check whether I am required to attend and that I will be available during the viva period. Signed ________________________ Date _______________ Name of Supervisor / Mentor _________________ 3 Table of Contents 1. SCHEME OF RESEARCH ................................................................................................................. 10 1.1 INTRODUCTION...................................................................................................................................... 10 1.2 OVERVIEW OF EPC INDUSTRY IN UAE ....................................................................................................... 11 1.3 ABOUT THE FIRM ‘DODSAL’ ..................................................................................................................... 12 1.4 OBJECTIVE OF THE PROJECT ..................................................................................................................... 13 1.5 STRUCTURE........................................................................................................................................... 14 1.6 SUMMARY ............................................................................................................................................ 15 2. LITERATURE REVIEW .................................................................................................................... 16 2.1 UNDERSTANDING DODSAL’S OPERATIONS ................................................................................................. 16 2.1.1 Business Models Used by Dodsal for delivering EPC projects: ................................................... 17 2.1.2 Brief outline of Downstream EPC projects ................................................................................. 18 2.1.3 Typical Construction sequence in EPC projects .......................................................................... 24 2.1.4 Project Organization structure ................................................................................................... 25 2.2 INDUSTRY TRENDS AND PRODUCTIVITY ISSUES ............................................................................................ 27 2.2.1 Key Industry Trends .................................................................................................................... 27 2.2.2 Common Management issues in EPC Projects ........................................................................... 29 2.2.3 Consultancy Problem definition ................................................................................................. 31 2.3 LITERATURE STUDY ON IMPROVING PRODUCTIVITY ...................................................................................... 32 2.3.1 Common issues in concurrent development projects................................................................. 32 2.3.2 Lean approach to productivity improvement............................................................................. 33 2.3.3 Value streams - the opening pace for Lean................................................................................ 35 2.3.4 Analyzing information flow using Design Structure Matrix (DSM) ............................................ 36 2.4 SUMMARY ............................................................................................................................................ 38 3. RESEARCH METHODOLOGY .......................................................................................................... 39 3.1 INTRODUCTION...................................................................................................................................... 39 3.2 SIMON SPELLER CRACKER MODEL ............................................................................................................. 39 3.3 PROJECT APPROACH AND DESIGN ............................................................................................................. 42 3.3.1 Field Analysis .............................................................................................................................. 43 3.3.2 Interviews/Meetings .................................................................................................................. 43 3.3.3 Desktop Analysis ........................................................................................................................ 45 3.4 LIMITATIONS ......................................................................................................................................... 45 3.5 SUMMARY ............................................................................................................................................ 45 4. DATA ANALYSIS ............................................................................................................................ 46 4.1 INTRODUCTION...................................................................................................................................... 46 4.2 IDENTIFYING VALUE STREAMS .................................................................................................................. 46 4 4.3 DSM ANALYSIS...................................................................................................................................... 52 4.3.1 Planned iterations ...................................................................................................................... 57 4.3.2 Unplanned iterations ................................................................................................................. 57 4.4 ANALYZING THE RESULTS AND CREATING CAUSAL MAP ................................................................................. 59 4.5 SUMMARY ............................................................................................................................................ 64 5. RECOMMENDATIONS ................................................................................................................... 65 5.1 INTRODUCTION...................................................................................................................................... 65 5.2 VALUE STREAMS BASED ORGANIZATION .................................................................................................... 66 5.2.1 Proposed Organizational structure ............................................................................................ 66 5.3 POTENTIAL IMPACT ANALYSIS .................................................................................................................. 70 5.4 JUSTIFICATION FOR NEW ORGANIZATION STRUCTURE ................................................................................... 72 5.5 BARRIERS FOR IMPLEMENTATION ............................................................................................................. 74 5.6 LEADERSHIP STRATEGIES ......................................................................................................................... 75 5.7 FUTURE PACES ...................................................................................................................................... 77 6. CONCLUSION................................................................................................................................ 79 7. APPENDICES ................................................................................................................................. 81 APPENDIX 1: OUTCOME OF INTERVIEWS/DISCUSSIONS ............................................................................ 81 APPENDIX 2: WORK BREAKDOWN STRUCTURES FOR VALUE STREAMS .................................................... 85 APPENDIX 3: IBC CODE OF CONDUCT AND PROFESSIONAL PRACTICE ....................................................... 87 APPENDIX 4: UPDATED SCHEDULE FROM PRIMAVERA USED FOR THE ANALYSIS ..................................... 88 8. REFLECTIVE SUMMARY ................................................................................................................. 96 9. REFERENCES ............................................................................................................................... 100 5 List of Figures FIGURE 1 : ENGINEERING & CONSTRUCTION PROJECTS .......................................................................................... 12 FIGURE 2 : CLASSIFICATION OF EPC PETROCHEMICAL PROJECTS .............................................................................. 17 FIGURE 3 : BUSINESS MODELS IN EPC BUSINESS .................................................................................................. 18 FIGURE 4 : EPC VALUE CHAIN ........................................................................................................................... 19 FIGURE 5 : BASIC BLOCKS FOR INFORMATION FLOW .............................................................................................. 19 FIGURE 6 : TYPICAL PROJECT SCHEDULE .............................................................................................................. 21 FIGURE 7 : CONSTRUCTION EXECUTION SEQUENCE ............................................................................................... 25 FIGURE 8 : PROJECT ORGANISATION STRUCTURE .................................................................................................. 26 FIGURE 9 : ISSUES LEADING TO PROJECT OVERRUNS .............................................................................................. 30 FIGURE 10 : CONSULTANCY PROBLEM DEFINITION................................................................................................. 31 FIGURE 11 : LEAN CORE PRINCIPLES .................................................................................................................... 34 FIGURE 12 : SIMON SPELLER CRACKER MODEL ..................................................................................................... 39 FIGURE 13 : STEPS TO ORGANIZE PROJECT ALONG VALUE STREAMS .......................................................................... 46 FIGURE 14 : DIFFERENT BOUNDARIES FOR EPC PROJECTS ...................................................................................... 47 FIGURE 15 : PLANNING LEVELS IN EPC PROJECTS .................................................................................................. 48 FIGURE 16 : CHARACTERISTICS OF VALUE STREAMS ............................................................................................... 50 FIGURE 17 : STEPS IN PREPARING VALUE STREAMS FOR DSM ANALYSIS .................................................................... 53 FIGURE 18 : STEPS IN CREATING DSM BLOCKS ..................................................................................................... 55 FIGURE 19 : DSM MATRIX ............................................................................................................................... 56 FIGURE 20 : COMMON BEHAVIORAL PATTERNS LEADING TO REWORK ...................................................................... 60 FIGURE 21 : CAUSAL ROOT MAP ANALYSIS ........................................................................................................... 62 FIGURE 22 : STRATEGIC MATTERS ...................................................................................................................... 65 FIGURE 23 : CURRENT ORGANIZATION STRUCTURE ............................................................................................... 68 FIGURE 24 : VALUE STREAM BASED ORGANIZATION STRUCTURE.............................................................................. 69 FIGURE 25 : TOP BUSINESS FACTORS ................................................................................................................. 81 FIGURE 26 : STAKEHOLDER MAPPING ................................................................................................................ 84 FIGURE 27 : WORK BREAKDOWN STRUCTURES STAKEHOLDER MAPPING .................................................................. 85 FIGURE 28 : IBC COMPETENCY FRAMEWORK ....................................................................................................... 87 6 List of Tables TABLE 1: STAGES IN EXECUTION OF EPC PROJECTS ................................................................................................ 21 TABLE 2: VALUE STREAMS IDENTIFIED................................................................................................................. 52 TABLE 3: POTENTIAL IMPACT ANALYSIS ............................................................................................................... 72 TABLE 4: BARRIERS TO IMPLEMENTATION ............................................................................................................ 76 List of Gantt charts GANTT CHART 1: CONSULTANCY PROJECT PLAN ................................................................................................... 42 GANTT CHART 2: IMPLEMENTATION PLAN ........................................................................................................... 