An Introduction to theConstruction Industry Institute

January 20, 2009

A research institute of leading owners,

contractors, and academics working

together to advance the business

effectiveness and sustainability of the

world’s capital facilities.

History

• Established as a recommendation from The BusinessRoundtable Construction Industry Cost Effectiveness (CICE) Project to address:

- construction research

- fragmentation of the industry

• Founded in 1983 by 28 companies; now over 110 members.

• First to bring research to the engineering-construction world.

• First owner-contractor-academic research collaboration for the constructed project.

• An industry forum for the engineer-procure-construct process.

Mission• Enhance business effectiveness and sustainability of the

capital facility life cycle

• Expand the global competitive advantage of its members through:

– active involvement & participation

– effective use of CII research findings, including CII Best Practices.

PurposeTo measurably improve the delivery of capital facilities.

Owner Members

AbbottThe AES CorporationAir Products and ChemicalsAlcoaAmeren CorporationAmerican Transmission Co.Amgen Anheuser-Busch InBevAramco Services CompanyArcher Daniels Midland Co.BP AmericaBristol-Myers Squibb CO>CargillChevronCITGO PetroleumCodelco-ChileConocoPhillipsDFW International AirportThe Dow Chemical CompanyDuPont

Eastman Chemical CompanyEli Lilly and CompanyExxonMobil CorporationGeneral Motors CorporationGlaxoSmithKlineHovensa L.L.C.Intel CorporationInternational PaperKaiser PermanenteMarathon Oil CorporationNASANaval Facilities Engineering Cmd.NOVA Chemicals Corp.Occidental Petroleum Corp.Ontario Power GenerationPetrobrasPraxair, Inc.The Procter & Gamble Co.Progress Energy

Rohm and Haas CompanySasol TechnologyShell Oil CompanySmithsonian InstitutionSolutiaSouthern CompanySunocoTennessee Valley AuthorityTyson FoodsU.S. Architect of the CapitolU.S. Army Corps of EngineersU.S. Dept. of Commerce/NIST/BFRLU.S. Dept. of EnergyU.S. Dept. of Health & Human Srvcs.U.S. Dept. of StateU.S. General Services AdministrationU.S. SteelVale

Contractor Members

Adolfson & Peterson ConstructionAker SolutionsAlstom PowerAMECAtkins Faithful & GouldAutodeskAZCO Baker Concrete ConstructionBarton Malow CompanyBateman Engineering N.V.Bechtel GroupBIS Frucon Industrial ServicesBlack & VeatchBowen Engineering CorporationBurns & McDonnellCB&ICCC GroupCDI Engineering SolutionsCH2M HILLCSA Group

Day & Zimmermanndck worldwide, LLCDresser-Rand CompanyEmerson Process ManagementFluor CorporationFoster Wheeler USA CorporationGrinaker-LTA/E+PCGross Mechanical ContractorsGS Engineering & Construction Hargrove and AssociatesHatchHill InternationalHilti CorporationJacobsJMJ AssociatesKBRKiewit Power ConstructionLauren Engineers & ConstructorsM. A,. Mortenson CompanyMustang

ParsonsPathfinder LLCPegasus Global HoldingsPrimavera SystemsR. J. MyckaS&B Engineers and Constructors, Ltd.The Shaw GroupSiemens EnergySNC-LavalinTechnipURS CorporationVictaulic CompanyWalbridgeThe Weitz CompanyWorldwater & Solar TechnologyWorleyParsonsZachryZurich

University of AlabamaArizona State UniversityAuburn UniversityBucknell UniversityCarnegie Mellon UniversityUniversity of CincinnatiClemson UniversityUniversity of Colorado-BoulderColorado State UniversityUniversity of California-BerkeleyEast Carolina UniversityUniversity of FloridaGeorgia Institute of TechnologyUniversity of HoustonUniversity of IllinoisIowa State UniversityUniversity of KansasUniversity of KentuckyLehigh UniversityUniversity of MarylandUniversity of MichiganMississippi State University

Universities involved 1983-2009University of New MexicoNorth Carolina State UniversityNorth Dakota State UniversityOklahoma State UniversityOregon State UniversityThe Pennsylvania State UniversityUniversity of PittsburghPurdue UniversityPolytechnic UniversitySan Diego State UniversitySan Jose State UniversityStanford UniversityState University of New York-AlbanyVanderbilt UniversityVirginia Polytechnic Institute and State University Texas A&M UniversityThe University of Texas at AustinUniversity of WashingtonUniversity of WaterlooUniversity of Wisconsin-MadisonWorcester Polytechnic Institute

CII Principles

• Place a premium on safety, ethics, continuousimprovement (cost, schedule and quality), and leadership.

• Owner / contractor member balance and influence.

• Promote a high level of knowledge transfer.

• Provide leadership development through member participation.

• High member involvement; small professional staff.

• Knowledge creation through CII research to define best practices, breakthroughs, and industry norms.

