Improving Operations Within Capital Project Execution with Case Examples

Abstract

Abstract Recent surveys of major capital project performance conclude that most oil & gas major capital projects fail to meet their budget and schedule objectives. We describe a new technical framework for project execution, drawing upon principles originally applied in the fields of computer and telecommunications network systems design. The constraints and activity synchronization needed to successfully operate digital network systems have many similarities with, and arguably much greater complexity than, the constraints and activity synchronization required to seamlessly execute capital projects. We show the applicability of utilizing network engineering principles to improve capital project execution. The observation is not new – indeed other industries routinely apply network systems engineering to manage their complex project operations and associated supply networks. Companies successfully applying such principles include Amazon, Federal Express and Walmart. After giving a high-level introduction to the commonality between the fields of network systems engineering and project management and execution, we briefly compare our approach with related ones such as Lean Project Management. The latter approach draws from the operations research and industrial engineering fields, which are foundational in network and systems engineering. We close by describing case examples from recent oil & gas major capital projects and the superior performance obtained by using a network systems approach.