79 List of Abbreviations EPC DSM LSTK RFI RFQ PO WBS TQM P&ID IFA IFC AFDE - Engineering, Procurement and Construction - Design Structure Matrix - Lump Sum Turn Key projects - Request for Information - Request for Quotation - Purchase Order - Work Breakdown Structure -Total Quality Management - Process & Instrumentation Drawings - Issued For Approval - Issued For Construction - Approved For Detailed Engineering 7 Abstract Lean principles originated from Toyota production system have made revolutions in many sectors, especially in manufacturing sectors with the achievement of high productivity. This report sets the stage to extend this philosophy into EPC industry, which is a conservative industry and use of those principle has not been widely accepted yet in the region. Typically EPC projects spans for 3 -4 years and involves coordination of various engineering functions. This industry involves tremendous flow of information due to the high overlapping of tasks called concurrent engineering. Several factors from the external environment have been scanned to understand the increase in pressure with the EPC contractors to adopt concurrent engineering setup. The current formal functional organization structures that exist in this industry is not able to cope with the industry trends and lead to many productivity issues, which in turn end ups with project overruns in terms of both schedule and budget. Dodsal Engineering and Construction Ltd, the flagship business of the Dodsal group is the sponsor of this internship. They are in the business of executing large scale engineering and construction projects for more than five decades. They are one of the major EPC contractors in United Arab Emirates. They have been facing significant productivity issues as discussed above in the recent years. The rationale behind this internship is to identify ways for applying Lean Principles to address their productivity issues and recommend an environment where continuous improvement is the fundamental nature. Considering the crucial factor of information flow in the industry and based on the Lean literature, value stream based organization was proposed based on the Lean concepts ‘Value streams’ and Design Structure Matrix (DSM). The exercise of organizing a project along value streams was done and the DSM identified the causes for rework, which is the most important reason for project overruns. 8 The DSM tool was used to identify the positive and negative iterations in the process. Recommendations were made to reduce the negative iterations. Further, this report demonstrates the need for this approach and explains how it is complementary to their growth strategy. Currently there are several internal initiatives within Dodsal to adopt this proposal. 9 Unit -1 1. Scheme of Research 1.1 Introduction EPC project refers to engineering, Procurement and Construction projects. EPC contractors are those who carry out such large scale engineering and construction projects on behalf of clients. The client here generally refers to oil & gas companies. At a conceptual level the most important challenge in managing an EPC project is to coordinate among the engineering, procurement, construction groups and ensure proper & timely flow of information/material. EPC industry over the decades had well defined systems to facilitate this. However in recent times, there have been significant changes in the industry which disrupt the flow. The major reasons are as follows. The first one being the dramatic increase in client power and other one is the execution of project, which is globally distributed. This in turn has shortened the project schedules. Meanwhile, the scope of activities has been drastically increased in terms of safety regulations and information system that is handover to clients. As a result, the activities in the project cycle were highly overlapped and inability to manage these overlaps served as the basis for decline in Productivity. This methodology of parallelizing the tasks or activities is called concurrent engineering (Backhouse, CJ and Brookes, 1996). Thus concurrent engineering has led to problems in ensuring timely and orderly flow of information between engineering, procurement, vendors and construction teams. This project involves in identifying ways to address these problems and to improve operational effectiveness from a lean perspective. Today, traditional ways of performing and managing construction processes face unprecedented challenges. The growing competition forces construction organizations to rethink their construction processes for improving productivity, quality, and efficiency (Karna and Junnonen, 2005). Especially the tremendous project complexities and uncertainties contribute to this issue. Dodsal Group, the sponsor company for the internship behind this project, is in the business of executing such large-scale projects. Their EPC projects typically run for few years 10 and involve coordination of efforts by hundreds of engineering staff. There are inherently many productivity and information flow issues in such projects. Dodsal has been facing significant operational efficiency difficulties, leading to cost and schedule overruns in recent years. The main issue was identified as rework due to the fact that the existing project management structure in Dodsal do not deal with concurrent engineering nature of the projects. These issues being the hot topic in this industry, the Internship report is on formulating Lean solutions for Dodsal engineering and construction, and providing them with recommendations to make their operations more efficient. EPC projects typically span over 2-3 years and new projects takes years to materialize. Given the time frame of the internship, it was not able to fully observe a lifecycle implementation of these concepts. However the report covers the phases of concept generation, value stream definition and discusses the challenges in preparing a conservative industry like EPC for lean implementation. 1.2 Overview of EPC industry in UAE The prosperity of the United Arab Emirates and its rapid transformation from a backward desert region to one with a booming economy has been made possible by revenue from oil exports. The UAE possesses nearly 10 per cent of the world’s total reserves, and there is no doubt that oil will continue to provide the income for both economic growth and the expansion of social services for several more decades (Madhu Pillai et al., 2010). The Middle East especially UAE is one of the main business hubs for EPC contractors in the world. It possesses a number of upstream oil & gas companies in operations and grows at steady rate. There are vast numbers of EPC contractors operating in this region. They range from multinational companies to small sub-contractors supporting the major players. The region has played host to some of the biggest tenders, most ambitious projects and the best prospects anywhere in the oil & gas world. The competition is so intense here. With the EPC industry going through a major expansion in the region, Dodsal has got numerous projects in its pipeline for the next 7 years across the Middle East region. Taking advantage of the industry upswing, Dodsal’s current main concern is to improve its operational 11 performance so as to rebuild a healthy EPC business and to increase its global positioning among the top EPC contractors. 1.3 About the firm ‘Dodsal’ Engineering and Construction is the flagship business of the Dodsal Group. As part of Dodsal's EPC business, it undertakes Engineering, Procurement and Construction projects as well as large scale complex Construction only projects in the Energy, Industrial and Infrastructure sectors. Dodsal has been successfully executing projects across the Energy, Industrial and Infrastructure sectors in the Middle East, Asia, Africa and Europe for over five decades since 1960. The company with it two arms as an EPC and a Construction contractor has executed wide range of projects (see figure 1) for leading international and regional Oil & Gas companies, other reputed government organizations. Figure 1 : Engineering & Construction Projects Dodsal Engineering and Construction Limited have a combined team of experienced professionals and skilled workforce who are well adept with the local laws, regulations, procedures and client requirements in the region. Most of the project personnel have rich prior experience of working with regional and international Energy companies and are readily available as a part of the in-house task force for deployment. 12 Dodsal is always committed to the integration of leading environmental practices and sustainability principles into its core business strategy. Dodsal's Quality Management System is certified to ISO 9001:2008 and the group's Occupational Health; Safety and Environmental management systems are certified to OHSAS 18001:2007 and ISO 14001:2004 respectively. The Dodsal Group routinely monitors and improves upon environmental practices, including: Water and energy conservation Waste mitigation, segregation, recycling and disposal Heritage and habitat protection These are the evidences that stand out for their interest on cleaner operations. In a whole, Dodsal’s strategy can be defined in one line as "Optimize the whole: for the project and the planet”. 1.4 Objective of the Project This report set out the stage for adoption of Lean in EPC projects and provide substantiation, that moving towards lean is sustainable for both the organization and the environment it operates. After careful considerations and discussions with Dodsal, the project was narrowed down to identify an approach for implanting lean tools and techniques that will identify areas of improvement and mitigate issues discussed in the Unit-2, Section 2.2. The Main objectives of this Internship project are:  To Study and analyze the productivity issues of Dodsal and identify areas where improvements can be made specifically in align with Lean principles  Identifying from the literature the tools and techniques that can be adopted to have an effective ‘Lean operations’ in EPC projects  To set an stage for creating an environment conducive for applying lean principles and improving their operational effectiveness  To suggest Extensive recommendations on the research in the selected areas with the help of the literature and case studies. 13 1.5 Structure This Report aims at explaining the need for the adoption of Lean principles in their Operations and explains how it can improve their operational effectiveness with reference to the Lean Literature. It also discusses the requirement that has to be incorporated with their existing organization structure. Finally the recommendations are made to give an edge for the organization to have a sustainable growth and greater chance of succeeding in a very competitive environment. The remaining part of this report is organized as follows: Unit-2 Literature review, describes things that are necessary to follow the rest of discussion. It comprises of three parts as follows -Understanding Dodsal’s Operations, details the basic background information about Dodsal’s current operational practices in executing EPC projects. It discusses about the key phases in EPC project, project management team and their structure. -Trends and Productivity issues, discusses the significant problems caused by general industry trends that has led to decline in productivity. It also describes key issues at Dodsal that formed the basis of this internship study. -Literature study on improving productivity in projects, briefly discusses about the past studies that exist along the concurrent engineering contexts. It discusses the value stream as the first step in implementing lean and the use of Design structure matrix to analyze value streams. It also highlights issues that are involved in applying these concepts to EPC projects. Unit-3 Research Methodology, discusses about the research method employed in the study. Initially, the Unit discusses the purpose of the project. It also discusses the project approach and the design. Various methods involved in data collection as On-field Analysis, Interview and Desktop analysis are explained. The limitations of this project are explained in the end. Unit-4 Data analysis and Discussions, describes a systematic approach to organize an EPC project along Value streams. It demonstrates the way in which value streams were identified and analyzed by Design structure matrix (DSM). The root causes for the issues recognized in 14 DSM analysis, are identified by causal root map analysis tool. Then extensive process improvement methods are suggested to mitigate the identified issues. Unit-5 Recommendations, proposes a new organization structure along value streams which will resolve many of their existing productivity problems. It also discusses the impact of new organization structure and the rationale behind this proposal. Finally it describes the internal initiatives taken by Dodsal to adopt this change. The leadership strategies that were followed to buy-in their decision towards value stream are also explained. Unit-6 Conclusion summarizes the discussion throughout this report. 1.6 Summary This unit has presented a brief outline of the project. It has reviewed the UAE EPC industry and the market for EPC contractors, the rationale and scope of the study. This Unit has also explained the objectives of the project and has outlined the structure of the remaining units. The next unit discusses about how EPC projects are executed within Dodsal, followed by common management issues facing them and the review of existing literature explaining the need for Lean operations 15 Unit -2 2. Literature review 2.1 Understanding Dodsal’s Operations As said earlier the term EPC industry refers general contractors who undertake large construction and engineering projects on behalf of their clients. It is a broad industry and consists of a wide range of facilities from large scale infrastructure projects like power stations, metro rail systems to construction projects like roads, tunnels etc., Dodsal is into a separate sub-sector, Oil & Gas EPC industry that focuses on industrial projects like offshore platforms, chemical plants, petroleum refineries etc., According to Pillai et al (2010), “EPC in industrial sector is a highly technology intensive business and is typically dominated by specialized engineering firms that have over time, built the necessary technology and design expertise”. Dodsal specializes and concentrates more on construction of downstream petrochemical plants. Petrochemical plants are largely classified into upstream, midstream and downstream projects as shown in following figure 2. Pillai (2010) describes, facilities which are involved in exploration and production of oil & natural gas are called upstream facilities. The midstream facilities usually deal with processing, storage and transportation of oil and natural gas. Downstream activities include facilities like petrochemical plants used for producing various end products from oil & natural gas. In this internship, the scope is restricted to downstream projects. The project used here in this report for data analysis is Ruwais sulphur plant, Abudhabi. Dodsal executed this project in 3.5 years, but supposed to be finished in 2.5 years originally. 