Produced by: KPI’s for Measuring & Controlling STO Projects E.J. (Ted) Lister Lister Management Inc.

Project Controls / Project Management Definitive Definitions The 4 + Key Performance Indicators Measuring Performance Trending, Forecasting Questions Agenda

Slide 3 Project Controls / Project Management Overview… You must be able to measure, in real-time, the status of your project based on KPI’s and their set Targets Projects need to be both controlled and managed It’s important to understand what you can control, and what you cannot; what you can manage, and what you cannot A method of measuring needs to be established for both controlling and managing the project

Slide 4 Project Controls / Project Management Overview – cont’d… Establish Project Controls at project kick-off o Work-list / Work-scope o Budget o What-if scenarios / Risk Management o KPI’s and Targets Project Management begins at Work-list cut-off o Work Management (Direct) o Resource Management (Indirect)

Slide 5 Definitive Definitions Planned Value o Estimate of Wrench-hours for an activity Earned Value o % complete of a planned activity based on field status Actual Value o Cost measurement; also used to measure worker performance Longest Job o Zero-float, determines the duration of the outage o Not to be confused with critical path, which accounts for risk

Slide 6 Definitive Definitions – cont’d S-Curve o Chart of values distributed along wrench-hour/time x y axis Baseline o A snapshot of the initial plan/schedule before feed-out Performance o Earned vs. Planned, Actual vs. Earned, Actual vs. Planned What-if Scenarios o Leveling a programmed plan to determine the best case scenario based on cost, schedule duration, and wrench-hours

Slide 7 The 4 + Key Performance Indicators In Order of Magnitude… 1.Safety, Health & Environment 2.Worker Performance  Wrench-time (76.7% direct in a 10 hour shift)  QA/QC (rework) 3.Schedule (earned vs. planned) 4.Cost (actual vs. planned)  Direct  Indirect

Slide 8 The 4 + Key Performance Indicators Setting Key Performance Targets… 1.Safety, Health & Environment = points 2.Worker Performance  Wrench-time (Direct)= 75%  QA/QC= 0 Rework 3.Schedule (Feed-in – Feed-out)= 31 Days 4.Cost = $41.2M  Direct (Wrench-hours x $45.00/h)= $18.7M  Indirect (115% of Direct) = $21.5M  Planning, Pre-Work, Post, Contingency = $1.5M

Slide 9 The 4 + Key Performance Indicators Safety, Health & Environment… Set positive targets for SH&E o Earn points each shift for 0 incidents (150 points) o Earn points for ProAct card reporting (150 points) o Earn points for audits (200 points) o Lose points for recordable incidents o A lost-time incident takes you into the negative with no chance of recovery o Incentives are based on positive numbers

Slide 10 The 4 + Key Performance Indicators Worker Performance… Set realistic direct wrench-time for worker performance o No more than 75% o Remember, once you determine direct wrench-hours all indirect resources and logistics are based on this number o If you don’t use strategic planning to support this number your chances of achieving this target will be diminished o Use productivity factors based on: season, location, worker experience, resource availability (inspectors, cranes, etc.)

Slide 11 The 4 + Key Performance Indicators Schedule… Establish a schedule in your planning software with a clearly defined WBS (Work Breakdown Structure) and Phase o The WBS is a vertical hierarchy of physical locations o The Phase is a horizontal section of work types Use What-if Scenarios to determine the longest job (series of planned activities with no float) Control the longest job; manage the remaining tasks

Slide 12 The 4 + Key Performance Indicators Cost… The cost is based on Work-scope + Indirects + Contingency = Budget Costs can only be controlled through Work-scope changes Costs are managed, not controlled, through performance Costs need to be measurable based on direct and indirect; found and added; WBS and Phase

Slide 13 Measuring Performance History Focus on Work Ahead Current Day STATUS = % COMPLETE or MHRS 100% Or Total Planned Man-hours Original Man-hour Overrun Original Baseline Scheduled Man-hours Schedule Variance New Scheduled Man-hours New schedule affected by activities not completed as per schedule plus added and extra work Schedule Slippage Earned Man-hours Original Target New Target TIME Project Performance S-Curve… Baseline Planned Earned Value - WP Actual Value - $ Found/Added Work Historical Trend Forecast

Slide 14 Measuring Performance Baseline… Save your project as a baseline comparative project just prior to feed-out Use the baseline for variance reporting and historical reference

Slide 15 Measuring Performance Updating… It imperative that field status reporting is done prior to the end of each shift for each scheduled activity The programmer will update the project in the planning software as a percentage complete (earned value) Actual hours can be tracked in the planning software, or accounting software, from timesheets The programmer must advance the project to the current status date and time

Slide 16 Measuring Performance Updating – cont’d… No uncompleted work can ever appear behind the status date line Use earned value % complete; do not try to capture actual start and finish times

Slide 17 Trending and Forecasting Using S-Curve Data… Trending performance should begin between day 3 – 5 to establish data to forecast probable target completions Use trending and forecasting to control the project Work-scope

Slide 18 Trending and Forecasting Reporting… A daily one-page report should be generated to illustrate the status of each KPI Additional information can also be included: o New Critical, All Critical o Found Work, New Work, Delays o Weather, POB, etc.

Produced by: E.J. (Ted) Lister Lister Management Inc.