Project Management

Chapter 5: Project Time Planning and Control

- Time planning is intrinsically linked to both the other two common success criteria, but also to the life cycle of the project. Planning is a distinct phase and is separated from implementation or other phases

- Most projects have a planning phase, an implementation phase and a replanning phase

- - Planning sits within a life-cycle continuum, because plans are not static due to

unforeseen events that occur in every project. Therefore there is a need for a replanning process that runs in parallel with the implementation phase.

- Replanning usually involves trade-off analysis- The planning process for cost, time and quality objectives are somewhat

similar until the scheduling process commences- Aims and objectives of the planning process:

o Establish the desired end positiono Establish the current positiono Plot a course for the project development from current to planned positiono Establish variance limits so that significant divergences can be detectedo Allow necessary resources so that divergences can be correctedo Ensure that all divergences are pulled back in lineo Allow some kind of contingency to cover major divergences

- The process of project planning should: o Consider the overall strategic objectives of the organisationo Ensure project objectives align with organisation strategic objectiveso Consider the work that has to be done and develop a break-down structureo Analyse the work packages and find the most logical sequenceo Determine the various interdependencies among work packageso Determine necessary resource requirementso Integrate resources with work packageso Determine the cost and duration of each packageo Establish a formal communication systemo Establish who does what, how and wheno Set up a suitable organisational structureo Establish baselineso Identify activities that are critical and communicate the importance of

theseo Establish suitable motivation procedureso Establish clear aims and objectives for each section of the project teamo Culminate with the production of a SPP

- When time delays occur, a trade off can be made with the other success criteria by increasing speedo Same quality, less time ->requires additional resources/costso Lower quality, same time

Project time planning and control and the generic project plan

- The project time planning and control process is part of the overall SPP- The SPP is a document that includes all relevant information to the planning

process for the entire project, this includes time, cost and quality, and also other planning elements, including:o Organisational and authority planningo Risk management planningo Communications system planningo Financial planningo Conflict and stress management planningo Authorisation and compliance planningo Health and safety planningo Change management planning

- Project time planning includes identifying, sequencing and scheduling activities and resources

- The plan will during the life-cycle of the project be adjusted to incorporate up-to-date information and increasingly accurate information

Project time planning and project life cycle- At the outset of the project a initial time plan acts as an indicator of key dates

and milestones. However, time and dates are likely to vary throughout the project.

- Internal and external factors influence the rate of progress, and project requirements can change

- Even though planning and replanning occurs throughout all life-cycles, the intensity of planning varies, with planning usually being more intense in the early stages

- Effects and consequences of changes affecting the project will often be more severe in the later stages, as more and more design and execution details become fixed

- The scope for change decreases in proportion with project evolution, with increased implications as a result

- The planning process intensifies during the proposal and initiation phase, and is at its most intense during the design and appraisal phase, decreasing throughout the implementation phase

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-- Cumulative effects of small changes may have large effect on the project as a

whole:o “Creeping Scope”: where there is no definitive cut-off point for design

changes, the client may continuously add specifications- Later stage replanning may be inevitable for reasons including:

o Internal (optional) change: Even with the most careful planning and design it is impossible to

cover all eventualities of design errors or omissions. In addition clients may introduce new specifications post- original design completion

o External (imposed) change: Re-planning may be necessary to adjust for changes in

contractor/subcontractor performance/liquidityo Sequential disruption (“Shuffling”)

Some times the project manager may be forced to reallocate resources from a later work package to a current, delayed package

This may solve the initial problem, but may cause subsequent delays further down the sequence of work

o Miscalculation (of time requirements)

- The emphasis of the planner changes from pure planning in the early stages to replanning and monitoring during the later stages

The process of project time planning

- Project time planning is not an exact science, but represents an approach to assessing activity start- and finish times using a series of estimates and approximations that are based on a combination of common sense, reasonable assumptions and past experience

- The following variables affect the time planning data and assumptions: o 1) Sources of time planning data:

The project plan must take account of a vast amount of information, which may come from a wide range of sources

Most project planners base estimates on experience and knowledge Where historical information on past projects is not available,

national or industry-specific standards may be used Company strategy and shareholder preferences may also be an

influence on the process Environmental conditions, like the performance and strategy of

competition may also be an issue to consider (i.e. time-based competition)

The form of contract influences the client’s planning process and have a major impact on the assumptions made by contractors, subcontractors and suppliers

A contract may include: Range of key dates to be met within contract terms and

conditions (date for possession, date for practical completion,period for final certification and completion, period for defects liability etc.)

Stakeholder preferences may be an influence because powerful stakeholders may prefer prioritising one success-criteria over another

Technical procedures may dictate development and progression on some aspects

Government regulations could influence by imposing compliance deadlines

o 2) Project uniqueness: Even though experience and data from past projects may be used in

the estimating process, the planner must never lose sight of the unique characteristics and demands of the relevant project he is undertaking

Obvious differences in project characteristics may include: The relative uniqueness of the project and therefore the

extent to which knowledge transfer can be used Geographical and culture differences The relative priorities of success criteria Availability and reliability of contractors, subcontractors and

supplier Contractual conditions and distribution of liabilities The characteristics of the client and the appropriate project

approach that aligns Local differences

Time of year Local conditions Local government regulations Local environment Client characteristics (operational policy)

The project objectives must be stated and defined before planning commences. The objectives are derived from the strategic business objectives. The project and business objectives must be compatible to avoid project and organisational management conflict.

o 3) People issues: The inherent danger is that project team members or staff may not

be willing to adhere to the planned environment of the project, with risk of independent working practices or sabotage.

