Planning, Scheduling, and Control of Large Projects - Essay Example

1 Project Scheduling Introduction The uses of network analysis are as extensive as the itself. Planning, scheduling and control of large projects has become less difficult because of the tools of networking. Yet at the same time network analysis should not be seen as a tool for managing complexity in isolation. Although program evaluation and review technique PERT) and critical path method (CPM) are the most important tools to have been developed since the Gantt in 1917, other related techniques like work breakdown structures WBS, cost optimization and control are as important to the economic and timely completion of projects. (Dilworth 1992, p.567) Earliest and Latest Dates of Activities Using the precedence diagram and activity schedule given, the following bar chart was made showing earliest and latest dates for activities A through K. To work out the early start and early finish of our network one has to start at the beginning activity, that is the activity/ activities with no predecessor. The early start of a job in a network is the earliest that a job can begin. In the case of a job with predecessors, the early start of a job is the largest of the early finish times of its predecessors. The early finish of a job is its early finish plus its own duration. This procedure of starting at the beginning and working out the early start and early finish of the activities in a network is often referred to as "forward pass". The late start and late finish of the activities on this network are determined by using a backward pass approach. The late start of an activity is the latest time it can begin 2 without extending the total time of the project. Late finish of an activity is the late start of the activity that succeeds. If an activity has more than one successor, then the smaller of the late starts is to be taken. In the case of activities that do not have a successor, the late finish is taken as the total time of the project. The late start of such activities is their late finish less their duration. Working out the late start of activities will help answer the questions: can the start of some activities be delayed, and if so by how much It must be mentioned at this juncture that this is a luxury that does not apply to activities on the critical path. By definition a critical path is "the longest path or sequence of connected activities, through the network" (Wiest & Levy 1977, p.26). Table 1 below gives the early start (ES), early finish (EF), late start (LS) and late finish (LF) for the activities under normal duration. Activity ES EF LS LF Slack A 0 6 5 11 5 B 0 10 4 14 4 C 0 14 0 14 0 D 6 10 11 15 5 E 14 16 14 16 0 F 16 17 16 17 0 G 14 19 15 20 1 H 17 25 17 25 0 J 19 23 21 25 2 K 19 24 20 25 1 Table 1 Bar chart showing earliest and latest dates for each activity, using normal cost durations 3 Critical Path under Normal Cost Duration An analysis of the network in fig 1 shows that the An analysis of the data given under normal cost duration shows that the path CEFH is the longest sequence of connected activities and it is therefore the critical path. The duration of the critical path is 25 weeks. In other words this is the total duration of the project. Although by definition a critical path in a network is of the longest duration, it does not mean that there cannot be more than one critical path. Besides by lengthening or shortening the duration of one or more activities, the critical path in a network could change. (Wagner 1972, p. 186). The total normal cost of all the activities is 96000 pounds. To this add the weekly setup cost @ 4500 pounds per week and the total cost of the project is 208500 pounds. Activities rescheduled after 16 weeks In a review of project status 16 weeks from its start it was observed that activities A, B, C, and E were all completed on time. However activity F has been delayed by a 4 week and the duration of activity D is now 12 weeks. An extension of a week has been granted. The assumption here is that this extension is without L/D. An analysis of this new information shows that the critical path is now 28 weeks, which is the new project duration. What this delay means is that by pushing project completion by an additional 3 weeks will not only entail an additional 13500 pounds by way of the weekly preliminary cost at 4500 pounds per week, liquidated damages at 10000 pounds per week will get added to the project cost. As an extension of a week has been granted liquidated damages will be limited to 20000 pounds. This will translate to 33500 pounds additional project cost. Revised Schedule to Optimize Time and Cost With Comments on the Solution While considering the several aspects of CPM, one topic is the "time-cost trade-off". This simply means, reducing the overall cost of the project or reduce the duration of the project with the minimum increase in cost. This is sometimes referred to as "crashing the project". (Dilworth 1992, p. 578) One way of reducing the duration of a project is by employing more manpower or using greater machine power. Whatever the increased resource, it means that there will be a corresponding increase in cost. Under normal duration the cost incurred to complete a project will be its normal cost. But the additional cost that will be incurred by reducing its duration is also referred to as crash cost. Applying crash costs to a project is the reason for the term "crashing a project". 