Tomsk Polytechnic University International Management Institute Project Management

Tomsk Polytechnic University International Management Institute Project Management Prof. Dr. -Eng. А. А. Dulzon

Project time planning and control • • • Content of the Module 5 5. 1 The concept of project time planning and control 5. 2 The process of project time planning 5. 3 Project replanning 5. 4 Trade-off analysis 5. 5 Resource scheduling 5. 6 Project planning software

5. 1 The concept of project time planning and control • Most projects can define success or failure criteria in terms of the time-cost-quality continuum. • Therefore, it is not generally possible to consider time planning in isolation. • Time planning is also intrinsically linked to the lifecycle of the project. Planning is a distinct phase and is separated from implementation or other phases. • Plans are not static because unforeseen events will occur during most projects. Hence there is generally a need for a replanning process that runs in parallel with the implementation phase.

The concept of project time planning and control • Time planning is only one form of planning. Most projects involve cost 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. • Actual performance is compared with planned performance in order to see variances. These variances then used as the basis for management reporting. This is a retrospective or reactive form of analysis. The project manager can also use this information to determine where problems are likely to arise in the future. • Planning can also be used to predict project performance by comparing performance data against planned values. This is a predictive or proactive form of analysis.

The concept of project time planning and control Aims and objectives of the planning process • In the most general terms, the goals of project planning are to: – establish the desired end position (in terms of project outcomes); – establish the current position; – plot a course so that the project can move from the current position to reach the desired end position; – establish variance limits so that any significant divergences away from the plotted course are detected; – allow necessary resources so that divergences can be corrected; – ensure that all divergences are pulled back into line; – allow some kind of contingency to cover major divergences (especially unforeseen ones).

The concept of project time planning and control Aims and objectives of the planning process • More specifically, the process of project planning should: – consider the overall strategic objectives of the organization; – establish project objectives that are clearly compatible with these strategic objectives; – consider the work to be done and compartmentalize it (develop work packages) in some way; – analyze the various work packages and work out the most logical sequence of execution; – determine the various interdependencies between the work packages; – determine the resources that are available or are required; – Integrate resources with work packages;

The concept of project time planning and control Aims and objectives of the planning process – determine the cost and duration of each work package; – establish a formal communication system; – establish who does what, how and when; – set up a suitable organizational structure; – establish baselines; – identify critical activities and communicate the importance of this activities; – establish suitable motivation procedures; – establish clear aims and objectives for each section of the project team; – culminate with the production of a strategic project plan (SPP).

The concept of project time planning and control Project time planning and control and the generic project plan • The generic strategic project plan (SPP) is a project document that includes all the information relevant to the planning process for the entire project. • This includes time, cost and quality, and also a wide range of other planning element, including: – – – – organizational and authority planning; risk management planning; communications system planning; financial planning; conflict and stress management planning; authorization and compliance planning; health and safety planning; change management planning. • Separate plans are required for each of these elements, and others as appropriate. The sum of all these individual plans forms the generic SPP.

The concept of project time planning and control Project time planning and control and the project lifecycle • Project time planning involves identifying, sequencing and scheduling activities and resources. • Internal and external factors influence the actual rate of progress, and project requirements can change. The result is that planning and replanning continues throughout the lifecycle of a project. • The nature and the intensity of the planning activity thus also varies throughout the life of the project. • The effect of changes on the time planning process will increase as the project evolves. This is because more design and execution detail becomes fixed as the project progresses. It therefore becomes more expensive and has greater time implications an a project to make changes as the project continues.

The concept of project time planning and control Project time planning and control and the project lifecycle

The concept of project time planning and control Project time planning and control and the project lifecycle • Thus, working around these becomes increasingly complex and is to be avoided or minimized wherever possible. • The nature and intensity of the planning activity varies throughout the life of the project. The level of of planning activity is generally the highest during the design and appraisal phase and decreases steadily throughout the implementation phase. • In some projects, later stage changes can have critical effects. Change generally has to be controlled as the cumulative effect of a number of small changes can have a large effect on the project as a whole. An example of this is creeping scope.

The concept of project time planning and control Project time planning and control and the project lifecycle

The concept of project time planning and control Project time planning and control and the project lifecycle • Later stage replanning may become necessary for a number of reasons. Some of these will be outside the direct control of the project manager, for example: – Internal (optional change). Large projects are characterized by a high degree of internal change which is introduced as an option by the client. Clients also often introduce new elements after the original design has been completed. – External (imposed) change. One example is where a supplier fails and is necessary to find a replacement. – Sequential disruption. The project manager may sometimes be forced to take resources from a later work package and temporarily reallocate them to a current work package that is being delayed. – Miscalculation. The various project planners may miscalculate the amounts of time resources that a particular work package requires.

The concept of project time planning and control Project time planning and control and the project lifecycle • It is important to appreciate that the time planning is an ongoing process. • The initial time plan is necessary in order to establish a project schedule. Some kind of baseline or milestone schedule is necessary at the outset in order to calculate key dates for the project. • However, it is also to appreciate that the schedule has to be constantly replanned throughout its lifecycle. • The emphasis on the planner therefore changes from pure planning in the earlier stages to replanning and monitoring during the later stages.