By involving all stakeholders in the planning process there is greater chance of support and commitment

It is therefore of importance in any project situation that involved parties perceive the project plan as fair, workable and achievable

o 4) Complexity: Planning for large projects may be very complicated and prediction

of the work that has to be completed is one of the main tasks of the project manager. This involves reviewing the work description and breaking it down in elements that can be individually and collectively controlled (WBS)

Having established a structure of work packages/elements, the project manager must determine:

The position of each work package within the sequence of work

The importance of each work package to the project as a whole

The criticality of each work package The amount of cost or time overrun that is acceptable for

each work package The resources required for each package

o 5) Uncertainty and change: Even the most meticulous and carefully prepared plans are subject

to some degree of uncertainty Risk management is therefore a necessity, but even if all potential

risks were known: It would not be possible to eliminate them all The cost of eliminating some risks may be prohibitively high Eliminating one risk may give rise to a new risk Some risks can not be accurately assessed The relative importance of risks may change over time

o 6) Accuracy and reliability: Planning skills are best complemented by sound operational and

technological knowledge, as demanded by the specific project Planning software often require training and experience to utilise,

and often one may find the planner: Using software that is more or less unfamiliar Making misguided assumptions Not using sufficient data in making estimates

It is of vital importance that the planner has the necessary skills and capabilities to make him credible to the other project team members. If not they will lack faith in the plan itself

o 7) Communication: For the project plan to be effectively implemented it is necessary for

all stakeholders to know their responsibilities, and these must be communicated in a clear and unambiguous way.

It is also important that stakeholders are familiar with the planning system used, and can relate to output data.

When issuing information to stakeholders, it could be an advantage if only relevant information is communicated to only the relevant people.

The planning process

The process of work package breakdown:Essential elements:

1) SOW2) WBS3) PLE4) Separate time, cost and quality planning5) Use network analysis (CPM/PERT) to generate DMS6) Use trade-off analysis ro replan7) Produce the PMS

1) Evaluate the project through the Statement of Work (SOW)- This is a descriptive document that defines the overall content and limits of the

project- The SOW includes all the work that has to be done in order to complete the

project- The level and accuracy of information provided should be such that contractors

and others can price the work to be carried out- Typical SOW contract documents include:

o Signature block and project title (identifies the project and the contract parties)

o Definition of contract terms and scope (terms and conditions in regard to range and extent of the works)

o Information and facilities to be provided by the client (additional obligations of the client)

o Project approval requirements o Terms of payment and interim valuations o Working drawings (full design information)o Specification (technical performance standards required)o Schedules (describe various component and assembly requirements)

o General conditions (sector-generic standard forms of contract designed to cover primary duties and obligations)

o Specific conditions (client specific conditions relevant to project)o Methods of handling variationso Form of tender (legal offer to carry out the works)o Appendices (any necessary summaries of additional contractual

information)o Dispute-resolution procedure (arbitration process (alternative dispute

resolution, ADR’s)-> litigation) o Bonds and insurances to be provided

2) The work breakdown structure (WBS)- In order to be able to define the scope of the project accurately, it is necessary

to break the total amount of work to be completed down into more manageable elements/work packages. This is necessary in order to:o Improve the accuracy of cost, time and resource estimateso Define a baseline for performance measurement and controlo Identify clear and achievable tasks and responsibilities

- The WBS acts as a starting point for all subsequent time, cost and quality planning- and control systems, and forms the building blocks of much of what is encompassed in the term project management

- The characteristics of the WBS will vary depending on the nature of the project. The primary characteristics from an operational point of view is threefold:o 1) Level of definition of the WBS:

Most WBS’s operate at 6 levels, but the project manager should determine the required detail that are most appropriate for the job in hand

One example of project breakdown levels: A) The programme B) The project C) The element D) The sub-element E) The work-package F) The work-package component

High- risk activities may be broken further down to isolate risk elements and plan for its mitigation

o 2) Numbering the WBS: Task codes can be used as unique identifiers throughout the project

for responsibility allocation, cost allocation, monitoring and reporting purposes

The WBS element codes should be designed to accommodate the cost accounting code system (CAC)

The CAC system is simply an alternative form of WBS with individual identifiers for each cost-centre heading or budget plan section

A CDES normally produces work element codes, and any defined piece of work is stored in the CDES and a WBS

In most cases, the WBS element code is the same as the CACo 3) Dividing the WBS:

The WBS may be based on the following: Work type Responsibility Location

3) Project Logic Evaluation (PLE)- PLE is about sequencing the individual WBS-elements

o Logic-driven solutiono Resource-driven solutiono Depending on the characteristics of the project, planning the allocation of

project resources must be considered, and over- or under-allocation must be adhered to.

4) Separate time, cost and quality planning- Planning techniques applied specifically to time control are known as

scheduling

5) The draft-master schedule (DMS)- Once the PLE is in place the next stage is networking and scheduling

- Networking is the process of defining the project logic in terms of the sequence of required activities, and then assigning durations to these activities

- Modern software allows networks to be developed quickly and efficiently- The DMS-concept:

- Scheduling is the process of calculating individual activity times in order to allow an estimate for the completion date to be calculated

- The end result of the scheduling process is the DMS- The DMS is a complete network analysis, or programme, for the project- The DMS also identifies a project’s critical path (path with longest total

activity duration- The most obvious uses for a DMS is:

*Identifying the overall completion date*Identifying order and delivery dates for suppliers*Identifying notification and start dates for nominated subcontractors*Identifying key completion dates as a basis for progress planning*Acting as the basis for the implementation risk management system*Identifying logic incompatibilities*Use in cross-checking with subcontractor schedules*Use in checking contractual compatibilities*Providing the basis for re-planning options and trade-off analysis*Providing data for the establishment of possible consequences of delay*Providing the data for EVA*Providing data for any necessary resource levelling

- The basic process involved is to assign durations to each activity in the PLE- Most of the activities will have some leeway as to when they start and finish

(float), but some will not.- Scheduling involves these primary stages:

-Assign durations to each activity (CPM(deterministic)/PERT(probabilistic))-Identify the start and finish window for each activity-Identify those activities with no window (critical path)-Replan as necessary-Rationalise resources-Form a draft master schedule (DMS)-Refine the draft to form a Project Master Schedule (PMS)

- Gannt Charts o The oldest and simplest form of project network or plan for presenting

project plan informationo A simple Gannt Chart consists of:

A horizontal time scale A vertical list of tasks A horizontal line or bar drawn to scale to represent the time needed

to complete the activityo Striped bars: tasks completedo Project milestones: diamond symbolso Limitations of Gannt Charts in complex projects:

Do not show underlying links and interdependencies between activities

Show primarily finish-to start relationships In paper form do not show complex resources requirements and

demands Re-planning is best performed on an activity-on-arrow schedule

o Used in combination through project planning software, Gannt Charts and network diagrams effectively communicate the project plan

- Network diagrams o A precedence diagram with activity durations, that enables the planner to

express visually the logic of a project plan by showing the dependency relationships between activities in a way that a Gannt Chart does not.

o The two most common types of network diagram are :

Activity-on-arc:

Arrows : activities/tasks – Consume time - Letters Circles: events (start and finish times for activities) – Points

in time – Numbers Activity durations A characteristic of AOA-diagrams is the use of dummy-

activities, that are not actual activities and do not consume time, but are included to maintain project logic

Activity-on-Node:

AON uses boxes at the nodes to represent activities instead of arrows between the nodes

Arrows in AON indicate dependency relationships There is no need for dummy activities AON have evolved from AOA with the increase in the use of

computers to drive project plans, and there is no doubt AON networks increase the power to cope with complex projects with complicated constraints between activities

Within AON, the relationships between start and finish times has to be defined. There are four alternatives:

o 1) Finish to start: a preceding activity has to finish before the dependent activity can start

2) Start to start: Activity B cannot start until activity A has started

3) Finish to finish: Activity B cannot finish until activity A has finished

4) Start to finish: Activity B cannot finish until activity A has started

Critical Path method- The duration of the critical path defines the expected duration of the project,

and is the most popular method for producing a DMS from a precedence diagram or network

- Was originally developed in 1960 by the DuPont Corporation in order to allow the programming of maintenance work during chemical plant shut downs

- It uses estimates of activity durations that are known with some degree of accuracy

- The basic CPM-method: - 1) Assign durations to each activity- This is usually based on experience, but some organisations use national or

company standards. If no record exist to calculate the duration, one of five techniques can be used:o 1) Modular technique: Complex operations are broken down into

increasingly small units, intending that all elements, if broken down into small enough packages, can be time estimated

o 2) Benchmark technique: The estimated durations are made on the basis of recorded times for similar works. This approach is often used for repetitive works

o 3) Modelling technique: Makes use of data fro past activities, the data is then used to generate an approximation of an unknown activity where the work lies somewhere between the works involved in two or more known activities

o 4) Computerised database estimating system (CDES): a specialist software package that builds up time estimates using a database of standard times for any given activity. The activity durations are generally estimated based on the individual activity durations of all various sub-elements, and these are adjusted to meet the estimates of the organisation concerned

o 5) Parametric technique: Applies when elements cannot be further broken down, where no standards for similar work are available, and where the project manager has no experience of similar works on which to base a realistic estimate

The process isolates to variables, the dependent and independent, and a mathematical relationship between the variables can be plotted

2) Identify start and finish windows for each activity- Two important event times are required:

* The forward pass : (EET)-EET: earliest time at which an activity can start, and is governed by the finishing time of any dependent preceding activity.-EET is calculated by carrying out a forward pass, and the EET of each activity is simply the finishing time of the preceding activity- Where an activity is dependent on two or more predesecessors, the EET is the later of the alternatives- EET can be expressed in two forms: earliest start time (EST) and earliest finish time (EFT)

The aim of the forward pass is to establish the earliest start time (EST) and the earliest finish time (EFT) for each activity. The basic rules are:

1. The EST for the first activity is zero, or the date the project will commence.2. The EFT for each activity is calculated by adding the duration to the EST.3. The EST of the next activity is the same as the EFT of its immediate predecessor.4. Where an activity has more than one immediate predecessor, the EST is the highest

of the EFTs of the immediate predecessors.5. The EFT of the last activity is the expected duration of the project.

* The backward pass: latest event time (LET)- LET’s are the latest times at which an activity can finish without affecting the start time of the following activity/activities- Where one or more activities follow a given activity, the LET for the activity is the earlier one

The next part of the procedure is to carry out a backward pass to determine the latest finish time (LFT) and the latest start time (LST) for each activity. This time the process proceeds from the last activity box and works backward, from right to left, through the network diagram. The rules are:

1. The LFT for the last activity is the same as its EFT.2. The LST for each activity is calculated by subtracting the duration from its LFT.3. The LFT of each remaining activity is the same as the LST of its immediate

successor.4. Where an activity has more than one immediate successor the LFT is the lowest of

the LSTs of the immediate successors.

EETs and LET from forward and backward passes

3) Identify those activities with no spare time contained (Critical path)- The difference between EET’s and LET’s is the float, which represents spare time between the EET and LET for any activity

- Float can be eroded if required without affecting the start time of the following activity, and float therefore represents an important planning safeguard that represents a buffer time where delays can to some extent be absorbed- The path through the network that has zero float is the critical path, which determines the completion date of the project- To reduce the overall time to completion, the critical activities are the ones to be examined for possible improvements in duration.

4) Replan as necessary- If the estimated time for completion is not acceptable, the client may

authorise an increase in costs in order of speeding up activities.- Alternatively it may be possible to:* Import new (additional) resources and allocate them to the activity* Decrease the amount of work required (cut corners)* Temporarily shuffle resources from other activities* Re-evaluate the activity sequence and logic* Increase the workload demand on individual team-members* Negotiate increased resource provision with subcontractors

* Overlap or phase activities* Use any spare time reserves* Speed up any associated approvals or consents- The most common response is to transfer resources from non-critical activities to critical activities. This increases completion times on non-critical activities, but as long as these changes do not go beyond the float times, no overall increase in project completion date will result

5) Rationalise resources- Resources should be levelled in order to make optimum use of them wherever possible. Large peaks and troughs, concentration of use and gaps in utilisation should be avoided.

6) Form a Draft master schedule- The DMS is the first attempt at scheduling the project, and is usually presented to the project team in preparation for a subsequent brainstorming session. It is also often presented to the client for comment.- The DMS is only a draft for discussion, and is the first step in the process of producing the PMS

7) Refine the draft to form a Project Master Schedule- The PMS is a refined version of the DMS. It contains firm times and dates for all activities, together with confirmed project logic- The PMS is a project document that is recognised and used by all members of the project team.

