Performance Management, Forecasting and Improved Decision-Making
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Mohamed Maged Hegazy, Associate Planning Director at Red Sea Global, outlines performance management principles and strategies for enhancing contractor delivery in mega-projects, drawing from over 21 years of experience in construction law and project management. Key topics include performance measurement systems, KPI development, and mitigation strategies to address delays and resource issues. The document emphasizes the importance of consistent monitoring, effective forecasting, and collaboration among project stakeholders to achieve project success.
Performance Management, Forecasting and Improved Decision-Making
- 1. Mohamed Maged Hegazy Associate Planning Director, Red Sea Global Driving Contractor Delivery with Forecasting and Improved Decision-Making #BIG5GLOBAL /@big5global
- 2. Mohamed Maged Hegazy Associate Planning Director, Red Sea Global #BIG5GLOBAL /@big5global • Master in Construction Law – Salford University, UK • Master of Business Administration – UoPeople, US • B.Sc. Civil Engineering – Ain Shams University, Egypt • Consultant – Saudi Council of Engineers • MRICS, Chartered Project Management Surveyor – RICS • CCP, Certified Cost Professional – AACE • PMP, Project Management Professional – PMI • P3O, Portfolio, Programme and Projects Offices – AXELOS, UK • FIDIC Contracts Consultant, AIA (Brussels) Fellow • Author of 50 Planning fundamentals & Fundamentals of Construction Contracts • Experience more than 21 years in mega-projects (Buildings, Infrastructure & Roads)
- 3. Content 1. Introduction to performance management 2. Performance measurement systems 3. KPIs, Root cause analysis and forecasting 4. Proposing appropriate mitigation strategies 5. Monitoring and evaluating the effectiveness of the actions 6. Deciding the way forward for performance enhancement 7. Conclusion and closing notes
- 4. 1- Introduction to Performance Management
- 5. Master and High-Level Programmes Levels of detail, Scope priorities, Milestones, Rolling wave planning & Critical path/Calendars WBS vs Levels of Detail Rolling Wave Planning Critical/Longest Path
- 6. WBS Decomposition and Consistency Phases of construction/work, Zoning, Vertical levels, Trades and Logical dependencies Work Phase Const. Phase Building Trade Floor/ Level Area/ Zone • The best approach to decompose the WBS is to keep the dependent activities/paths as close as possible for better monitoring and control. • One you establish a decomposition approach, be consistent in all phases as much as possible.
- 8. 2- Performance Measurement Systems
- 9. PMS Basis (Consuming Time vs Cost vs Effort) Mobilization, Engineering, Procurement, Construction and Close-out duration/cost/manhours Duration Weights: - Timewise, activity takes more time deserves more proportional weight. But: - An activity can take long duration without much cost or resources required as a shorter activity may need. Cost Weights: - Resources are loaded as per payments because cash flow is key in progress. But: - An expensive activity may reflect a sudden high progress while the project is not ahead of schedule. Manhours Weights: Manhours address the required effort to execute any activity and it’s more indicative for progress While this neglects the other resources & the difference between payments and progress makes confusion.
- 10. Rules of Credit – Incremental Milestones Standard methods of measure for construction vary widely depending on the nature of the work and the number of steps. The following describes five common physical progress methods for measuring the extent of completion of the scope of a work package: 1. Units Completed 2. Incremental Milestone 3. Weighted or Equivalent Units Completed 4. Resource Expenditure (Level of Effort) 5. Judgment
- 11. Applying Weightages on the Programme with Rules of Credit Org. Maturity in PM and Quantity based activities vs Engineering and procurement progress Phase Weight Mobilization 2% Engineering Submission/Approval 60/40% 10% Procurement 3% Prequalification 10% Material Submission/Approval 20% PO 20% Delivery 50% Construction 80% Close-Out 5% Example for a Construction Project JIT: Break down between physical Mobilization and Early submissions Break down by no. between all types of submissions and approvals (resubmission issue) Does this includes the manufacturing and how will it be measured or to split for long-lead items Break down based on the productivity sheet and manhours assigned to each activity (Qty credit) Break down between physical demobilization, snag/de-snagging and documents submissions 0/100 activities based on the issuance of the purchase orders Break down between submissions and approval 60/40% (resubmission issue= e.g. 20%)
- 12. Appropriateness for Control and Forecasting Progress %s/layouts, Remaining works, LOB and Practicality of look-ahead schedules P6 calculates the planned (schedule)% and actual (performance EV)% only if the programme is cost loaded (Budget cost). Therefore, we may load the weightage in units with cost (rate $1) either equal to the project total cost or 1M … as aforementioned. Otherwise, the resource units can be used for reporting. This may contradict with the cash flow or other resource reporting. Visualizing the progress is important via progress layout/4D. Forecasting of the remaining work is also crucial for project control.
