Tuesday, January 27, 2009

Managing a Pipeline Project

Product names mentioned in this post are the property of their owners.

What is different about a pipeline project?

In pipeline construction, as in other logistics-based projects like railroad building, laying cables, building roads, etc., the primary measure of physical progress is the distance (ex. feet or meters) completed per day. This requirement helps to differentiate reporting and work processes from those associated with such location-specific projects as bridges, dams, tunnels, process plants, software development, movie making, etc.

Today, the confluence of data management, wireless technology, internet and demands for transparency by managers and investors has combined to impose an unprecedentedly high set of expectations on project managers. A pipeline project can cost a billion dollars. Incurring costs at the rate of multiple millions a day is routine in such projects. Imagine yourself as a Project Manager, Director, or VP in charge of a pipeline project. You have to be confident that for the $2,000,000 that was incurred yesterday by the construction team, your project earned at least $2,000,000 of value. The trended CPI (cost performance index) should be steadily at 1 or above. This has all the signs of a stressful job.

This post discusses basic approaches to ensuring that your pipeline construction project proceeds on time, within budget, safely, in an environmentally sound manner and with high quality.

Project Management Organization

The primary objective of the project management system is to measure the progress and other measurement indexes such as earned value, incurred, budget, target, etc. These are compared to a baseline of expectations. If this job is done well, the project management team has the resources needed to make sound decisions that will ensure that the project progresses to a safe, desirable and stress-free conclusion. A discussion on methods for establishing and maintaining the baseline is included along with a discussion of the functional roles and responsibilities of the key members of the project management and execution team.

Plan the work––then work the plan

Planning the Work involves developing the scope of the work, human, equipment and other resources, materials, costs and time required to do the work. These processes are usually assigned to people that are functional experts such as Project Managers, Estimators, Planners and Schedulers.

Working the Plan involves a different focus and the functional experts that do this include Project Manager, Foreman, Superintendent, Contract Administrator, Timekeeper, Cost Analyst, Field Engineer, etc.

We use each of these functional experts to help us navigate the project management processes involved with managing a pipeline project. We discuss each of the duties involved in each of these functions along with the data collected and the reports produced for management review as well as to ensure project success. We then discuss some software tools that project team members and others use to collaborate electronically as well as manage data more efficiently.

Project Manager

The buck stops with the project manager (PM). If things go badly, the PM is the scapegoat. The PM is to the project what the coach is to the football team. He calls the shots and directs the key people in the team. She identifies any shortcomings early and, in a timely manner, implements solutions to overcome these. The PM needs a tool that helps in the creation of a complete scope of the project. No changes to the scope of the project are allowed to 'sneak' into the project without the knowledge of the PM. However, at the same time, people often work on out-of-scope work. The data management system is configured to allow the addition of out-of-scope work automatically and easily. This new scope is designated, automatically, as unapproved until the PM approves it. Out-of-scope work is either unforeseen or unexpected work. It may occur because of inexperience or because an unexpected hurricane blew in during the project. Contingency may be used to defray these unexpected costs. The PM also needs to have the base plan along with changes always available. This plan indicates where the project is expected to be today. Estimator(s), planner(s) and scheduler(s) are charged with ensuring the continuous existence of an accurate baseline while the project is being planned as well as after execution has started.

TeamWork Solutions' Project app provides the PM with the tools needed to see the scope, cost and schedule of the project at any time. In addition, other key performance indicators (KPI's) such as safety performance are available to the PM. TeamWork Solutions' robust reporting tools provide the PM with the horsepower needed to report on the state of the project to corporate management. myProjects provides access to each of the project reports at both a detailed work item level as well as rolled up to various levels of the project WBS. These include cost, human-hour, and other progress reports––in tabular and graphical formats.


The Estimator uses a project's drawings to build a time, cost and materials estimate of labor and in-place materials required for the project. Third-party estimating databases such as Richardson's and Mean's provide the estimator with associated labor rates for installation of the materials. Tools for the inclusion of escalation, contingency, burdened rates, etc. are available to the estimator. The line items from the estimate may later be linked with the planner's plan line items. This provides an integrated means for spreading the estimate over time in order to provide a cash flow. Alternatively, a manual cash-flow tool is available that allows the estimator to easily spread costs for estimated line items over the duration of the project. This results in what is commonly called a cash flow.