5. 2 The process of project time planning Factors affecting the time planning process • Project time planning is not an exact science. It represents an approach to assessing activity start and finish times using estimates and approximations that are based on a combination of common sense, reasonable assumptions and past experience. • Time planning on large projects is influenced by a range of variables. The main of them: – – – – sources of data; project uniqueness; people issues; complexity; uncertainty and change; accuracy and reliability; communication.

The process of project time planning Sources of time planning data

The process of project time planning • Irrespective of whether the project manager is developing time, cost or quality plans, the same basic procedure is adopted: 1. 2. 3. 4. 5. • 6. 7. evaluate the project through the Statement of Work (SOW); generate a Work Breakdown Structure (WBS); execute Project Logic Evaluation (PLE); separate time, cost and quality planning; use network analysis (CPM or PERT) to generate a Draft Master Schedule (DFM); use trade-off analysis to replan; produce the Project Master Schedule (PMS). This process is known as the top-down strategic approach to project planning.

The process of project time planning

Step 1. The statement of work (SOW) • The statement of work is the descriptive documennt that defines the overall content and limits of the project. • The SOW includes all the work that has 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. • A typical SOW contains all the information that is required by a contractor or bidder. The level and accuracy of information should be such that contractors or others can price for the work to be carried out.

The statement of work (SOW) • Typical SOW contract documents include: – Signature block and project title. – Definition of contract terms and scope. It summarizes the terms and conditions used and describes the range and extent of the works in sufficient details to identify the limits of the project. – Information and facilities to be provided by the client detail the additional obligations of the client. – Project approval requirements. – Terms of payment and interim valuations. – Working drawings. – Specification. – Schedules.

The statement of work (SOW) – General conditions. They are standard forms of contract. They are sector-generic and designed to cover the primary duties and obligations under the contract in most applications. – Specific conditions are drawn up for each particular project. Typical examples would include restrictions on noise, working times, etc. – Methods and handling variations. – Form of tender. The form of tender usually states the project title and parties involved and acts as an agreement to carry out the works as described for the stated sum. – Appendices contain any necessary summaries of any additional contractual information, such as fees and contingencies.

The statement of work (SOW) • Dispute resolution is the process for dealing with disputes and arguments. Most contracts provide for an arbitration process, followed by recourse to litigation if arbitration process to be unsuccessful. It prevents costly lengthy legal actions. • Bonds and warranty conditions specify what provision is required and how this is to be executed. The bond covers contractor performance up to practical completion and hand over. The warranty guarantee covers the quality and reliability of the finished product after hand over and during use. The conditions of contract might require that the warranty is secured in some way, perhaps by being insurance backed.

Step 2. The work breakdown structure (WBS) • In most projects the major deliverables are large objects that are impossible to deliver with a single clearly defined activity. • It is important therefore to break down these deliverables into smaller, more manageable components. This is necessary in order to: – improve the accuracy of cost, time and resource estimates; – define a baseline for performance measurement and control; – identify clear and achievable tasks and responsibilities.

The work breakdown structure (WBS)

The work breakdown structure (WBS) Level of definition of the WBS • Most WBSs operate down to about six levels, but a project manager should operate within whatever levels are most appropriate. • The number of WBS levels required increases with the size and complexity of the project and is determined by the need to define the tasks at a level where there are manageable and achievable. • Small projects may require as few as three levels, whereas big projects may have up to six or seven levels. • High-risk activities should be further broken down in order to isolate the risk and plan for its mitigation.

The work breakdown structure (WBS) Numbering and dividing the WBS • A logical and straightforward numbering system is required to ensure that each task is properly coded. • Task codes can be used as unique identifiers throughout the project for many purposes, including responsibility allocation, cost allocation, monitoring and reporting. • The WBS element codes should be designed so as to accommodate the cost accounting code (CAC) system that in use. • Most modern project planning and control software (f. e. , the computerized database estimating system package– CDES) automatically generates work element codes as the WBS is generated. • The same element code will be used in each part of the system I. e. time, cost and quality planning and control. • As with most aspects of planning, there is no single correct way for preparing a WBS. The dividing of the WBS may be based on work type, responsibility, location, etc.

The work breakdown structure (WBS) Numbering the WBS

Step 3. Project logic evaluation (PLE) – 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. – For time control, the project manager has to know when each WBS activity is programmed to start and finish. This is a prerequisite for placing orders, committing to delivery dates, resource calculations, etc. – PLE is also required for cost-planning calculations and for quality control. – Often, there are more than one way in which the activity could be carried out.

Project logic evaluation (PLE) Resource over-allocation

Project logic evaluation (PLE) • In reality, most operations are subjects to some kind of resource limitation. This constraint applies just as much to small projects, such as making a cup of tea, as it does to large complex projects. • The parallel sequence of activities as shown in the previous slide is possible, but not for a single person. The logic-driven sequence shown is therefore dependent on additional resources. • The resource-driven solution is clearly a different layout to the logic-driven solution. Most modern software automatically calculates precedence diagrams using resource-driven or logic driven formats, as input by the user. • Resource over-allocation can be clearly identified by the presentation of a simple bar chart, as shown in the next slide.

Project logic evaluation (PLE) Resource over-allocation

Step 4. Separate time, cost and quality planning • At this step, the process of planning splits depending upon the aspect being considered: – Project planning from the point of view of time planning and control. Planning techniques applied specifically to time control are known as scheduling. – Cost estimating, planning and control. Basically, the cost planning process consists of isolating individual cost packages and calculating an accurate cost estimate for each one. The individual components are then combined to produce a cost total, usually in the form of budget plan. – Quality planning.

