G-7

James A. Bent John W. Hackney

Chief Schedule Engineer Manager of Cost Engineering

Past President and Founder, AACE

Mobil Research and Development Corporation

Engineering Department

Post Office Box 1026

Princeton, New Jersey 08540

OWNER APPROACH TO PLANNING AND SCHEDULING

SUMMARY STANDARD SCHEDULES

Uncertain world-wide conditions, changing Duration and logic parameters of a Project

areas of engineering-construction operations, Master Schedule; Overall Progress Breakdown -
and massive increases in size and complexity of Engineering, Procurement, Construction;
projects have thrust effective planning and Construction Logic Diagram.
scheduling to the forefront of project management.
The financial and schedule objectives of such
projects must reflect both previous experience This paper is directed to those engaged in
and current economic conditions if they are to planning and scheduling activities, and to members
provide meaningful and achievable goals. Their and prospective members of project teams charged
success will be directly dependent on communicating with performing today's challenging super-projects.
management's cost and schedule objectives to all
working levels.
PLANNING-SCHEDULING-CONTROL - AN INTEGRATED SYSTEM
This presentation outlines significant aspects
of an owner's in-house planning and scheduling o Over the past five years, owners have been
operations, and their integration with techniques faced with deteriorating performance by contractors
and methods used by the contractor. Effective in the palnning and scheduling of projects, as
owner/contractor performance is required to meet related to owners' needs. This is due, in part,
the stringent demands of current and prospective to uncertain worldwide conditions, massive increases
projects for establishing attainable objectives in size and complexity of projects, and also - in
and for prompt evaluation of progress. Timely some cases we believe - to out moded, inappropriate
project-wide communication of project status re contractors' policies and corporate structures.
relative to project goals is a basic requirement Furthermore, since 1973, most major process contrac-
for effective performance by the project team. tors have increased their engineering staffs by 50
to 100%. This has led to a dilution of expertise,
talent and experience, especially in the area of
The paper is organized as follows: project controls and services.

PLANNING - SCHEDULING - CONTROL. Many contractors have invested heavily in

AN INTEGRATED SYSTEM. the development of PERT and CPM techniques and
control systems. In spite of this investment,
Some case histories of lack of integration. and resulting sophisticated systems with their
associated heavy running costs, owners continue
COMMUNICATION - A VITAL AND NEGLECTED FACTOR. to experience poor execution of the planning and
scheduling function. We believe this is due in
Comments on the role and responsibilities part to the increasing size and complexity of
of a schedule engineer. projects mentioned above, but principally to the
reduced quality of scheduling personnel, failure
MODIFICATIONS TO TYPICAL CONTRACTOR PLANNING AND to appreciate owners' real objectives, and lack
SCHEDULING SYSTEM. of system integration. Rarely does the owner
encounter a contractor's performance where the
Review of a typical system with modifications planning, scheduling and control of engineering,
as required by the owner to meet his specific procurement and construction phases is effectively
needs. bound into one system. Too often, rigid depart-
mentalization of contractors has forced owners'
OWNER SCHEDULING SERVICE. representatives to act as catalysts, and coordi-
nators, to achieve project execution.
Review of organization, task force approach,
front-end scheduling, project operations Over-departmentalization is evident when
and data development. separate groups of a contractors organization
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operate to an appreciable degree to the exclusion but also improvement in reporting frequency and
of the interests of associated group and depart- timeliness.
ments. In particular, owners experience too many
instances where engineering design, procurement, Early contractor control is essential. Owner/
project and construction departments act as contractor cooperation is required in this very
separate companies. Corporate policies sometimes early stage to convey to contractor personnel the
are allowed to override project objectives, and available details of the scope of the project, the
the true long-range objectives of the engineer- estimated cost of its components, and pre-contract
contractor. Unless engineering, procurement and planning and scheduling for its execution.
construction groups operate as a team, with
differing functions but common objectives, project
execution will be inefficient and costly.