The most commonly available tool in use today for estimating is an Excel spreadsheet. The flexibility of Excel makes it a logical tool for use in an environment where estimating is a new concept. However, repeated use of Excel becomes a tedious process as more estimators are expected to use the same format. Newer ideas are hard to incorporate into the estimate spreadsheet. In addition, it is difficult to maintain an accurate, definitive and current spreadsheet, when so many people are on the distribution list.

TeamWork Solutions' iapp is an ideal solution for estimators. Data from drawings are entered into the central TeamWork Solutions database. This data is available for re-use and review by all team members who have appropriate rights. For example, the Buyer does not have to re-enter all of the estimate line items into another Excel spreadsheet or into another application, in order to actually purchase the materials. He/she simply uses the exact data from the estimate!

The end result of the estimating process is that a cost estimate for the project and an expenditure cash flow is available as a basis for cost tracking as well as the scheduling processes.


While the estimator's job is to figure the cost based on the in-place materials in engineering drawings, the Planner, on the other hand, arrives at cost based on building a planned sequence of work items in a work package. The planner's plan includes the cost of labor crafts and crews as well as the cost of rental equipment, if required, consumable materials and sub-contracted costs. The planner links the work items using ties (precedence relationships) into a coherent flow of work. The person that prepared your Thanksgiving dinner deserves credit as a natural planner! Imagine if he/she had started cutting and cooking the yams on Thanksgiving morning, rather than placing the thawed, stuffed turkey in the oven. Your yams would be cold by the time the turkey was done. Planners save their company––and their PM––untold amounts of heartburn, and dollars, simply by developing a sound, workable, field-walked-down plan. They have spent the time in the field thinking through and 'building' each step of work involved in the completion of the planned work package. Plans are created for each work package. A work package is a basic component of the scope of the project––a part of its WBS (work breakdown structure).

Planners today use MS Excel, MS Project, or Primavera as a primary planning tool. The problems associated with Excel have been discussed previously. MS Project and Primavera are both project scheduling tools that standalone, isolated from all of the other project tools, such as the scope development and estimating, cost management tools. Their ability to easily export data simply helps to cause more fragmentation of the project's data. This leads to a greater need for more people to spend time managing this increasing spread of data in spreadsheets.

TeamWork Solutions Plan app leverages the project scope and estimated data that has already been entered to ensure that the planner stays focused on planning the identified work––rather than spending time re-entering the work packages that have already been estimated. Plan also allows the plans to be easily updated with scope changes, thus automatically maintaining conformance with the company's business rules. A planner can stay focused on building the plan on a mobile device if needed.


Scheduling is the process whereby dates are calculated for each work item in the plan. The scheduling engine uses the information provided to compute these dates. Information is either schedule-based or resource-based. Schedule-based information includes duration of work items as well as the logic that connects a work item to others. Additional nuances such as periods and milestones help the scheduling engine to ensure that work is scheduled in the appropriate window of time. Resource-based information comes from the contractors that supply the manpower and equipment for accomplishing the work. The numbers of available skilled personnel are modeled into the scheduling engine as resource limits. By using these resource limits and the periods over which are available, the scheduling engine ensures that reasonable dates are computed for each work item. When a reasonable schedule has been derived in this manner, the PM should snapshot the scheduled plan into a Target or a Baseline. This process (snapshot to target to baseline) may need to be repeated as new scope is added.

Another reason for re-targeting the project is when the progress is so out of whack compared to the original target, the PM decides to create a recovery schedule as a new, revised target.

TeamWork Solutions' Schedule app operates, behind the scenes, as an automated, business rule-driven scheduling engine. This means that, once your business rules have been modeled into the system, it continues to produce consistent schedules at a pre-defined frequency. This, in turn removes the need for the huge overhead in technical scheduling personnel that many projects are currently burdened with. Schedule also supports the transfer of schedule data into Primavera and MS Project. These apps can now be used for plotting of Gantt charts, Logic Diagrams, histograms, etc. TeamWork Solutions also provides its own version of these types of diagrams as reports and on-screen displays.

