Performance Advantage

Overview

Williams' Performance Advantage^™ is our approach to field productivity improvement. In the construction/maintenance industry, the work processes that most directly impact the customer are those used to actually construct and/or maintain their facilities. Our focus is on optimizing the work processes responsible for providing the craft workforce with the tools, materials, equipment, and information they need, when they need it. By optimizing the field force's "value-added" activity, the rest of the organization is driven in the same direction. This approach is reinforced by Construction Industry Institute (CII) research that concludes that the best way to positively affect productivity is to assume the craft workforce wants to be productive and that the most positive impact is derived by focusing on removing their obstacles to productivity improvement. Our program basically focuses on two areas:

Ensuring overall sound project execution.

Aligning all team players up front, so all members understand their common objectives and each member's roles and responsibilities associated with accomplishing those objectives.

• Measuring and analyzing the project's ability to provide resources to the craft.
• Implementing improvements that optimize value-added activity.

Creating a work environment conducive to continuous improvement.

• Our Safety First Policy drives a safe work environment, which compliments improved productivity.
• Taking care of lower-level needs of the craft worker, such as providing clean restrooms and break areas, improving conditions, access and egress of parking areas, etc.
• Implementing processes that engage, motivate, and recognize the craft contribution.

Performance Advantage^™ includes these key processes that are of particular value:

• Alignment Process
• Project Measurement
• Industrial Engineering
• Value-Added Process
• Client Interview Process
• Lessons Learned Methodology

Alignment Process

The Alignment Process is used at project kickoff to effectively integrate all members of the team involved with the successful execution of the project. It is a facilitated process that starts with identifying critical stakeholders involved with the project. These include but are not limited to:

• Client
• Williams' Executive Management
• Williams' Project Management
• 3rd Party Engineering Company or Partner
• Key Suppliers/Subcontractors

Key people are brought together at project kickoff in a facilitated meeting that covers these important areas:

• Client Objectives
• Key Result Areas
• Measurements
• Roles and Responsibilities Clarification

By starting every project with an alignment, it provides us with the clearest picture of how to proceed on the most productive path.

Project Measurement

While it is important to measure the outputs of the construction process, such as productivity ratios, schedule progress vs. plan, and rework percentage, it is also important to measure the "systems" of construction.

These systems are the very work processes that ultimately impact field productivity. Through their research, the Construction Industry Institute (CII) has developed the "Best Practices" of project execution, within which these key work processes are identified. At Williams, we have categorized these Best Practices into 12 Execution Fundamentals":

Within each, Performance Advantage^™ has identified key work processes and what is critical to quality for each. From there, measurements are assigned that are indicative of system performance.

For example, under Project Controls, we measure Project Controls Report Timeliness. Measuring the delivery of Project Controls information reinforces the philosophy that it's more important to have critical data that is 95% accurate in Project Management's hands on time, than waiting until the data is 100% accurate and be 3 days late.

The sum total of these system measures creates a "Project Dash Board" that will give project management an indication of how all project systems are running.

Industrial Engineering

Working with managers, supervisors, staff and craft, the function of Industrial Engineering is to assist Williams and its clients in the identification of opportunities for improvement and to aid in the implementation and measurement of improved performance. Techniques used to accomplish this include:

• Cycle Time Reduction
• Crew Balancing
• Incentives
• Traffic Patterns
• Work Process Analysis
• Logistics
• Manpower/Equipment
• Work Measurement
• Material Utilization Handling/Flow
• Information Flow & Analysis

Industrial Engineering is certainly not a new discipline, but its benefits and value added are now being fully realized on construction/maintenance projects around the world. There are many areas that can be impacted by Industrial Engineering. Some of these are:

• Workforce Productivity
• Administrative Efficiency
• Resource Utilization
• Design Effectiveness
• Cost Reduction
• Cycle Time Reduction (Work Process Improvement

This portion of the program is an extremely laborious exercise. It is required that at least 1,500 observations are made to ensure a 95% confidence level in the data. But it's worth the effort. Providing meaningful, statistically valid information to project management allows them to make more proactive decisions that benefit the project earlier. Combined with other value improving practices, Industrial Engineering provides a method to assist project management in organizing the project and its resources most effectively, and subsequently to evaluate and improve the project's execution.