• Knowledge dissemination through CII research publications, implementation guides, educational materials, workshops, and conferences.

• Knowledge management, organization, and assessment of relevance of the 450-plus CII documents and publications.

• Knowledge assessment of the impact of CII practices through the benchmarking and metrics program.

CII: A Leader in the Construction Industry

Through these knowledge processes, CII enhances the business effectiveness, sustainability, and global competitiveness of CII members

and lifting the construction industry.

“CII is the one place that owners, contractors and academia work jointly on key initiatives to improve our industry. The depth of knowledgeable resources that actively participate is unparalleled in the industry. CII is also the one industry forum that through research provides deliverables and tools that its members can immediately put into practice. The benchmarking metrics from its members consistently validate the value of participation and membership. The opportunity to network and learn from industry leaders is also invaluable.”

John W. Dalton, Sr.Mustang

Benefits of CII Membership

• Collaboration with leading industry, government, and academic institutions on key industry issues without the risk of anti-trust problems.

• Competitive edge through immediate access to new research findings, offering a first-to-market competitive advantage.

• Equal vote by all CII members in the selection of research and other CII activities.

• CII Product Library – Free, unlimited organizational access to CII Products Online, a 24/7 web-based resource of CII Best Practices, practices, products, and tools that when successfully implemented produce significant improvements in cost, schedule, and safety.

Benefits of CII Membership• Networking and CII committee/team participation that lead

to partnerships and long-term personal relationships.

• Education Programs to help members develop leadership and competence in their staff, from entry level to executive level, including online courses, modules for member self-instruction, and registered instructors for customized training.

• CII Implementation Training to integrate CII Best Practices into business strategies. CII implementation tools and workshops explain the methodology and applied skills required to implement CII research findings.

• CII Benchmarking & Metrics Program provides tools for members to compare their capital and maintenance projects with the best in class.

Benefits of CII Membership

• Ability to input an unlimited number of projects into a secure database managed by CII where self-analysis tools point to CII resources to improve specific project parameters throughout the project process.

• Implementation support to integrate CII Best Practices into planning and execution processes, resulting in organizational improvements in planning, execution, and delivery of capital facilities projects.

• Member pricing on CII products, conference/workshops, education modules, and online training.

• Access to member-only products and events.

What Drives Our Industry Today?

Work Force and Human Capability

Increased Environmental Considerations

Global Growth and Interconnectedness

Productivity/Efficiency Improvement

Driver 1. Workforce & Human Capability

231 Construction Industry Craft Training256 Project Site Leadership Role in Improving Construction Safety √261 Optimizing Jobsite Organization √269 Real-time Pro-Active Work Zone Safety in Construction √

Driver 2. Increased Environmental Considerations

242 Front End Planning for Renovation/Revamp Projects250 Sustainable Design & Construction264 Product Integrity Concerns in Low-Cost Sourcing Countries √ 268 Project Definition Rating Index for Infrastructure Projects √

CII Research: Addressing the Drivers

√ Research Just Starting

Driver 3. Global Growth and Interconnectedness

244 Global Project Control & Mgt. Systems257 Global Procurement & Materials Management √260 Reimbursable Contracts √263 Globalization √

Driver 4. Productivity/Efficiency Enhancements

215 Workforce View of Construction Productivity233 Planning, Facilitating, Evaluating Design Effectiveness245 Optimizing Engineering Value in Projects252 Craft Productivity Research √ 255 Adaptation of Ship Building Production Systems to Construction 258 Information Integration Work Process Changes √266 Std. Approach to Identify/Define Owner Value & Align E&C Response √

CII Research: Addressing the Drivers

√ Research Just Starting

CII Practices (Research Findings)Project Planning Phase

• Attract and Maintain Skilled Workers

• Automated Identification

• Effective Use of Global Engineering Workforce

• Environmental Remediation Management

• Equitable Risk Allocation

• International Project Risk Assessment

• Leader Selection

• Modularization/Preassembly

• Organizational Work Structure

• Project Delivery and Contract Strategies

• Project Security

• Project Teams

• Technology Implementation

• Value Management

• Work Process Simulation

Design/ Construction/ Startup Phases

• Craft Productivity Practices-

• Design for Maintainability

• Design for Safety

• Engineering Productivity Measurement-

• Piping Design

Project Life

• Cost & Schedule Control

• Employee Incentives

• Fully Integrated & Automated Project Processes (FIAPP)

• Management of Education & Training

• Managing Workers’ Compensation

• Project Health Assessment

• Small Projects Execution

CII Best Practices

A process or method that, when executed effectively, leads to enhanced project performance.

To qualify, a practice must be sufficiently proven through extensive industry use and/or validation.

• Pre-Project Planning

• Alignment

• Constructability

• Lessons Learned

• Materials Management

• Team Building

• Planning for Start-Up

• Partnering

• Quality Management

• Change Management

• Disputes Resolution

• Zero Accidents Techniques

• Implementation of Products

• Benchmarking

The Owner’s experience…

21

“Those companies that actively participate in CII find opportunities to interact with others who share similar core values and come together for the common purpose of improving not only their own bottom line but the industry as a whole.

