Lecture_15_Project_Control (1).ppt
- 2. CLOSEOUT DEVELOPMENT OPERATIONS DESIGN, PLANNING FEASIBILITY Actual Start of Project Organization Estimation Planning Finance Evaluation Monitoring & Control Changes & Claims Quality & Reviews CLOSEOUT Recall: The 5 Phases of Project Management Project Control
- 3. Monitoring & Control: A Feedback Process Correct Deviations Monitoring 1. Measurement 2. Performance Analysis) Detect deviations Control 1. Actions 2. Revised Plans, Cash Flows, Schedules, etc. Project Control
- 4. Project Control: The Big Picture … Given Project is Off-track Project Control
- 5. Project Control: The Big Picture … Given Project is Off-track Monitoring indicates that: - Project is behind time-schedule, and/or - Project has exceeded budget, and/or - Quality of materials or finished work is below standard, and/or - Productivity is lower than as planned, etc. Project Control
- 6. Project Control: The Big Picture … Given Resources for PC (the 4-M’s) Project is Off-track Project Control
- 7. Project Control: The Big Picture … Given Resources for PC (the 4-M’s) Project is Off-track Resources available to the Project Manager for Project Control: - Money - Manpower (labor) - Materials - Machinery (Equipment) Project Control
- 8. Project Control: The Big Picture … Given Mechanism and Elements of PC Resources for PC (the 4-M’s) Adjust the resources Adjust the project characteristics: size, scope, etc Project is Off-track Project Control
- 9. Project Control: The Big Picture … Given Mechanism and Elements of PC Resources for PC (the 4-M’s) Adjust the resources Adjust the project characteristics: size, scope, etc Project is Off-track More labor? Better labor? Better supervision? More materials? Better materials? More equipment? Better equipment? More money? Reduce project size? Reduce project scope? Terminate project? resource s project Project Control
- 10. Project Control: The Big Picture … Given Mechanism and Elements of PC output Resources for PC (the 4-M’s) Project is Off-track Adjust the resources Adjust the project characteristics: size, scope, etc Project brought back on- track Was the Project Control successful? How can we tell? Project Control
- 11. Project Control: The Big Picture … Given Elements and Mechanism of PC output Resources for PC (the 4-M’s) Project is Off-track Adjust the resources Adjust the project characteristics: size, scope, etc Project brought back on- track Project Control
- 12. Outline of this Lecture: 1. How can we tell when PC is needed? 2. What resources are available for PC? 3. What are the elements of PC? 4. What is the mechanism of PC? 5. Some important issues in Project Control Project Control
- 13. Part 1 How can we tell when Project Control is needed?
- 14. Specific Clues General Clues Is Project Control is needed now? How can we tell? “Primitive” Indicators Other Indicators Performance and Quality Cost Time
- 15. How can we tell when Project Control is needed? Performance - Unexpected technical problems arise - Insufficient resources are unavailable when needed - Quality or reliability problems occur - Owner/Client requires changes in technical specifications - Inter-functional complications and conflicts arise - Market changes that increase/decrease the project’s value GENERAL CLUES (Meredith and Mantel, 2006)
- 16. How can we tell when Project Control is needed? Cost - Technical difficulties that require more resources - Scope of work increases - Bid amount (accepted for the contract award) is too low - Reporting of the monitoring results are poor/late - Project budgeting for contractor cash flows not done right - Changes in market prices of the inputs GENERAL CLUES (Meredith and Mantel, 2006)
- 17. How can we tell when Project Control is needed? Time - Technical difficulties require more time to solve - Scope of work increases - Unexpected utilities needing relocation - Task sequencing not done right - Required material, labor/equipment unavailable when needed - Key preceding tasks were not completed on time. GENERAL CLUES (Meredith and Mantel, 2006)
- 18. 1. How can we tell when PC is needed? “Primitive” indicators: – More resources or less resources haven been used than planned – Activities are taking long than planned – Cost of activity (or of project to date) is higher than expected actual actual actual planned planned planned 0 500 1000 1500 2000 Amt of concrete used (tons) Total Man-hours Equipment-hours Amount input to date SPECIFIC CLUES
