IMPLEMENTING LEAN PROJECT MANAGEMENT

TRANSFORMING PROJECT DELIVERY AT SHELL PERNIS

CASE STUDY: IMPLEMENTING LEAN PROJECT MANAGEMENT

THE CHALLENGE

Shell Pernis, one of Europe's largest refineries, faced a critical operational challenge with their construction projects. Only 22% of projects were being delivered on time, with 78% missing their target completion dates—creating a significant "leverbetrouwbaarheid" (delivery reliability) problem. This persistent issue was impacting operational efficiency, increasing costs, and causing frustration throughout the organization.

Through detailed analysis, we identified three root causes behind this poor performance:

1. Faulty project management systems leading to ineffective planning and control

2. Inadequate project specifications resulting in frequent scope changes and rework

3. Ineffective communication models between key stakeholders (contractors, schedulers, project managers)

These issues manifested in material shortages, uncontrolled work-in-progress, unreliable planning, and low team motivation—all contributing to the chronic delays.

THE APPROACH

As part of the strategic response team, I helped design and implement a comprehensive Lean Project Management solution focused on the Last Planner System (LPS). This methodology represented a fundamental shift in how Shell approached project planning and execution, with three core components:

1. Collaborative Phase Scheduling

• Joint planning sessions between contractors and schedulers

• Clear definition of handoffs between project stages

• Identification of critical dependencies and constraints

2. Workload Control Through LPS

• Three-level planning hierarchy:

  • Master & Phase schedule (low detail, long-range)

  • Look-Ahead planning (medium detail, constraint identification)

  • Weekly Work Planning (high detail, commitment-based)

• Rigorous constraint removal before work release

• Authority given to contractors as "Last Planners" to commit only to achievable work

3. Continuous Improvement Process

• Weekly performance reviews comparing planned vs. actual work

• Root cause analysis of any missed commitments

• Structured learning and adaptation of the process

The implementation included comprehensive training programs (€400,000), consultant support (€312,000), and digital tools (€10,000) to ensure successful adoption across all stakeholder groups.

THE RESULTS

Quantitative Impact:

• Delivery reliability improved from 22% to 70% of projects completed on time

• Productivity (Percent Plan Complete) increased to 80%

• Lead times reduced by 40-50% across project portfolios

• Cost savings of 15-20%, averaging €592,304 per project

• Total financial returns: €740,000 (HSU Project) and €2,090,000 (Tank Project)

• Return on Investment: Total implementation cost of €722,000 yielded multimillion-euro returns

Qualitative Impact:

• Enhanced team motivation through greater control and involvement

• Improved materials management with materials available when needed

• Reduced scope creep and rework through better specifications

• More reliable planning allowing all stakeholders to better anticipate needs

• Increased initiative and ownership from contractors empowered as Last Planners

• Higher client satisfaction with more predictable project outcomes

KEY INSIGHTS

The Shell Pernis case demonstrates how systematic application of Lean principles can transform construction project performance, even in complex industrial environments. The Last Planner System proved particularly effective because it addressed both technical planning issues and human factors like motivation and communication.

The success factors included:

1. Shifting control to those closest to the work (contractors as Last Planners)

2. Creating reliable commitments through constraint removal

3. Building in continuous learning through regular performance reviews

4. Using digital tools to support (not replace) collaborative planning

5. Involving all stakeholders from the beginning

This approach not only improved immediate project metrics but created sustainable capabilities for ongoing excellence in project delivery at Shell Pernis.

This case study demonstrates how implementing structured Lean methodologies can dramatically improve project performance in complex industrial environments while enhancing team dynamics and stakeholder satisfaction.