- 13. 3- KPIs, Root cause analysis and forecasting
- 14. Programme Updating and EVM Performance vs Schedule% (Baseline early/late, changed logic & revised %s), Reporting details and KPIs - Are you reporting against the early planned or late planned or something in between? And why? - If you allows for fixing the out of sequence using a change log, do you keep reporting the delays against the original baseline either? And why? - After having a revised/recovery programme, do you keep the planned% of the original baseline in your reports as well? And why? AACE MARCH/APRIL 2020
- 16. Reporting Details and KPIs
- 17. Forecasting Challenges - Practicality of look-ahead schedules Primavera filters are not always useful. It may be not achievable or less than required or not practical on site. Therefore, manual preparation of the look-ahead schedules can be helpful with reference to the planned %s, dates, critical paths as required.
- 18. Delay Quantification Approaches including LOB and Trend Analysis
- 19. Baseline (TF=0) Update TF=0 while Performance%>Scheduled% Data Date Data Date
- 20. Line Of Balance http://www.cpmtutor.com/c02/img/gif_22a.gif Data Date Delay: 1W Ahead: 4D Dealy: 9D
- 21. (Forecast) -Magnify the cost variance. -Maintain the variance till end. -More accurate. -Time (SV) affect he cost as well as (CV). Var. now VAC CPI CPI SPI Planned Value vs Earned Value = Schedule% vs Performance % (for PMS regardless Actual Cost and Cost Control) Planned Manhours vs Earned Manhours (for PMS regardless Efficiency) Planned Units vs Earned Units (for PMS regardless Changes in Quantities) Earned Value Forecasting/Units according to Budget Cost/Units
- 22. 22 (earned value) (Invoices) (planned value) Cost baseline 3- SV= -1,067$ Daily planned budget= 266.67 $ / day 1- TF= -15 Days 5- Trend analysis delay= -35 days % Complete = 26.7% = - 4 days Example of multiple approaches ETC: time schedule update 4- ES, Var= -6 Days
- 23. 4- Proposing appropriate mitigation strategies
- 24. Resources Issues - Shortage in Manpower: Extra crews and labors - Overtime (temp) or double shifts - Idle Equipment: Ensure maintenance and sufficient operators - Nonproductive Resources: Supervision and training - Lumpsum work with incentives program - Delay in engineering works: Technical team increase/support - Material takes long for installation: Check alternatives
- 25. Cash-flow Issues - Cash flow enhancement by expediting payment process - Improve the review/payment time of IPCs - Advanced payment increase - Pay material on site - Payment to subcontractors and suppliers directly
- 26. Management Issues - Methodology of application - Training and adding more skilled labors - Enhance Supervision workforce or skills - Get the site ready early to decrease time losses - Sequence and logistics solutions - Management Rearrangement - Site layout and choosing weather suitable working hours
- 27. 5- Monitoring and evaluating the effectiveness of the actions
- 28. Reporting of Performance • Performance is improving and recovering delays • Improvement is not sufficient, and more actions are required • Plan B/C/D – Apply the effective solution • Recovery is not enough: Acceleration is required
- 29. Acceleration • Recovery is not enough: Acceleration is required • Where the contract does not provide for acceleration instruction but the Contractor and the Employer agree that accelerative measures should be undertaken, the basis of payment should be agreed before the acceleration is commenced. • SCL 16.5: The Contractor should provide notice.
- 30. 6- Deciding the way forward for performance enhancement
- 31. Potential Decisions: - Micromanagement of contractor resources - Direct payment/management of subcontractors - Descope based on the capacity of the contractor or type of work - Termination after grace periods and re-award to another contractor
- 32. 7- Conclusion and closing notes
- 33. Recommendations - Plan with consideration of the completion/close out activities and the risk mitigation plans to be prepared - Check the root causes of delays or poor performance to effectively recover/mitigate them - Focus on the project success with win-win situation to work in a collaboration with all parties
- 34. Schedule levels, critical path and control basis Performance measurement systems KPIs, Root cause analysis and forecasting Proposing appropriate mitigation strategies Monitoring and evaluating the effectiveness of the actions Deciding the way forward for performance enhancement
- 35. Thank you #BIG5GLOBAL /@big5global Mohamed Maged Hegazy mm.hegazy@ppmconference.net mobile : 00966-580264968