Step 5. The Draft Master Schedule • After PLE is in place, the next stage in the planning process is networking and scheduling. • Networking is the process of defining the project logic in terms of the sequence of required activities, and then assigning duration to these activities. This allows the planner to calculate individual start and finish times for each activity and overall project completion date. • Modern software allows networks to be generated quickly and efficiently. More important, it allows complex replanning calculations to be carried out quickly and accurately. • The end result of the scheduling process is the Draft Master Schedule (DMS).

The Draft Master Schedule • The DMS is a complete network analysis for the project, showing start and finish time for each activity. • The DMS also identifies the project’s critical path, namely the path through the project that has the longest total activity duration. It is therefore the path of activities that determines the overall project completion date. • Most of the activities will have some leeway (float) as to when they start and finish, but some will not. • Generally, the items without float in their activity windows are critical. Any delay in these activities will delay the following activities, and if the least are on the critical path it will result in overall project completion delay.

The Draft Master Schedule • The most obvious uses for a DMS are for: – identifying an overall project 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; – providing the basis for re-planning options and tradeoff analysis;

The Draft Master Schedule – providing data for the establishment of possible consequences of delay; – providing the data for earned value analysis; – providing data for any necessary resource levelling. • Scheduling involves the following primary stages: – – – – assign durations to each activity; identify the start and finish window for each activity; identify those activities with no window (critical path); re-plan as necessary; rationalize resources; form a Draft Master Schedule; refine the draft to form a Project Master Schedule (PMS).

The Draft Master Schedule • In terms of assigning activity durations there are two primary alternatives. They are based on the critical path method (CPM) or on the program evaluation and review technique (PERT). • CPM is a deterministic approach. This means that the activity durations can be calculated or are known with reasonable accuracy. • PERT is used where component activity times cannot be accurately calculated or are not known. In such cases, the likely time can be expressed in terms of a probability. There might be a maximum time, a minimum time and a most likely time.

The Draft Master Schedule Gantt charts • The oldest and simplest form of the project network is the Gantt chart or bar chart. • In its simplest form, the Gantt chart consist 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 activity. • The level of detail of each activity displayed is determined by the time scale. • Gantt charts allow effectively monitor the progress. • More sophisticated Gantt charts can be drawn to show critical activities, floats and dependency relationships.

The Draft Master Schedule Gantt chart

The Draft Master Schedule Gantt charts • Important project events are known as project milestones and these are often shown on Gantt charts as special symbols. • For projects of a limited size and number of activities Gantt charts provide an effective tool for planning and monitoring. • Gantt charts have serious limitations when it comes to larger projects with complex dependency relationships. • Modern project planning software packages provide the information in the form of both Gantt charts and network diagrams. Used in combination, these will effectively communicate the project plan.

The Draft Master Schedule Network diagrams • A network diagram is simply a precedence diagram with activity durations added to it. • It enables the planner to express visually the logic of a project plan by showing the dependency relationships between activities in a way that Gantt charts do not. • The two most common types of network diagram are activity-on-arc (OAO) diagrams and activity-onnode (AON) diagrams. • General rules for both types are that arrows run from left to right for start to finish of a project; and diagrams are not to scale in any way.

The Draft Master Schedule Activity-on-arc network 10 A 2 20 40 B D 3 1 C E 1 30 2 50 • The arrows (or arcs) represent activities or tasks, and the circles (or nodes) represent events. The events are therefore start and finish points for the activities. The activities consume time and the events are points in time. • Events are labeled with numbers in the nodes and activities are labeled with letters above the arrow. The layout of the diagram shows the dependency relationships between activities. • A characteristic of AOA diagrams is the use of dummy activities. This are shown as broken lines and represent dependencies. Dummy activities are not actual activities and usually do not consume any time. They are only included in order to maintain project logic. • The estimated duration for each activity is added below the arrow representing that activity.

The Draft Master Schedule Activity-on-nodes network B Start D A Finish C E • This network represent the same activities and logic shown in the previous slide. The main difference is that the AON diagram use boxes at the nodes to represent the activities instead the arrows between the nodes. The arrows in this case only indicate the dependency relationships between activities. • There is no need for dummy activities. • AON networks increase the power to cope with large and complex projects with complicated constraints between activities.

The Draft Master Schedule Activity-on-nodes network Within AON, the relationship between the start and finish times and the dependencies has to be defined. There are four main possibilities: 5 1. Finish to start relationship. A time lag may be written on the arrow to indicate that activity B cannot start until a specified period after activity A has finished. 2. Start to start relationship. Activity B can start as soon as activity A has started. Here also could be a time lag. 3. Finish to finish relationship. Activity B cannot finish until activity A has finished. This type of relationship can also contain a time lag. 4. Start to finish relationship. Activity B cannot finish until activity A has started. Again, a time lag may be present. A B A B

The Draft Master Schedule Critical Path Method (CPM) • CPM is the most popular method for producing a DMS from a precedence diagram. CPM was originally developed in 1960 by the Du. Pont corporation in order to allow the programming of maintenance work during chemical plants shut away. • CPM is activity-oriented and uses estimates of activity durations that are known (reasonably accurate). • The basic CPM process is to: – – – – assign duration of each activity; identify the start and finish window for each activity; identify those activities with no spare time contained within the duration (critical path); re-plan as necessary; rationalize resources; form a Draft Master Schedule (DMS); refine the draft to form a Project Master Schedule.