Program Evaluation and review technique

- PERT was originally developed in the early 1960’s the US Navy, specifically for use on the new fleet of ballistic missile submarines

- PERT is a probabilistic approach in that it uses durations of activities based on optimistic, probable and pessimistic estimates.

- PERT is event-oriented as it works on calculating the probability of events being completed within a given time.

- The basic steps involved in a PERT-analysis are: o 1) Assign 3 durations to each activity (opt, pess, probable)

In PERT calculations, the expected time of an activity is taken as an average of the optimistic, most likely and pessimistic. This average can also be expressed in terms of activity standard deviation

o 2) Calculate activity mean duration and standard duration PERT durations are based on a beta distribution average, for which

average expected time is: Expected mean time for each activity:

o T=(a+4m+b )

6 Standard deviation for each activity:

o S=(b−a )6

o The standard deviation is the spread of values around the most likely time

The PERT critical path is calculated in the same way as with CPM

o 3) Calculate forward pass and backward pass values Similar to CPM, but using individual activity mean durations instead

of deterministic estimateso 4) Identify activities with no spare time contained within the duration

Similar to CPMo 5) Calculate project mean duration and standard deviation

The average project duration is the sum of all expected durations of critical path activities

The project standard deviation is the sum of the squares of each critical path activity standard deviation

Project mean duration=∑ allindividualcriticalpathmean durations

Project standard deviation: √∑ (allindividual criticalpaths tan dard deviations )

2

o 6) Identify target completion date and calculate variance about target If the target date is 33 weeks, and the project mean duration is 35

weeks, the PERT-technique can evaluate the probability of the target being achieved

Project mean duration=35 weeks Project standard deviation=2 weeks Target project duration= 33 weeks

The difference between the target duration and the project mean duration is converted from weeks to standard deviations by standardising it. This is done by dividing the difference between the project mean duration and target duration by the project standard deviation:

Project mean target duration= 35-33 weeks = 2 weeks Project mean difference= 2 weeks Project standard deviation=2 weeks Standard mean difference = 2/2= 1 standard deviation

The lower target value is exactly 1 standard deviations below the average value

From statistical tables it can be ascertained that the mean duration will be achieved on 50% of occasions.

Events within 1 standard deviation of the mean: 68% Events within 1 standard deviations above the average

mean: 84% Events within 1 standard deviations below the average

mean: 16% There is therefore a 16% chance of achieving the target date by

week 33. Events within 1 standard deviation above the normal mean

occur 68% of the time. Events within 2 standard deviations occur 95% of the time. Events within 3 standard deviations occur 99% of the time. E.g. A standard deviation of 1.6 above the mean equates to

about 84% (using linear interpolation)o 7) Replan as necessary

PERT replanning is in many ways similar to CPM, but with PERT , if the calculated probabilities are not acceptable, then the project manager has to modify the activities by i.e. increasing resources, which in turn will affect all three duration estimates

Replanning in PERT also includes recalculations of average and standard deviations on the critical path each time the analysis takes place

o 8) Rationalise resources Similar to CPM

o 9) Form a DMS Similar to CPM

o 10) Refine the DMS into a PMS Similar to CPM

6) Project replanning- As soon as the DMS and the PMS are established, things begin to change: new

design elements, change in client preferences, contractor required changes etc.- Change is a significant part of any project and the project planning and control

system has to be flexible enough to allow for and incorporate change- In practice, the most common requirement for replanning concerns time and cost- The analysis and execution of time changes, and its effect on costs, is known as

crash analysis:

Crash analysis

- In crash analysis, the project manager offers replanning advice based on the relationships between time and cost. This of course, assumes that quality criteria are fixed.

- Cost can be considered as a function of time, and the relationship can be plotted as a curve.

-- To reduce the time of project completion using additional resources, the

project manager must find the activities that can be speeded up at least cost, and then crash using steadily increasing cost activitieso This will increase the gradient of the time-cost trade-off curve, up to a level

where all critical activities have been crashed. Beyond this point, no further time can be saved on the project. Any further crashing will lead to cost increases only, without any time saved.

- The basic process involved in developing a time-cost curve is:o 1) Define the project logic

SOW-> WBS -> PLE (logic/resource)-> Precedence diagramo 2) Add the duration for each activity

Deterministic durations based on past project records, national standards, or CDES

o 3) Establish the project critical patho 4) Calculate the cost of crashing each activity

The cost of crashing a function is function of resource limits and availability

The best sequence can be isolated by converting a crash cost to cost of crashing per unit time

o 5) Calculate the cost of crashing per unit time

Crashcos t−original cos tOriginalduration−crashduration

o 6) Calculate the most cost-effective crash sequence Start with the cheapest and progress to the most expensive (if

necessary), creating a cumulative effect on cost Only critical path activities must be crashed

o 7) Check the critical path As critical path activities are crashed, the overall length of the

critical path will reduce. At some point, the critical path may no

longer be critical, because it will be shorter than other alternative paths through the network. It is therefore important to check the critical path after each crash

If a parallel path becomes critical before the crash limit has been reached, the process has to be repeated on order to identify a new critical path.

In some cases, two critical paths may appear, and if this occurs it is no longer viable to crash a single path. Both critical paths must be crashed at the same time. This involves finding those activities on each critical path that have the lowest cost of crashing per unit time, and crashing these simultaneously. Once this has been done, the next lowest pair of crash activities are crashed at the same time and so on. Once any critical path becomes fully crashed, that is the end of the process

o 8) Crash the network up to crash limit When all critical path activities have been crashed, there is no need

to crash non-critical activities

Points on the crash curve: Optimum cost point: The project starting point, with the

lowest cost for a given time. First crashing point: This is the point reached when crashing

the cheapest crash cost per unit of time Maximum crash point: All critical path activities have been

crashed right up to their limits Fixed overhead curve: If more time is taken, the cost might

not decrease due to fixed or overhead costs

7) Trade-off analysis- Crash analysis is one form of trade-off analysis, which only considers the relationship between time and cost variables. Other forms are applicable to quality and time or quality and cost. Each assuming the third variable to be constant.- Trade-offs are very useful in that they allow a project manager to show a client different scenarios and outcomes as an aid in decision-making.

