Integrated Project Delivery for Industrial Projects

RT-341 Topic Summary
RT 341

Overview

Industrial capital projects are risky business ventures with increasing size, uncertainty, and complexity that frequently experience growth in cost and time to deliver, and oftentimes do not achieve their desired performance results. From Merrow (2011), “65% of all industrial projects fail to meet business objectives.” The misuse of capital project funds and resources does not provide a stable foundation for sustainable business development in the industrial sector to stay competitive in the global market. The adversarial environment created from the risk shedding structure of current project delivery methods not only impedes the performance of industrial projects but can also stifle innovation and create inefficiencies in the industrial project development sector. Industrial capital project delivery has suffered from stunted growth in productivity and broad industry innovation while seeing an increase in claims and disputes for a number of years dating back to the 20th century. Integrated project delivery (IPD) in the healthcare industry in the United States and alliance contracting on public infrastructure projects in Australia and New Zealand have proven to effectively use enhanced collaboration and integration strategies and methods to bring value for money to the overall project. Using the principles of IPD and alliancing can be a way to deliver industrial projects with more active collaboration of participants and with higher levels of integration of project stakeholders to reduce the probability of failed projects and to create a better environment of innovation and efficiency leading to a more efficient use of the industry’s available resources.

RT-341 evaluated the use of increased integration and collaboration by applying the principles and methods of IPD and alliancing in the industrial sector. The RT-341 statistically tested and proved that project performance increases as the number and intensity of collaboration and integration principles and methods used increase using 85 completed survey responses from CII member companies. The research also concluded that the variability of project performance decreases as collaboration and integration increases, meaning there is less probability of a poor performing project if more collaboration and integration principles and methods are used on the project and higher certainty of overall project performance.

The research also provides guidance to effectively structure project delivery with the right balance of IPD and alliancing collaboration and integration principles to enhance industrial project performance and achieve important business objectives. RT-341 developed an industrial integrated project delivery (I2PD) framework for industrial projects, defining nine principles (five collaboration and four integration principles) and 20 methods, as well as their expected impact. It also reports on barriers to implementation of this delivery method on an industrial project. An I2PD maturity model developed in this study can be used as a roadmap for organizations to apply I2PD for their future projects.

Key Findings and Implementation Tools

1 : High Certainty of Project Success

Implementation of more collaboration and integration principles and methods increases the possibility of project success and provides higher certainty of project success.

Reference: (FR-341)

2 : I2PD Inertia for Success

RT-341 identified that poor leadership was highly correlated with project failure but leadership was not highly correlated with project success. Collaboration and integration are highly correlated with project success.

Reference: (FR-341)

3 : I2PD Framework

The research identified I2PD framework encompassing five collaboration principles, four integration principles and 20 methods and how each impact overall collaboration and integration on an industrial project.

Reference: (FR-341)

4 : Barriers and Solutions to Implementing I2PD

The I2PD Guidebook reports potential barriers to implementation of I2PD and proposes possible solutions to each barrier on an industrial project. It provides guidance on key principles and methods of I2PD to structure and deliver an industrial project with collaboration and integration. The guide describes methods to implement I2PD with process workflow and reports on potential barriers to implement these on industrial projects with potential solutions.

The I2PD contract templates will be based on a real I2PD project and will include key contractual clauses incorporating the key collaboration and integration principles to create a framework for integrated project delivery on an industrial project. The template can serve as a benchmark for future I2PD projects.

Reference: (FR-341)

Key Performance Indicators


Presentations from CII Events

Session - Integrated Project Delivery for Industrial Projects: Collaborate. Integrate. Succeed.

Publication Date: 07/2018 Presenter: Number of Slides: 34 Event Code: AC2018


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