PMI Project of the Year
The AP60 Smelter Project: A Triumph in Team Building
Rio Tinto Alcan (RTA) won the Project Management Institute’s 2014 Project of the Year award. Here is how they and their team did it.
Introducing the new technology as part of a project of this scale required careful planning. The team relied on detailed preliminary studies to develop every aspect of its project plan, including how it would transfer information from RTA’s R&D lab in France to how it could most efficiently build the components.
During its initial research, the team identified six aluminium smelter reference projects, analyzed the applicable lessons learned and incorporated those lessons into the AP60 project plan. The team even spoke to people who had worked on the reference projects to better understand risks and avoid setbacks. The in-depth research paid off by bringing the project’s pitfalls into focus. To avoid them, the team would have to cultivate a culture of shared values, establish strong labour relations and facilitate cross-functional communication.
With more than 100 equipment suppliers and 50 installation contractors working on-site at the same time, the project team knew it needed to tackle integration and communication issues up front. Its preliminary studies showed that people had to understand the project’s strategic goals if the team wanted them to identify problems before they wreaked havoc on the schedule and the budget.
“We moved all the people within an environment where there were no SNC-Lavalin, Hatch or Rio Tinto logos. It was the AP60 project. So we had one team, one alignment, one culture. Before giving anyone a contract, we would meet them and explain the strategic goal we were pursuing,” Mr. Michel Charron project director of RTA says. “The hardest part was making sure they had the right attitude and would help build the culture we wanted for this project.”
From the outset, the team encouraged open communication and a collaborative working environment. “We moved all the people within an environment where there were no SNC-Lavalin, Hatch or Rio Tinto logos. It was the AP60 project. So we had one team, one alignment, one culture,” says Marc O’Connor, vice president of projects, North America mining and metallurgy, SNC-Lavalin.
The project leaders outlined clear roles and responsibilities and looked for opportunities to improve the flow of information among teams.
One way the project team facilitated open communication was by co-locating the technology and engineering teams that needed to work together to scale the technology up to the industrial level. This allowed the teams to better understand each other’s requirements and constraints, Mr. Charron says.
“R&D people are good at telling you how they want it, but the engineering team is good at making sure we can construct and deliver it on time and on budget,” he says. To create an environment where everyone was dedicated to delivering a successful project, the team worked to cultivate a culture where people weren’t always pointing fingers at the other guy.
“With a blame culture, people will try to delay facing the problem. If you have a no-blame culture, it allows people to raise the issue as soon as something happens,” Mr. O’Connor of RTA says. “And if you put the real problem onto the table, proper action will be taken.”
For instance, if a design flaw was identified, the engineering team would immediately raise a red flag so the team could quickly make the necessary adjustments. This allowed the team to avoid surprises during the construction process—and improved the quality of the end product.
“At the end of the day, the success of the project depends on the success of everybody, and the success of everybody depends on the success of the project,” says Mr. Noël.
The team’s unity and commitment to the project helped it survive the global economic downturn, which coincided with the project’s planning phase in 2009. Both RTA and SLH recognized that personnel changes could seriously impair the schedule and quality of work by disrupting the project’s continuity. So when Mr. Charron learned the project would have to reduce spending for an extended period of time, the team instead found ways to reduce the project’s overall cost and improve its business case.
The CA$280 million in potential cost reductions the team identified kept the AP60 project off the chopping block. When it proceeded to the execution phase in December 2010, it was more important than ever to avoid cost overruns caused by mishaps and delays.
At this point, the project team leveraged another lesson learned during preliminary studies: Keep workers safe and satisfied. On several reference projects, conflicts with labour unions and lost time caused by injuries had caused significant delays.
The project’s timing posed an additional hurdle, as construction was underway while an unpopular labour reform law was being implemented across Quebec. To stay on good terms with unions, the team employed a full-time labour relations expert early in the project and established a steering committee designed to respond quickly to labour-related concerns.
RTA requested the CA$75 million scope change in July 2011, when the company didn’t want to miss out on rapid growth in the aluminium industry. Rather than lose valuable production time during an expansion project at a later date, RTA wanted to roll the increase into phase one.
Mr. Charron asked the team to honestly assess the project plan to see if the increase was feasible. The request was coming during the most complex phase of execution; an increased scope could put the project at risk.
“If the team had said, ‘No, that’s not a good deal. We will jeopardize the whole project,’ I would have said okay, we’re not going to do it,” he says. “But they said, ‘We can do it—but this is what we’re going to need.’”
In November 2011, the team added one month to the schedule and revised the project plan, leveraging as much base work as possible to minimize delays and cost overruns. Again, the engineering, procurement and construction teams relied on close collaboration to optimize the workflow. Speaking the shared language of project management helped facilitate communication across disciplines, Mr. Noël says.
“PMI standards are essential for project success because they provide a common framework for how to do projects,” he says. “What’s good about A Guide to the Project Management Body of Knowledge (PMBOK® Guide) is it’s a language that is shared by people from very different perspectives.”
By working together to leverage lessons learned from the initial scope, the team improved its performance by up to 40 percent for some activities. A monthly critical path analysis was one way the team was able to beat its goal, Mr. Noël says.
“We did detailed scheduling of critical components,” he says. “We did things like expediting procurement items. We measured performance. This helped us understand where we were drifting.”
Monitoring progress carefully and taking corrective action quickly also allowed the project team to control costs. At one point, forecasts predicted the final cost would come in slightly over budget. But at completion, the project was well within Rio Tinto’s budget allocation.
The work paid off. The team made up the additional month it had added to the schedule and handed the project over to the operations team in December 2012—the original project delivery date.
Along with proving the viability of RTA’s proprietary technology at full production scale, the project provided
lessons learned during the plant’s construction that can be leveraged during later installations. And the RTA project community is better for it, Mr. Charron says.
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