1.040/1.401/ESD.018 1.040/1.401/ESD.018 Project Management, Spring 2007 Project Management, Spring 2007 Lecture 15 Lecture 15 Project Control Project Control Samuel Labi and Fred Moavenzadeh Department of Civil and Environmental Department of Civil and Environmental Engineering Engineering Massachusetts Institute of Technology Massachusetts Institute of Technology
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1.040/1.401/ESD.0181.040/1.401/ESD.018Project Management, Spring 2007Project Management, Spring 2007
Lecture 15Lecture 15
Project ControlProject Control Samuel Labi and Fred MoavenzadehDepartment of Civil and Environmental Department of Civil and Environmental EngineeringEngineeringMassachusetts Institute of TechnologyMassachusetts Institute of Technology
- Key preceding tasks were not completed on time.- Key preceding tasks were not completed on time.
GENERAL CLUES (Meredith and Mantel, 2006)GENERAL CLUES (Meredith and Mantel, 2006)
1. How can we tell when PC is needed?1. How can we tell when PC is needed?
““Primitive” Primitive” indicators:indicators:– More resources or less More resources or less
resources haven been resources haven been used than planned used than planned
– Activities are taking Activities are taking long than plannedlong than planned
– Cost of activity (or of Cost of activity (or of project to date) is project to date) is higher than expectedhigher 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 CLUESSPECIFIC CLUES
1. How can we tell when PC is needed?1. How can we tell when PC is needed?
““Primitive” Primitive” indicators:indicators:– More resources or less More resources or less
resources haven been resources haven been used than planned used than planned
– Activities are taking long Activities are taking long than plannedthan planned
– Cost of activity (or of Cost of activity (or of project to date) is higher project to date) is higher than expectedthan 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 CLUESSPECIFIC CLUES
1. How can we tell when PC is needed?1. How can we tell when PC is needed?
““Primitive” Primitive” indicators:indicators:– More resources or less More resources or less
resources haven been resources haven been used than plannedused than planned
– Activities are taking long Activities are taking long than plannedthan planned
– Cost of activity (or of Cost of activity (or of project to date) is higher project to date) is higher than expectedthan expected
JAN FEB MAR APR MAY JUN
Activity 1
Activity 2
Activity 3
planned
actual
NOW
Legend
planned actual
SPECIFIC CLUESSPECIFIC CLUES
1. How can we tell when PC is needed?1. How can we tell when PC is needed?
Program (schedule)
Progress (actual)
Program (schedule)
Progress (actual)
now time
50%
70%
““Primitive” Primitive” indicators:indicators:– More resources or less More resources or less
resources haven been resources haven been used than planned used than planned
– Activities are taking long Activities are taking long than plannedthan planned
– Cost of activity (or of Cost of activity (or of project to date) is higher project to date) is higher than expectedthan expected
$
SPECIFIC CLUESSPECIFIC CLUES
1. How can we tell when PC is needed?1. How can we tell when PC is needed?
Why are they “primitive”?Why are they “primitive”?- May be biased.May be biased.- Do not consider that progress may be Do not consider that progress may be
overestimated or underestimated due overestimated or underestimated due to:to:
- execution of unscheduled work done, or execution of unscheduled work done, or - execution of more work of low value and less execution of more work of low value and less