The Draft Master Schedule Critical Path Method (CPM) • 1. Assign durations of each activity. For some activities, there may be no experience and no published information from which to calculate the duration. In these cases, it may be possible to calculate a deterministic estimate using one of five techniques: – Modular technique. In this technique, large or complex operations that cannot be accurately time-estimated are broken down into smaller and smaller units. In theory, if the unit is small enough, a duration estimate can always be made. In practice, it is not always possible to isolate every single component. – Benchmark technique. In this technique, the estimation are made on the basis of recorded times for similar works.

The Draft Master Schedule Critical Path Method (CPM) – Modelling technique. The modelling technique makes use of data from known past activities. The data is used to generate an approximation for an unknown activity where the work involved lies somewhere between works involved in two or more known activities. – Computerized database estimating system (CDES) technique. CDES is a software package which builds up time estimates using a database of standard times for any given activity. – Parametric technique. This approach isolates two variables, the dependent variable and the independent variable. F. e. , there is a functional relationship between the length of the tunnel to be built (independent variable) and the time required (dependent variable).

The Draft Master Schedule Critical Path Method (CPM) • 2. Identify the start and the finish window for each activity. – the list of activities; – the procedure diagram; – analyzing the network diagram to determine the critical path. It involves three simple steps. These are the forward pass, the backward pass, and the calculation of float. The longest path through the network will have no float time between the earliest and latest event times and this path will therefore be the critical path for the project. – The forward pass begins with the first activity box and progresses forwards from left to right until the last box is reached.

The Draft Master Schedule Critical Path Method (CPM)

The Draft Master Schedule Critical Path Method (CPM) Activities and durations for the bridge project Activity A B C D E F G H I J K L M N O Description Mark out side Dig foundation A Concrete foundation A Cure foundation A Dig foundation B Concrete foundation B Cure foundation B Dig foundation C Concrete foundation C Cure foundation C Erect tower A Erect tower B Erect tower C Erect west span Erect east span Duration (days) 5 3 2 8 6 4 15 4 3 10 1 3 2 5 4

The Draft Master Schedule Critical Path Method (CPM)

The Draft Master Schedule Critical Path Method (CPM) • The first stage is to calculate the earliest event time (EET). It is governed by the finishing time of any dependent preceding activities. • It is possible to split the EET into earliest start time (EST) and earliest finish time (EFT). • The EST for the first activity is zero, or the date the project will start. • The EFT for each activity is calculated by adding the duration to the EST. • The EST for the next activity is the same as the EFT of its immediate predecessor. • Where the activity has more than one immediate predecessor, the EST is the highest of the EFT’s of the immediate predecessors. • The EFT of the last activity is the expected duration of the project.

The Draft Master Schedule Critical Path Method (CPM)

The Draft Master Schedule Critical Path Method (CPM) • 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. • The process proceeds from the last activity box and works backward, from right to left, through the network diagram. • The LFT for the last activity is the same as its EFT. • The LST for each activity is calculated by subtracting the duration from its LFT. • The LFT of each remaining activity is the same as the LST of its immediate successor. • Where an activity has more than one immediate successor the LFT is the lowest of the LST’s of the immediate successors.

The Draft Master Schedule Critical Path Method (CPM) • The backward pass results are shown in the next slide. • The next stage is to calculate float throughout and to identify the critical path. The float is the spare time available within activities throughout the project. It is equal to differences between the LFT and the EFT or the LST and the EST. • The critical path is the line through the network with zero float and is usually highlighted. • Knowing the critical path is important for the project team. The critical path gives the project team the information needed to prioritize activities and to allocate resources in order to ensure that the critical activities remain on schedule. • The critical path may change through the life of the project. As float is used up in non-critical activities, they may become critical. Therefore, near critical activities (with little float) should be monitored carefully.

The Draft Master Schedule Critical Path Method (CPM)

The Draft Master Schedule Program Evaluation and Review Technique (PERT) • • • PERT is a probabilistic approach to project planning which was originally developed in the early 1960 s by departments within US Navy, specifically for use on the new ballistic missiles. PERT is event-oriented as it works on calculating the probability of events completed within a given time. The basic steps involved in a PERT analysis are: 1. 2. 3. assign three durations to each activity (optimistic, most likely and pessimistic); calculate activity mean duration and standard deviation; calculate forward and backward pass values; ’

The Draft Master Schedule Program Evaluation and Review Technique (PERT) 4. identify those activities with no spare time contained within the duration (critical path); 5. calculate project mean duration and standard deviation; 6. identify target completion date and calculate variance about target; 7. Re-plan as necessary; 8. rationalize resources; 9. form a draft master schedule (DMS); 10. refine the draft to form a project master schedule (PMS).

The Draft Master Schedule Program Evaluation and Review Technique (PERT) • 1. Assign three durations to each activity. - In PERT calculations, the expected time for an activity is taken as an average of the optimistic, most likely and pessimistic times. This average can also be expressed in terms of an activity standard deviation. - The expected times are used as durations on a standard networking chart and the critical path is then calculated as in standard CPM techniques. - The sum of the individual durations for the critical path can then be used to calculate a project expected time and standard deviation.