All contractors emphasize in sales presen-

tations the unified application of their resources
to the owner's project. Departmental flexibility
and coordination are stated as being strengths
of the company organization. In practice, the
owner too often finds that planning, scheduling
and control is exercised only within compartmented
contractor departments. While it is highly desir-
able that individual departments and departmental
sections participate in the setting of schedules,
and in controlling to these schedules, overall
progress scheduling and control is the owner's
prime concern. For this reason final schedule
authority must rest in a strong active project
management, supported by adequate staff schedule
personnel.

Alternatively, owners sometimes find scheduling

operations consolidated in an autonomous group,
the output of which is voluminous but unused. If
the engineer-contractor is to meet the owner's
objectives, and in the long run, his own objectives,
the output of planning and scheduling groups must
be both usable and used by the project team.

EXHIBIT A.

This is a flow chart indicating the elements PRRFOBMANCE PROBLRMS Rxhibit B

necessary for an integrated schedule system. It
is our opinion that contractors need to achieve . TOG MANY MXIVITIES.
fully integrated and coordinated control systems
along those general lines. To do so will require
in many instances a thorough re-thinking of schedule- . ACTIVITT NETWORKS - POORQUALITY.
related operations, ;nd up-grading of scheduling
personnel. In some instances, judicious "head-
knocking" is going to be required to call attention . EARLY CONTROL LACRING.
to out-moded practices and attitudes, and failures
to conform to contractors stated management policies. FRONT END SCHEDULE - BNGINEERING ONLY.

NO CRITICAL PATH.
EXHIBIT B.
RECURRING CONTRACTOR PERFORMANCE PROBLEMS NO CRITICAL PURCHASE PLAN.

NO CONSTRUCTION PLAN.
Some of the specific problems owners experience
are: networks with too much detail, networks with
poor logic, lack of early identification of critical-
. SLIGRTING OF UX;ISTIC PROBLEMS.
ity, hazy construction planning, and minimal sense
of urgency in purchasing critical material. In too
many instances engineering progress is measured by
manhours expended, instead of by useful work per- . NO/POOR SDBCONTRACT PLAN.

formed; construction work progress is not quantified,

and subcontract progress is uncontrolled.
. MANPOWR USAGE CONSIDERED AS ENGINEERING PROGRESS.
As to network size, we believe 10,000/20,000
activity networks are costly, unmanageable and
inefficient, even on large projects. Better control . LATE. OVER-COMPLEX, OR NON-EXISTANT WFXXLY
CONSTRUCTION PROGRAMS.
is achieved when the number of activities is reduced
to a maximum of not more than 5,000. This permits
not only improvement in the quality of networks, . SLIGRTING OF SUBCONTRACT CONTROLS.
I

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EXHIBIT C. COMMUNICATION - A VITAL AND NEGLECTED FACTOR
ENGINEERING MANPOWER CONTROL.
Too often schedules, especially logic networks,
This necessary early control is to ensure appear to be a mass of arrows, lines and circles.
that the contractor has sufficient manpower At first sight, engineering and construction mana-
available and planned to meet current and future gers throw up their hands in horror and resort to
requirements. The evaluation should cover the barcharts which they have maintained for just such
contractor's total workload, past experience with a situation. When this happens, both owner and
scope increases, available manpower, possible means contractor lose; sometimes for the specific project,
of effectively augmenting manpower, allowances for and always in the long run. Schedule engineers
lost time, holidays and vacations, and so forth. need to be reminded, regularly and forcibly,
that "their" schedule is not the end product. The
successful completion of the project is the end
product.

The best schedules keep in mind that:

Their fundamental purpose is to communicate.

Technical excellence will not compensate for
non-communicative schedules.
They cannot work in a vacuum, but must make
themselves part of the daily give-and-take of
the project.
They must labor to avoid poor layouts and poor
formats.
The activities they establish must be quantifiable.
Simplicity is essential (KISS).
Their schedule formats must be organized for
updating and showing progress.