The deliverable of a scheduling process is a workable schedule. This schedule forms the basis for the execution of work in the field. It is therefore critical that the schedule is workable and reasonable from the standpoint of execution using available resources. Schedule uses the company's business rules to routinely produce workable field schedules. More on this is discussed in the section on Execution (Field Engineer, Superintendent, Foreman).

Now we move into the executing the plan section of this discussion.


The Project Buyer or Purchase Agent has to buy materials and services at an optimal cost. The work done by this person and his/her team ensures that costs are kept to a minimum while quality and timely deliverables are maintained. The buyer requires a means to aggregate all of the materials requests from each of the projects that are currently being contemplated. The project schedule clearly affects the timing of the placement of the purchase order as well as the delivery of the purchased items. These schedule constraints should always be available to the buyer. Likewise, if a delivery of a critical material is going to be late, the schedule should be automatically 'made aware' of this.

Approved planned packages are automatically the source of the information in bid packages. The Buyer electronically sends these bid packages to potential bidders. The bidders, in turn, respond to the bid request electronically. The buyer and the project team review bids and select the winning bids, notify the winning bidder, query the bidders, all electronically and in a manner that ensures that an electronic record is kept of all communications and decisions.

TeamWork Solutions' Procure app is designed to integrate with the estimate, plan and schedule in order to streamline the flow of data to and from the purchasing department. Materials Expeditors use the system to keep track of deliverables and where they are delivered.

Field Engineer, Superintendent, Foreman

The field is where the 'rubber meets the road'. All of the previous work in the project, the estimating, the planning, the scheduling and the buying, all see their benefit in the execution phase of the project, which is in the field. Today, however, it is still common practice for the field to 'create the wheel from scratch'. They create tracking spreadsheets and charts and enter data into scheduling program and presentation applications. This is a huge waste of effort and serves as a potential disconnect in the management of the scope of work. Execution people need to be able to work the planned schedule and to be able to modify it to suit changing conditions in the field, as they occur. They certainly need to keep track of the progress of each work item. This progress is used by the scheduling engine to re-schedule each shift or each day in order to produce fresh workable schedules. Today, foremen routinely perform the time-consuming process of preparing timesheets for their crews at the end of each shift. This is now done electronically with mobile devices. This approach ensures that the entire field operation is an integral component of the project.

TeamWork Solutions' Execution app is a tool that is designed for daily use by foremen and field personnel. It is integrated into the same system that provides management level reports and thus is an extremely fast-track and highly visible approach to project management. Sure, there are plenty of opportunities for bad data, or no data, to enter the system. However, the highly visible and non-redundant nature of the project data makes these holes easy to find, and then resolve. This results in a well run project, with few surprises.

Contract Administrator

Each of the contractors that support a project has negotiated a set of rates and other terms with the owner. It is useful for the project team to be aware of the contractual rates and other terms. This enables them to quickly react to any potential issues associated with real or perceived non-conformance to contractual obligations. Simply managing each of the rates for each of the labor crafts, skills and trades, each of the equipment rentals as well as any consumables that are supplied by the contractor is a huge task that is often done in a spreadsheet. Another complexity is that rates can change over the duration of the project.

TeamWork Solutions' Contract app is designed to provide a means to manage each contract's rates as well as other terms. The actual contract can be printed and sent electronically from Contract. This system also directly integrates with Incur, the system for tracking a project's incurred costs.


The Timekeeper is a ubiquitous presence on construction sites. He/she/they spend a lot of time entering timesheet data into Excel spreadsheets or Access databases. This is a time-consuming process. Sadly, it is also riddled with places for errors to creep in. These errors render the data collected virtually useless––other than as a project-level check on incurred human hours, equipment hours and consumables. A major reason for the degraded value of timekeeping data is the sheer number of WBS, work order, account, GL or other codes that timekeepers and foremen have to select from. A simple error at this point renders the data useless for drilling down to the work item level.

TeamWork Solutions' Incur app was designed to link with the project schedule to ensure that all time is charged to a work item in the scheduled plan. Should an appropriate work item not exist, Incur permits the timekeeper or foreman to create a work item (or even a work package) on the fly. This process is a foolproof means for collecting time against a specific work item. Any queries or mischarges are easily addressed and fixed. Incur also permits a tracking of each of the decisions made with respect to reversal of time charges. This makes auditing this data quite easy. The Execution app provides a means for the foremen to directly enter their data into Incur - thus allowing timekeepers to serve the more valuable function of ensuring accurate and complete data is available for each employee. Better quality data is now available.