16 Figure 2 : Classification of EPC Petrochemical Projects 2.1.1 Business Models Used by Dodsal for delivering EPC Projects The most predominant business models used for delivering those large scale engineering and construction projects are lump-sum turnkey projects and reimbursable service contracts. They are explained in the figure 3. For the rest of our discussion, we concentrate only on lump-sum turnkey (LSTK) projects as this is the most common model used by Dodsal. 17 Figure 3 : Business Models in EPC Business 2.1.2 Brief outline of Downstream EPC projects A Typical LSTK downstream project spans around 2-3 years and involves a multi- million dollar effort. According to Bertelsen & Nielsen (1997), construction of such industrialized facilities involves a specialized supply chain where EPC contractor acts as the channel cocoordinator. The typical players involved in the value chain are shown in Figure 4. It includes a swarm of players from process technology firms, equipment manufacturers to construction sub-contractors. There are four key stages involved in the execution of EPC project. We briefly discuss these four stages in the Table 1 below. 18 Figure 4 : EPC Value Chain The general flow of information between the various phases in an EPC project is as follows (informational flow: figure 5). Figure 5 : Basic Blocks for information flow This is only a general direction. In reality these functions are highly dependent and overlapped. The information flows ‘To and fro’ between these functions and are explained in the following Units. A typical downstream project schedule at Dodsal is shown in Figure 6. It displays the extent of overlap between different function in the form of Gantt chart. 19 Table 1: Four Stages in execution of EPC Projects Figure 7 20 Figure 6: Typical Project Schedule (p21-p23) Figure 6 : Typical Project Schedule 21 22 23 This schedule was created by the planning engineers using the project management software tool called primavera. It is the most leading tool in its kind in the industry. It is used to develop project plans and schedules, network plans for each function, create work break down structures, and helps in tracking the project progress both in terms of schedule and budget. It also creates reports used to indicate the deviation of the project progress to the management. The left Pane describes the various milestone activities across each function. The right pane shows the time frame for each milestone and also explains the overlap between these milestones. This is a base line schedule created at the initial stage used for tendering. Then this is developed further with all the necessary network plans for each activity. This is shown in the Appendix-4. This overlap occurs mainly in two ways. The first kind is the overlap of activities within a same function and other way is the overlap between activities between different functional disciplines. This overlap creates many issues. 2.1.3 Typical Construction sequence in EPC projects The outcome of the first three phases provides the necessary work front for construction. The construction involves the majority of time in an EPC project. The construction in itself has a typical sequence which is shown below (See Figure 7). It is very important to have a general understanding of the execution sequence in construction, as these are assumed as the internal end customers and form the basis for identifying value streams as discussed in the section 4.2. 24 Figure 7 : Construction Execution Sequence 2.1.4 Project Organization structure The formal functional organization structure that executes engineering and construction projects is shown in figure 8. This is the most commonly used structure in the industry. In this section we will discuss about the key roles involved in execution of those projects. Later in unit5, let us see how this structure is reorganized to form a value stream based organization structure. The project director/ manger (PM) is the top authority who executes the entire cycle of EPC projects and wholly responsible for the profit from the project. There are number of other managers from different functions giving support to the project manager. (See Figure 8) 25 Figure 8 : Project Organization Structure The engineering division consists of several engineering functional disciplines. Each of these functional disciplines is a team, directed by a senior lead engineer. Project engineers are those who coordinate between those functional teams and regularly assist the project manager in resolving the issues that pops up in a project. According to Ballard & Howell (2003), “project engineers are seasoned engineering leads and report either directly to the project manager or to engineering managers”. Procurement manager handles a team, who are specialized in handling all supply chain related activities like vendor identification, purchasing, coordination with vendors and material handling etc. The construction manager is solely responsible for the on-site construction progress and reports directly to the project manager. It involves managing various skills (from labors to engineers), which is very different from engineering and procurement phases. In Dodsal, most of the construction work is outsourced to sub-contractors. 26 The Projects managers are the most powerful in a project, but when it comes to reality they will have to cooperate with a matrix of other organization managers in order to ensure smooth project execution. In addition to these functional departments, Project control and planning group plays a significant role in executing the projects smoothly. They are responsible to track the project progress in terms of schedule and the budget, and report to the management if there are any deviations. Then accordingly measures are taken to put the project back in track. They develop the project plans, schedules and prepare the work break down structures for each engineering functions. Later in section 4.2, planning and creation of WBS along value streams is discussed in detail. There are also few other departments involved in the front-end project bidding and project grant phase. Those groups are estimation, budgeting and contracts management. Other supporting functions include material management, Project IT, Quality group/ TQM. In Dodsal, there is a practice of creating task force in order to accelerate the works in larger projects. It is a cross functional team that comprises of engineers from different functions. It is formed on the basis of the task that has to be accelerated. During this phase, members are literally brought out of their functional discipline and located separately. This team mainly focuses on the project progress rather than working for their corresponding functional departments. This is the most preferred method for project managers in critical situations and is hated by the functional heads as it disturbs their regular working. 2.2 Industry Trends and Productivity issues This section gives a brief overview of common management issues and their root causes from the industry. This will facilitate the process of finding lean literatures on productivity tools. At the end of this section, the most common productivity issues faced by Dodsal was drawn out and hence the problem definition for the report was defined. 2.2.1 Key Industry Trends For the last few decades, there has been no change in the organization and structure of EPC projects. But there is a drastic change and trends in the external environment factors that have made the current organization structure unable to cope with them. This has led to many 27 common management and productivity issues. The key trends that led to such issues are discussed in detail as follows: Increase in Client Power: As the prospects of industry grew, there was a huge increase in low cost contractors. This has led the clients to choose from many, based on their expediency. This in turn has affected the EPC contractors, by increase in client pressure to reduce the project cycle time and compress on their profit margins; in spite of increase in project complexity. According to Repenning and Sterman (2001), the major factor behind this trend is the lack of significant process or technology innovation in the industry over the last few decades. Thus this imbalance between the client and the contractors has led to less motivation for the contractors to invest in productivity improvements. Increase in Global Execution: The distributed pattern of petrochemical investment has led to execution of projects globally across the world. Also, the increase in pressure of reducing cost has moved the contractors for outsourcing in low cost countries. Result is the fragmentation of projects, where most of the engineering and procurement activities are spread out to reduce the cost (Backhouse and Brookes, 1996). This has led to various complex coordination issues adding up to their regular work. Increase in project complexity: The intensification of petrochemical plants in both scope (Client handover requirements and Safety) and scale have led to new challenges in coordination (Ballard, 2008), which the current structures might not deal effectively. Increasing IT complexity: Information flow is critical in such complex projects. The range of IT tools from auto-simulators to 3D designs has fundamentally changed the work process in this business by declining project performance rather than increasing their efficiency. The reasons claimed for this are: - Reduction in computational cost of change has an impact on 'behavioral change' where both engineers and clients can make frequent design modifications. - IT has changed the meaning of 'Project deliverable', while project procedures remain the same (George Reichard et al; 2007). For instance, the process departments delivers P&ID as physical 28 document, for which input information are obtained from multiple engineering groups. IT has changed this into mere report with no critical value added. Progress monitoring and control have also become complicated due to this IT impact. - The software tools for these IT applications undergo a frequent change, which means that a project with 2-3 years duration has to adjust to this IT changes every 1-2 projects. These tools have still not yet grown to deliver full productivity promises (Ballard, 2008). 2.2.2 Common Management issues in EPC Projects Concurrent engineering: As discussed in the previous section, the increase in pressure to reduce the cost, project cycle time in spite of increase in scale and scope of the project has led the EPC contractors to parallelize the tasks heavily. To compress the project cycle time, the activities are overlapped in spite of being sequential (Ballard, 2001). This setup is called concurrent engineering. It has resulted in complex coordination issues and serious impacts on information flow as discussed in Section 4.3 DSM Analysis. Insufficient Traditional coordination mechanisms: Given rise to serious coordination issues as discussed above, the traditional way of doing it is no longer sufficient (Ballard & Howell, 2003). Earlier the execution was mostly sequential and it worked well with the teams that located closely. However this cannot help in the current situation, where concurrent engineering, globally distributed sites and outsourcing has become very common. This again adds up to serious coordination issues, that only pops up in the last minute and give rise to costly rework cycles. Wrong incentives encouraged in the industry: As said earlier in Table 1, around 80% of the project cost is represented by procurement and construction and while engineering represents only 20%. But the engineering cost has direct influence over the procurement and construction cost. The importance of this is not preached in reality during project contract negotiations. During this process, both the contractor and client are ready to compensate for the engineering cost incurred. This way of emphasizing on controlling the project cost at expense of engineering costs, place the project at risk. It also put the engineering leads in 29 pressure to minimize the cost incurred and will lead to issue like sub-optimizations that will have serious impacts on the construction phase. Unworkable budgets: Due to decline in pricing power as a result of poor performance and industry changes, most of the EPC contractors tend to start a project with schedule and cost budgets that are not attainable (Patty& Denton, 2010). This sort of environment causes serious behavioral patterns into the teams; make them lethargic about the targets as they know that it is not possible to achieve the targets. The managers knowing this can even set tighter targets to the team and thus create a negative spiral. Functional focus amplifies problems created by man-hour focus: The problem of excessive focus on man hours is further amplified by with functional focus. Since this business is characterized by low profit margin and evaluated based on the manpower utilization (Costa,2009), the functional departmental heads are in a continuous pressure to make their staffs fully engaged and get the job done in the minimum period. This in turn doesn’t provide enough time for the different functional engineers in the review cycles, which can lead to finding of an issue at later stage. This can lead to rework and can have serious impacts in the downstream activities. Thus this hides the problem and creates a wrong sense of progress. Figure 9 : Issues Leading to Project Overruns 30 2.2.3 Consultancy Problem definition Many of the issues discussed above have been encountered with Dodsal and develops into two major problems: Project Overruns in terms of schedule and budget, ending up in depletion of profit margins (Refer figure 9 above). The scope of this internship program was to find ways to improve their operational efficiency and avoid overruns in the project using lean principles. This report finds ways to address those issues by using the following approach as shown (Refer figure 10). Figure 10 : Consultancy problem definition 1. Using lean and value streams to take system level approach to productivity improvement 2. Using DSM approach to analyze information flow in concurrent engineering setup In the following Units, the relationships between these concepts and ways to adopt are discussed. 