Cost–performance trade-off

- Higher performance -> Higher cost- Higher performance -> higher sales (to the point where increases in cost make

the product uncompetitive)- 6-stage methodology for trade-off analysis:

o 1) Identify the reason for the problem To be sure that the cause of the problem/change requirement does

not reoccur, the project manager must seek detailed information on the cause. A control system must be established to avoid recurrence of the problem

Trade-offs can be made both before and during project execution: Pre-execution: generally caused by client requirement

changes, disapproval of DMS or cost plan. Typical reasons for pre-execution trade-offs:

o Changes in client requirementso Discovered design incompatibilitieso Changes imposed by subcontractors/supplierso Changes imposed by external consultantso Misunderstandings resulting from poor

communicationso Unforeseen problems such as sudden non-availability

of materials, equipment etc.o Changes in organisational strategic objectives

Execution-trade offs are usually tactical responses to change due to internal or external factors

Typical reasons for execution trade-offs:o Changes in client requirements (additional work)o Discovered human error (inaccurate time-estimating)o Discovered execution problems (inaccurately

assessed risk)o Project-specific events (mechanical failure/ground

conditions)o 2) Re-evaluate the project objectives

Have the original objectives of the project changed? Organisation strategy changes -> project status changes? Typical reasons for project status change:

o Changes in competitor behaviouro Changes in customer demando Changes in national and global economyo Changes in strategic leadership and emphasiso Changes in available technologyo The introduction of new codes of practiceo The introduction of new legislation

o 3) Allow for any other relevant factors What other factors could affect trade-off analysis?

A deterioration of industrial relations within the company

Weather conditions Exchange rates Mechanical failure or breakdown Discovered errors or omissions in the contract

documentation Resource availability problems Consultant problems

o 4) Assemble a shortlist of solution scenarios Problem type:

Cost: extending time/compromising quality Time: add resources/compromise quality Quality: increase time/increase cost limit

Each solution scenario must also be considered in terms of risk and consequences of solution implementation

o 5) Select and test the best (or approved) alternative Up to a certain level, the change control system might allow the

project manager to approve of changes directly. Above a certain level, a formal trade-off recommendation report (TORR) has to be produced, and presented for approval by change control committees and change review panels

o 6) Implement the best alternative This is the responsibility of the project manager and involves

revision of the DMS In the case of pre-execution trade-offs, the result is the PMS that is

issued as part of the contract documentation

Trade –off classification (8 possible combinations)- Type 1: Time is fixed (cost+ quality variable)- Type 2: Cost is fixed (time+ quality variable)- Type 3: Quality is fixed (time+ cost variable)- Type 4: Time and cost is fixed (quality variable)- Type 5: Time and quality is fixed (cost variable)- Type 6: Cost and quality is fixed (time variable)- Type 7: Everything is fixed- Type 8: Nothing is fixed

Resource scheduling- Project planning depends on a wide range of variables, but the most important

one when scheduling activities is resource availability- There are 7 main types of resources:

o Peopleo Materialso Equipmento Fundso Informationo Technologyo Space

- And the two main considerations to be made in allocating these resources are:o Resource productivity: a measure of how effectively team members work

both individually and collectively as a team. There are various reasons for different levels of productivity:

High productivity individuals may be “held back” if the average productivity level in the team is lower

The skills and abilities of team members are not balanced Personality clashes may impair performance There is usually a learning curve and a forming process

involved, and productivity tends to be related to the life-cycle of the project

In addition to people issues, also productivity of equipment and machinery can have an immediate effect on overall productivity

o Resource availability: will directly affect how well the team is able to meet the requirements of the schedule

Once the project is underway, team members may become unavailable for a time, through temporary reallocation within the organisation or through sickness

Resource aggregation- Resource aggregation is a way of estimating the total resource requirements

on an ongoing basis throughout the life-cycle of the project- The starting point is to isolate the resources required for each activity, and

then to calculate resources requirements as a function of schedule completion requirements

- When there are fluctuations in labour demand, the greater the difference between maximum and minimum demand, the greater will the inefficiencies within the resource profile be.

- The only context where large fluctuations do not indicate an inefficient arrangement is where resources can be moved quickly between projects and where set skills are in more or less constant supply and demand throughout the programme of projects

- If resources cannot be moved easily between projects, large variations in resource demand leads to periodic idle time, which in turn can lead to individual loss of earnings and consequent disillusionment and de-motivation.

- Even if resources are easily mobile between projects, there are a number of disadvantages associated with variations in demand:o Inevitable forming process each time a new project team member enterso Inevitable learning curve as new team members familiarise with new

projectso Team and project learning curves both lead to reductions in productivity

and a consequent reduction in the overall effectiveness of the project.

Resource utilisation- Resource utilisation is often expressed in terms of an efficiency index known as

the resource utilisation percentage- The resource utilisation percentage is simply the total number of person days

available to the project divided by the total number of person days actually worked

- If 100 people are employed on the project for 50 days, there are 5000 person days available. If each person on average only works on the project for 25 days then the total number of person days worked is 2500. The resource utilisation percentage is: 2500/5000 x 100% = 50%

- The resource utilisation percentage can be calculated for each week through the project based on the resource allocation allowed for in the planning stages. The percentage can be projected forward and shown as a curve. This curve can be superimposed on a resource histogram to show percentage values across the life cycle of the project.

- The project manager may set a minimum value for percentage, and if this limit is exceeded, resource levelling must take place.

Resource levelling (or smoothing)- This is the process of levelling out the peaks and troughs in resource demand

so that resource utilisation approaches an average.- There are a number of constraint scenarios within resource levelling can be

considered. The relative scenario affects the extent to which resource levelling can be carried out:o 1) The project completion date is fixed:

Resource levelling can only be carried out to a limited extent. The levelling cannot affect the critical path, so critical activities cannot have resources reallocated or delayed. This means that resource peaks in critical activities cannot be reduced. Levelling is therefore restricted to available float-time on non-critical activities.

o 2) The project completion date is fixed: Levelling can take place on all activities but only up to the

maximum duration allowed for the project. In this case critical activities are prioritised and levelling takes place in a set sequence

o 3) Resources are limited: In practice, resources are always limited to some extent. A number

of parallel activities may require the same key resource, and levelling may distribute demands in this key resource over several parallel activities, which may lead to a resource demand that is in excess of the limit allowed

o 4) Resources are unrestricted: Would only apply to small projects within large organisations

- In most practical applications, resource levelling works by consuming the float that is available on non-critical activities.o For each non-critical activity there is an earliest start time and a latest start

time. Resource levelling works by comparing the resources required to achieve the latest start time. A compromise is then made at which lies somewhere between these minimum and maximum resource values.