Value Added Process

The Value Added Process is intended to create an innovative, productive work environment. The approach to create this environment of cost-consciousness and innovation among all project employees is to encourage them to contribute their intellect and experience in ways that add value (in terms of reduced cost, improved quality, and enhanced safety and schedule performance) to our customers. This atmosphere is created through a focus on participation that motivates everyone to get involved repetitively, understanding that repeated involvement will yield the optimum value. Recognition and reward for contributions positive to the project's performance reinforce employees' participation. Over time, ownership of the process is transferred to the craft as the full potential of the process cannot be realized without their full acceptance. Since "Value" can only be acknowledged by the customer, the final step is for the customer to verify that each submission did indeed add value to the project before that submission is "approved".

The focus is on participation instead of dollar value, because any employee who contributes a cost savings idea wants that idea to save as much money as possible. Monetary goals will not make their ideas worth more. By focusing on participation, optimum savings can be achieved because everyone is looking for opportunities to reduce costs and improve quality, safety, and schedule performance.

With this focused effort on reducing project cost, the effective hourly rate for our services is reduced, creating value for our customer.

Client Interview Process

On a periodic basis, our management will ask you to participate in a Client Interview. This is a structured process of interviewing key client personnel regarding their perception of Williams' performance. We are very interested in how you feel we are conforming to your requirements across eight key performance indicators:

• Safety
• Responsiveness
• Cost Management
• Value
• Schedule Management
• Solutions/Innovation
• Understanding Your Needs
• Competence of Personnel

We will ask if you have noticed any improvement, what we need to do to improve, and what we do well. After compiling that information, we will compose a formal response that addresses the issues raised during the interviews. We will also use this information to focus our improvement efforts, so we spend our energy improving in the areas that are of most concern to the customer.

Lessons Learned Methodology

It is an age-old problem in the construction/maintenance industry....how to institutionalize lessons learned and best practices across all projects. At Williams, we've addressed this issue with another key aspect of Performance Advantage^™.

As project improvements are identified through the other facets of the program, typically 90%-95% are either project-specific or even more specific to a situation that arose on that project. However, there will be a small number of items that are so fundamental in their application that they transcend the projects on which they are identified. For those items, we categorize them by construction discipline (Civil, Mechanical, Electrical, etc.) or function (Quality, Safety, Materials Management, etc.) and enter them in a special database specific for this use.

Following the project alignment meeting at the beginning of a new project, key personnel are presented with their respective lessons learned for consideration to implement on their current project. Subsequently, we will capture new lessons learned during the course of the project and finish with a formal review with those same discipline/function leaders at the end of the project. Any additional lessons learned are added at that time. The process then reiterates on the next project.

In this way, we can continue to raise the bar of productivity performance on every project we execute.

Results

Performance Advantage^™ provides both tangible and intangible results. In today's dwindling craft labor market, companies must figure out ways to both attract the best of the best and also to optimize their utilization of existing resources. This program assists in both of these areas. All else being equal, an experienced craft worker would prefer to work in an environment that engages them.

In terms of tangible results, a project can achieve savings and avoidances equal to 10% of direct field labor costs using this approach. These savings come from efficiency improvements gained from Industrial Engineering analysis, from innovation and creativity sparked from the Value Added and Client Interview Processes, as well as from leveraging the lessons learned from other sites.

Williams' Performance Engineers have generated value across multiple industries and have diverse regional experience in the Southeast, Ohio Valley, Gulf Coast, and Northeast regions of the U.S. The table below shows some of our early successes:

 

Project Type / Contract Average  Manpower & Duration	Direct Activity Start	Direct Activity Finish	Direct Activity Improvement	LABOR SAVINGS (Based on $40 per hour rate)
Combined Cycle - Lump Sum 275 - 12 mths	DA - 37.9%	DA - 38.5%	.6%	$343,200
Coatings - Nuclear T&M-Incentive 55 - 10 mths	DA - 57.2%	DA - 61.0%	3.8%	$251,631
Simple Cycle T&M Not to Exceed 330 - 10 mths	DA - 38.0%	DA - 38.6%	.6%	$343,193
SCR Reimbursable 125 - 17 mths	DA - 39.4%	DA - 42.8%	3.4%	$1,281,774

Total: $2,219,798

We know of no one else in our industry taking such a proactive and thoughtful approach to performance improvement and look forward to teaming with you to generate the world class results you expect.

Circle of Influence

The model below represents the five key aspects of the Performance Advantage^™. Depicted on the model are the various roles and responsibilities of the Performance Engineer, the individual responsible for implementing the program on the project. These five key aspects represent an integrated, synergistic approach to productivity improvement that allows Williams to deliver "unsurpassed value" to you.

• Planning, Kickoff Assistance & Measurement
• Industrial Engineering
• Stockholder Engagement
• Value Added
• Improvement Network