THE EC HARRIS GUIDE TO

WORK ACTIVITY NORMS (WAN)

An ARCADIS company
THE EC HARRIS GUIDE TO
WORK ACTIVITY NORMS (WAN)
EC Harris is a leading global Built Asset Consultancy, generating value for our clients, our
people and the community. We do this by helping our clients obtain optimum value from
investing money on operating, using and owning assets, and delivering optimized asset
performance and availability.
Utilizing over 100 years of experience
and expertise in the Oil, Gas and
Chemicals industry, working for many
of the major national and international
oil companies, we help clients improve
margins and drive efciency across
their portfolio of investments throughout
the life cycle of their assets, anywhere
in the world.
We work with clients to improve
their business margins by maximizing
project and program values for
investments and increasing reliability
and performance of assets in the
Oil, Gas and Chemical industries.
Recognizing that knowledge retention
and subsequent utilization is the
cornerstone of all improvements,
we have collated baseline information
covering all aspects of capital
investment and operational activities
for use by our clients and staff.
Our (WAN) is part of a series of
publications intended for use by our
clients and our people to support
work activity estimating and baselining
productivity performance.
The following data reects EC Harris
opinion for what constitutes WAN
and how they can be used to improve
performance. The detailed WAN
themselves, together with details of
how they are to be applied, are
contained in The EC Harris Work
Activity Norms Book.
To obtain support in utilizing this
information please see the contact
information detailed later in this
document or visit:
www.echarris.com/oilandgas
2
TABLE OF
CONTENTS
Preface 4
What is a Work Activity Norm
(WAN) 5
The challenge 5
The solution - Work Activity Norms
(WAN) 6
How are these WAN used? 7
Contract Factors 7
How are Contract Factors
generated? 8
What other Factors are used? 8
How does this look as a model? 9
What are the benets? 10
How are these benets realized? 11
How do we know that
productivity is improving? 12
How do we link the Contract
Factor and Productivity
Improvement Process data 13
What WAN sets are available? 14
Is there an estimating IT platform
available to use with the WAN? 15
PREFACE
The EC Harris Work Activity Norms
(WAN) data is published to support
our clients and people in primarily
undertaking productivity and efciency
improvement activities. Additionally
the WAN can be utilized as a standalone
data set for estimating and planning
work activities.
The WAN productivity strategy is part
of the overall portfolio of EC Harris
services targeted at helping clients
deliver increased asset contribution
through improving and increasing the
reliability of outputs and productivity
of their assets, alongside decreasing
the total cost of ownership.
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multiplied by
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t
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reduced quantum
decreases the number
of jobs, labour hours and
inventory consumption
increased efciency
reduces labour hours
and re-work required
to complete the
quantum of work
improved commercial
management reduces
the overall cost
of maintenance
work delivery
q
uantum
reduction
efciency
increase
rate
reduction
4
5
What is a Work Activity Norm (WAN)?
The challenge
All construction activities have an
amount of time associated with them.
For example, to install a newly
fabricated section of pipework on site
(the task) will take a certain amount
of time. The amount of time this takes
is inuenced by many factors. Some
of these factors may be inuenced by
the client, some by the contractor
and others by external forces. This is
illustrated in the diagram opposite.
Base WAN
(ideal conditions)
Interference
by other trades
Skill level,
experience and
efciency if the
labour Overall size
of the site
Access around
the site
Site logistics
(laydown areas,
distance to
Contractors
compound, etc)
Local weather
conditions
Local site rules
and regulations
Specication
requirements
Permit
requirements
Specic task
location (at
height or
inside vessel?)
The factors which inuence the amount
of time required to carry out the Task
(and therefore the productivity of the
contractor) will be different for each
contractor, site and country. This
makes it extremely difcult to measure,
compare and benchmark performance
between different contractors and
geographical locations. This is further
compounded when many clients either
use time and materials based contracts,
Schedules of Rates (usually with no
norm build-up transparency) or
different sets of norms with different
contractors and at different locations.
The solution - Work Activity Norms
(WAN)
In order to arrive at a common basis
for benchmarking and performance
measurement, EC Harris have
developed a suite of WAN. These have
been developed from collating and
testing the published times for the
WAN from a number of sources
and then linking them to a Standard
Method of Measurement (SMM) for
each Discipline.
The WAN have been set at a baseline
of an average site and location and at
a level that is challenging - i.e. ideal
conditions and assume standard
working conditions at a normal
working height.
A WAN is the time it takes to
complete a unit of an Activity and is
used for estimation of the total amount
of labour required to perform a task.
For instance, the task example will
comprise of a number of Activities:

Erecting the pipework

Installing a valve

Making anged joints

Hydrotesting.
By multiplying the quantities for the
above Activities by the WAN we can
arrive at the base manhours required
to perform the task under ideal
conditions.
6
In this example, the time required
to complete the task in ideal
conditions is almost 36 hours in
total. This could equate to 3 men
x 12Hrs = 36Hrs.
Example: Install 100ft of
prefabricated 6nb Sch 40 Carbon
Steel Pipework, incl. 1 no. Valve
and 12 no. 150# Flanged joints
Quantity
Unit
WAN Hrs
Erect Pipe 100ft 0.24 24.00
Install
valve
1 Nr 0.81 0.81
Making
ange
joint
12 Nr 0.42 5.04
Pressure
test insitu
onsite
100ft 0.061 6.10
35.95
Hrs
7
How are these WAN used?
Contract Factors
In order to be able to estimate the actual time it will take to complete this task by
a particular Contractor at a particular site we need to apply a Contract Factor to
the WAN. This Contract Factor takes account of all of the departures from ideal
conditions due to the inuences listed above and makes the WAN specic to a
Contractor and Location. For example, the estimated task hours for two different
Contractors working at three different sites could look something like this:
Base WAN Hrs Contract Factor Estimated Job Hrs
Contractor 1 - Site A 35.95 1.8 64.7
Contractor 1 - Site B 35.95 1.5 53.9
Contractor 1 - Site C 35.95 2.1 75.5
Contractor 2 - Site A 35.95 2.0 71.9
Contractor 2 - Site B 35.95 1.8 64.7
Contractor 2 - Site C 35.95 2.4 86.3
As you can see in the chart below, the
use of WAN makes benchmarking
between different contractors and
locations very simple - as the base
WAN and Method of Measurement
(i.e. how they are applied) are always
the same - only the Contract Factor is
specic for a Contractor / Location.
Contractor 1
- Site A
Contractor 1
- Site B
Contractor 1
- Site C
Contractor 2
- Site A
Contractor 2
- Site B
Contractor 2
- Site B
Base WAN Hrs
Addl Contract Factor Hrs
35.95
35.95
35.95
35.95
35.95
35.95
28.8
18.0
39.6
36.0
28.8
50.3
8
How are Contract Factors generated?
The simplest way to generate the
Contract Factor is at the start of a new
contract. In this situation the WAN can
be issued to the tenderers with the
Invitation to Tender. The tenderers
then benchmark the WAN against
their own norms and tender a Contract
Factor. This also simplies tender
evaluation as there are only two items
to compare - the Contract Factor and
Selling Rate.
Alternatively, if converting an existing
contract to a WAN basis, the Contract
Factor may be assessed from existing
contract datasets and negotiated with
the contractor.
In both instances, exercises should
be undertaken to assess the likely
Contract Factor using historical data.
What other factors are used?
There are two further factors that may
be used in a WAN based Contract:

Material Factor: for convenience,
and to reduce the number of WAN,
certain WAN sets are generated
by applying a Material Factor to a
base WAN set.

Condition Factor: some of the items
listed that inuence the time it takes
to complete a task can be isolated
on an individual task basis - for
instance:
- Working at height
- Working in conned spaces
- Working using special PPE (BA
sets, etc)
For maintenance or small projects
where it is possible to pre-assess the
conditions under which an individual
task may be carried out, one or more
condition factors may be applied to
the base WAN. When the contract is
for a major project and pre-assessment
is not possible at task level then these
conditions may be included in the
overall Contract Factor and there
would be no condition factors.
9
x x x
=
x x
=
* *
*If applicable
WAN
Contract
Factor
Material
Factor
Condition
Factor(s)
(sum of)
Factored
WAN
Quantity
Factored
WAN
Selling
Rate
Activity
Cost
How does this look as a model
The basic principles are summarised in the diagrams below:
10
What are the benets?
There are many benets associated
with a WAN based contract - most
of these contributing to an overall
improvement in productivity and
reduction in costs over time:

Transparency of Contractors costs
- this provides the ability to
understand the cost implications of
site constraints/issues and monetize
savings

Allocation of risk to those best
placed to manage - Company or
Contractor - Mitigates the volume
driver inherent in T&M where prot
is maximized by increasing work
volume

Agreements based upon standard
WAN (i.e. the same base norms
across all locations), with a
standard method of contracting,
measurement, valuation and
recording of work carried out.
This allows a company to
benchmark performance in a
meaningful way and compare sites,
and Contractors to identify
improvement opportunities

Facilitation of continual
improvement in efciency and
productivity

Enables the possibility to change
work methods to improve
productivity; e.g. automated
processes, improved procedures,
reduction of permit waiting times

Simplied tendering process


Knowledge retention and
reapplication of continual
improvement.
11
How are these benets realized?
The key benet of cost reduction is realized through the removal or mitigation
of barriers to working efciently. In practice, this is achieved by a Company and
Contractor working closely together to identify and remove these barriers. This
results in improved productivity and a reduction in the Contract Factor over a
period of time.
CF = 2.1
CF = 1.9
CF = 1.8
Q1
Q6
Q12