- The levelling process produces a better resource utilisation percentage, in addition to a number of associated advantages:o Reduced peaks in resource demand means there are fewer people on the

project at any one time. This has implications for the overall control and co-ordination demands on the project manager, and may also have a cost implication.

o Individual people work for a longer period on the project, which has implications for the development of team working and learning curves

o Reduced float times on individual activities can lead to greater continuity between activities.

o Reduced activity durations may have implications for external subcontractors. Resource levelling may reduce the overall time that a subcontractor is required to attend the project. This may reduce overall costs.

Project Planning software- Recent history records that project management tools and techniques grew

hand in hand with the development of computerised information systems- Techniques like EVA-analysis require a system that can process large amounts

of data throughout the life cycle of the project.- The responsiveness and effectiveness of a company’s project management

software can be one of their main sources of competitive advantages.- Advantages of computer-based project planning and control:

o Speedo Cost (saves resources)o Capacityo Reliabilityo Combined analysis (time and cost simultaneously)

- Disadvantages of computer-based project planning and control o Reliance (risk of system breakdown)o Over emphasis on system detail (excessive time usage on system)o Information dump/Information overloado Potential misdirection: Good-looking reports can be interpreted as correct

by their appearance. They are not better than the accuracy of input information

- General factors for consideration for a company thinking of purchasing or replacing a project planning system:o Lead in time: 3-6 months before a new system is commissioned up to a

level where it is reliable, and the staff are trained to use it fullyo Transition: Switching from one system to another can cause reluctance to

abandon old systems and knowledge. Phasing out an old system and replacing it is a project in itself with consequent risks

o Training: When new systems are implemented, and staff is trained and educated on how to use it, their resources are not available for use in existing systems, which may have an adverse effect on the profitability of the organisation

o Updates: Keeping up to date with the latest developments in the software package may be time and cost consuming

o Networking: In large projects the project planning software is usually connected to the CMS-system (configuration management system), and this raises security and access implications that the project manager must be aware of.

o Wider compatibility: The logical extension of the CMS is to link the central network to external consultants and in some cases even external contractors and suppliers. Though such a link may cause security issues, there is also the obvious advantage of ease of communicating and informing of project developments and requirements

- System critical success factors of project planning software: o The system should be usable

Support and assistance should be offered within the software package

o The system should use familiar displays with clear and unambiguous display of information

o The system should be CMS compatibleo The system should be extendable

Should incorporate next generation ideas and supply innovative solutions ahead of demand

- General features of project planning and control software systems o A project management system should be able to:

Project planning Gannt Charts and network diagrams Critical path analysis Update schedules and information automatically when

changes as made Resource management Tracking and monitoring

Updating data, including the ongoing status of each activity, enables the system to monitor a project against the original plan and will highlight variances from the plan

Report generation Produce a wide range of status reports covering most

aspects of the project, from budgets and cash flows to resources and schedules

Analysis and decision aiding Some systems can produce what-if analysis, but most

systems provide information that can be used in decision-making

Version 2

Project ManagementModule 5: Project Time Planning and Control

Learning Objectives

The objective of this module is to develop an understanding of the time planning process. This process involves breaking the project down into individual components and then allocating times or duration values to each component. The next stage is to link these components together in a logical progression. Models are then generated to ascertain likely completion dates for individual and collective activities. Finally, further models may need to be generated to allow for replanning and change.

By the time that you have completed this section you should be able to :

Understand the process for generating a work breakdown structure (WBS). Understand the basic sequence of works necessary to produce a precedence

diagram. Appreciate the basic mechanics of scheduling using the critical path method

(CPM).

Appreciate the basic mechanics of Program Evaluation and Review Technique (PERT).

Clearly define the differences, advantages and disadvantages of CPM and PERT. Generate and execute crash scenarios Generate and present trade-off scenarios

Time planning and control cannot be considered in isolation. Time, cost, and quality planning and control are intrinsically linked and must be considered collectively and as part of the project management three-way continuum. Time planning will therefore be examined as one aspect of the overall, or generic strategic project planning exercise.

Introduction

In modules 1 and 2 the text considered the concept of the time-cost-quality continuum. Most projects can define success or failure in terms of these three variables. The position of the project at any particular time can usually be shown as a compromise among the three, as shown in fig. 5.1.

In figure 5.1, point A represents the present position of the project. Point B represents the anticipated location after a certain amount of time if now intervention takes place. Point B1 represents the desired location. The shaded area represents the growing divergence between desired end point, and actual end point. It has been decided that quality needs to be improved, perhaps because too much rework is being required. The solution in this case is to increase the time allowed; hence there is an intended move from A to the desired position B1. However, this has not taken into account the cost increases associated with the longer time scale (for example, if the same number of people are required for longer, the wage costs will be higher), and so position B rather than B1 is likely to result.

Although this section concentrates on time planning, it must be borne in mind that, in practice, it is intrinsically linked to the other two variables of quality and cost; it is not generally possible to consider time planning in isolation. A change in any one of these variables will almost certainly impact on one or both of the other two.

Time planning is also intrinsically linked to the life cycle of the project. Planning is a distinct phase and is separated from implementation or other phases. Most projects have a planning phase, an implementation phase and a replanning phase, as shown in Figure 5.2.

Planning sits within a life cycle continuum. Plans are not static because unforeseen events will occur during most projects, except for the most simple. Hence, there is generally a need for a replanning process that runs in parallel with the implementation phase. Replanning generally requires trade-offs to be made among the three variables.

