Department of Civil and Environmental Engineering Department of Civil and Environmental Engineering Massachusetts Institute of Technology Massachusetts Institute of Technology 1.040/1.401 Project Management Project Dynamics - Introduction to System Dynamics Dr. SangHyun Lee Dr. SangHyun Lee
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Department of Civil and Environmental EngineeringDepartment of Civil and Environmental EngineeringMassachusetts Institute of Technology Massachusetts Institute of Technology
1.040/1.401 Project Management
Project Dynamics- Introduction to System Dynamics
Dr. SangHyun LeeDr. SangHyun Lee
Project Dynamics
Motivation – Project Dynamics
Errors & Changes
System Dynamics
Applications
Trouble-free Projects Behave as Planned:
Design Labor (Equivalent People)Simulated Data100.
75.
50.
25.
0.
TIME91 92 93 94 95 96Year 1 Year 5Year 4Year 3Year 2 Year 6
Planned Data
But more typically, projects ...
... Have schedule and budget overruns
... Surprise us with late requests for additional time or resources... Seem to get stuck at “90%” complete... Result in new products with flaws discovered after release... Hinder learning because of difficulty in comparing the performance of different, “unique” projects
Typical Project “Disasters”
20 civil infrastructure projects in 17 states experienced significant cost increases ranged from around 40% to 400% (General Accounting Office 2002). This trend is not limited to projects in the United States. According to Flyvbjerg et al. (2003), cost overruns are found in 90% of all the mega-projects in 20 countries ranging from Europe to Asia and such cost escalation is not a new phenomenon but has persisted over the past 70 years
Typical Project “Disasters”
The Channel Tunnel -- original estimate, $3 billion; final cost, $10 billionBoston’s “Big Dig” -- original mid-1980’s estimate, $2.5 billion; latest estimate, $14.5 billion (9/2001)Aircraft development -- nearly double initial estimate (see following slide)New Car Development -- original plan, 400 person-years of effort; final cost, 800 person-years (see following slide)
Year
Design Labor (Equivalent People)Simulated Actual
800.
600.
400.
200.
0 0 3 6 9 12 15 18 21
ApproximateOriginal Plan
Disguised results from actual aerospace project
On typical development projects ...
… Staffing experiences an extended tail
Program Staff, Simulated vs. Data (Equivalent Staff)
400.
300.
200.
100.
TIME
0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Simulated Original Plan Actual
Disguised results from actual vehicle project
… Or a second staffing peak
Project Dynamics
Motivation – Project Dynamics
Errors & Changes
System Dynamics
Applications
The Drivers of Project Dynamics
Errors & Changes
Their Feedback effects
Latency (late discovery)
Knock-on effects between work phases
Knock-on effects between projects
Difficulty in Managing Errors & ChangesFeedback Process Caused by Errors and Changes
Execution
Errors & Changes
Control Action
-Balancing Loop
Resolving issues
_Reinforcing Loop
Generating other issues
+ +
Latency - Impact of Late Discovery
Not properly installed Waterproof Membrane
Foundation Mat
Drainage PipeDiscovery
Error/Change
FS -20Substructure
Waterstop
Early Discovery
Late Discovery
Latency - Impact of Late Discovery
Not properly installed Waterproof Membrane
Foundation Mat
Drainage PipeDiscovery
Error/Change
FS -20Substructure
Waterstop
Delay
Derivative Activity
Water
Concrete Block Wall
“Problems encountered during construction are fundamentally dynamic. However, they have been treated statically with a partial view on a project
[Lyneis et al., 1999].”
Project Dynamics
Motivation – Project Dynamics
Errors & Changes
System Dynamics
Applications
System Dynamics
Originates at late 1950’s from MITStems from Control TheorySystemic understanding of complex management system
Event
Pattern of Behavior
System Structure
Progress Gap
# of workers
“Project behind schedule”
Three ways of looking at a problem:
Threshold
Progress Gap
# of Workers
Production
-
++
Quality Dillution
Work To Do
+
+
+
The System Dynamics Viewpoint
Event
Patterns of Behavior
System Structure
Low
Medium
High
Ability to Influence
System dynamics modeling provides a means of ...
... understanding the structure of projects and how that structure creates behavior ... better understanding leads to better management (e.g., policy design)... learning across projects
Examples of Behavior Modes on a Project
ProjectStaffing
Time
TypicalPlan
Examples (continued)
FractionComplete
Time
.5
1
TypicalPlan
The Traditional View
WORKBeing Done
PEOPLE PRODUCTIVITY
WORKTO BEDONE
WORKDONE
WORK TO DO STAFF % DONE
TIMETIMETIME
But traditional approaches fail to consider rework
WORKBEING DONE
PEOPLE PRODUCTIVITY QUALITY
WORKTO BEDONE
WORKREALLYDONE
REWORK
WORK TO DO STAFF % DONE
RWK
TIME TIME TIME
Or Undiscovered Rework
WORKBEING DONE
PEOPLE PRODUCTIVITY QUALITY
KNOWNREWORK
UNDISCOVEREDREWORK
REWORK DISCOVERY
WORKTO BEDONE
WORKREALLYDONE
WORK TO DO STAFF % DONE
RWK
UR REALLY
TIME TIME TIME
Caused by the need to accomplish rework
0 3 6 9 12 15 18 21
800.
600.
400.
200.
0
Work Assignments of Staff to...
Original Work
Rework
Total
Design Labor (Equivalent People)
On typical development projects ...
Simulated Actual
Year
800.
600.
400.
200.
0 0 3 6 9 12 15 18 21
ApproximateOriginal Plan
Disguised results from actual aerospace project
… Staffing experiences an extended tail
Program Staff, Simulated vs. Data (Equivalent Staff)
400.
300.
200.
100.
TIME
0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Simulated Original Plan Actual
Disguised results from actual vehicle project
… A second staffing peak
On typical development projects ...
Policy Analysis
Progress Gap
# of Workers
Production
-
+
+Quality Dillution
Work To Do
+
+
+
Overtime+
+
Fatigue+
+
Project Dynamics
Motivation – Project Dynamics
Errors & Changes
System Dynamics
Applications
Typical Uses of Models
•Benchmarking
•Risk Management
•Developing Policies and Heuristics
•Management Training
•Dispute Resolution / Litigation
Learning in SystemsThe power of simulating a well-defined problem
enables organizational learning. E.g.,
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
BetterHiringConditions
Past Program
0
DifferentStaffingPolicies
Peace ShieldSchedules
Fewer Vendor& HW Problems
Scope Differences& Fewer CustomerChanges
Teaming& OtherImprovementsMore
ExperiencedPeople
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