5 In crashing a project the intention is to find out: 1) The minimum duration of a project with minimum cost and 2) The minimum project duration and the cost associated with it. Rescheduling after 16 weeks: In the first part it was seen that, normal duration for the project is 25 weeks. Now one-week extension is granted. Further there are constraints regarding activity F and D. First let us work out the schedule given that D will take 12 weeks and that starting F is delayed by one week. Please refer to the table2. The revised normal schedule shows that project will take 28 weeks to complete. Activity cost is the total of costs of all the activities. A preliminary cost is calculated at 4,500 per week of the project. Project takes 2 weeks more than allowed (normal 25 weeks + 1 wk extension). Per week 10,000 is payable. Total cost of the project is 2,42,000. If we crash an activity (we try to do it fastest way possible. We may have to spend more money to get the job done faster) we save time. If the activity is in the critical path, then it is worth speeding up the activity. Look at the crashed activity trial 1 in the table2. We have crashed activities G, H, J and K. We get them done at the minimum possible time at greater cost. This reduces project completion time, preliminary expenses and liquidation damages. Cost incurred for the crashed activities increases. Total cost reduces to 2,23,000. 6 Can project cost be reduced further When we crash an activity we save time but increase cost. Saving time beyond a point may not lower cost. Increase in cost due to crashing an activity may be substantially more than the benefits realized. Hence an iterative approach in crashing may yield further cost reduction. Reschedule at end of week 16 Crashed Activity-trial 1 Crashed Activity-trial 2 Earliest Dt Latest Dt Earliest Dt Latest Dt A 0 6 17 0 6 17 0 6 17 B 0 10 4 0 10 4 0 10 4 C 0 14 10 0 14 10 0 14 10 D 6 18 5 6 18 5 6 18 5 E 14 16 6 14 16 6 14 16 6 F 17 18 4 17 18 4 17 18 4 G 18 23 18 18 21 28 18 23 18 H 18 26 12 18 24 14 18 26 12 J 23 27 9 21 24 10 23 26 9 K 23 28 11 21 23 17 23 25 17 Activity cost* 96 115 102 Prelim cost* 126 108 117 Liquidated damages* 20 0 0 Total Cost* 242 223 219 *in '000 Table 2 Look at crashed activity trial 2 in the table2. What if we do not crash activity G and H (we do them in normal duration) In crashing all the activities we have reduced the project completion time to 24 weeks (less than allowed 26 weeks). There is no bonus for completing the project ahead of schedule. Trial 2 shows that total cost can be reduced to 2,19,000 by crashing only J and K. 7 We have optimized the total cost by using iterations in the above example. In real projects significant benefits can be realized. We need to have exact information regarding time saved in crashing and increase in cost. Without this information we cannot optimize. In real life this type of information may not be available. We have seen the benefit of precedence diagram and activity schedule in optimizing the project cost. WBS helps us to break down the activity in to smaller activity and specify relationships. This helps us to have better control of project execution and costs. Introduction to the WBS What is WBS Work Breakdown Structure (WBS) is defined as "a task-oriented detailed hierarchical breakdown, which defines the work packages and tasks at a very low level". (Project Management Framework 2004) WBS is normally structured like a tree. And this treelike structure captures all the work that is involved in a project while maintaining a sort of logical hierarchy without at the same time losing the relationship of the pieces of work to one another and to the final outcome of the project. While a tree structure is what is normally chosen to represent a WBS, a WBS is also represented as a Gantt chart. WBS is sometimes also represented in the form of tabulated lists that can be indented to show groups and relationships. (Chapman 2004) 8 And this field of planning has a characteristic set of terminology. Often while discussing the subject terms like project, task, subtask terminal nodes and subprojects are used. The project here is fundamental to the tree structure of the WBS. It is as basic as the root is to a tree. A task is used to denote a job that is part of the project. Tasks can be further broken down to smaller activities for the sake of clarity and simplicity. These activities that are part of a task are referred to as subtasks. A task that does not have subtasks is referred to as terminal nodes. Often in the case of multiple WBS there will be sub-trees. These sub-trees are referred