The Draft Master Schedule Program Evaluation and Review Technique (PERT) • 2. Calculate activity mean duration and standard deviation. – PERT durations are based on a beta distribution average. For such a distribution the expected mean time for each activity (a + 4 m + b) T= 6 where a = optimistic time, m = most likely time, and b = pessimistic time. – It is to be noted that the beta average give greatest weighting to the most likely outcome. – Standard deviation for each activity (b – a) S= 6

The Draft Master Schedule Program Evaluation and Review Technique (PERT) • 3. Calculate forward and backward pass values. This is done in exactly the same way as under the CPM approach using individual activity mean durations. • 4. Identify those activities with no spare time contained within the duration (critical path). • 5. Calculate project mean duration and standard deviation. Σ Project mean duration = (all individual critical path activity mean durations) Project standard deviation = Σ(all individual critical path activity standard deviations) 2

The Draft Master Schedule Program Evaluation and Review Technique (PERT) • 6. Identify target completion date and calculate variance about target. – Either the target duration is given by the client, or the project manager determined it himself, the project manager have to evaluate the probability of this target actually being achieved. – From statistical tables it can be ascertained that the mean duration will be achieved on 50% of occasions. Remember that the beta distribution is not symmetrical. – To calculate the probability of achieving the target completion date the difference between the project mean duration is converted from time (days, weeks, etc. ) to standard deviations by standardizing it. This is done by dividing the difference by the project standard deviation. – From statistical tables it can be found the probability of the target date being achieved.

The Draft Master Schedule Program Evaluation and Review Technique (PERT) • 7. Re-plan as necessary. – PERT replanning is carried out in more or less the same way as in CPM analysis. – Replanning in PERT involves recalculating the average and standard deviation for each activity on the critical path each time the analysis takes place. – Changes in critical path activity mean duration and standard deviation results in changes in the project mean duration and standard deviation. • 8. Rationalize resources. • 9. Form a draft master schedule. • 10. Refine the draft to form a project master schedule. The steps 8, 9 and 10 are carried out in the same way as in CPM analysis.

5. 3 Project re-planning • As soon as the DMS and PMS have been established, things immediately begin to change. • Change is a significant part of any project, and the planning and control system has to be flexible enough to allow for and incorporate change accurately. • Project management is about optimizing time, cost and quality performance, which are intrinsically linked. Changes in requirements of these variables frequently occur, and the project manager has to be able to re-plan the project accordingly. • In practice, the most common requirement for project replanning calculations concerns time and cost. Clients often ask for projects to be speeded up and need to know how much of an increase in speed is possible and what it will cost.

Project re-planning Crash analysis • In crash analysis, the project manager offers re-planning advice based on the relationships between time and cost. This of course assumes that performance or quality criteria are fixed, as is the case in most projects. • Generally, a project will have clearly defined time and cost performance at the start. This will usually be the time and cost limits that were established as part of the statement of works and that have been translated into contractual terms and conditions. • The project could move to a different position in terms of time and cost characteristics. • If we assume that quality is fixed, then cost can be considered as a function of time.

Project re-planning Crash analysis Typical time-cost curve

Project re-planning Crash analysis • Generally, a time-cost curve will typically have a starting point at the agreed tender or project price. This usually represents the minimum or near-minimum cost value and the near-optimum time value. • In order to save time on the project, there will almost certainly be a requirement to increase resources. This will allow the project to finish more quickly but will result in a cost increase. • If a project manager is looking for ways to achieve this, the most obvious way is to find out which activity can be speeded up at least cost, and then crash that one first, followed by the next cheapest, and so on. This will result in the typical negative time-cost curve.

Project re-planning Crash analysis • This curve will rich a point where all critical-path activities have been speeded up as far as possible. • Beyond this point, no further time can be saved on the project. Any further crashing will result in cost increase, and no further time will be saved. • There is no point in crashing any non-critical activities, as this will simply increase costs while giving no time saving. • As critical path items are crashed, the overall length of the critical path will reduce. In most cases, this means that at some point the original critical path will no longer be critical. It is therefore important that the critical path is checked after each crash to ensure that it is still critical.

Project re-planning Crash analysis • If a parallel path becomes critical before the crash limit has been reached, then the process has to be repeated so that a new critical path can be identified. • In some cases, two critical paths may appear. It now becomes necessary to crash both critical paths at the same time. This involves identifying those activities on each critical path that have the lowest cost of crashing per unit time and then crashing them simultaneously. • Once any critical path becomes fully crashed, that is the end of the process. • The classical time-cost curve is one example of a tradeoff analysis which is widely used in project management.

5. 4 Trade-off analysis • Crash analysis is one type of trade-off analysis, but crash calculations consider the relationship between time and cost variables only. • Other forms of trade-off analysis are applicable to performance and time, and performance and cost. Each scenario seeks to establish the relationship between two of this variables while assuming that the third variable is fixed. • Trade-offs are very useful in that they allow the project manager to show a client different scenarios and outcome possibilities as an aid to decision making.

Trade-off analysis Methodology for trade-off analysis • There is a six stage methodology for trade-off analysis: 1. 2. 3. 4. 5. 6. Identify the reason for the problem. Reevaluate the project objectives. Allow for any other relevant factors. Assemble a shortlist of solutions scenarios. Select and test the best (or approved) alternative. Implement the best alternative.