work of high valuework of high value
SPECIFIC CLUESSPECIFIC CLUES
1. How can we tell when PC is needed?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 CLUESSPECIFIC CLUES
1. How can we tell when PC is needed?1. How can we tell when PC is needed?
$max
t
BCWS
ACWP
BCWP
Time
SCHEDULE VARIANCECOST VARIANCE
RESOURCE FLOW VARIANCE
TIME VARIANCE
tmax
ACWPt
BCWSt
BCWPt
t-p
now
SPECIFIC CLUESSPECIFIC CLUES
1. How can we tell when PC is needed?1. How can we tell when PC is needed?
So we know Project Control is needed So we know Project Control is needed (at time (at time tt) particularly when:) particularly when:
- - RVRVtt is –ve, is –ve, - - RIRItt < 1 < 1- - CVCVtt is –ve is –ve- - CICItt <1<1- - SVSVtt is –ve is –ve- - SISItt is < 1 is < 1- - TVTVtt is –ve is –ve- - TITItt is < 1 is < 1
Part 2Part 2
Resources Resources
for for
Project ControlProject Control
2. Resources for Project Control2. Resources for Project Control
MoneyMoney
Machinery (Equipment)Machinery (Equipment)
Materials and SuppliesMaterials and Supplies
Manpower (Labor and Manpower (Labor and Supervision)Supervision)
Money as a PC ResourceMoney as a PC Resource
Not a direct resource Not a direct resource Rather, used to influence the Rather, used to influence the
amounts or quality of the amounts or quality of the other resourcesother resources
Using Equipment for PCUsing Equipment for PC
Often used to augment labor Often used to augment labor in order to speed up projectin order to speed up project
Can be expensiveCan be expensive
May involve renting or May involve renting or purchasingpurchasing
Materials and Supplies as a PC ResourceMaterials and Supplies as a PC Resource
Increase in quality or quantity Increase in quality or quantity may be necessary to enhance may be necessary to enhance project controlproject control
Improved inventory systems for Improved inventory systems for materialsmaterials
Manpower as a PC ResourceManpower as a PC Resource
Project problems (time delays, excess Project problems (time delays, excess costs, poor performance, etc.) are costs, poor performance, etc.) are partly due to the human element partly due to the human element (action or inaction)(action or inaction)
In using Manpower as a tool for In using Manpower as a tool for project control, PM encounters project control, PM encounters human emotions (anger, fear, human emotions (anger, fear, frustration, etc.)frustration, etc.)
Elements of Project Elements of Project ControlControl
3. Elements of Project Control3. Elements of Project Control
Manpower-related controlManpower-related control
Machinery-related controlMachinery-related control
Money-related controlMoney-related control
Material-related controlMaterial-related control
3A. Resource-related3A. Resource-related
Re-allocate resourcesRe-allocate resources
Elements of Project ControlElements of Project Control
ManpowerManpower
MachineryMachinery
MoneyMoney
MaterialsMaterials
3A. Resource-related3A. Resource-related
Re-allocate resourcesRe-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
Elements of Project ControlElements of Project Control
ManpowerManpower
MachineryMachinery
MoneyMoney
MaterialsMaterials
3A. Resource-related3A. Resource-related
Re-allocate resourcesRe-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
Elements of Project ControlElements of Project Control
ManpowerManpower
MachineryMachinery
MoneyMoney
MaterialsMaterials
3A. Resource-related3A. Resource-related
Re-allocate resourcesRe-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.
Elements of Project ControlElements of Project Control
ManpowerManpower
MachineryMachinery
MoneyMoney
MaterialsMaterials
3A. Resource-3A. Resource-relatedrelated
Re-allocate resourcesRe-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
Elements of Project ControlElements of Project Control
ManpowerManpower
MachineryMachinery
MoneyMoney
MaterialsMaterials
3A. Resource-related3A. Resource-related
Re-allocate resourcesRe-allocate resources
- Discontinue use of sub-standard material
- Seek new sources of superior material
Elements of Project ControlElements of Project Control
Options:Options:
- Reduce project size? - Reduce project size?
- Reduce project scope?- Reduce project scope?
- Terminate project?- Terminate project?
3B. Project-related3B. Project-related
Part 4Part 4
MechanismsMechanisms
of of
Project ControlProject Control
Mechanisms of Project ControlMechanisms of Project Control
Types of Mechanisms:Types of Mechanisms:
- Cybernetic- Cybernetic
- Go/No-go- Go/No-go
- Post-control- Post-control
Types of Control MechanismsTypes of Control Mechanisms
CyberneticCybernetic
- “Cyber” means “Steer” or - “Cyber” means “Steer” or helmsman (Greek language)helmsman (Greek language)
- May be First-, Second-, or - May be First-, Second-, or Third-orderThird-order
Cybernetic control mechanismsCybernetic 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)
Cybernetic control mechanismsCybernetic 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.
