Project Management Progress evaluation Prof. Mauro Mancini

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1 Project Management Progress evaluation Prof. Mauro Mancini tel.: POLITECNICO DI MILANO Department of Management, Economics and Industrial Engineering Mauro Mancini Progress Project Progress control OBJECTIVES Times Costs Quality WORK DESCRIPTION WBS, OBS, CBS RESOURCES ALLOCATIO N Planning ACTIVITIES SCHEDULING CPM, Gantt RESOURCES LEVELLING Series and parallel approach BUDGETING Costs, Cash Flow CORRECTIVE ACTIONS PERFORMANCE ANALYSIS AND ESTIMATES TOFINISH Times, Costs Control MONITORING AND REPORTING Variances Analysis Partial balance-sheet PROJECT REALIZATION OUTPUT Mauro Mancini 2

2 Project Progress Physical control Progress Percentage physical progress of a project (or a single phase) may be defined as the work amount completed at the reference date (time now) compared to the total work amount required to complete the project, estimated at the time now Mauro Mancini 3 Project Progress Physical control Progress There are several parameters that can be used to evaluate physical progress: physical quantity realized (Q) standard man-hour (SMh) actual man-hour (AMh) conventional percentage weight of the work executed For all these methods total work amount estimate at the time now it is necessary to know Mauro Mancini 4

3 Project Progress-Physical control Quantity Can be used only for single activities for which it is definable a unique brief physical parameter of performance It is usually used for site activities but it may be extended to design and procurement activities considering number of documents produced on the total foreseen The advantage is the objectivity of the method, but the limit is that it is applicable only to specific parts of the project. Mauro Mancini 5 Project Progress-Standard control Men Hours Also this methodology is typical of site activities The fundamental requisite is the availability of standard rendering (R) that allows to transform physical amount in standard men hours SMh = Q/R There are two advantages: progress evaluation of different phases becomes addable and this measure is not affected by work productivity (p) variation Mauro Mancini 6

4 Project Progress-Actual control Men Hours It is based on the assumption that project progress is proportional to work amount. This assumption is typically verified in plant project in engineering and construction/assembly phases, but it is not the same for other activities as supervising AMh = SMh/p There is again the advantage of aggregation but it is lost an independent evaluation of work productivity effects Mauro Mancini 7 Project Progress-Conventional control %Weight Based on assigning a percentage weight to each Work Package or activity: completion of an activity allows to gain a progress corresponding to the percentage weight associated to it This weight is proportional to work load required for that activity but also to other factors as the criticism of the activity itself This percentage progress may be gained in a unique solution or gradually Mauro Mancini 8

5 Project Progress Economic control Progress It is always possible to evaluate economic percentage progress, defined as sustained costs at time now compared with total cost foreseen at time now. It is important to highlight that, although every resources use implies a cost, economic progress is not representative of actual physical progress. Mauro Mancini 9 Project progress Progress key control requirements A project s status must be: Measured according to the status of its basic elements (Cost/Control Accounts/Work Packages) Grouped together as far as scheduling level, until the status of the whole project can be ascertained A project s status should be measured using one of the following techniques, described in the appendix Methods of Measuring Status: 1. Milestone 2. 50/ / Units complete 5. Percent Complete (Management Assessment) 6. Apportioned Effort 7. Level of Effort Only one method must be used per Work Package. Mauro Mancini 10

6 Project Progress-Site control activities T t= 1 ( SMhg ) SMh tot t = Mauro Mancini 11 Project Progress-Design controlactivities For engineering progress evaluation the percentage weight approach has to be used: 1.Assuming that every documents contributes with a pi ratio to the engineering work package progress and 2.that everyone is characterized by some intermediate milestones to which conventional progress values are associated (fi) The following summation represents percentage progress of the work package considered, where N is number of documents belonging to WP: N i= 1 fi * p i N with i= 1 p i = 100 Mauro Mancini 12

7 Project Progress-Planning control and Control For the planning and control activity, it is necessary to know both period values and cumulated ones until time now. Comparison between planned values and actual values allows to evaluate project situation and eventually to identify corrective actions. For simpler activities space-time diagrams may be used (progress representation with a straight line), while for more complex activities S curve are usually used Mauro Mancini 13 Project Progress-Planning control and Control To every phase may be associated a S curve, evaluated on the basis of specific evaluating parameters Engineering Procurement (technical documentation) ( committed values) Construction/Assembly (physical quantities realized) Mauro Mancini 14

8 Project Progress-Phases controls curve Mauro Mancini 15 Progress Project Progress control Natante Boat a vela Engineering Ingegneria Approvvigionamenti Supplying Montaggio Assembly Collaudo Testing A1 A2 A3 C I1 I2 I3 M1 M2 M3 Mauro Mancini 16