31 2.3 Literature Study on improving productivity In this section, concepts related to Lean productivity tools used in the environment of concurrent engineering setups are discussed. Initially value streams are defined as the first step in implementing the lean and then we explore the concept of DSM (Design structure Matrix), which is powerful tool to analyze flow of information in an information centric environment. Along this discussion, few past studies along this theme have been highlighted. Lastly, the ways to adopt these concepts in EPC project is discussed. 2.3.1 Common issues in concurrent development projects Many problems that are associated with EPC project management in a concurrent engineering setup has been explored deeply. According to Backhouse and Brookes (1996), the execution of concurrent engineering setup doesn’t succeed most of the time because of misalignment with resources, metric, process, tools and also the focus of the organization in the need of efficiency. He also adds that inappropriate organizational structures, policies and decisions take place due to the mismatch between the technical organization, dynamic complexity of the projects and also mental models used by the managers. DSM is a powerful technique that can be used by the managers to look at those complexities in new perspective and can help them manage the projects efficiently. Sterman (2000) describes about how to overcome the behavioral patterns that is been developed from the sequential working, by analyzing an EPC paper mill project using DSM. Ford and Sterman (2003) discuss the short sighted management policies as the reason for project failure. The project appears to be on schedule until 90% progress and freezes. It is then completed after consuming about the two times the duration of planned schedule. Repenning et al (2001) explains about the models that help understand how fire fighting, recognition of unplanned allocation of resources are discovered last in the project cycle and these are very familiar in concurrent development projects. They explain about how the manager’s attempt to push the resources to do a bit more in a short time, forms the basis for their decrease in concentration to the upfront task and finally ending up with issues in downstream activities. 32 Though the literature gives enough insights that can identify and resolve the problems that occur in the engineering and construction projects, it is not easy for the organization to utilize these recommendations to put them in action. Repenning and Sterman (2001) calls this space between the accessibility to proven solutions and the lack of ability to implement them as "improvement paradox". They propose that this inability is not because of the specific improvement tool, but because of the influence by the physical and psychological factors and situations, in which the new development programs are introduced. The need for this stability was very significant and the leadership strategy that was used to attain this stability in the internship program is discussed in section 5.6. 2.3.2 Lean approach to productivity improvement With reference to the interview and discussions made with the Dodsal (Appendix -1), they stated Lean as the preferred methodology to improve their productivity and thus defined the internship scope. So this context explains about the key concepts of lean and how this could be applied within their EPC projects. According to Womack and Jones (2003),” Lean Principles concentrates on five core principles” as shown below (figure 11).It was derived from the highly successful practices of Toyota production system. Being motivated by its achievement in the manufacturing domain, this concept is being extended into the EPC projects (Lean engineering) and an organization providing the environment for Lean engineering is developed (Lean enterprise). This involves a huge impact on the organization and the implementation can be achieved through a fundament shift in management attitude. 33 Figure 11 : Lean core principles Lean requires system wide thinking and decentralized action. Hence renovating the current traditional approach with lean is very difficult and demands for process preparations called stability conditions. Marchini (2004) explains the importance of expanding lean thinking into the associations between the different firms involved in the entire construction value chain. Also there are several initiatives to adopt lean philosophy in engineering & construction industry, from industry key players. Lean Construction Institute (LCI) plays a significant role in defining new lean tools and techniques for the industry. Most of them has been adopted and in practice across the globe. 34 2.3.3 Value streams - the opening pace for Lean Lean lay emphasis on system wide thinking. Most of the Lean experts and practitioner’s insist to look at a system as a whole, before getting down to optimize any individual process or process group in it. It can be accomplished by the use of value stream mapping. It creates an end to end process map of material and information flow in a system. Thus by creating a high level conceptual view of a system, it promotes to identify areas where improvements can be made to increase the efficiency. Without doing this, any improvement done in the sub process doesn’t work efficiently to bring end value for customers. This can even lead to sub optimization that affects the other part of the system (Howell and Ballard, 1998) as discussed in the section 2.2.2. As a result, most of the lean practitioner’s and experts use value streams as the opening step in implementing lean. According to Rother and Shook, (1999), Value stream is defined as the set of activity involved in producing a finished good from raw materials or bringing concepts to reality. The value stream analysis involves elimination of non value added activities in the system process flow and makes the system capable of reacting rapidly to the end customer. The first step in conducting a value stream mapping is to create the current state of process map that capture the flow of material and information in the system. It also captures other key information that creates value and non value in the process. This information serves as the basis for applying lean principles and enables creating a future state map with the proposed process improvements. The most important thing in creating the future map is to classify the activities into value added and non value added activities. The non value added activities can give rise to waste and supporting activities. These concepts are very predominant in manufacturing sector and several initiatives are being taken to extend these concepts into other areas. Morgan (2004) and McManus (2002) argue about the implementation of value streams in product development in automotive and aerospace industries. In large engineering and construction projects, these value streams can’t be applied directly as explained in the section 4.2. 35 This report sets the stage for Dodsal, for a value stream based organization and proposes an environment, favorable to such lean concepts and provides a way for continuous improvement. The various initiatives taken by Dodsal in implementing the value stream approach are being discussed in the section 5.7. 2.3.4 Analyzing information flow using Design Structure Matrix (DSM) DSM- Design Structure Matrix is a compact and also powerful method for analyzing the information flow and dependencies between the components in a system. DSM is otherwise called as Dependency system matrix. It normally represents the components in a system as rows and columns in an n-square matrix. Rows and columns represent information exchange and dependency relationships between these elements and their corresponding intersection shows the interaction between them. The off-diagonal cells in the matrix indicate system interactions. It captures interaction between the system elements in such a way that, it brings out feedback iterations in the system design. Petrakis and Pultar (2005) illustrate that, DSM also involves mathematical analysis and many algorithmic tools which are used to improve the system design. Eppinger (2001) provides an excellent overview of DSM. DSM representation is also used to analyze various other factors such as project activities, process parameters, system components or team organization. Many types of DSM can been seen based on the system elements. In this report, Time based DSM was used to analyze the information with respect to time. Eppinger et al (1994) classify task relationships based on informational dependencies as follows: Parallel (no information flow), Sequential (A feeds information to B), Coupled (A and B mutually dependent on each other for information). 36 Coupled tasks are the most common feature in a concurrent engineering setup and the resultant feedback loops that occur between the coupled tasks are called as iterations. Iterations can be planned or unplanned. Unplanned ones cause delay in the projects. Traditional planning process ignores such feedback loops which leads to rework and hence causes delay in the project. Ford and Sterman (2003) uses systems dynamics models in concurrent engineering setup to identify that, delay in discovery of rework leads to unplanned Iterations. The most important value of DSM is to see a complex system as a whole and understand it. Traditionally, managers were not able to figure out complex systems, but now using DSM, they can capture a complex system in a single view. By DSM analysis of a single value stream, the root cause for rework in Engineering & Construction projects has been identified for Dodsal management (Refer Unit 4). Eppinger (2001) explains that DSM allows not only identifying the issues but also helps mangers to fix them. McManus and Millard (2002) suggest, DSM is a useful tool for mapping and analyzing value streams in product development and project management where information flow is large compared to material. 37 2.4 Summary Thus this unit gives a brief outline on Dodsal’s current operational Practices, the internal issues facing them, productivity problems as result of industry trends and the lean literature showing the Lean tools and techniques that can be used in this industry. Unit-4 explains about how the Lean tools and techniques discussed in the literature part can be applied in large scale Engineering and Construction projects, which served as the basis for formulating the recommendations for Dodsal. 38 Unit -3 3. Research methodology 3.1 Introduction This Unit deals with the overall research design adopted in this project to explore the operations of Dodsal in order to identify new areas of improvement by Lean principles. The objectives formulated in the Unit 1 have been recognized and discussed further. Also, the literature discusses the choices of research methodology and how they are used to gather the required information for the study. 3.2 Simon speller cracker Model The Simon’s speller cracker model was used as the frame work to do this consultancy piece of work. This frame work served as basis to define the role and responsibilities as a consultant, scope of this internship and plan the process required for an effective action learning approach to this piece of consultancy work. It consists of three phases as shown in the Figure 12. They are as follows Figure 12 : Simon speller cracker Model “Speller Cracker Model” – Framework for Managing Consultancy Pre Consultancy Consultancy Project Post Consultancy Review PID Client Review Company Review Team Review Personal Review Beginning Middle Market Suspect Prospect End Review Sale Reflection-in-Action Reflection-on-Action 39 TIME Pre-Consultancy: It involved understanding the need of this internship from Dodsal. Two different strategic matters that involved strategic decision were identified. These were identified with the series of discussions and meeting with company personnel representing Top management. This phase identified the necessity of Lean principles for Dodsal in order to avoid the problem of project overruns and to increase their position in the list of top EPC contractors globally. Consultancy: Once the direction for the project is set, this phase involved the design, development and implementation of the project by the use of a project plan. It defines the roles, responsibilities, timescale and illustrates the actions required to complete the task. The Project plan for this internship is shown in the Gantt chart 1. Post –Consultancy: This phase is about the outcome or the key learning from this piece of work undertaken. It is the time taken to reflect on this internship effort and establish key learning points about your working practice, working relationships, knowledge management and personal development. The reflective summary outlining the above is listed in the Unit -8. Also, this internship gave an opportunity for me to work as a business consultant for Dodsal, and I had worked with utmost honesty and integrity in my own actions as well as with interactions with the employees in Dodsal, and the organization as a whole. This approach of consultancy was conducted as per IPC code of conduct for consultants, attached in the Appendix-3. 