Accounts Receivable

Knowing what you have been invoiced for is a critical aspect of managing a project. Typically, large companies have in-house enterprise system such as Oracle or SAP that serve as a repository for this information. In cases such as this it would be useful to have a data transfer from these systems directly into the cost analysts system. Often, the analyst simply re-types the information into his/her spreadsheet

TeamWork Solutions provides an integration tool that allows it to easily query an external source of data, then import and process that data. In addition, if needed TeamWork Solutions' Invoice app can be used as a project-level tracking tool for review of invoiced items.

Cost Analyst

As the project progresses, money is being spent. It is the cost analyst's job to track this expenditure and to predict (forecast) where the costs are headed. To do this he/she tracks some key indexes. These include Incurred costs, committed costs and expended costs. The usual tool available to cost analysts for this tracking is a spreadsheet. Sadly, this means the entry of project data in the cost analyst's spreadsheet.

TeamWork Solutions' Cost app is designed to help the cost analyst by providing a solution that is integrated with the rest of the project. Incurred costs flow in from the Incur app. Committed costs flow in from the Procure and Contract apps and from the corporate purchasing tool, such as Oracle or SAP. Likewise expended costs flow in from the corporate accounts receivable system. Cost provides a single point access for the analyst to review the latest costs on a daily basis and to provide a means for the analyst to forecast costs, use contingency as well as make timely pre-payments to contractors for work done.

Tools for collaboration and improved data management

As you have seen, TeamWork Solutions has tools to support the functions of each of the major players in a project team. In order to ensure the necessary level of collaboration between project team members, TeamWork Solutions has a few additional tools that are intrinsic to the apps.
  • Issue - allows users to identify issues of any kind and to track these issues to their successful resolution in a timely manner.
  • Reference - is an electronic documentation system that provides help on each of the apps and tools within the TeamWork Solutions' suite of apps.
  • Document - is a tool for attaching documents to 'objects' such as projects, contracts, Timesheets, work packages, assets, etc. This is a very useful tool as it removes the need for the user to chase down support documentation associated with the project or any of its components.
  • Notes - is a note-keeping tool that allows the attachment of notes to 'objects' such as projects, contracts, Timesheets, work packages, assets, etc. This is a very useful tool that provides a means of annotating objects so other users may be notified.
  • Approval - is a tool that allows you to send your project or change or bid award, or other such items to appropriate people in the project for their electronic approval. This tool keeps track of dates of approvals. It saves a lot of wasted time in managing of paperwork.
  • Notify - this is TeamWork Solutions' internal email manager. It sends T-mails to people inside and outside your company and records this notification. It is a great tool for tracking who 'has the ball' and how long they have had it.
  • Backlog - is a tool for people to see exactly which items still await their attention. Again, this is a great tool for simplifying the process of knowing what should be worked on next.
  • Reports - TeamWork Solutions has a huge library of reports that support each of the apps. Many of these reports have been configured in Crystal reports, some are in Excel and others in HTML. App-specific reports appear on report menus in appropriate locations.
  • Instant Action - this is a TeamWork Solutions tool that provides context-specific actions for the user. If you see a Lightning Bolt Icon in your tool bar, clicking it reveals a list of the actions that are appropriate for the data that you have displayed in the current tab.


Managing a pipeline project, and indeed, any project, involves juggling a lot of issues. TeamWork Solutions provides a consistent framework for you to build your project so that it runs from start to finish in a consistent, predictable, stress-free and safe way. Each person in your team can tap into the TeamWork Solutions project database and provide data or analyze data as required. It should be clear that the system has been designed from the ground up to be malleable to be able to meet the different business objectives of different organizations as well as of different project types in different industries. TeamWork Solutions has been designed to be so tailorable that you could make it speak a language other than English - without any additional programming. The sooner you start the process of getting your projects organized, the sooner you will achieve the repeatable project success that is the goal of all project managers and the companies that own projects. We at the TeamWork Group are glad to make ourselves available, in person or over the web, to help you decide your options and to help you manage your projects. Our TeamWork Associates can be on-site with you and your team or available on the web. In either case we help your team by helping them build skills and processes that ensure 100% project success.

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