9 Project Progress Progress-Example control WP Precedence Duration [Days] Res. D. [Men] Material [M ] I1 / 4 2 eng. / I2 / 4 3 eng. / I3 / 3 1 eng. / A1 I eng. 10 A2 I2 7 / 14 A3 A1,A2 2 2 op. 3 M1 A3 8 3 op. / M2 A3 3 4 op. / M3 A3,I3 5 1 op. / C M1, M2, M3 2 2 op. / I1 = Boat design I2 = Equipment Design I3 = Graphics and colours A1 = Mast, deck, keel supplying A2 = Equipment supplying A3 = Transportation M1 = Boat assembly M2 = Equipment assembly M3 = Painting C = Testing Considering the following costs: 1 eng. = 200 /day 1 op. = 150 /day To define the physical and accounting development Mauro Mancini 17 Project Progress Progress-Example control ES EF Activities I1 I2 I3 A1 A2 A3 M1 M2 M3 C LF TF LF Days Mauro Mancini 18

10 Project Progress Progress-Example control Planned physical development It is possible relating to the amount of human resources requested by the various activities (supplying? ) WP DURATION [DAYS] Resources absorption Costs [M/ ] eng./d Op./d day-man labour material Total I ,6 0 1,6 I ,4 0 2,4 I ,6 0 0,6 A , ,2 A A ,6 3 3,6 M ,6 0 3,6 M ,8 0 1,8 M ,75 0 0,75 C ,8 0 0,8 Mauro Mancini 19 Project Progress Progress-Example control It is advisable to record the WP state of development with the method: it considers the development equal to zero until the activity is not completed. This method is effective for project with many WP, characterized by very similar and short resources absorption rates. In this case it is suitable to divide the M1 WP in 3 milestones (proportional to the resource absorption with constant rate inside the single WP) placed at the 3, 6 and 8 day from the WP start day. Mauro Mancini 20

11 Project Progress Progress-Example control Resources absorption method daily frequency Physical develop period cumulated pers. cum M Daily Freq % 7% % 14% % 20% % 26% % 27% % 28% % 30% % 31% % 32% % 33% % 34% % 35% % 36% % 38% % 39% % 40% % 41% % 42% Mauro Mancini 21 Project Progress Progress-Example control Resources absorption method daily frequency Physical develop period cumulated pers. cum M Daily Freq % 43% % 44% % 47% % 49% % 58% % 67% % 76% % 81% % 85% % 89% % 92% % 95% % 98% % 100% Mauro Mancini 22

12 Project Progress Progress-Example control 100% 80% 60% Phis. Dev M Phis. Dev. Daily Freq.. 40% 20% 0% Mauro Mancini 23 Project Progress Progress-Example control Accounting development: In this case it is necessary to make reference to the allocated resources cost. It is possible to allocate costs with two different methods: with the barycentre method, suitable for small WP allocating themselves during their duration. This method is suitable for the bigger WP To simplify it is common to join the WP costs at the first WBS level Engineering: 4.6 M Supplying: 30.8 M Assembly: 6.15 M Testing: 0.8 M BAC = M Mauro Mancini 24

13 Project Progress Progress-Example control It is suitable to consider the A1 and A2 WP like a WBS unique element and to split it in three instalments during the whole duration and to keep A3 (transportation) separated, because, even belonging to the supplying, it is a different type of activity The three instalments in which the activities have been divided make reference to: Receiving offers from potential suppliers (20%) Order releases (50%) Delivery (100%) Mauro Mancini 25 Project Progress Progress-Example control Days # eng # Op lab. Material BCWS M Daily freq. A1 A2 A3 oper cumul oper cumul Accounting development Daily M Freq 1 6 1,2 0 1,2 1,2 0% 3% 2 6 1,2 4,6 4,6 1,2 2,4 11% 6% 3 6 1,2 4,6 1,2 3,6 11% 9% ,6 1 4,6 11% 11% 5 1 0,2 0, ,6 2,825 7,425 11% 18% 6 1 0,2 0, ,6 2,825 10,25 11% 24% 7 1 0,2 0, ,44 10,04 2,825 13,075 24% 31% 8 1 0,2 0, ,04 2,825 15,9 24% 38% 9 1 0,2 0, ,04 2,825 18,725 24% 44% ,2 0, ,04 2,825 21,55 24% 51% ,2 0, ,16 18,2 2,825 24,375 43% 58% ,2 0,625 18,2 0,825 25,2 43% 60% ,2 0,625 18,2 0,825 26,025 43% 61% ,2 0,625 18,2 0,825 26,85 43% 63% ,2 0,625 18,2 0,825 27,675 43% 65% ,2 0,625 18,2 0,825 28,5 43% 67% ,2 0,625 18,2 0,825 29,325 43% 69% Mauro Mancini 26