Lastly, they will find that when the above are

observed their schedules will have credibility,
and will receive the serious consideration and
usage they deserve.

EXHIBIT E.
THE SCHEDULE ENGINEER.
EXHIBIT D.
In a recent national three-day seminar on
On very large projects in remote locations,
material logistics are a major problem. planning and scheduling, a survey of attending
It is
essential that material tonnage histograms be contractors showed that approximately 10% of their
schedule personnel fulfilled the requirements listed
prepared and evaluated against the capacity of
proposed transport and unloading facilities. It in Exhibit E. Large, complex projects require
is more than embarrassing to find the daily tonnage capable and experienced schedule engineers. Too
often, detailed and sophisticated shceduling systems
capacity of a shipping harbour is a tenth of that
required to handle peak-month shipments. have proven ineffective due to the lack of exper-
ience of the schedule engineers. As owners' re-
presentatives, it appears to us that in many cases
the contractor's career structure does not place
sufficient weight on the position of schedule
engineer. We have observed young capable schedule
engineers moving into interesting, supervisory
responsibility within the engineering, project
and construction departments. That's fine, but we
also need to see such people moving into respected
and responsible positions in scheduling.

MODIFICATIONS TO A TYPICAL CONTRACTOR PLANNING AND

SCHEDULING SYSTEM

Due to some or all of the problems outlined

in previous paragraphs, some owners have taken
the lead role in initiating and controlling planning
and scheduling. They set up the system, specify
the format and detail of logic networks, and
insist on particular computer programs.

Mobil believes there is a better way - that

is, to provide the contractor at the very outset

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of a project with a preliminary, generalized over- criticality is often fould for the procurement of
all critical path schedule, detailed operational long delivery equipment and materials.
requirements, and a lean-but-adequate owners task
force to monitor the contractor's operations. The Construction subcontracts are a major consider-
responsibility of the owners task force is to define ation, and the "Subcontract Preparation Schedule"
the owner's interests and see that they are preserved can be effective in letting and controlling sub-
throughout the project. Detailed planning, sched- contracts in a businesslike, orderly fashion, with
uling and control are the contractor's responsibility, due regard to their criticality.
and it is his responsibility to see that they are
efficient operations, effectively utilized. The key elements of engineering progress are
usually found in civil design, and in production
This is an equal partnership operation. of piping isometrics. Curves showing the cubic
yards of concrete which have been defined by
drawing issue, and the piping which has been defined
SENIOR SCHEDULE ENGINEER Exhibit E by isometrics issued, all against a time scale,
can be effective in monitoring engineering progress.
QUALIFICATIONS
Construction status reporting can be improved
by relating progress to quantified bi-weekly work
programs.
. EDUCATION - BATCHELOR DECREE OR EQUIVALENT.
Effective construction subcontract control
requires appropriate contractual provisions author-
. 5 YEARS OR MORE IN RELATED INDUSTRY WORK. izing monitoring of progress and performance.

The fundamental objective of owner modifica-

tions of this type is to improve monitoring capa-
. KNOWLEDGE OF ESTIMATING AND COST CONTROL. bility at minimal cost, without unnecessarily
disturbing the contractor's normal methods, or
increasing the cost of scheduling operations. In
. 3 YEARS CONSTRUCTION (JOBSITE) EXPERImCE. practice, it has been found that contractors have
significantly improved project control with such
techniques, at decreased shceduling costs. Hope-
. 5 YEARS SCHEDULING EXPERIENCE. fully these techniques will be considered by
contractors in establishing future standards,
with improvements based on their on-going experience
with many owners.
. SELF-STARTER, WITli CAPACITY FOR TEAM WORK.

. GOOD COMMUNICATOR - ORALLY AND IN WRITING.

. FLEXIBLE AND IMAGINATIVE APPROACH.

. BE PREPARED TO TRAVEL.