40 41 3.3 Project Approach and Design Initiation of the contact with the client company was through the support from Mr. Dinesh, The Senior Project Manager of Dodsal. The initial briefing by Dinesh and Santhosh (Senior Project Engineer, Dodsal) led me to understand that the company is in full swing to identify areas of improvement which would maximize efficiency of their operations, with minimal impact on the environment. With the ideas obtained from the initial meeting, a proposal was prepared based on the discussion and submitted to Mr.Dinesh and Mr. Santhosh, who was the contact person in the company. The proposal presented, highlighted the objective; approach and timeline of the project which at a later stage was acknowledged by the company. The next stage after the proposal approval was to collect data and discuss with the concerned employees. Data collection process involved collection of both primary and secondary types. When the experimental data is been gathered by the researcher themselves, then it is defined as primary data. In contrast, when the experimental data is gathered from an already existing resource and utilized for study, then it is defined as secondary data (Eriksson and Kovalainen, 2008). In this project, data set has been collected directly from the field work and hence primary data is the prime source of information for this study. Secondary data has also been used at few occasions in the analysis Unit to support certain key discoveries from the field work and strengthen the validity of arguments. With respect to the data, qualitative and quantitative data are the two extensively used terminologies in management research where the former constitutes all the numerical form of data and later comprises of non-numerical data. Both types have its own traditional data collection and analysis techniques (Saunders, Lewis and Thornhill, 2007). Thus this stage was focused on gathering all necessary data about Dodsal, which would be informative to support the project. The primary and the secondary data required were collected through three main methods. On-Field Analysis Interviews/Meetings Desktop Analysis 42 3.3.1 Field Analysis The field analysis was started with the help of Santhosh, senior project engineer for Dodsal. Initial visits were scheduled with meeting people in various departments of Dodsal to learn and understand their operations. The First few visits were dedicated to have a clear idea of what is happening. Discussions with each of the department heads gave a clear light on how an EPC project is executed in Dodsal. Reviewing company documents also provided a base for understanding how the company operates and is structured. After this initial phase of understanding their entire value chain and operations, more importance and time were spent in the Project Planning and control department. This department plays a significant role in planning and tracking the EPC projects. They prepare the base line schedule for projects used for tendering and once the project is being awarded the detailed schedule is being developed from the base line schedule. Planning engineers working in this department assisted in developing value streams, the corresponding WBS and network plans for value streams as discussed in section 4.2. On the field visit days with the mid- level employees gave a better knowledge regarding the technical aspects and real time scenarios. A few visits were made accompanying the project and site engineers to learn about the typical issues they face in a project. Necessary data’s were collected with the help of them, which served as the basis for this project. 3.3.2 Interviews/Meetings A traditional reason for opting for an interview as an effective data collection method is to develop a sense of trust with the participants that would encourage them to provide answers to the questions as transparent as possible (Saunders, Lewis and Thornhill, 2007). And also, since the employees are the major contributors in the company operations and efficiency score, it was critical to meet key people face to face to get their input. It was important to talk with people starting from the upper management to front line employees to understand if the information flow and the company strategy are uniformly spread. Hence the interviews were scheduled with the required people as shown below: 43 Interview with Taral kumar, Projects Director (Upper Management): Interview and discussions with Dinesh, Senior Project Manager (Middle Management) Meetings and discussions with Santhosh, Senior Project Engineer (Lower Management) Meetings and discussions with Thilak, Lead Planning Engineer (Lower Management) The Interview with Taral, the Projects Director was aimed at understanding the Company’s Competitive strategy, contract management and their current position in the industry. In addition, this interview provided information on Company’s goals, future plans, current performance of the company and other aimed future Growth strategies. This was an important interview as this decided to narrow my work on finding ways to improve their productivity using lean principles, as this was in align with their interest. This narrowed down my research to find ways to improve their productivity using Lean tools and techniques. Discussions with Dinesh, Senior Project Manager were very helpful in knowing the entire cycle of EPC projects. He helped in getting the insights of their entire value chain and to understand the common management issues facing the industry. And the interview with Santhosh was designed to know the issues faced in a day to day basis at site and if there are any bottlenecks in their daily actions. This interview gave a clear idea of how the changes or delay at engineering and procurement phases drastically affected their work at site. With the knowledge of how an EPC project is being executed, the discussions with Thilak, Lead planning engineer helped to understand how the project is being planned, updated and tracked for control. The time taken for each phases of the project was understood through him. He played an important role in collecting data to identify value streams and to evaluate the same as discussed in Unit 4. This phase was the most insightful and informative to our data finding step, providing with the ability to flexibly interact and probe on necessary points. Since a good number of people were interviewed, it was able to highlight common themes and trends in the feedback, which contributed to the formulation of recommendations. 44 3.3.3 Desktop Analysis The Desktop research helped in understanding and learning the current industry trends and the productivity issues in EPC industry. The official web page of the Dodsal (http://www.Dodsal.com/) is very user friendly and informative. Due to previous working exposure in the industry, it was easy to understand the technicalities of the industry and how the company is setup. Desktop research was also utilized to gain an understanding of various tools and methods used by the other big companies in their supply chain to improve performance. Various research journals and case studies prepared by Lean construction institutes and other major companies in the region were studied which was very helpful in designing the recommendations. 3.4 Limitations There were few limitations in terms of project. The typical EPC projects executed in Dodsal was around 3-4 years. This was the major concern as the outcome of the recommendations from this internship was not feasible to observe due to the limited internship period of 4 months. Though it was a problem, initiatives were taken to implement the recommendations in a low risk project as discussed in section 5.7. 3.5 Summary This Unit discussed the various methods used for collecting the relevant data. The research method and the methodology are dealt in detail. The data collected through the above mentioned methods are analyzed in the next Unit. 45 Unit - 4 4. Data Analysis 4.1 Introduction In this Unit, we are going to look at how to organize an EPC project along value streams. In unit-2, we have gone through the concepts of value streams and DSM and let us see how this could be applied in a large scale engineering and construction projects. This part of the report was really significant as this convinced to buy-in the management decision towards Lean and was the important step in facilitating the mental shift. The following were the steps identified to organize a project along value streams (refer figure 13). Figure 13 : Steps to organize project along value streams 4.2 Identifying Value streams The key difficulty in identifying the value streams was to define the start and end points. Unlike Product development or manufacturing where value streams can be defined by using the existing process boundaries or by using physical area of a plant, the same methodology can’t be used to define the value streams in EPC projects, as it involves characteristics of both design and manufacturing domain. The Engineering, Procurement and Construction feature of a project can be considered as combination of design, supply chain and manufacturing environment. For instance, consider the generation of engineering drawings, which starts from basic design, then gets into production of final drawings and finally been sent for fabrication. Thus it was too complex to decompose the project. The following figure shows the different 46 concepts used across the globe to split an Engineering and construction project. Here we will look at the limitations and difficulties, when we try to adopt the boundaries shown in the figure-14. Figure 14 : Different Boundaries for EPC projects EPC functional boundaries: Initially it was thought to use these broad functional boundaries as value streams, as it had a good boundary definition. But once looking after those set of activities under these groups, it was realized that those set of activities were highly interrelated and can’t be isolated to define them as value streams. As we could see in Unit-2, most of the inputs for onsite construction come from engineering and procurement functions. Also, many of the engineering details can be finalized only with vendor information, this in turn can to lead to procurement delays and thus these functional groups are highly interrelated, dependent on each other and can’t be used as Value streams. Functional Sub-divisions: This is the most common way an EPC project can be viewed. As we saw in the Unit-2, there is lot of information exchange between these functional Departments. The project deliverables are measured & tracked on the basis of these departments. But none of these 47 departments can provide a substantial end result for onsite construction by themselves. Thus it is not suitable to define the value streams based on the functional sub divisions, as it is highly interdisciplinary. Moreover the concept of creating value stream is to eliminate this mental boundary and create a new cross functional frame work for executing projects enabling superior productivity and avoid project overruns. Project Phase Gates: Like most of the EPC contractors, Dodsal also defines and uses project phase gates like IFA, IFC etc to split projects into different phases. The problem here to define the value streams based on these phase gates is that the scope of these phase gates was too broad. Figure 15 : Planning levels in EPC projects Detailed Project plans and Schedules: The Detailed project schedules prepared using Primavera, was used to define the value streams. The updated Gantt chart, with the list of activities was used to do this. It was the obvious choice to interpret the sequence and interrelation between the tasks and hence form 48 the value streams. The project schedule used for this purpose was a level -4 schedule. This industry uses level 1-5 to define the details of their planning which is illustrated in detail on the above figure 15. The main reason that stood behind choosing the project schedules from primavera to identify value stream was that, it was possible to derive a CPM/PERT network out of all activities in the project, which illustrated the critical deliverables in the project and hence formed the basis for forming the value streams. The Updated schedule used for this purpose is shown in the Appendix-4. It is partially shown for few functions for the purpose of understanding it. This was the most time consuming process in the internship and the support of the planning department helped in getting this job done. As a result of this exercise nine value streams were identified as shown in the following Table 2. One of the main objectives behind creating the value stream is to create a master template for each value stream upon which project plans could be derived. Now Let us see the methodology used to define value streams and the procedure that was used to evaluate them. To follow the discussion further, there should be a general understanding of the construction sequence. This was discussed in the Unit 2. Here the methodology refers to some of the key points that were considered the most important in defining the cross functional value streams. Construction was identified as the internal customer and all value streams were identified by considering the construction work front as their end customer. Construction work front refers to the materials and information that needed to enable on-site construction. 49 The following characteristics were used to define them: Figure 16 : characteristics of value Streams The value streams identified, closely resembled the construction execution sequence. After the exercise of grouping the activities under each value stream, there were activities that were duplicated in more than one value stream and were unavoidable. In the case where an activity was duplicated, it was further decomposed and added with the corresponding value streams. There are also cases where the possibility of decomposing was less. In that situation it was added to one of the value stream and added as a constraint to other value streams. For Instance, this could be seen in the value stream ‘procurement’ as it depends on other value stream for the final information about the materials and equipments to be purchased. 