to as subprojects. These terms are used to describe the relationships in the tree structure. History of the WBS WBS was originally developed by the American military establishment. It has been explained by the American army as a "product-oriented family tree" made up of hardware, software, data, services and other inputs that relate to the product to be developed or manufactured and the relationship of all the inputs to one another and to the end product. Developing a WBS is by no means an easy task. It involves breaking down a project into its elements while at the same time maintaining a relationship of the elements to one another and to the final outcome of the project. Normally a "task-oriented" approach is what is used. But a "task-oriented approach is more compatible to smaller projects where extensive use of project controls is not employed. 9 A task-oriented way of dealing with WBS is often preferred because of the method's relative simplicity. It is not difficult to think of a project in terms of the work involved especially when the project in question is small and conducive to be broken down in terms of tasks. The first thing to do in developing a WBS from a task-oriented approach is to think of a project in terms of a collection of tasks and then to list out those tasks sequentially. However this approach is not the only approach to WBS. And most organizations that are involved in developing WBS choose a method they are comfortable with and stick to it. What is the purpose of WBS If you look a little closer a large project is nothing but a collection of small projects. Comprehending a large project in totality is a difficult task. On the other hand comprehending a small project is relatively easy. All projects are made up of tasks and activities. Depending on the extent of attention we need to pay to some activities, the activity is broken down to a set of related tasks. If the nature of the project is such that a microscopic examination of activities is superfluous, projects are broken down to activities and not its component tasks. However for the purposes of this paper only tasks will be considered to avoid complexity. Research has shown that the average human being is more at home dealing with 7-9 items. If more number of items is involved, comprehension is not only difficult but is often partial. The fundamental purpose of a WBS is to break down large projects into bite sized tasks for easier comprehension. As a WBS is done at the planning stage of a project it 10 makes cost estimations less difficult. It also allows for comparisons between planned and actual. Breaking down any project to task level also facilitates re-engineering and cost analysis. WBS makes detailed planning and setting costs and budgets possible. WBS also helps in setting goals for the different tasks. It also makes work allocation and assigning responsibilities possible. WBS reduces the scope for error. The higher the levels of accuracy required the greater can the depth to which a project is broken down. WBS also allows one to set exact start and finish dates for the various tasks. For this purpose a WBS also serves as a tool of communication. With the assignment of responsibilities to specific departments and individuals self-supervision is possible and costly centralized monitoring is eliminated. WBS - is it Product or Process Oriented When WBS was first introduced by the American military, it was meant to apply only to the development or manufacture of products. However WBS was subsequently made flexible enough to apply to deliverables also. If the focus of a project is a process, then the tasks will be made of "nouns or verbs". But if the output of a project is a product then the tasks will be thought of in terms of the parts that go to make the final product. For instance, if the project is the manufacture of bicycles, then the tasks are thought of in terms of planning, design, and assemblies. On the other hand if the project is a process then the tasks are thought of as planning, design, purchase, fabrication and so on. (Chapman 2004) 11 How is a WBS created A WBS is a logical presentation of the tasks to be performed for the completion of a project. There are a number of ways in which these tasks can be presented. The tasks could be arranged in "life-cycle phases". Or they can be grouped on the basis of functions. Whatever the method, it must be remembered that a WBS represents the scope of the project and it is not the plan by which the project is to be executed. If the WBS to be created involves painting a building, if the subproject of "prepare materials" follows the subproject "paint the building", the arrangement of subprojects may not logically be right. But the WBS would still be a valid document. Additionally, a WBS could be "activity-oriented" or it could be "deliverable-oriented" and it could be "top-down" structured or "bottom-up" structured. The following is an example of a "activity-oriented" WBS relating to the painting of a building. Procure Materials Procure paint Procure