- 19. 1. How can we tell when PC is needed? “Primitive” indicators: – More resources or less resources haven been used than planned – Activities are taking long than planned – Cost of activity (or of project to date) is higher than expected actual actual actual planned planned planned 0 500 1000 1500 2000 Amt of concrete used (tons) Total Man-hours Equipment-hours Amount input to date SPECIFIC CLUES
- 20. 1. How can we tell when PC is needed? “Primitive” indicators: – More resources or less resources haven been used than planned – Activities are taking long than planned – Cost of activity (or of project to date) is higher than expected JAN FEB MAR APR MAY JUN Activity 1 Activity 2 Activity 3 planned actual NOW Legend planned actual SPECIFIC CLUES
- 21. 1. How can we tell when PC is needed? Program (schedule) Progress (actual) Program (schedule) Progress (actual) now time 50% 70% “Primitive” indicators: – More resources or less resources haven been used than planned – Activities are taking long than planned – Cost of activity (or of project to date) is higher than expected $ SPECIFIC CLUES
- 22. 1. How can we tell when PC is needed? Why are they “primitive”? - May be biased. - Do not consider that progress may be overestimated or underestimated due to: - execution of unscheduled work done, or - execution of more work of low value and less work of high value SPECIFIC CLUES
- 23. 1. How can we tell when PC is needed? Work Schedule (WS) Work Performed (WP) Budgeted Cost (BC) Actual Cost (AC) BCWS BCWP ACWS ACWP Used for plotting the Program S-curve Used for plotting the Progress S-curve Used for plotting the EVA S-curve SPECIFIC CLUES
- 24. 1. How can we tell when PC is needed? $max t BCWS ACWP BCWP Time SCHEDULE VARIANCE COST VARIANCE RESOURCE FLOW VARIANCE TIME VARIANCE tmax ACWPt BCWSt BCWPt t-p now SPECIFIC CLUES
- 25. 1. How can we tell when PC is needed? So we know Project Control is needed (at time t) particularly when: - RVt is –ve, - RIt < 1 - CVt is –ve - CIt <1 - SVt is –ve - SIt is < 1 - TVt is –ve - TIt is < 1
- 27. 2. Resources for Project Control Money Machinery (Equipment) Materials and Supplies Manpower (Labor and Supervision)
- 28. Money as a PC Resource Not a direct resource Rather, used to influence the amounts or quality of the other resources
- 29. Using Equipment for PC Often used to augment labor in order to speed up project Can be expensive May involve renting or purchasing
- 30. Materials and Supplies as a PC Resource Increase in quality or quantity may be necessary to enhance project control Improved inventory systems for materials
- 31. Manpower as a PC Resource Project problems (time delays, excess costs, poor performance, etc.) are partly due to the human element (action or inaction) In using Manpower as a tool for project control, PM encounters human emotions (anger, fear, frustration, etc.)
- 34. 3. Elements of Project Control Manpower-related control Machinery-related control Money-related control Material-related control 3A. Resource-related Re-allocate resources
- 35. Elements of Project Control Manpower Machinery Money Materials 3A. Resource-related Re-allocate resources Also referred to as ”Human Resource Control” - Lay-off/fire any under-performing staff - Hire staff with needed skills - Assign staff with specific skills to specific activities Issues: -PM may be seen as a “stern disciplinarian” - PM must avoid heavy handed actions, - Fix problems without blaming people
- 36. Elements of Project Control Manpower Machinery Money Materials 3A. Resource-related Re-allocate resources Also referred to as ”Physical Asset Control” - Decommission any under-performing equipment - Bring in equipment with appropriate capabilities - Re-assign specific equipment to specific activities
- 37. Elements of Project Control Manpower Machinery Money Materials 3A. Resource-related Re-allocate resources Also referred to as ”Physical Asset Control” - Decommission any under-performing equipment - Bring in equipment with appropriate capabilities - Re-assign specific equipment to specific activities Issues: - Equipment decisions may involve some economic analysis - Equipment-based control easier than manpower- based control - Some trade-off may exist between manpower and equipment utilization.