50 Table 2: Value Streams Identified 4 51 The next process was to create a WBS for these values streams. According to Allen and Hamiltion (2001), “A work breakdown structure (WBS) in project management, is a deliverable oriented decomposition of a project into smaller components. It defines and groups a project's discrete work elements in a way that helps organize and define the total work scope of the project”. The WBS for each value stream can be seen in the Appendix-2. This activity helped us to draw out a master template for each value streams and that would serve as the base for creating Project Plans out of it. Each of these WBS defines a network plan for the corresponding value stream. This exercise helped in convincing mangers, that it covers the entire aspects and scope of a project. 4.3 DSM analysis Thus once identifying the value streams, it was approved with the Planning department. The next phase is to do a value stream analysis using Design structure matrix (DSM) as discussed in the literature review. Due to the internship time limit, the value stream analysis was restricted to a single value stream. The value stream chosen was based on the critical activities of a project, and the area where the frequency of rework is high within a project. The ‘Above ground Piping/conveyor’ value stream was selected for the analysis along with the approval of planning department. The resultant finding of this analysis was the most significant factor in shifting the mental gap of the management towards organizing Engineering & Construction project along value streams. As discussed in the value stream Table-2, the ‘Above ground piping/conveyor systems’ refer to those set of activities that provides construction with sufficient work front for installing the rack and process piping systems above ground. This activity is marked as a significant milestone in executing petrochemical construction projects and most prone to rework. With this value stream almost all the piping in line with plant design is laid and allows procurement to finish up with their bulk buy. The major reason to choose DSM as the mapping tool is that it is a proven tool for tracing the flow of information (Millard, 2001). It works well in an environment where information flow is crucial (Yassine, 2003). This industry involves mostly coordination of 52 information flow, which is very important in executing such large scale Engineering & Construction projects. The major pattern of such flow of information includes - To and fro information interchange between functional departments to produce detailed engineering drawings - Informational flow between various engineering functions, vendors and buyers from procurement department to purchase materials and equipment - Material/Information flow to provide work front at construction sites in proper sequence Doing a value stream analysis with Design structure Matrix involves few preparatory steps before being analyzed. They are as follows and shown in the following figure 17. Figure 17 : Steps in preparing value streams for DSM Analysis With the value streams identified using the updated schedule from primavera, it was easy to form the network plan for DSM analysis. This sets out to be the master template for creating DSM blocks. This may vary and would change as the scope of project changes. But the sequence of the blocks is based on actual time frame it happens in the real project but differs from the current planning method. Figure 18 explains how the DSM blocks for the ‘above ground piping’ was drawn out for the analysis and Figure 19 show the interactions between the DSM blocks plotted in a matrix. Each DSM block represents a group of activities as in the network plan and each interaction in DSM is the consolidation of information flow between the component activities. It is very important to identify the exact flow of information between the DSM components and mark the interactions for a better analysis. 53 As expected, most of the interactions between the DSM blocks were below the diagonal of the matrix. But some interactions were found plotted above the diagonal of the matrix. Those are called as the feedback loops. These feedback loops provided the basis for a detailed analysis. There was few common iteration patterns found in the matrix and was marked with different color codes as shown in figure 19. There were 2 main types of unplanned iterations and a planned iteration. The next portion will discuss about those patterns, problems identified through this analysis and some possible solutions are suggested. 54 Figure 18 : Steps in creating DSM blocks 55 Figure 19 : DSM Matrix 56 4.3.1 Planned iterations The method of producing the Process & Instrumentation drawings, corresponding datasheets are highly iterative as shown in matrix (refer figure 19). This was very clear as it involves lot of information exchange between the project team and the design engineers, to generate the final plot plan. It involves derivation of the process flow diagrams from the scope of the project and generation of the corresponding Process & Instrumentation drawings. This is then made out to be a preliminary plot plan and the necessary equipment design activities are started in parallel. Design of equipments might propose a change in the plot plan for reasons like space, erection feasibility etc., which can lead to an alternate process flow diagram forming a feedback iteration loop. Thus in this stage the process is kept open for change that are unavoidable. Those iterations are harmless as it denotes the early stage of design and iterations are also fast between the engineers working at the same location. 4.3.2 Unplanned iterations Vendor information not on time: As we can see in the matrix (figure 19), there are some unplanned iterations between the vendors and process of generating the final Process flow drawings. This is basically due to following reasons: In few cases, there is a delay in finalizing the vendor list which can lead to late arrival of required engineering information for the process design. Also even in some situations, 57 procurement people can lead to schedule and information delays, from the vendors due to their activities which intend to keep their cost down. There are also instances, where engineers don’t respond to the vendor enquires in time or they might not follow up thoroughly with vendors to get the necessary information. This lack of accountability leads to vendor information coming in late after the documents have been issued for the next stage. On the other hand the DSM analysis also unrevealed the fact that the changes caused by the information delay from vendors was not really necessary to complete those design drawings. Information like paint finish, commissioning procedures might only be available at end of delivery from the vendor. This piece of information is not really required to produce the process flow drawings. However when this information is released it has to be updated and provided as a single document to the field. But in some cases when the engineers reopen the document for revision of these changes, they tend to modify few things that lead to rework. This clearly implies that there is need to differentiate the engineering revisions from documentation updates and a proposal was made on the same. Delayed Client feedback: Most of the time, client review comments doesn’t come back in time and it was very common in the industry. The client teams have a trend of putting off their reviews and raise issues related to design before each project phase gates like AFD, IFA etc signs off. This is mostly due to the reason that the client team doesn’t have the operational team taking over the facility. So the client approves the design at the initial stage but keeps on making small changes over the time. For instance, the client might approve the design for an area of the facility and when reviewing a subsequent area, might find some issue and make changes in design. In order to make the design consistent all over the facility they tend to reopen the reviewed area and make changes. However these issues are overcome by use of change orders and negotiated at Top level management. 58 The worst problem is that the internal engineers know that there is going to be design changes from client and they tend to accumulate all these changes over time. This in turn generates rework to all other areas where the changed design is going to have the influence. 4.4 Analyzing the results and creating Causal map Based on the results from DSM analysis and issues discussed in Unit 2, most of them seem to be highly interrelated. To bring this out, a powerful representation tool called causal root map analysis was made. In this causal root map analysis, issues identified from DSM analysis and issues discussed in Unit 2 were all brought together. It was all coupled to three common tendencies that resulted in rework as shown below (See Figure 20). 59 Figure 20 : Common behavioral Patterns leading to rework The following section discusses about the root causes of these behaviors as shown in the figure 21 and provides measures to avoid this. Breakdown of schedule discipline: With increase in overlap of tasks, the information handoffs between the different groups are becoming highly uncertain leading to an increase in the frequency of rework on the released documents. The impact of such frequent changes creates a behavioral pattern that tends internal engineers to become careless in information they handover, as they know it will change later anyway. And whenever an engineer reopens a document they tend to make few other modifications when they really work on it. For instance making a change in one area may come up with a calculation flaw and that can lead to changes in other areas due to the consistency of design. Such addition of desired but not mandatory changes leads to schedule and cost overruns. The other underlying reason behind this issue is that information transfer happens in multiple stages and the documents are released with multiple release states. 60 Figure 21: Causal root map Analysis 61 Such use of information on a probabilistic basis generates rework. The possible way of avoiding this could be done by splitting the deliverables based on the content of information and release can happen with a subset of data that is fully matured. Lack of system view of internal workflow: The extreme focus on the functional groups can lead to lack of system wide approach. This affects system wide decision making process, by leading to decisions based on local functional priorities that affect other functions adversely. For Instance, a Design engineer might accept a change from the client which is going to be small work for him, but can have major rework for the downstream activities. This lack of system view also manifest schedule problems in the other way. In order to show progress, a Lead mechanical design engineer might make his division to work on the deliverables that can be finished easily and that can be of no use in the early stage. This can lead to additional cost and effort. 62 Vendor finalization takes time: Most of the procurement activities are done by public contracts. This is done to achieve low cost purchases. It is a time consuming process and the vendors will not commit to prices until all the design specification are ready. This in turn delays the vendor information coming in late and can cause rework by changing the engineering documents that has been issued already. This could be avoided by allowing vendors to be involved in the initial design process. This allows to exchange and share information/knowledge between the vendors and internal engineers. This could avoid deviation in design and could reduce the overall cost. This is the kind of change that is expected out of this transformation to Lean enterprise. Misleading Metrics: The metrics based on engineering man-hours doesn’t work well at all the situations. These metrics are basically tied up with the external commercial reporting as clients often pay according to the progress based on milestones. These metrics used to measure the internal performance doesn’t handle the rework issue properly. For instance the monthly productivity figures were calculated on incremental progress achieved and the effort spent on that month. If rework occurs in a project, ideally the progress of the project should decline, but it is not done so, as this reflects negative progress to the clients and their payments get affected. The effect being the metrics measuring the productivity becomes inaccurate when there is rework. Such wrong feedback can mislead the team and also makes them attached to the same way of working. Thus it is very critical to realign these metrics to change these behavioral patterns. 63 4.5 Summary Thus the use of Value streams, DSM and causal map analysis brought together all the internal problems that lead to rework at the expense of schedule and cost overrun in the project. The DSM was the powerful tool to persuade the attention of top management towards the existing issues that reinforced the rework cycle. It proposed a system wide approach to mitigate them. It also identified specific process improvement methods like tracking the progress based on the content of information rather than on probabilistic basis, separate engineering changes from the documentation updates and use of progress metrics that are devised to consider rework. However the report didn’t look at the improvement options fully, but to devise a system for project control team to identify such areas for improvement and work on it in continuous improvement basis. 