Time planning is only one form of planning. Most projects involve cost planning and quality planning as well. Planning sets the goals or targets to be achieved. The project manager attempts to ensure that these targets are met through project control procedures, which monitor actual performance and track it over a period of time. Actual performance is compared with planned performance in order to isolate variances. These variances are then used as the basis for management reporting. The project manager can also use this information to determine where problems are likely to arise in the future.

Project planning is used to establish targets for performance so that, as the project progresses, actual known performance can be compared with planned performance and variances can be calculated. This is a retrospective or reactive form of analysis in that it uses discrepancies between actual and planned progress to show where the project is performing well or badly. It then uses these variances as the basis for management reporting, and executive decision-making. Planning can also be used to predict project performance by comparing performance projections against planned values. This is a predictive or proactive form of analysis. More experienced project managers can look at the project plans and quickly see where problems are likely to occur. They use this information to pre-empt the problems or to mitigate their effects if they cannot be pre-empted.

This module considers the process of time planning from inception through to implementation, replanning, and trade-offs. It should again be noted that the early stages of the planning process are to some extent common for time, cost, and quality. It is only after a certain point in the project life cycle that the consideration of the variables splits into different specialisms. This usually occurs at the start of the scheduling stage. After this point, the remainder of the module discusses planning purely from the point of view of time.

Learning Summary

The concept of project time planning and control

Project time planning and control are essential project management skills. In order to be able to deliver on time, cost, and quality limits for any process, planning and control are always prerequisites.

Planning is essential to most enterprises, and it is take for granted in the management of everything from football teams to construction projects.

Most aspects of an enterprise can be planned, and the planning process can aim at several different objective criteria. Most projects evaluate success in terms of the optimization of time, cost, and quality criteria. As a result, most project management planning and control tends to center on these three variables.

Other variables may also be considered, such as safety and reputation, but most of the immediate and non-statutory success objectives are related to time, cost and quality optimization.

Planning as a discipline effectively sets targets. These targets may subsequently be achieved or not, depending on the success of the project. The project manager attempts to ensure that these targets are met through project control procedures.

Project control procedures examine actual performance and track it over a period of time. They then compare actual performance with theoretical performance in order to isolate variances. These variances are then used as the basis for management reporting.

Planning is also a way of establish where the project should be, in terms of time, cost, and quality performance, at any particular moment in time. A project manager can then use this information to identify where problems are likely to arise in the future—for example, where existing performance is likely to cause problems in the future.

Variations in project success and failure criteria will affect the time planning and control process. If the value of quality suddenly increases, this will almost certainly generate an increased time requirement.

The project time planning and control process is only part of the contents of the generic project plan or strategic project plan (SPP). The SPP is a project document that includes all the information relevant to the planning process for the entire project.

The project SPP includes separate planning and control processes for time, cost, and quality, and also a wide range of other planning elements including communications planning, marketing planning, financial planning, benefits planning, and risk planning.

Separate plans are required for each of the foregoing elements, and also for the others listed in the SPP pro forma in BS6079. The collective assembly of all these individual sub-plans forms the generic SPP.

A project plan must be established for all projects if effective project management techniques are to be applied. The project time planning and control system is only one of numerous planning and control systems that collectively form the generic project plan.

Project time planning involves identifying, sequencing and scheduling information. Depending on the nature and size of the project, this information can range from just a few activities and resources to, in the case of large capital projects, many thousands of activities with complex interdependencies and resources.

The planning process must be robust enough to withstand rigorous testing and yet take account of the constantly changing environment in which the project exists.

Planning is carried out throughout the project life cycle. The intensity of planning activity varies over the life of the project. Traditionally, planning is the most intense in the early stages.

Major changes during the project will result in increased planning activity no matter what stage the project is at. This replanning is a central requirement on most projects and can be one of the most complex areas that the project manager has to manage. Time replanning tends to become more complex as the project progresses.

In most projects, large changes at later stages in the project life cycle can have critical effects.

The process of project time planning

The time planning process will vary in relation to a number of factors. These factors influence the data and assumptions that are used in developing the planning and control system. Typical examples include source of time planning data, project uniqueness, people issues, large project complexity, project uncertainty, competence in planning and communicating the plan.

Most project planners base their time estimates for individual activities on their own knowledge and experience. In cases where similar projects have been run in the past, it is usually possible to derive reasonably accurate estimates for most activity durations.

No two projects are exactly the same and it is generally necessary to plan every project independently. This applies more to some applications than to others. Construction projects in particular tend to be more or less unique.

Project planning involves a systematic approach to working that not everyone is comfortable with. It requires an ability to look ahead and effectively integrate uncertainty with the more tangible aspects of planning such as estimating and scheduling. Good project planning also requires considerable imagination and creativity and these characteristics are not universal.

Perhaps the most difficult part of any planner’s job is to predict the activities required to complete the project with any reasonable degree of accuracy.

The risk of uncertainty is inherent throughout any project plan as in any plan. As well as the global uncertainties surrounding the project as a whole, there are elements of uncertainty within each of the planned activities and al of the assumptions made during the planning process.

Planning large projects is a highly complex and specialized skill. It requires an in-depth knowledge of sophisticated planning techniques and systems. To achieve good workable plans, the planning skill is best complimented by a good operational and technological understanding of the project itself.

If a project plan is to be effectively implemented, stakeholders must be fully informed of all their responsibilities. The information must be issued in a format that is clear, understandable, and unambiguous.

The Planning Process

Irrespective of whether the project manager is developing time, cost, or quality plans, the same basic procedure is adopted up to a point. This involves breaking the project down into some kind of work packages where individual targets for performance can be set for each such package.

The level of definition of work package will depend on the nature and type of project. Project work packages might vary in relation to the planning and control system concerned. A package for cost control purposes might not match the packages defined for quality management purposes.

This process is sometimes referred to as the top-down strategic (TDS) approach to project planning. It is a top-down approach in that it takes the work at the project level and breaks it down into individual work packages or components that can be subjected to individual and independent time, cost, and quality control.

Planning is strategic in that work packages are projected forward so that an overall sequence of execution can be derived. This sequence will determine the time, cost, and quality planning and control characteristics of the project.

The Statement of Work (SOW) is the descriptive document that defines the overall content and limits of the project. In practice, nearly all projects have an SOW, as they cannot be efficiently managed or executed unless the managers and administrators can define the boundaries and limits of the project.