- 38. Elements of Project Control Manpower Machinery Money Materials 3A. Resource-related Re-allocate resources Also referred to as ”Financial Resource Control” - How much money should be spent? - How should it be spent? - PM assisted by: - Project accountant - Project Finance Manager
- 39. Elements of Project Control Manpower Machinery Money Materials 3A. Resource-related Re-allocate resources - Discontinue use of sub-standard material - Seek new sources of superior material
- 40. Elements of Project Control Options: - Reduce project size? - Reduce project scope? - Terminate project? 3B. Project-related
- 42. Mechanisms of Project Control Types of Mechanisms: - Cybernetic - Go/No-go - Post-control
- 43. Types of Control Mechanisms Cybernetic - “Cyber” means “Steer” or helmsman (Greek language) - May be First-, Second-, or Third-order
- 44. Cybernetic control mechanisms Process Comparator Standards Effector and Decision- maker Outputs Inputs Mechanism: - System output monitored by sensor - Sensor measurements transmitted to Comparator - Measurements compared with predetermined standards -- Deviation from standard sent to decision-maker -If deviation from standard is too large, signal sent to Effector Monitoring mechanism (e.g. sensor)
- 45. Cybernetic control mechanisms Process Comparator Standards Effector and Decision- maker Outputs Inputs Mechanism: - System output monitored by sensor - Sensor measurements transmitted to Comparator - Measurements compared with predetermined standards -- Deviation from standard sent to decision-maker -If deviation from standard is too large, signal sent to Effector Monitoring mechanism (e.g. sensor) This is a First-order cybernetic control system. (Standards are fixed) Example: Thermostat that keeps room temperature to 70F all year round.
- 46. Cybernetic control mechanisms Process Comparator Standards Effector and Decision- maker Outputs Inputs Mechanism: - Same as described for First- order Cybernetic systems, but: - Standards are not fixed, but the manner they change is fixed. Monitoring mechanism (e.g. sensor) This is a Second-order cybernetic control system (standards vary according to a fixed set of rules) Examples: Thermostat that keeps room temperature to 70F in winter and 65F in summer, Robot installations, Automated inventory systems, Automated record keeping systems Memory Pre-programmed Responses
- 47. Cybernetic control mechanisms Process Comparator Standards Effector and Decision- maker Outputs Inputs Mechanism: - Same as described for First- order Cybernetic systems, but: - Standards are not fixed but are variable. Also, the manner they change is variable because there is a consciousness (human element) involved. Monitoring mechanism (e.g. sensor) This is a Third-order cybernetic control system (standards vary according to a variable set of rules) Examples: Most Project management systems. Consciousness Memory, Selection
- 48. Cybernetic control in Project Management 1. PM must clearly define “outputs” in terms of relevant project characteristics 2. PM must establish standards for each characteristic 3. Monitoring mechanisms (sensors) must be established to measure the characteristics at regular intervals 4. For each characteristic, the trigger point or maximum deviation (difference between “attained level” and “standard level”) should be established. 5. If triggered, appropriate action should be taken to minimize the deviation between Attained Level and Standard Level of performance.
- 49. “Go/No-go” Mechanisms of Project Control Testing to see if some specific precondition has been achieved Yes/No (discrete) Control in most PM fall into this category (Cooper, 1994; Meredith and Mantel, 2006) Example: Was Activity X completed within 6 months? Did Activity Y cost exceed its budget of $1.5 million? Some engineering judgment is necessary in exercising these types of controls.
- 50. Post-Control Types of Project Control Also called: Post-performance control, Post-performance review Is done after the activity or project is over Like a post-mortem or report card Is it “Locking the barn door after the horse has escaped”? Or is it “We need to learn from the past to avoid future mistakes”? Generates lessons from current projects so that future projects can be controlled better.