Trade-off analysis Methodology for trade-off analysis 1. Identify the reason for the problem. Trade-offs can occur both before and during the execution of the project. Typical reasons for pre-execution trade-offs are: – – – changes in client requirements (particularly changes in the required scope of work and cost limits); discovered design incompatibilities; changes imposed by subcontractors and suppliers; misunderstanding resulting from pure communications; unforeseen problems such as sudden nonavailability of important materials; Changes in organizational strategic objectives (generally resulting from external imposed change)

Trade-off analysis Methodology for trade-off analysis • Typical reasons for execution trade-offs: – changes in client requirements (particularly additional required work); – discovered human error (such as inaccurate time estimating); – discovered execution problems (such as unforeseen work complications); – emerging risk (such as inaccurately assessed risk); – project-specific events (such as mechanical failure or unforeseen conditions). • It is imperative that the reason for the problem is identified and some kind of control system put in place to avoid or control the occurrence of the same problem in future.

Trade-off analysis Methodology for trade-off analysis 2. Reevaluate the project objectives. Imposed change may result from changes in the project status and environment. – Typical reasons for a relative change in project status resulting from a change in organizational strategy include: – – – – changes in competitor behavior; changes in customer demand; changes in the national and global economy; changes in strategic leadership and emphasis; changes in available technology; the introduction of new codes of practice; the introduction of new legislation. Any of these changes could result in the formulation of new strategic objectives, which in turn result in the original project objectives becoming misaligned.

Trade-off analysis Methodology for trade-off analysis 3. Allow for any other relevant factors. Typical examples include: – – – – a deterioration in industrials relations within the company; weather conditions (where relevant); exchange rates (where relevant); mechanical failure and breakdown; discovered errors or omissions in the contract documentation; resource availability problems; consultant problems. 4. Assemble a shortlist of solution scenarios. 5. Select and test the best alternative. 6. Implement the best (or approved) alternative.

Trade-off analysis Trade-off classification Within overall time, cost and quality constraints, some projects may operate with one variable fixed, with two fixed, or even with all three fixed.

5. 5 Resource scheduling • Project planning depends on a wide range of variables, but the most important one when scheduling activities is resource availability. • After defining and sequencing the tasks to be done, resources have to be allocated to each activity to ensure its successful completion. There are seven main types of resources: – people; - equipment; - materials; - funds; – information; - technology; - space (where appropriate). • There are two major considerations to be made in allocating these resources: – resource productivity; – resource availability.

Resource scheduling • 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 that are required for each activity, and then to calculate resource requirements as a function of schedule completion requirements. • Resource fluctuations are inevitable and will always occur to some extent on a project. • Generally, the greater the difference between the maximum and minimum demand the greater the degree of inefficiency within the resource profile. • The only case in which large fluctuations do not indicate an inefficient arrangement is where resources can be moved quickly between projects.

Resource scheduling • If resources cannot be moved around between projects easily, large variations in resource demand leads to periodic idle time. • Idle time in turn can lead to individual loss in earnings and consequent de-motivation. • If resources can be moved easily between projects there are still a number of disadvantages associated with wide variations in demand. • It is important to make efficient use of resources where possible. The resource utilization percentage is the total number of person days available to the project divided by the total number of person days actually worked. If it falls below a certain level across the life cycle of the project (for example, 70%), then some degree of resource levelling (or smoothing) must take place.

Resource scheduling Resource levelling (or smoothing) • It is a process of levelling out the peaks and troughs in resource demand. • Most project software has a facility to perform a resource levelling function. • There a number of constraint scenarios within which resource levelling can be considered. Some of them: – The project completion date is fixed. Resource levelling can only be carried out to a limited extent. The process cannot affect the critical path what means that resource peaks in critical activities cannot be reduced. – The project completion date is variable. Levelling can take place on all activities but only up to the maximum duration allowed for the project.

Resource scheduling Resource levelling (or smoothing) – Resources are limited. In practice, resources are always limited to some extent. Levelling may distribute demands in key resources over several parallel activities, which may lead to a resourse demand that is in axcess with the overall limit allowed. – Resources are unrestricted. There are no limitations on the extent to which resources can be redistributed. This scenario would only exist in the case of small projects in large organizations. • In most practical applications, resource levelling works by consuming the float that is available on each non-critical activity.

Resource scheduling Resource levelling (or smoothing) • The levelling process produces a better resource utilization percentage. The process also provides a number of associated advantages: – Reduced peak in resource demand means that are fewer people on the project at any one time. This has implications for the overall coordination and control demands on the project manager and may also have a cost implication. – Individual people work for a longer period on the project. – Reduced float times on individual activities can lead to greater continuity between activities. This can be significant where there are direct operational linkages between activities. – Resource levelling may reduce the overall time that a subcontractor is required to attend the project and in turn produce cost reductions.

5. 6 Project planning software • Information technology plays an ever-increasing role in all management fields and in none more so than project management. • Today, it would be almost inconceivable for all but the smallest of projects to be managed without a computerbased system, and that computer system will embrace every aspect of the project. • Project management as a management paradigm has expanded rapidly over the last five years as more and more companies understand the benefit to be gained from managing their entire business portfolio as a series op projects. • In contemporary project management, virtually all project planning and control is carried out using appropriate software.