The SOW includes all the work that has to be done in order to complete the project. However, the project cannot be planned or controlled at this level as it is too big. It is necessary to break the whole down into individual components that can be individually evaluated and managed.

For a US or European project, the SOW is usually contained in the contract documents. In the UK, this would comprise a full set of production information, a

specification, all schedules, and some kind of measurement or quantification of the works to be done, assembled in such a way that it can be accurately priced by a tenderer.

A work breakdown structure (WBS) is a representation of how large tasks can be broken down into smaller and more manageable sub-tasks.

The number of WBS levels required increases with the size and complexity of the project and is determined by the need to define tasks at a level where they are manageable and achievable. Small projects such as preparing a simple brochure may require as few as three levels, whereas a project such as launching a global marketing campaign for a consumer product may have six or more levels.

Project Logic Evaluation (PLE) is the process of taking the WBS work packages that have already been identified, and showing the sequence in which they are to be carried out. This is important for time, cost, or quality evaluation.

Networking is the process of defining project logic in terms of the sequence of required activities, and then assigning duration to these activities.

Scheduling is the process of calculating individual activity times in order to allow an estimate for the completion date to be calculated. The end result of the scheduling process is the Draft Master Schedule (DMS).

Within AON, the relationships between start and finish times has to be defined. There are four alternatives:

o 1) Finish to start: a preceding activity has to finish before the dependent activity can start

2) Start to start: Activity B cannot start until activity A has started

3) Finish to finish: Activity B cannot finish until activity A has finished

4) Start to finish: Activity B cannot finish until activity A has started

The DMS is a complete network analysis or program for the project showing start and finish times for each activity. By using specific analysis techniques, it is also possible to calculate start and finish times for groups of activities, for section of the project and for the project as a whole. The DMS also identifies the project’s critical path, namely the path through the project that has the longest total activity duration times. It is therefore the path of activities that determines the overall project completion date.

In terms of assigning activity durations, there are two primary alternatives. These are based on the critical path method (CPM) or on the program evaluation and review technique (PERT). Both approaches use an essentially similar concept, but the calculations used and application of each are quite different.

CPM is used where deterministic calculations can be used. Deterministic values are applicable where times for activities can be calculated or are known with reasonable accuracy—for example, the times take to execute each of the stages in making a cup of tea.

The critical path through any network diagram is the longest path. The duration of the critical path defines the expected duration of the project under normal circumstances. The most popular method for producing a draft master schedule (DMS) from a precedence diagram or network is to use the critical path method. (CPM).

PERT is used where component activity times cannot be accurately calculated or are not known, such as making a cup of tea with a faulty kettle that may or may not work properly.

In both CPM and PERT cases, the calculations are used as the basis for evaluating the individual and overall times that are applicable to the project. They are not simply used once to arrive at overall and individual completion dates. They are also used as the basis for the replanning process, which is an essential feature of most project planning and control.

Replanning is often necessary because the Draft Master Schedule produced by the project manager is just that—a draft. It is presented to the client as one possible solution for the planning and control of the project, it may or may not be acceptable. Typical reason why it might not be acceptable are that it finishes the project too late and time savings are required, or it is too heavily resourced and the overall cost has to be reduced.

The replanning process is just as important as the initial planning process. As soon as a schedule has been produced, there will be immediate requirements to change it. Change notices and variation orders will be issued throughout the project execution phase, client requirements may change, planning regulation may alter, etc. Replanning tends to be a complex operation and is one of the main reasons why project planning software, as opposed to manual methods, is used almost exclusively.

Project Replanning

In crash analysis, a project manager offers replanning advice based on the functional relationship between time and cost. The objective is to look at that relationship for the process concerned and to generate a curve showing alternative cost and time scenarios. The client can look at this curve and can see how much it will cost to meet a range of different time options.

The cost of crashing is a function of resources and limits and availability. In addition, resources on an activity can only be increased up to a point. Additional resources may be immediately available at the same or greater unit cost, available later at the same or increased unit cost, etc.

The crash sequence will usually start with the cheapest unit crash-cost item and progress to the most expensive unit crash-cost item. This will generally appear as a negative curve, rising more and more steeply away from the origin (original project time and cost). The curve should always rise more and more steeply as the unit crash cost increases for the later items and the cumulative effect is significant.

The other major consideration is the critical path. There is no point in crashing non-critical items as any time saved on these items will not reduce the overall project or package completion date. It is therefore essential that the crash sequence contains only those items that are on the project or package critical path.

Trade-Off Analysis

Crash analysis is one aspect of trade-off analysis. The crash example in the text considered the trade-off between time and cost. There can also be trade-offs between time and performance and cost and performance. Each scenario seeks to establish the functional relationship between two of these variables while assuming that the third element is fixed or constant.

A requirement for trade-off occurs because project conflicts arise. This could be because of changes to project objectives, success and failure criteria, incompatibilities, errors, etc. The main types of causes for trade-offs are human error and mechanical failure, problems of uncertainty and totally unexpected problems.

Changes in project environment, changes in company corporate strategy, new statutes and codes of practice, and inaccurate original forecasts and planning are all potential sources for conflict and a requirement for trade-off analysis.

Gantt Charts

In its simplest form, the Gantt chart consists of a horizontal time scale, a vertical list of tasks and a horizontal line or bar drawn to scale to represent the time needed to complete each task or activity.

Gantt charts provide an effective tool for planning and monitoring. They require little training to produce and give a very easy to understand visual image.

Resource Schedule

Most organization do not have idle staff and equipment waiting to carry out a particular activity on a particular project. What is likely is that they are also required for other jobs, and some degree of prioritization will be required.

Resource scheduling is critical in any resource-driven application. Resource leveling allows peaks and troughs in resource demand to be evened out

allowing more consistent use of resources.

Project planning Software

In contemporary project management, virtually all project planning and control is carried out using proprietary software.

The use of project planning software offers advantages of speed, capacity, efficiency, economy, accuracy, and the ability to cope with large amounts of complex data.

Disadvantages include the systems management requirement, information overload, isolation, and dependency.