- 51. Desired characteristics of a project control mechanism Flexible – PC should be able to react to changes in system performance Cost-effective – Value of PC should exceed cost of PC Useful – Must really satisfy the needs of project, not the whims of the PM Timely – Be able to react quickly before the problem overwhelms the project Simple –Easy to understand and operate Adjustable – Capable of being adjusted to reflect changing priorities Documented – so that training is possible
- 52. Some Interesting Issues in Project Control Flexibility Trade-offs Some things to watch out for Impediments to Project acceleration Cost-only and time-only actions to control projects
- 53. Value of Flexibility in Project Planning Flexibility is primary defense against risk Planning too tightly may highly complicate control Flexibility in construction is key during control Want adequate float and contingency to change plans if needed Be careful on value engineering that limits flexibility! Some Interesting Issues in Project Control
- 54. Trade-offs between Performance Measures during Project Control Can sometimes only correct for one performance measure at a time – Time – Cost – Quality Need to understand tradeoffs and triage – Pick where to make tradeoffs (e.g. non-critical activities) Some Interesting Issues in Project Control
- 55. Tradeoffs Time Quality $ Acceleration $ (Overtime, shift work, Rework, higher-end equipment, better crews etc.) Less $ Low progress Resource reduction Selection of poor quality workers Default of contractor/subs Quality problems result from overtime, shift work, new hires Quality level impacts speed of work, Level of rework Need for rework imposes high expenses High quality needs can lead to costly miscalculations on labor time Trying to save $ Can lead to substitution, lower quality workmanship Slow progress $ Delayed occupation, Higher interest on const. loan Loss of tenants Opportunity cost Some Interesting Issues in Project Control
- 56. Trade-offs: The Time-Quality-Money Triage In many cases, the best we can do is to pick the areas where tradeoffs do the least harm e.g. – Move resources from non-critical activities – Accelerate only critical activities – Sacrifice quality on non-critical items that can be remedied after substantial completion Some Interesting Issues in Project Control
- 57. Some things to watch out for: Overreacting/Improvisation, etc.) When trying to correct, often bump up against other limiting factors – Space constraints/Hiring time/Morale/Coordination difficulties Improvisation dangerous (working w/o planning) – Often can lead to “Snowballing” (increased problems at a rapidly accelerating rate) – Confusion, discoordination, cascading unanticipated effects, suboptimal work efficiency, lack of morale – Breaking “Job rhythm” and learning curves can really inhibit productivity! Some Interesting Issues in Project Control
- 58. Controlling the Time Schedule – Project Crashing – Adding new project resources – Changing the “production function” (Change the technology) – Change operation conditions by altering the precedence, sequence, or timing of work Fast-track, activity overlapping Overtime Shift work – Changes in the tools, methods, operating conditions – Work in more sheltered location Some Interesting Issues in Project Control
- 59. Impediments to Project Acceleration Human resources – Multiple-shift work Environmental/safety issues, High cost, Neighborhood objections – Overtime/extended workdays Fatigue, Lower morale, Rework – Increasing # of workers Training (takes time of most experienced!), Space constraints, Hiring time Technology – Using more, larger or more efficient equipment Training/learning curve, Procurement time, Space constraints – Using faster-installing materials Procurement, Submittals for owner approval – Alternate construction methods Skill set, Learning curve, Unknown side-effects Some Interesting Issues in Project Control
- 60. Impediments to Project Acceleration Human resources – Multiple-shift work Environmental/safety issues, High cost, Neighborhood objections – Overtime/extended workdays Fatigue, Lower morale, Rework – Increasing # of workers Training (takes time of most experienced!), Space constraints, Hiring time Technology – Using more, larger or more efficient equipment Training/learning curve, Procurement time, Space constraints – Using faster-installing materials Procurement, Submittals for owner approval – Alternate construction methods Skill set, Learning curve, Unknown side-effects Some Interesting Issues in Project Control