Cybernetic control mechanismsCybernetic 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
Cybernetic control mechanismsCybernetic 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
Cybernetic control in Project ManagementCybernetic control in Project Management
1.1. PM must clearly define “outputs” in terms of PM must clearly define “outputs” in terms of relevant project characteristicsrelevant project characteristics
2.2. PM must establish standards for each PM must establish standards for each characteristiccharacteristic
3.3. Monitoring mechanisms (sensors) must be Monitoring mechanisms (sensors) must be established to measure the characteristics at established to measure the characteristics at regular intervalsregular intervals
4.4. For each characteristic, the trigger point or For each characteristic, the trigger point or maximum deviation (difference between “attained maximum deviation (difference between “attained level” and “standard level”) should be established.level” and “standard level”) should be established.
5.5. If triggered, appropriate action should be taken to If triggered, appropriate action should be taken to minimize the deviation between Attained Level and minimize the deviation between Attained Level and Standard Level of performance.Standard Level of performance.
““Go/No-go” Mechanisms of Project ControlGo/No-go” Mechanisms of Project Control
Testing to see if some specific precondition has Testing to see if some specific precondition has been achievedbeen achieved
Yes/No (discrete)Yes/No (discrete)
Control in most PM fall into this category Control in most PM fall into this category (Cooper, 1994; Meredith and Mantel, 2006) (Cooper, 1994; Meredith and Mantel, 2006)
Example: Was Activity X completed within 6 Example: Was Activity X completed within 6 months?months?
Did Activity Y cost exceed its budget of $1.5 Did Activity Y cost exceed its budget of $1.5 million?million?
Some engineering judgment is necessary in Some engineering judgment is necessary in exercising these types of controls. exercising these types of controls.
Post-Control Types of Project Post-Control Types of Project ControlControl
Is done after the activity or project is over Is done after the activity or project is over
Like a post-mortem or report cardLike a post-mortem or report card
Is it “Locking the barn door after the horse Is it “Locking the barn door after the horse has escaped”?has escaped”?
Or is it “We need to learn from the past to Or is it “We need to learn from the past to avoid future mistakes”?avoid future mistakes”?
Generates lessons from current projects so Generates lessons from current projects so that future projects can be controlled that future projects can be controlled better.better.
Desired characteristics of a project control Desired characteristics of a project control mechanismmechanism
FlexibleFlexible – PC should be able to react to changes – PC should be able to react to changes in system performancein system performance
Cost-effectiveCost-effective – Value of PC should exceed cost – Value of PC should exceed cost of PCof PC
Useful Useful – Must really satisfy the needs of – Must really satisfy the needs of project, not the whims of the PMproject, not the whims of the PM
TimelyTimely – Be able to react quickly before the – Be able to react quickly before the problem overwhelms the projectproblem overwhelms the project
SimpleSimple –Easy to understand and operate –Easy to understand and operate AdjustableAdjustable – Capable of being adjusted to – Capable of being adjusted to
reflect changing prioritiesreflect changing priorities DocumentedDocumented – so that training is possible – so that training is possible
Some Interesting Issues in Project Some Interesting Issues in Project ControlControl
FlexibilityFlexibility Trade-offsTrade-offs Some things to watch out forSome things to watch out for Impediments to Project Impediments to Project
accelerationacceleration Cost-only and time-only actions Cost-only and time-only actions
to control projectsto control projects
Value of Flexibility in Project Value of Flexibility in Project PlanningPlanning
Flexibility is primary defense against riskFlexibility is primary defense against risk
Planning too tightly may highly complicate Planning too tightly may highly complicate control control
Flexibility in Flexibility in constructionconstruction is key during is key during control control
Want adequate float and contingency to Want adequate float and contingency to change plans if neededchange plans if needed
Be careful on Be careful on value engineeringvalue engineering that limits that limits flexibility!flexibility!