14 Project Progress Progress-Example control Days # eng # Op lab. Material BCWS M Daily freq. A1 A2 A3 oper cumul oper cumul Accounting development Daily M Freq ,2 0,625 18,2 0,825 30,15 43% 71% ,2 0,625 18,2 0,825 30,975 43% 73% ,2 0,625 13,6 31,8 0,825 31,8 75% 75% ,3 1,5 3,6 35,4 1,8 33,6 84% 79% ,3 1,5 35,4 1,8 35,4 84% 84% ,2 35,4 1,2 36,6 84% 86% ,2 35,4 1,2 37,8 84% 89% ,2 35,4 1, % 92% ,6 6,15 41,55 0,6 39,6 98% 94% ,6 41,55 0,6 40,2 98% 95% ,45 41,55 0,45 40,65 98% 96% ,45 41,55 0,45 41,1 98% 97% ,45 41,55 0,45 41,55 98% 98% ,4 0,8 42,35 0,4 41,95 100% 99% ,4 42,35 0,4 42,35 100% 100% Mauro Mancini 27 Project Progress Progress-Example control 100% 90% Accounting Development 80% 70% 60% 50% 40% 30% 20% 10% 0% M Daily Freq Time [Days] Mauro Mancini 28

15 Project Progress Progress-Example control 100% 80% 60% 40% 20% 0% Phis. Av. Fis. Dev. - M M Phis. Av. Fis. Dev. - F. D. giorn. Fre. Acc. Av. Cont. Dev M Acc. Av. Cont.- Dev. D. F. Fre giorn Time Tempo [Days] [gg] Mauro Mancini 29 Project Progress Progress-Example control 2. At the day number 30 (from the start day) are available the following information: The WP M1 phisical development is equal to 50%, for the WP M3 it is 20%, while for WP M2 it is not still started Has been spent o10% less for the engineering phase o10% more for the supplying phase o2 M for the assembly phase Judge the MM 2 performance in terms of CV and SV Mauro Mancini 30

16 Project Progress Progress-Example control Not later than the 30 th it has been scheduled all the activity, but the testing, for a cost equal to: BCWSc (30) = =41.55 M Considering the WP really realized: BCWPc (30) = =37.35 M In the same way it is possible to compute the real sustained costs: ACWPc (30) = = M Therefore, it is possible to compute SV = BCWPc BCWSc = = M CV = BCWPc ACWPc = = M Mauro Mancini 31 Project Progress-Exercise control 1 EX # 1 A WP is made by the elaboration of 50 same type documents (for example electrical schemes) for which the following percentages of conventional development has been defined in correspondence of the principal comlpetion phases. Stage of development Conventional development Preliminary emission 40% Emission for interdisciplinary checks 65% Emission with builder approval 90% To suppose that, at a certain date, 25 of the forecasted documents have been released and are so subdivided 10 For the preliminary emission 10 For interdisciplinary checks 5 For construction To compute the contribution given to the per cent development considering that the WP weight (on the whole project) is the 15% Mauro Mancini 32

17 Project Progress-Exercise control 1 SOLUTION: The WP development percentage is determined by the relation: A = n WP Where n i is the per cent number of documents achieving the completion phase i, while A i represents the conventional development for the completed phase i i A i A WP = , , Analogously, the whole project development is given by: A D + A D = i A + WP P i 0,9 = 0,3 0,15 = 0,045 = 0,3 The contribution given by the WP to the project development is equal to 4,5% Mauro Mancini 33 EX# 2 Project Progress-Exercise control 2 A WP related to 8000 metres piping installation is made by three activities in sequence: excavation, welding, assembly. The teams assigned to the three activities work 8 hours/day and 5 days/week with the following constant rates: Excavation: Welding: Assembly: 400 m/day 320 m/day 450 m/day It is necessary to keep a minimal progression difference between each couple of activities equal to 200 metres. Mauro Mancini 34

18 Project Progress-Exercise control 2 At the time now the excavation is on the 10 th day, the welding on the 3 rd and the assembly is going to start in 2 day. Considering the advancement proportional to the working hours to compute: 1.How long the welding team can work with the initial advancement rate 2.If the welding team adopts a 10 hours/day labourite schedule when will be reached by the assembly team 3.Which is the labour program that allows to arrive to the conclusion with the minimal temporal difference among the activities Mauro Mancini 35 Project Progress-Exercise control 2 SOLUTION: The situation at the time now is the following: The excavation has completed 10 [d] x 400 [m/d] = 4000 meters The welding has completed 3 [d] x 320 [m/d] = 960 meters The assembly is going to start in 2 days POINT 1 It is evident that the assembly phase, having an advancing rate greater than welding rate, is going to reach the welding phase (it is going to be at a distance equal to 200 meters) Indicating with X the number of days (starting from the time now ) in correspondence of the attainment is possible to write the equation: X 200 = 450 (X - 2) Therefore: X = 1660/130 = 12, days The welding activity can continue with the actual advancement rate only for about 13 days, after that it is going to slow the assembly. Mauro Mancini 36