Project planning software • The most obvious advantages of project management software include the following: – Speed. One good package can produce the same planning information as a whole team of planners and in much quicker time. – Cost. Modern software is initially expensive. However once the software is in use, the potential cost savings can be very significant. – Capacity. Good packages offer enormous capacity and even very large projects with thousands of activities and resources can be accommodated. – Reliability. Modern software is extremely accurate and reliable. The programs are very carefully checked and tested. – Most modern packages offer combined analysis functions (time, cost, resources simultaneously).

Project planning software Disadvantages of computer-based project planning and control • Reliance. The use of advanced software generates an automatic reliance and a consequent risk. Smaller companies are often guilty of not taking precautions to protect their project data. • Over emphasis on system details. A project manager, as an expensive professional may be spending time on what is really an ancillary support activity. • Information dump. There is often a tendency for people to produce reports and print-outs that contain to much information, simply because it is easy to do so. • Potential misdirection. Modern packages can produce very professional looking reports. This can be a danger as people have a natural tendency to accept well-presented material as being accurate, but the system is only as accurate as the information that is input to it.

Project planning software General factors for consideration • A company that is thinking of purchasing a project planning system, or replacing an existing system, should consider a number of issues: – Lead-in time. Modern packages are very complex and it can take up to six month for a new system to be installed. – Transition. Phasing out an old system and replacing it with a new system can also take a lot of time and efforts. – Training. Staff training can be a time consuming and expensive process. – Updates. Keeping up to date with the latest developments consumes time and money. – Networking. The multi-user approach means that the project manger have to have an awareness of networks and the corresponding security and access implications that are involved. – Wider compatibility. The logical extension of the system is to link the central network to external consultants and even to external contractors. There are obvious security considerations, but there also significant potential advantages.

Project planning software • System critical success factors: – The system should be useable (user-friendly). – The system should use familiar displays. – The system should be CMS (configuration management system) compatible. – The system should be extendable. • Every project management information system on the market today will be capable of at least one, and probably most of the following: – – – Project planning. Resource management. Tracking and monitoring. Report generation. Analysis and decision aiding.

Project planning software Common commercial project planning and control software • Systems suitable for large or multi-project users: – – – – Power Project Professional; Primavera Project Planner; Artemis Views 4; Open Plan; Cobra; Enterprise PM; Micro Planner X-Pert. These are likely to cost from $1500 upwards, and require a significant investment in time and effort to master all the features.

Project planning software Common commercial project planning and control software • Mid-range products up to about 2000 tasks include: – Microsoft Project; – Micro-Planner Manager; – Primavera Suretrak. These software packages offer a tremendous range of planning, scheduling and tracking tools and they produce a vast array of reports. They cost from around $300 upwards. There also some simple low-cost packages available for under $150, including: – – – Milestone simplicity; Project Vision; Quick Gantt.

Review questions (Module 5) The concept of project time planning and control • True or false? • 5. 1 Time planning and control can be considered in isolation from other project success variables. • 5. 2 All project time planning and control systems are based on setting targets and then monitoring actual performance against planned performance. • 5. 3 Project time planning systems are obsolete as soon as they are prepared. • 5. 4 A project time plan is only one form of plan contained within the overall strategic project plan (SPP). • 5. 5 A project time plan has only limited value if it is not used in conjunction with a cost plan and quality plan. • 5. 6 The project time planning and control process continues throughout the life cycle of the project. • 5. 7 Post-contract time planning is less effective than precontract time planning.

Review questions (Module 5) The concept of project time planning and control • 5. 8 In the case of most projects, there will be a requirement for some kind of pre-contract and postcontract re-planning. • 5. 35 Most clients set project objectives that are based on which of the following? A Success criteria. C Success and failure criteria. B Failure criteria. D Other. • 5. 36 Most clients would define project parameters in terms of A Time. B Cost. C Performance. D Any two. E All three. • 5. 37 A good Strategic Project Plan (SPP) containts separate plans for A time. B cost. C performance. D all three. E all three plus others.

Review questions (Module 5) The concept of project time planning and control • 5. 38 Project time planning is carried out A pre-contract. B post-contract. C both pre-contract and post-contract. D both, plus other at other life cycle stages. • 5. 39 Generally, as the life cycle proceeds, the complexities involved in project planning and replanning A remain unchanged. B increase. C decrease. • 5. 40 Project time planners often use their own basic data for assembling draft schedules. These basic data are most often based on which of the following? A Past experience. B Published standards. C Extrapolation and interpolation. D Computerized systems.

Review questions (Module 5) The concept of project time planning and control • 5. 41 In general terms, the more unique the project A B C D the more complex the planning process. the greater the consequences of change. the easier the process of change. the lower the cost of planning implementation. • 5. 42 Project planning works better in some organizations than in others. Generally, rigid and scientific project time planning works best in which of the following? A Pure project. B Pure functional. C Matrix. D More than one of the above.

Review questions (Module 5) The process of project time planning • True or false? • 5. 9 The majority of project time planning data is obtained from historical records and past experience. • 5. 10 All members of an organization are happy to operate within a planned environment. • 5. 11 All processes can be subjected to some form of time planning and control. • 5. 12 Generally, the larger and more complex the project, the greater the need for effective time planning and control. • 5. 13 Project time planning reduces uncertainty. It is therefore a form of project risk management.