brushes Procure sandpaper Procure ladder Get Building Ready for Painting Sandpaper previous paint coats 12 Protect floor from spilling paint Mask all electrical fittings Cover furniture Paint the Building Post-painting Cleaning Clear floors Unmask electrical fittings Uncover furniture If the same painting project is to be presented as a deliverable-oriented WBS it would look something the following: Preparation of Consumables Paint preparation Brush preparation Ladder preparation Sandpaper preparation Preparation of Building Preparation of walls Protection of floor Protection of electrical fittings Protection of furniture Building Painting 13 Building Cleaning Floor protective-cover disposal Furniture cover removal (Wikipedia/Work Breakdown Structure) While creating a WBS care must be taken to ensure that the structure shows hierarchy and that the relationship between the elements and the relationship of the elements to the outcome are maintained. At this juncture it may be mentioned that WBS are better suited for projects with tangible output rather than for process-oriented projects. What levels of details should be given An important consideration while creating a WBS is the level of detail that is sought to be achieved while breaking down the project to its elements. If the tasks into which a project is broken down are too broad, the WBS will not serve any useful purpose. Such a WBS will make monitoring critical elements impossible, as these elements may be buried in some broad-brush task. On the other hand extensive dissecting could make tracking cumbersome. There will be too many elements to keep track of, and it may not be possible to do justice to the job of monitoring. This will invariably be the outcome if the planned project is some time away. A sensible via media could be found in the "concept of progressive elaboration". This means that an element in a project can be elaborated if required before work actually 14 begins. "Rolling wave planning" is one form of progressive elaboration. According to this concept there is a time frame set for all elaborations. One pragmatic solution is to stop dividing tasks into subtasks when it is not possible to define preset outcomes for the task in question. When a WBS reaches that level of detail when it is not possible to plan outcomes, it is an indication that optimum granularity has been reached. (Wikipedia/Work Breakdown Structure) WBS Design Principles Probably the most important principle governing WBS design is the "100% Rule". The Practice Standard for Work Breakdown Structures (Second Edition), published by the Project Management Institute (PMI) defines the 100% Rule as follows: The 100% Rule...states that the WBS includes 100% of the work defined by the project scope and captures ALL deliverables - internal, external, interim - in terms of the work to be completed, including project management. (Wikipedia/Level of Detail) The 100% rule simply means that the total of the work at the "child level" must be the same as 100% of the work represented by the parent. This further means that the details in a WBS must be limited to what is intrinsically a part of the project and not go beyond that. Another principle to bear in mind is to focus on "planned outcomes" while developing the WBS and not on "planned actions". The danger on focusing on activities is that the developer of the WBS could end up having more actions that necessary or may 15 fail to include some of the tasks. If the WBS relates to a tangible product, it is better to use a product breakdown structure. Alternatively if the project outcome is a deliverable, then it is better to use a deliverable oriented structure. One additional guideline to bear in mind while a developing a WBS is to make sure that there is no overlapping of the definition elements within it. The danger here is that if there is an overlap it could mean duplication of work and its attendant problems such as incorrect project costing and ambiguity in responsibilities. WBS - Common Glitches and Misunderstandings WBS is sometimes thought of as a detailed work list, a project plant and even as a schedule for execution. It is not. A WBS on the other hand is just a definition of the scope of a project. This must be borne in mind as otherwise an improperly defined WBS could lead to irrecoverable problems. Sometimes a WBS is even thought of as an organizational chart. A WBS is used to assign responsibilities for the tasks in a project. It should not be allowed to supersede the organization chart. While it is preferable to breakdown a project to bite-size pieces, one should not be so obsessed by this guideline that it should be observed even at the cost of clarity. WBS are sometimes method oriented. This can lead to problems as methods change quite frequently. A WBS should be outcome oriented. Planned outcomes seldom change. 