Commence
contract

Identify issues

Laydown areas
relocated

Permitting
improved

Specications
optimized

Shift pattern
optimized
12
How do we know that productivity
is improving?
The key tool used in measuring
productivity is the Productivity
Improvement Process. The Productivity
Improvement Process is a statistical
method (random activity sampling)
for the systematic study of events,
used to measure productivity. It
highlights inefciencies and identies
improvement opportunities within the
work process. The process involves
performing sample measurements
throughout the entire course of the
day and identifying if events are
value-creating (i.e. carrying out
work - wrench time) or non
value-creating (i.e. indirect activities
or interruptions to the work). The
result is a % process reading based
upon a statistically signicant sample
which gives an assessment of the ratio
of productive/non-productive at a
point in time and can be benchmarked
against industry standards and
EC Harris database. EC Harris have
developed a Productivity Improvement
Process methodology and productivity
strategy which provides valuable
indications for improving the working
processes and identies trends
allowing the benets of change and
increased performance to be recognised.
The Productivity Improvement
Process is a statistical method
(random activity sampling) for
the systematic study of events,
used to measure productivity.
It highlights inefciencies and
identifies improvement opportunities
within the work process.
13
How do we link the Contract Factor and
Productivity Improvement Process data?
The Productivity Improvement Process
(PIP) is a relative measure of productivity -
i.e. ratio of productive/non-productive
time. An actual measure of productivity
is established by dividing the total
achieved (norm based) hours for a job
by the total expended hours and has a
direct relationship with the Contract
Factor. Although there is no direct link
between a PIP % and the Contract
Factor, an improving Productivity
Improvement Process reading over
time means that there should be a
corresponding movement in the
Contract Factor. The relationship
between Productivity Improvement
Process, actual Expended Hours and
the Contract Factor is
illustrated in the diagram below.

Line 1 shows identical % PIP
readings for Contractor A (CA)
and Contractor B (CB).

Line 2 shows the actual hours
expended against the jobs the PIP
audits were focused on. Its evident
that, although the % PIP are
identical, CB expended 20% more
hours overall than CA. This means
that although both Contractors
expended the same proportion of
hours on PIP activities, CB is
working less efciently than CA

Line 3 shows that the base WAN
hours for the jobs under audit is
3,800 hours. This is a smaller
proportion of the total expended
hours for CB compared to CA. This
equates to a productivity of 0.38 for
CA and 0.32 for CB. The inverse of
this calculation gives the Contract
Factor against the WAN.
By sampling the actual manhours
expended against the jobs sampled
in the PIP audits, a more direct
relationship may be established between
PIP and the Contract Factor.
1
2
3
CF = 2.63 CF = 3.16
PIP
40%
PIP
4,800
WAN
Hrs
3,800
PIP
40%
PIP
4,000
WAN
Hrs
3,800
Non-
Productive
60%
Non-
Productive
6,000
Bal.
Expend
Hrs
6,200
Non-
Productive
60%
Non-
Productive
7,200
Bal.
Expend
Hrs
8,200
Contractor A Contractor B
14
What WAN sets are available?
EC Harris unique Work Activity
Norms Productivity Strategy provides
the client with full visibility of the cost
of work performed and covers all
major disciplines of work activities.
This allows clients to contract for
maintenance services and benchmark
productivity across multiple locations
and disciplines.
The utilization of WAN as part of a
contracting strategy across complex
assets is generally applied with a
combination of contracting approaches
which allows for varied and exible
work packages typically encountered
when undertaking maintenance,
turnarounds and minor projects such
as Schedule of Norms, T&M, Schedule
of Rates and Lump Sums.
Disciplines WAN include:


Scaffolding

Steelwork


Static Equipment

Rotating Equipment


HVAC

Mechanical Pipework


Electrical and Instrumentation
Insulation


Painting

Industrial Cleaning


Tankage

Civil and Building


Fireproong

Safety and Loss Prevention
15
Is there an estimating IT platform
available to use with the WAN?
CCES (Contract Cost Estimating
System) is a premier industry IT
solution that puts clients in control of
project and estimating costs. EC Harris
has developed CCES to provide clients
with the tools they need to dynamically
create and rene the detail and accuracy
of estimates on an ongoing basis.
With a powerful estimating engine
and library of estimate templates,
standardized industry costs and
preloaded relevant WANS, estimates
can be rapidly assembled, checked
and approved whilst avoiding time
consuming and costly cross-checking.
As standard, CCES has extensive
abilities to draw in new data, recycle
previous activity and rapidly build
estimates collaboratively as required.
Moreover, estimates can then be
owed seamlessly through to a variety
of contract types and suppliers in
support of maintenance or project
activity ensuring you secure the level
of control required by your business.
EC Harris LLP, 34 York Way, London, N1 9AB t +44 (0)20 7812 2000 f +44 (0)20 7812 2001
oil&gas_chemicals@echarris.com
echarris.com/oilandgas
8234EC