19 Project Progress Progress-Exercise control 2 POINT 2 With 10 hours/day working hours the advancement rate for the welding activity becomes: 320 [m/day] / 8 [hours/day] 10 [hours/day] = 400 [m/day] Adopting at the time now the new working hours and still indicating with X the number of days after that the welding activity will be reached by the assembly activity, it is possible to write the following equation X 200 = 450 (X - 2) Therefore: X = 1660/50 = 33,2 34 days In this way the assembly work interruption will be no present, because with the new working hours the welding phase will be completed in: ( ) [m] / 400 [m/day] = 17,6 18 [days] (starting from the time-now) Mauro Mancini 37 Project Progress Progress-Exercise control 2 Hypothesis: adoption of a backward scheduling logic T is the completion time necessary to the whole WP; therefore T coincides with the finish date for the assembly activity: Tfm = T Because the duration of this activity is: 8000 [m] / 450 [m/d] = 17,78 [days] 18 [days] The start date for the assembly work will be: Tim = Tfm 18 days = T 18 days The programming s objective is to arrive to the works conclusion with the minimal temporal difference among the activities; when the assembly team will be at 200 meters from the welding team (attainment) the latest will have to be completed. Mauro Mancini 38

20 Project Progress-Exercise control 2 Called Tfwa the finish date for the welding labour, it will be connected to the assembly finish date by the following equation: Tfm = Tfwa [m] /450 [m/d] = Tfwa + 0,44 [days] Tfwa + 0,5 [days] Therefore: Tfwa = Tfm 0,5 [days] = T 0,5 [days] Considering its duration, the welding activity will have to start at the date: Tisa = Tfwa 8000 [m] / 320 [m/day] = (T 0,5 days) 25 days = T 25,5 days. Also the welding team will be at a distance equal to 200 meter from the previous team in correspondence of activity excavation conclusion. Mauro Mancini 39 Project Progress-Exercise control 2 Considering the previous statements is possible to write the equation; Tfwa = Tfsc [m] / 320 [m/d] = Tfsc + 0,6 days Therefore: Tfsc = Tfwa 0,6 [days] = (T 0,5gg) 0,6 [days] = T 1,1 [days] Tisc = Tfsc 8000 [m] / 400 [m/d] = (T 1,1 [days] ) 20gg = T 21,1 [days] Mauro Mancini 40

21 Project Progress-Exercise control 3 Ex# 3 In order to subcontract an assembly WP characterized by: Physical quantities Standard Yield: Q = 1000 tons R = 1 (ton / SMh) The Main Contract can chose among the A, B and C company for which are wellknown, form previous experience, the following labour productivity coefficients. On the basis of the following data related to the three company: A B C Labour Productivity Working hours [h/d] Labour Hourly cost [ /EMh] Late payment [months] To choose the most suitable company Considering a constant resource use rate, evaluate, for the chosen company, the relation between the WP and the resource daily use rate Mauro Mancini 41 Project Progress-Exercise control 3 SOLUTION: 1) Economical evaluation: Objective: to minimize the unit cost [ /ton] A) B) C) 15 [ /EMh] = 18 [ /ton] 0,8 [SMh/EMh] 1[ton/SMh] 30 [ /EMh] = 20 [ /ton] 1,5 [SMh/EMh] 1[ton/SMh] 20 [ /EMh] = 20 [ /ton] 1[SMh/EMh] 1[ton/SMh] The most suitable company is the company with the lesser cost, therefore the A. However is important to consider the late payments. Mauro Mancini 42

22 Project Progress-Exercise control 3 SOLUTION: 2) Financial evaluation: Considering a monthly interest equal to 1% is possible to compute the payment present value A : B : C : 18,750 ( 1+ 0,01) 20 ( 1+ 0,01) 20 1 ( 1+ 0,01) 3 6 = 18,198 /ton = 19,801 /ton = 18,840 /ton The A choice is still the best choice, also considering the financial aspect Mauro Mancini 43 Project Progress-Exercise control 3 Work Package duration: Fixed: T = duration R = Standard Yield = 1 Q = physical quantity = 1000 tons M = number of workers P = productivity = 0,8 W = Working hours = 10 h/d Q [ton] T [d] = R [ton/smh] P [SMh/EMh] W [EMh/g - man] M [man] Therefore: T = ,8 10 M T M = 125 [days man] Mauro Mancini 44

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