16 WBS Coding Systems - Additional Control Facilitated By Its Use WBS coding can be in the form of letters and numbers. In a system where letters and numbers are used, the code assigned to a specific task will change when a task is added or deleted. However if a mask is defined and used to code WBS elements, their identification will not change unless the task itself is moved to another subproject or if the hierarchy of the task itself. (Project 2002:Basic 2002) When WBS coding is sequential it shows the hierarchy level of a specific task. Functional areas can be built into the coding system such that the department responsible for that task is apparent. Since WBS codes are also used as a communication tool, its basic details should be recognizable immediately. (Wikipedia/Tools for Developing a WBS) Hierarchical Planning and Programming - Their Use in Large Construction Projects The success of a project will depend critically upon the effort, care and skill you apply in its initial planning. (Blair n.d.) Planning is critical to any project from point of view of both time and cost. Changes in an ongoing project can lead to cost over-runs and delays. Errors in projects can creep in because of lack of clarity between the entities internal to a project. It can also happen because of this situation between internal and internal entities. Problems can also occur because of miscalculation of times, resources needed and from other external influences. 17 Basic to any planning is the definition of the scope of work. This definition is then broken down into groups of tasks and outcomes and these tasks should be linked within a structure. WBS often serves this purpose. In the case of large projects the structure of a plan is arranged in a hierarchy. In hierarchy planning a problem or task at one level is broken down to a small number of sub tasks at the next level. Hierarchical planning can be done using "hierarchical approximation" which is an early form of hierarchical planning or with the use of "hierarchical decomposition" Hierarchical approximation simply denotes the criticality of a task. Hierarchical decomposition breaks down a project into "primitive actions" and "abstract actions". Characteristic of most projects is that each one is in itself unique. Projects are a collection of inter related tasks. And the resources in terms of time and money for any project are limited. And all projects have their own management structure. Before any plan is undertaken a project management team is formed. This team is comprised of members from various relevant departments. This team is responsible for drawing up the plan, scheduling it and controlling its execution. Planning a project involves identifying internal and internal resources that will be required for the project and relating them to the time schedules of the project. It also involves identifying the tools/ means that will be required for the accomplishment of tasks. Examples of tools/means are descriptions of activities, milestone charts, cash flows 18 charts, PERT/CPM, engineering drawings and so on. Planning also involves setting times for all relevant tasks. Project scheduling requires that all resources needed are identified, the quality and quantity in which they will be needed and when they will be needed. Scheduling also requires that milestones be set for internal and external entities. This means that start and end times are fixed for all tasks. These timings are monitored throughout the life of the project. Equally important to the success of planning is it's monitoring. All inputs in terms of resources should be constantly monitored and at the first sign of non-compliance corrective action must be taken. In addition to resources, task timings must also be monitored to avoid surprises and delays. A Gantt chart is a good tool to depict tasks and their timings and will help in keeping track of schedules. A PERT chart with CPM is also an important monitoring tool. (Ford & Prestage 2003) Planning and programming are important tools of management and communication. They are used to anticipate and avoid glitches from happening. The mere fact of preparing a plan and its schedule gives the project management team the opportunity to think of the project from end to end. It also helps the team to stay focused. Especially in the case of larger projects, it helps in the allocation of funds and enables the team keep track of budgets for the different stages of the project to avoid cost overruns. Not only are cost overruns avoided, even time delays are forestalled. Planning and programming projects helps to increase the team's efficiency. And because of well defined objectives it helps to compare projected output to actual output to 19 ensure quality at every stage and at all levels. (FDOT, Project Management Handbook, 2006. pp.1) Cost Optimization in the Construction Industry Potential Uses and Barriers In the case of repetitive projects optimum crew size can be worked out using available "dynamic programming formulations". Doing this may not however lead to "overall minimum cost", it will result in the minimization of the of the overall project duration. (Moselhi & Rayes 1993) Further in the case of repetitive projects, it is