64 Unit -5 5. Recommendations 5.1 Introduction In this internship, two different types of strategic matters: a series of organizational problems as well as an organizational objective desired by the top management were dealt. Based on the above discussions, recommendation was made in line with those strategic matters as shown below in figure 22. Figure 22 : Strategic Matters It is quite evident from our findings that main challenge in such projects is the management of information flow. The DSM analysis and other subjective evidence, repeatedly strengthen the need for the full system view of operations. The following organizational structure was proposed based on the literature and internal discussions. By adopting this approach, there would be an extensive impact on the Dodsal’s project management structure. The following section would outline the organization proposal based on the value stream, its rationale and its impact on the organization as a whole and the preliminary steps needed to aid the implementation. 65 5.2 Value streams based Organization The value stream approach required re-drawing the mental map of engineering and construction projects; hence project organizations structure had to be re-oriented. Also, Metrics and supporting process had to be realigned and changed respectively. The fundamental approach is to break an Engineering & Construction project in to mini projects and it should be along the lines of the value streams. The aim of this exercise is to facilitate decentralized operational decision-making, foster cross-functional working, and create a system flow and line up incentives to the needs of the final customer. This Segregation of projects is a common method used in upstream oil & gas business where the projects themselves are composed of standardized units. This is also common on most of the onsite construction as projects are divided into independent sectors. This is usually considered very useful and it tends to give clarity on the operations and also aims at achieving high productivity. Thus, Value stream organization helps us to advance this approach further by moving it to design, Engineering and procurement phases. 5.2.1 Proposed Organizational structure Project is managed as a sequence of mini projects, each with its own hours related to manpower and budgets related to procurement. So, the final output of each value stream would provide us with necessary work front for construction like materials and drawings at the appropriate time. Cross functional team with engineers and senior buyers will have unswerving control from each value stream. Home office construction personnel will be scattered line reporting back into one or more value streams. Managers purposely skilled to supervise cross-functional teams will run each value stream. The responsibility of the manager will be to supervise multiple value streams, as these value streams are spread out in various time phases. There is a need to create a separate strategic team within the supply chain to manage over procurement and logistics of engineering materials needed for the entire project. This team will encompass technical personnel like expeditors, quality inspectors, materials 66 coordinators, requirement planners etc. The senior buyers from the procurement team will be aligned into this group. A value stream champion for each stream of the work in the organization will be nominated from the outer side of the projects. The following Figures 23 and 24 compare the current organization structure with proposed organization structure. 67 Figure 23 : Current Organization Structure 68 Figure 24 : Value Stream based organization Structure 69 The Following are the key changes: Currently functional departments have straight line control while project engineer’s role which is usually a coordinating role is a staff role. The proposal aims to change these roles. The underlying principle behind this change is that a team can be efficiently managed in a staff function, but in order to achieve coordination within cross functional teams in a concurrent engineering project, line roles are required in the project. Due to this change, the functional roles will become staff roles. For instance, Engineering leads will be responsible for maintaining technical quality and have to ensure standard procedures are always adhered to. Subsequently, the existing responsibilities of the functional leads like maintaining budgets and monitoring deliveries would be moved to the new Value stream Managers. As part of the project executive team, the managers from engineering and procurement division will allot operational responsibility to the value streams. They will focus on managing interfaces with clients and external contractors and provide needed supervision. The home office organization, exterior to the projects, is unaffected and will continue to be along with functional lines. 5.3 Potential Impact Analysis The Impact of these changes are carefully analyzed as there are many other supporting function for executing such large scale complex projects, being affected by this proposal. This has been discussed in detail as shown in the Table 3 below. 70 Table 3: Potential Impact Analysis 71 5.4 Justification for new Organization structure The first step in implementing as well as enabling lean & productivity improvements have to begin with an effective team organization. We all know that teams are natural units for information flow. In order to achieve this there needs to be right management structure which would give additional responsibility and full control to teams in order to create value to the final customer. This structure would also aid us to create incentives and measures. These would in turn, help us to achieve project goals. These are not achieved in the current organizational structure. The value stream approach thus solves many of the issues by creating a suitable organizational structure. This structure aligns the actual workflow in projects. The positive implications of value stream are as follows: Allow faster informational exchange with Vendors: By collating manpower and procurement budget under a single manager, a better cross functional trade-offs is achieved. For Example, procurement decisions can be made more holistic by including logistic schedules and overall landed cost in the purchasing decisions. There is also significant impact on behavioral patterns by creating cross functional teams. For example, the metrics used for engineers will measure final delivery to construction. As such engineers will be able to respond faster and follow up with vendors more meticulously. Buyers will advance certain orders to guarantee the goals they set, as part of scheduling are met instead of waiting for batching orders. This in turn increases administrative efficiency. Efficient management of client changes: The value stream manager has extensive responsibility. The delayed decisions on some projects can affect the overall system flow and it’s the responsibility of the manager to observe the impacts and to supervise the review process. At present, the leads of the project measure client changes with regards to the increment efforts for their own department and they do not base their decision with regards to cost to other downstream functions. Project /engineering mangers are not expected to be there in all client technical meetings and so the overall decision making on operational flow has to be pushed down to the 72 projects which is considered to be a system wide approach. As a result, value streams create a mental map facilitating the system view. This gives clear visibility of the total system cost of changes, and it also helps provide solid basis to push back client changes. Effectively address common Issues: From the Causal Analysis explained in the unit-4, it can be clearly seen that a value stream organization solves many of the common project issues. As Millard (2001) describes, it avoids sub-optimization, avoids focus on man-hours, helps looking at holistic system view, creates appropriate metrics, avoids out of sequence work, reduces matrix conflicts and enables closer procurement and engineering coordination. The most critical benefit of the value stream is that it creates a correct mental picture on the final goal in any Engineering & Construction projects both internally and externally. This clearly defines that EPC is not merely getting engineering work done in lowest possible man-hours or achieving lowest procurement costs. It re-iterates the focus of delivering a time effective and cost effective end results on the site. Facilitate Lean: The most important aspect of value streams is that it helps in meeting tighter budgets as well as deadlines by enabling clear and continuous interactions within cross functional teams. As a result of a system wide approach of moving down the decision making capabilities, an environment is created for continuous improvement. Thus according to Millard (2001), “value stream creates a homogeneous modular approach to projects by enabling new cross-functional procedures, data/information handoffs, benchmarking etc., leading to extensive productivity improvement”. It creates operational teams that have enough capabilities to monitor the information flow, skill requirements and work dependencies on their own. 73 As it can be seen clearly, teams are now aligned towards project goals and in order to have more informed decision-making capabilities at project’s operational level, they can/should be given more authority. 5.5 Barriers for Implementation The proposal for changing the project organization can give rise to many issues. The key issues that came up during the analysis are discussed below in the Table 4 with the possible suggestions. 74 Table 4: Barriers for Implementation 75 5.6 Leadership Strategies In order to build a broader support for this proposal few leadership strategies were followed, as depicted below. The initial interviews, discussions/meetings were useful to draw out a stakeholder mapping (refer Appendix-1), which was very useful to frame these strategies. It was useful to indentify the internal champions and the necessary work was done to gain their support. As discussed in the Appendix-1, there were evidences to understand their inertia towards lean was very positive. It made the things easier to convince the management and to buy in their decision towards this value stream approach. 76 5.7 Future Paces Given the results shown from this report, Dodsal started adopting the proposal, with their first initiative of planning and scheduling a project along value streams using the WBS created. There are steps taken within the Project planning and control department to do the DSM analysis for all other value streams and identify areas for process improvements. The metrics for measuring performance along value streams are yet to be started. As a result of the discussions in the report, the internal initiatives that will be launched will have a span of 2-3 years for complete execution. The following Gantt chart 2 with time frame was depicted below to show the different levels of activities in implementation. This was done on the basis of discussion with the project Manager and projects control and planning team. 77 78 Unit - 6 6. Conclusion The UAE Oil & Gas industry is spurred with rapid growth rate and resultant external factors has forced the EPC contractors to adopt for concurrent engineering setups to execute projects. The existing functional organization structure in Dodsal has led to many productivity issues, raised due to the inability of handing concurrent engineering tasks, resulting in project overruns. This report has set the basis for adopting Lean principles to address those issues effectively. The idea behind this report is to split the macro sized projects into micro mini projects using value streams. This concept has been adopted from the upstream EPC businesses and onsite construction processes. The value streams were identified using the updated project schedule of an executed project, developed using Primavera. The methodology used to identify them is very well explained. The value stream identified in this report clearly defines the boundaries between them and the WBS created for each value streams evidently demonstrated that it is better than functional boundaries in handling such complex projects. Then a key value stream identified was analyzed using design structure matrix to identify the planned and un-planned iterations in the value stream. The steps involved in preparing a value stream for DSM analysis was explained. Then a causal root map analysis was made on the outputs from DSM exercise. It highlighted the existing behavioral patterns that led to rework. The idea of this approach was used to show Dodsal, how value streams and DSM analysis can be used to identify specific areas that needs process improvement. It also showed that this approach facilitates orderly flow of information/work, better accountability and enables cross functional culture. As a result, this exercise played a significant role in shifting the management mindset towards value stream based organization. The last part of this report proposes a value stream based organization structure, an implementation plan with its implication. It also discusses how these principles complement to their strategic decision of acquiring IDEA engineering and membership with Lean Construction 79 Institute (Refer Appendix-1). The effort in this internship has helped to get buy-in the management towards value stream based organization. It also discusses about the leadership strategies used to build a broader support for this proposal. The implementation starts from project planning & scheduling for a new project, along value streams and is expected to continue at stages. Building on the effort of Millard (2001), we demonstrated the suitability of value streams and DSM in an industry like Engineering and Construction, which is information centric. This strategic move towards value streams will open a new window for Dodsal, providing a comprehensive solution to the issues discussed in this study and can help them provide their customers more lucrative EPC business solutions. 