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Chapter 9: Reducing Project Duration 4KF3
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Lecture Notes Options for Accelerating Project Completion
Unconstrained Resources
o Adding resources
o Outsourcing
o Overtime
o Core project team
o Do it twice
Constrained Resources
o Fast-tracking
o Critical-chain
o Reduce scope
o Compromise quality
Project Crashing
The process of accelerating a project.
PMBOK: “A specific type of project schedule compression technique performed by taking action to decrease the total project schedule duration after analyzing a number of alternatives to determine how to get the maximum schedule duration compression for the least additional cost.”
Project Cost Duration Graph
Crashing
Crash Time vs. Normal Time
Crash Cost vs. Normal Cost
Crash Point
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Project Crashing
An Example
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Chapter 9: Reducing Project Duration 4KF3
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Chapter 9: Reducing Project Duration 4KF3
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Chapter 9: Reducing Project Duration 4KF3
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How Short is Short Enough?
Include contract provisions in your calculations; – Some contracts have penalties for late delivery – Other projects have bonuses for early completion
Is the cost of crashing lower than the penalty for lateness?
Is the cost of crashing lower than the bonus?
Is there a strategic benefit to early completion?
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Finding the Optimum Point
Terminology
• All Normal ‐ a project schedule in which all durations and costs are at the normal rates.
• All Crash ‐ a project schedule in which all durations are at their lowest durations.
Considerations
Crash Time Estimates
Linearity Assumption
Choice of Activities
Network Sensitivity If Cost is the Issue, Not Time?
Reduce scope
Have owner take on responsibility
Outsource
Brainstorm for Savings
Reading Notes
Rationale for Reducing Project Duration
Time to market
o Business survival depends on adaptability
When unforeseen delays cause substantial problems
o Costs of getting back on track vs. being late
Incentive contract can make reduction of project time rewarding
Imposed deadlines
Avoid/reduce high overhead costs
When it is important to reassign key equipment and/or people to new projects
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Options for Accelerating Project Completion
Options When Resources ARE NOT Constrained
Adding Resources
o Most common method
o Limited – not necessarily a direct correlation between resources and speed
Outsourcing Project Work
o Subcontracting an activity to a contractor who may have superior knowledge or
abilities
Scheduling Overtime
o Easiest
o Disadvantages include added fees for hourly overtime charges, productivity
losses, organizational concerns, etc.
Establish a Core Project Team
o Avoiding hidden costs of multi-tasking
Do It Twice – Fast and Correctly
o Quick and dirty short-term solutions before actual solutions
Options When Resources ARE Constrained
Fast-Tracking
o Changing activity relationships from sequential to parallel
Critical-Chain
o Recall: CCPM
Reducing Project Scope
o The most common response
o Reassess the true specifications of the project
o Calculate the savings
Compromise Quality
o Rarely acceptable or used
Project Cost-Duration Graph
Procedure for identifying the costs of reducing project time so that the comparisons can
be made with the benefits of getting the project completed sooner
Project Cost-Duration Graph: see figure 9.1
o The total cost for each duration is the sum of direct and indirect costs
Indirect costs
Supervision, administration, consultants, interest
Can vary directly with time
Direct costs
Labour, materials, equipment, subcontractors
Assigned directly to a work package and activity
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Constructing a Project Cost-Duration Graph (3 Steps)
1) Find total direct costs for project durations
2) Find total indirect costs for project durations
3) Sum direct and indirect costs for these selected durations
Determining the Activities to Shorten:
Managers need to look for critical activities that can be shortened with the smallest
increase in cost per unit of time
Normal time for an activity represents low-cost, realistic, efficient methods for completing
the activity under normal conditions
Crashing: shortening an activity
Crash time: the shortest possible time an activity can realistically completed
Crash cost: the direct cost for completing an activity in its crash time is called crash cost
Crash point: represents the maximum time an activity can be compressed
The heavy line connecting the normal and crash points represent the slope, which
assumes the cost of reducing the time of the activity is a constant per unit of time
Assumptions of graph:
o The cost-time relationship is linear
o Normal time assumes low-cost, efficient methods to complete the activity
o Crash time represents a limit – the greatest time reduction possible under
realistic conditions
o Slope represents per unit of time
o All accelerations must occur within normal and crash times
See example on pages 316-319
Practical Considerations
Using the Project Cost-Duration Graph
o Graph is valuable to compare any proposed alternative or change with the
optimum cost and time
o Want to create graph as early as possible
Crash times
o Collecting crash times can be difficult
o Times are rough at best
Linearity Assumption
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o Reasonable, quick comparisons can be made using the linear assumption and is
adequate for most projects
Choices of Activities to Crash Revisited
o Other factors beyond cost:
Inherent risks with crashing
Timing of activities
Overallocation of resources
Impact on morale and motivation
Time Reduction Decisions and Sensitivity
o How far to reduce the project time toward the optimum depends on the sensitivity
of the project network
o A network is sensitive if it has several critical or near-critical paths
o Slack reduction in a project with several near-critical paths increases the chances
of being late
o Large savings can result in reducing paths that are insensitive (occur in about
25% of all projects)
What if Cost, Not Time, Is the Issue?
Commonly used options for cutting costs:
o Reduce Project Scope
o Have Owner Take on More Responsibility
Identifying tasks that customer can do themselves
o Outsourcing Project Activities or Even the Entire Project
o Brainstorming Cost Savings Options