Review questions (Module 5) The process of project time planning • 5. 14 A statement of works (SOW) accurately defines the scope of the project. • 5. 15 A work breakdown structure (WBS) breaks the project down into components that can be subjected to different planning and control systems. • 5. 16 All WBS operational systems operate at the same levels of control at all times. • 5. 17 All WBSs must have six levels. • 5. 18 The project WBS defines the basic building blocks for the time, cost and quality planning and control systems. • 5. 19 A precedence diagram is essentially a WBS that has been developed in terms of showing work execution sequences.

Review questions (Module 5) The process of project time planning • 5. 20 There is one primary form of scheduling, the critical path method. • 5. 21 CPM is a deterministic approach, based on known activity durations. • 5. 22 PERT is a probabilistic approach based on unknown durations. • 5. 23 Only CPM uses the analysis of the critical path. • 5. 24 A project can only ever have one critical path. • 5. 25 Project re-planning is only necessary because of changes in the pre-contract phase. • 5. 26 Project replanning uses trade-off analysis as an eventual tool.

Review questions (Module 5) The process of project time planning • 5. 43 Which of the following is a statement of work (SOW)? A B C D A description of all the works required A form of contract. An invitation to bid. A form of method statement. • 5. 44 Which of the following is a work breakdown structure (WBS)? A B C D A form of project schedule. A form of contract. A set of individual works descriptions for subcontractors. A set of project work packages.

Review questions (Module 5) The process of project time planning • 5. 45 Most practical WBS would be developed to a maximum definition of A four levels. B five levels. C six levels. D more than six levels. • 5. 46 Generally, the project WBS acts as the basis of the project A time plan or schedule. B cost plan. C quality plan. D all three. • 5. 47 Project logic evaluation (PLE) is the process of A calculating the most efficient use of resources required for the project. B deriving the most logical sequence for executing WBS element activities for the project. C levelling project resources. D calculating the critical path.

Review questions (Module 5) The process of project time planning • 5. 48 Generally, project logic evaluation can be A resource-driven. B logic-driven. C both. D other. • 5. 49 Scheduling is the process of A B C D assigning the durations to activities. calculating the critical path. producing a draft master schedule. other. • 5. 50 The critical path method (CPM) is a deterministic approach. This means that it is applicable where activity durations can be estimated A accurately. B approximately. C not at all. • 5. 51 CPM is most applicable for which of following? A A research project. B Transport system modelling. C A construction project.

Review questions (Module 5) The process of project time planning • 5. 52 The program evaluation and review technique (PERT) is applicable where activity durations can be estimated A accurately. B approximately. C not at all. • 5. 53 PERT would be appropriate for which of the following? A C A research project. B A construction project. A repetitive manufacturing process. • 5. 54 CPM uses one duration estimate for each activity. How many does PERT use? A One estimate. B Two estimates. C Three estimates. D More than three estimates.

Review questions (Module 5) The process of project time planning • 5. 55 PERT activity average, project average and standard deviation are calculated using which of the following? A A normal distribution. C A beta distribution. B An alpha distribution. D Other. • 5. 56 PERT project target average outcomes are compared using a • 5. 57 In both CPM and PERT, the critical path is the A longest path. B shortest path. C path that cannot be crashed. D cheapest path. • 5. 58 Any project can have a maximum of A zero critical paths. C two critical paths. B one critical path. D other.

Review questions (Module 5) The process of project time planning • 5. 59 Replanning may be required during which of the following A Pre-contract stages. C The entire project life cycle. B Post-contract stages. D Other. • 5. 60 Crash analysis is a form of trade-off analysis. Crash analysis considers the trade-off between A performance and time. C time and cost. B cost and performance. D other.

Review questions (Module 5) Trade-0 ff Analysis True or false? 5. 27 Trade-off analysis is a way of providing alternative scenarios when time, cost or quality have to be changed in relation to each other. 5. 28 Crash analysis is a form of trade-off analysis and involves a cost-time trade-off. 5. 30 The requirement for a trade-off is always generated within the project. 5. 61 Trade-off analysis uses the relationships between time, cost and quality for a project. In doing this it assumes that A C E one variable must be fixed. B two variables must be fixed. three variables must be fixed. D no variables must be fixed. any combinations of the above.

Review questions (Module 5) Resource scheduling • 5. 31 A Gantt chart shows activities against dates. • 5. 32 Resource levelling is a way of minimizing resource demand. • 5. 33 Resource levelling is appropriate in any type of a project. • 5. 70 A Gantt chart is a form of A cost plan. B cost report. C time schedule. D quality plan. E none of the above. • 5. 71 The main objective of resource levelling is to A crash the schedule. B smooth out peaks and troughs in resource utilization. C identify activities that are under-resourced. D improve overall quality performance. E none of the above.

Review questions (Module 5) Project planning and control software • 5. 34 Most contemporary project time planning and control is carried out on a computer using purposewritten software. • 5. 72 In project management, specialist software is most frequently used for A time planning and control. B cost planning and control. C quality planning and control. D all of the above. • 5. 73 Which of the following proprietary project planning packages is the most powerful A Microsoft Project. B Power Project Professional. C Super Project. D Quick Gantt.