Some Interesting Issues in Project Some Interesting Issues in Project ControlControl
Trade-offs between Performance Trade-offs between Performance Measures during Project ControlMeasures during Project Control
Can sometimes only correct for Can sometimes only correct for oneone performance measure at a time performance measure at a time – TimeTime– CostCost– QualityQuality
Need to understand Need to understand tradeoffstradeoffs and and triagetriage– Pick where to make tradeoffs (e.g. Pick where to make tradeoffs (e.g.
non-critical activities)non-critical activities)
Some Interesting Issues in Project Some Interesting Issues in Project ControlControl
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 expensesHigh 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 Some Interesting Issues in Project ControlControl
Trade-offs: The Time-Quality-Money Trade-offs: The Time-Quality-Money Triage Triage
In many cases, the best we can do In many cases, the best we can do is to pick the areas where is to pick the areas where tradeoffs do the least harm tradeoffs do the least harm e.g.e.g.– Move resources from non-critical Move resources from non-critical
activitiesactivities– Accelerate only critical activitiesAccelerate only critical activities– Sacrifice quality on non-critical items Sacrifice quality on non-critical items
that can be remedied after that can be remedied after substantial completionsubstantial completion
Some Interesting Issues in Project Some Interesting Issues in Project ControlControl
Some things to watch out for: Some things to watch out for: Overreacting/Improvisation, etc.)Overreacting/Improvisation, etc.)
When trying to correct, often bump up against When trying to correct, often bump up against other limiting factorsother limiting factors– Space constraints/Hiring Space constraints/Hiring
– Often can lead to “Snowballing” (Often can lead to “Snowballing” (increased increased problems at a rapidly accelerating rate)problems at a rapidly accelerating rate)
– Confusion, discoordination, cascading Confusion, discoordination, cascading unanticipated effects, suboptimal work unanticipated effects, suboptimal work efficiency, lack of moraleefficiency, lack of morale
– Breaking “Job rhythm” and learning curves can Breaking “Job rhythm” and learning curves can really inhibit productivity!really inhibit productivity!
Some Interesting Issues in Project Some Interesting Issues in Project ControlControl
Controlling the Time Schedule – Project Controlling the Time Schedule – Project CrashingCrashing
– Adding new project resourcesAdding new project resources– Changing the “production function” Changing the “production function”
(Change the technology)(Change the technology)– Change operation conditions by altering Change operation conditions by altering
the precedence, sequence, or timing of the precedence, sequence, or timing of workwork
Fast-track, activity overlappingFast-track, activity overlapping OvertimeOvertime Shift workShift work
– Changes in the tools, methods, operating Changes in the tools, methods, operating conditionsconditions
– Work in more sheltered locationWork in more sheltered location
Some Interesting Issues in Project Some Interesting Issues in Project ControlControl
Impediments to Project Impediments to Project AccelerationAcceleration Human resourcesHuman resources
– Multiple-shift workMultiple-shift workEnvironmental/safety issues, High cost, Neighborhood Environmental/safety issues, High cost, Neighborhood
Fatigue, Lower morale, ReworkFatigue, Lower morale, Rework– Increasing # of workersIncreasing # of workers
Training (takes time of most experienced!), Space constraints, Training (takes time of most experienced!), Space constraints, Hiring timeHiring time
TechnologyTechnology– Using more, larger or more efficient equipmentUsing more, larger or more efficient equipment
Training/learning curve, Procurement time, Space constraintsTraining/learning curve, Procurement time, Space constraints– Using faster-installing materialsUsing faster-installing materials
Procurement, Submittals for owner approvalProcurement, Submittals for owner approval– Alternate construction methodsAlternate construction methods
Fatigue, Lower morale, ReworkFatigue, Lower morale, Rework– Increasing # of workersIncreasing # of workers
Training (takes time of most experienced!), Space constraints, Training (takes time of most experienced!), Space constraints, Hiring timeHiring time
TechnologyTechnology– Using more, larger or more efficient equipmentUsing more, larger or more efficient equipment
Training/learning curve, Procurement time, Space constraintsTraining/learning curve, Procurement time, Space constraints– Using faster-installing materialsUsing faster-installing materials
Procurement, Submittals for owner approvalProcurement, Submittals for owner approval– Alternate construction methodsAlternate construction methods