80 7. Appendices Appendix 1: Outcome of Interviews/Discussions The following questions were asked during various phases of the client visit to get essential information about Dodsal. These questions helped in analyzing the issues further and provide feasible recommendations for the project. As said, the questions were divided into three phases. In the first phase- the first 5 questions gave us an understanding about the operations of Dodsal and the interest of Dodsal towards lean initiatives. 1. Give us an overview about your EPC construction model and please explain the characteristics, advantages having this model? 2. Please list the Lean initiatives that you have been involved with in your organization? 3. Please list the departments and/or areas of your organization in which the Lean initiatives have been implemented? 4. What was the original aim of the Lean initiatives your organization has implemented? 5. What are the business factors to commence a lean initiative? From these questions we were able to analyze from the information, the top business factors for adoption of lean as shown below (Figure 25). Figure 25 : Top Business Factors 81 The Second phase consists of 6 questions from which Dodsal’s previous lean initiatives were probed to understand the procedures they follow to adopt lean. It also gave understanding about their strategic moves through lean adoption. 6. Does your organization have any plans to implement Lean in other areas / departments? 7. What proportion of your overall organization has been involved in implementing Lean Initiatives? 8. What have been the other resource (time, finance) implications of implementing the Lean initiatives? 9. What tools and techniques have been used in the Lean? 10. What external support is your organization utilizing to assist with the implementation of any lean initiatives? 11. If you have utilized external support, how effective has this support been? The findings from these questions were pretty much satisfactory as it gave us an insight towards their lean approach and the strategic moves behind this adoption. It can be concluded that they were in the right path towards achieving operational excellence. The Acquisition of India’s AE&E IDEA (India) Pvt. Ltd was considered as a strategic fit and further strengthens the company's existing business footprint in the energy, industrial and infrastructure sectors. This acquisition has further helped in achieving its core mission of serving customers globally. There had been outstanding results by aligning with external agents for their lean operations. This can be confirmed by the fact that they have a membership with Lean Construction Institute to further leverage their competitiveness. This was also considered to be a strategic move towards operational effectiveness. The following passage briefs about the Lean construction Institute. The Lean Construction Institute, (LCI) was founded in August 1997 and is a non-profit corporation. They are involved in developing expertise related to project based production 82 management system in the field of executing large scale engineering and construction projects. They are the pioneer in extending Lean production revolution started in manufacturing, into construction industry. These are following benefits Dodsal can enjoy by being a member of LCI. The membership can give them the best opportunity to learn about the new concepts and techniques that are developed for executing large scale engineering and construction projects. The employees are up to date with the current trends and practices in the industry and this act as source of motivation for them to adopt those practices in their work. The members can build a competitive advantage in the industry through a long term relationship with LCI. It is by fitting new tools and techniques to the organization and association with leading thinkers and implementers will bring the firm out in front as the industry changes In the third phase that consists of 5 questions, the questions aimed at finding the ways of communicating the lean principles in to the organization as a whole and any obstacles that can occur. In addition to this, evaluation methods of lean initiatives had been sought. 12. What strategies have been used to engage staff in the Lean initiatives? 13. How has progress on the Lean initiatives been communicated through the organization? 14. What have been the barriers to implementing Lean Initiatives and/or realizing success? 15. Has there been any evaluation of the impact of the Lean Initiatives? 16. How long do you think the implementation phase of the Value stream would take? From these questions, it was concluded that by changing the organizing structure, the value stream can be smoothly implemented. From the information received we were able to develop a matrix for stakeholder analysis as shown in the below figure 26. It can be clearly seen from the figure, there are four major blocks. We were able to identify those personnel. 83 Figure 26 : Stakeholder Mapping Change Agents: It was the Engineering Director and Senior Project Manager who had the power to influence to change gave a broader support. Change Facilitators: They were the Managers and Engineers from the Project control & planning department. People to Convince: Managers and staff from the Engineering & Procurement functions are reluctant to the change but they have higher levels of authority. Minor Skeptics: These are usually laborers and front line employees for whom the change would be trivial. 84 Appendix 2: Work Breakdown Structures for Value streams The Work breakdown structure for each value stream is shown below. These were created by the use of primavera as discussed in the Unit 4. Refer the following figure 27. Figure 27 : Work Breakdown Structures Stakeholder Mapping 85 86 Appendix 3: IBC Code of Conduct and Professional practice The Institute of Business Consulting is the professional body for business consulting. It is an organization within the Chartered Management Institute. Both Institutes combined to form a code of professional practice to be followed and competencies to be followed by consulting professionals. It defines the responsibility to the consulting professions in relation to the professional conduct, levels of competence and standards of behavior in the consulting Business. This entire piece of consulting works was in line with IBC Code of professional practice. Figure 28 : IBC Competency Framework 87 Appendix 4: Updated schedule from Primavera used for the analysis The Updated Schedules used for the analysis part is shown here. The Updated schedule is comprises of 900 activities and 80 pages long. So the first 10 pages have been attached for the purpose of understanding. The Project name used for this purpose is Ruwais sulphur plant, Abudhabi. Dodsal executed this project in 3.5 years, which was planned for 2.5 years originally. 88 Updated Project Schedules from Primavera (p89- p95) 89 90 91 92 93 94 95 8. Reflective Summary Acknowledgement to the Transformation: When I try to look back after my past from now, I see things entirely in a different perspective than when I did the same thing a year before doing my MBA. My Previous experience is around a technical environment in steel construction industry. I had been myself in a variety of roles starting from technical roles to team leader and to managerial roles. My professional role taught me a great deal not just about the construction industry, but also about project management, team building, and challenges with cultural diversity. I would like to believe that my extrovert nature, good communication and negotiating skills, and my sheer ability to work hard made me successful even in a very demanding economic environment. As I stared progressing in my career, I noticed that other than technical expertise there is something one has to posses to become an efficient Manager. It was then I realized the importance of a good management degree that would not just teach me business skills, but also hone my leadership abilities and help me understand trade and business from a global perspective. So I finally decided to pursue MBA from the University that matches my learning abilities and I was firm on getting admission in Middlesex University Business School. It was here that I learnt firsthand, how a single managerial decision qualitatively and significantly affected performance in every facet of the organisation. As part of my MBA, I got an excellent opportunity to do an internship with Dodsal, which is one of the biggest achievements in life. I can see myself transformed from an Engineer to Engineering Business Consultant. It all happened only with things I learned from my MBA and I owe a massive debt of gratitude to all my professors in Middlesex University for this transformation. Consulting Project: Reflective practice suggests that the development of professional practice can be brought about by the analysis of significant events or "critical incidents". Here I mean my consultancy project as a critical incident in my life. 96 In a broader sense, management consultancy refers to the activities done by an individual or a group of people aimed at making the firms improve their performance. The IBC model & Simon speller cracker model have suggested that whole consultancy process starts with identification of the issue, then focus moves on to analyze such issues and formulate recommendations for the firm to resolve the issues identified. The final stage is to help the firm or client in implementing them. Salder (1998) states that each of these stages are unique, serves it own purpose but in the mean time inter linked with each other and occurs in a sequence. This reflective summary is going to explore the learning outcome from the practical process of consultation with Dodsal. The implementation stage is not covered, as this didn’t happen due to the time limit. However the implementation plan was made with the consultation of Dodsal. Consulting Process with Dodsal: The entire piece of consultancy work with Dodsal consisted of three phase as explained below: The Entry Phase  Understanding their Concerns/Identifying the issue  Agreeing the Brief and its scope The first official meeting in this was phase was really important for both of us. According to the literature, in reality, a good first initial meeting normally would mean the winning of contract for the consultants. The whole atmosphere was pleasant. The client was very friendly and polite. They were ready to help me on any information I was asking for. The three main objectives achieved in the first meeting were: Understanding the issue Building the relationship Selling and getting the contracts. There were few negotiations on the key objectives of the project. This was largely because of the different perception they had on the problems. It was all explained and the project scope was narrowed down to Lean solutions. This was achieved by the knowledge gained on the Lean literature before meeting them. 97 Data collection and Analysis Phase During this phase, there were frequent visits to Dodsal‘s Head office and their construction sites. The data was collected from almost all the points of contact. This was very constructive, as both client and I were able to learn something from each other on the industry and about the possible solutions for the problem. Presenting Advice and solutions phase This was a formal power point presentation, and it was a big success. The proposal was accepted by the client and initiatives have been taken by the client to start the implementation. The presentation was in a lively manner as the client got involved rather than just listening to it. It was a very open discussion in a relaxed way. This turned out to be the success for my proposal. However this didn’t work out with my presentation at the University. The problem here was that, the presentation was more into technical things rather than speaking about how I have applied the management principles to attain that. I was also marked for the same. But instead I got a good constructive feedback from my mentors and it is incorporated as such in the report. The most important thing I learned here is that “I have to suit the theme according to the place”. The Process Evaluation: Looking back at the overall piece of this consultancy work, it was reflecting the model suggested by IBC and the framework followed Simon speller cracker model. - Consulting Approach: Different situation requires consultant to be in different mode in order help the client. There is always a dilemma faced by a consultant during the process and either he take up the role of an ‘expert’ to give advice on resolving the issue or plays as an ‘facilitator’ to help the client to figure out the solution for themselves. So it is very critical to understand what role a consultant should play in different situations. This was clearly understood and was followed in the right way by the use of “IBC code of conduct & Competency frame work”. 98 - Client Consultant Relationship in ‘Dodsal’: My relationship dimension with Dodsal was half way between contractual and idealized relationship. The relationship had four dimensions: Knowledge, Skills, Attitude and Emotions. These dimensions vary at different situation and the important thing is to use these dimensions at right level. This is because of the fact; I was there to help Dodsal to improve their operational effectiveness. On the other hand they were looking me as an MBA student and helping me to complete my MBA Project work. As a result of this, there was a constant change in the role I had played. In the initial stage, it was like I was there to learn and show them what I can do. In the Later stage, I become more like an expert trying to persuade them in accepting my ideas and findings for the Project. Thus there was no particular role to play in this consultancy work. What is important is that to choose the right role for a particular situation as discussed in the section consulting approach. Overall Evaluation: Overall from my experience in doing this consultancy project for Dodsal, was priceless. I had learnt a lot from this consultancy and from my MBA. 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