Carol P. ArnoldDuPont

Cost Growth (Owner)Note: Average Budget 44 Million, submitted after 2002 (n=127)

Bet

ter

Schedule Growth (Owner)Note: Average Planned Duration 131 weeks, submitted after 2002 (n=155)

Bet

ter

“CII is absolutely the best resource available for continuously improving a Project Delivery System. Participation by either an Owner or Contractor organization in CII brings with it the valuable opportunity of rapid personnel development largely due to the interaction of people with the common objective of improving the efficiency of capital deployment. People develop and execute projects, CII exposes people to ever improving project results.”

Bernard C. FedakAker Solutions

Value of CII Best Practices - Budget (Contractors)Note: Average Budget =58 Million, submitted after 2002 (n=81)

Bet

ter

Value of CII Best Practices – Schedule (Contractors)Note: Average Planned Duration=109 weeks, submitted after 2002 (n=81)

Bet

ter

CII Benchmarking & Metrics

• 1,647 Projects Entered Since 1996• Confidential• Inexpensive

– Free with CII Membership (General Program)– No Consultants Required (Self Evaluation)

• Compelling Metrics– Unique Measures of Best Practices & Productivity for

Engineering and Construction– Not a ‘Black Box’ – Easy to Comprehend– External Performance Benchmarks of Cost, Schedule, Safety,

Change, and Rework

The Value of Benchmarking

• Improves project & company performance when used as an ongoing measure

• Determine performance relative to peers

• Establishes improvement goals based on external / competitive benchmarks

• Enables your company to understand & achieve “best in class” performance

• Continuous ImprovementImplementBest Practices

MeasureResults

Identify Opportunitiesto Improve

Select Implementation

Tools

ConductTraining

Compare toCompetition

CII Continuous Improvement Process

CII Member ResourcesResearch Products• Research Summaries• Implementation Resources• Research Reports

Mentoring• Communities of Practice• Implementation Champion Program• Experienced ISC members• CII Staff

CII Online ImplementationTool Box

Professional Development• Executive Leadership Program• Education Modules• Courses• Online Education• Professional Development Continuum• Registered Education Providers• Web Seminars

Events• Annual Conference• Performance Improvement Workshops• Benchmarking Seminars / Workshops

"I have seen and experienced first-hand the truly special collaboration between owners, contractors and academics.  These efforts have produced new knowledge and useful products positively impacting the industry. But in my opinion the most valuable legacy of CII's first 25 years has been the outstanding personal and professional development of the thousands of volunteer participants.”

Dr. G. Edward Gibson, Jr.University of Alabama

CII’s Net Value Add (NVA)

NVA for the Member Company

• Improved capital delivery

• Transparent methodology to measure progress– Best Practice Use– Productivity– Industry

• Smarter, more confident, better prepared employees

• Implementation tool set

• Forum for company to company and company to academia relationships

• Industry intelligence and knowledge

• Recognition for employees

NVA for the Member Employee

• Builds:– Knowledge– Leadership skills– Confidence– Industry intelligence

• Builds trusting relationships with customers and potential customers

• Grows the employee’s peer group – owners, contractors and academics

• Increases employee value to member company

• Forum for self actualization – accomplishing something for the greater good

• Satisfy professional development requirements

You are Invited to the CII Performance Improvement Workshop

March 30 – April 1, 2009

Phoenix, Arizona

Focused on:

• CII Product Implementation

• Best Practices

• New Practices

• Case Studies

• Networking

Register today – https://www.construction-institute.org/piw/index.cfm

2009 CII Annual Conference“Leadership for the Next Generation”

July 28-30, 2009

• Over 500 Top Industry Attendees

• Presentations on:– New CII research– CII product implementation

case studies

• New CII Initiatives– Professional Development– Implementation– Benchmarking– Other

• Notable Speakers

The Peppermill Resort – Reno, Nevada

New Research to be Unveiled at 2009 Annual Conference

• Estimating as a Competency in Capital Projects• Quality Management in the Capital Facilities Delivery

Industry – A Best Practice Refreshment• Adaptation of Shipbuilding Production Systems to

Construction• Project Site Leadership Role in Improving Construction

Safety• Global Procurement & Materials Management Best

Practice Refresh• Enhancing & Expanding Innovation in the Construction

Industry• Information Integration Work Process Changes

CII Senior Staff

Wayne Crew, CII Director

Research, Breakthrough Strategy,& Academic LiaisonSteve Thomas, CII Associate Director

Education & Implementation Manuel Garcia, CII Associate Director

Benchmarking & MetricsStephen Mulva, CII Associate Director

Knowledge Management & BrandingKim Allen, CII Associate Director

Questions?

Contact Jewell Walters: jkwalters@mail.utexas.edu