possible to generate and evaluate optimal construction plans that minimize project duration and maximize crew work continuity (Hyari 2006, pp. Abstract). This is possible through developing workable schedules for repetitive projects, practical construction plans and establishing ideal tradeoffs between the duration of the project and work crew continuity. (Hyari 2006) Mathematical models can be worked even in the case of non-repetitive projects factoring in such variables as repetitive and non-repetitive tasks, multiple crew strategies, constraints, job conditions to obtain better scheduling. This is another way in which scheduling can be optimized and direct cost controlled. Mathematical models can be built to give ideal construction schedules and minimum construction costs automatically when the variables are substituted. 20 Barriers to the Use of Cost Optimization Cost optimization in the construction industry seems to rely heavily on scheduling. However scheduling has always been viewed as a timetable for the completion of jobs in a project. Unfortunately scheduling is seen in isolation of cost. Traditionally resources are allocated to tasks before the commencement of a project. And from then on resources are viewed independent of schedules. The consequence of this is a cost model that is not connected to the time model. This makes cost control hard and inaccurate. The most favoured method of construction cost estimation is the manual system. This method is subject to several human factors and can vary significantly from individual to individual. This situation exists despite the fact that it is possible to automate the construction cost estimation process. Another barrier to cost optimization is the non-availability of a clear mathematical model or rule for price calculation. The costs of construction materials, equipment and labour depend on numerous factors. This makes it all the more necessary for a system that can provide up to date information that is crucial to more accurate cost estimations. (Karim & Adeli 2001, pp. 10) Conclusion The recent years have seen excellence in architecture and immense technological advancements in construction materials. It is unfortunate that when these two aspects of construction have made giant strides, the planning and execution part of the industry has stagnated relatively. While a lot has been written on the importance of planning, 21 scheduling and execution of projects, it is common for most people to rely on Gantt charts and PERT/CPM even now. No one denies the importance of these tools. But with greater awareness of the more modern tools of planning, scheduling resource allocation, execution and monitoring is bound to save millions of pounds. The industry is still in a state disarray. 22 Reference List Blair, Gerard. M, n.d., Starting to Manage: the essential skills, Vol. 8 of the IEEE Engineers Guide to Business, USA, http://www.see.ed.ac.uk/gerard/Management/bookInfo.html Chapman, James. R, Work Breakdown Structures 2004, Retrieved December 05, 2006, from http://www.hyperthot.com/pm_wbs.htm Dilworth, B. James, 1992, Operations Management, United States, McGraw-Hill. FDOT Project Management Handbook 2006. Retrieved December 05, 2006, from http://www.dot.state.fl.us/projectmanagementoffice/PMhandbook/Schedule.pdf Ford. John & Prestage, Richard, 2003, Green Bank Project Management.Retrieved December 05, 2006, from http://72.14.235.104/searchq=cache:yCoxF007_WUJ:www.gb.nrao.edu/jford/ppts.pdf+project+planning+pdf&hl=en&gl=in&ct=clnk&cd=1 Hyari, Khalied 2006, Optimal Planning and Scheduling for Repetitive Construction Projects, Journal of Management in Engineering, Vol. 22, No. 1, January 2006, pp. 11-19. Retrieved December 05, 2006, from http://www.pubs.asce.org/WWWdisplay.cgi0600163 Karim, A (Asim) & Adeli, Hojjat 2001, Construction Scheduling, Cost Optimization, and Management, UK, Spon Press. Moselhi, Osama & El-Rayes, Khaled 1993, Scheduling of Repetitive Projects with Cost Optimization, Journal of Construction Engineering and Management, Vol. 119, pp 681-697. 23 Project 2002: Basic 2002, United States of America http://www.courseilt.com/preview/PV-PJ2K2Bas.pdf Project Management Framework 2004. Retrieved December 05, 2006, from http://oit.osu.edu/projmanage/glossary.html Wagner, Harvey. M, 1972, Principles of Operations Research, London, Prentice-Hall International. Wiest, D. Jerome & Levy, K. Ferdinand, 1977, A Management Guide to PERT/CPM, New Delhi, Prentice-Hall of India.Work Breakdown Structures 2006, In Wikipedia, The Free Encyclopedia. Retrieved December 05, 2006, from http://en.wikipedia.org/wiki/Work_breakdown_structure Work Breakdown Structures 2006, In Wikipedia, The Free Encyclopedia. Retrieved December 05, 2006, from http://en.wikipedia.org/wiki/Work_breakdown_structure#Level_of_detail#Level_of_detail Work Breakdown Structures 2006, In Wikipedia, The Free Encyclopedia. Retrieved December 05, 2006, from http://en.wikipedia.org/wiki/Work_breakdown_structure#Tools_for_developing_a_WBS#Tools_for_developing_a_WBS Read More