EXHIBIT F.
MODIFICATIONS TO THE TYPICAL CONTRACTOR SYSTEM.

As mentioned before, necessary modifications

may include imporving network quality and reducing
the number of activities. Another modification
sometimes required is the provision of simplified
summary networks, which can be produced quickly
at minimal cost, usually be manual techniques.
Owners and contractors alike often have difficulty
in evaluating project status because of the volum-
inous paperwork produced by the contractors' systems.
These simplified networks can very easily show the OWNER SCHEDULING SERVICE
essential features of the status of engineering,
procurement and construction - either overall, or An owner's scheduling effort has two basic
highlighting some especially significant area of objectives,:
the total network. They are a distillation, the
essence of the complexities represented in real- Provide front-end planning and scheduling for
istic detail in the full project network. capital projects.
Aid owner project teams in ensuring that the
contractor's performance is effectively meeting
The material requisition curves show progress company and project planning and scheduling
on early engineering and pruchasing activity, where objectives.
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EXHIBIT G. must necessarily be brief and to the point. Every-
SCHEDULING SERVICE. body is busy. But they are essential if fatal
schedule failures are to be avoided.
This is a flow chart depicting the work of
an owner in developing schedule standards, historical EXHIBIT H.
data, front-end schedules and contractor monitoring TASK FORCE ORGANIZATION
systems. It is essential that early schedules be
simple, but accurately reflect all basic relation- Most major owners use task forces to monitor
ships.and constraints, so higher management can contractor performance. Some contractors are of
quickly focus on activities of significant schedule the opinion that this approach increases schedule
criticality. In later project stages the owner's durations and increases project costs. However,
contractor monitoring system must be sufficiently in today's volatile market-places, with associated
detailed to ensure that performance is measured contractor reluctance to bid on a lump-sum basis,
with appropriate accuracy, and criticality promptly we believe owner task forces are necessary, and
communicated throughout the owner/contractor project that they make a clear positive contribution to
team, over the entire project duration. meeting owner objectives.

It cannot be emphasized too strongly that Owner and contractor must structure their
collection and analysis of historical schedule and task force organizations to harmonize. The better
cost data on an integrated basis is essential for the coordination and communication of owner and
effective project control of both schedules and contractor personnel in this joint task force
costs. Integration of scheduling with cost control operation, the greater the prospect for successful
functions throughout project performance is vital project execution.
for efficient operation.
Systems and procedures do not build projects.
A significant feature of a successful schedule People do.
monitoring operation is the relationship between
contractor and owner personnel. As seen from the
flow chart, one item of the initial execution phase
of a capital project is "screening and qualifying"
contractors prior to contract award. During this
activity, owner scheduling requirements can be
clearly explained, and performance commitments
obtained from the contractors being screened.

After contractor award, the reality of these

commitments will be tested during detailed dis-
cussions. These should be conducted in a spirit
of equal partnership. Many of today's owners have
sophisticated and proven techniques for scheduling,
estimating and project control. Detailed cooper-
ative discussions of schedule organization, proce-
dures, systems and controls at this very early
stage can prevent later system changes, costly
'reorganizations, and personnel reassignments.
Such discussions should be promptly followed by
related discussions with the contractor's engineer-
ing, procurement, construction and project services STANDARD SCHEDULES
groups to verify mutual understanding and accept-
ance of a common approach to planning, scheduling The attached standard schedules can be used
and schedule control. At this stage the discussions by the owner to develop in-house front-end schedules
They reflect historical data, are available early,
and provide a check on the contractor's more
detailed schedules.

EXHIBIT J.
PROJECT MASTER SCHEDULE - U. S. A.

This basic standard‘schedule is updated as

economic conditions change, but usually not more
than twice a year. The "notes" require full
consideration. Such a shcedule can be used for
most process plant projects, but corrections must
be applied for subcontract construction, overseas
work, and remote jobsites. The logic will gener-
ally apply for small projects, but with reduced
activity durations. It is interesting that
engineering operations presently appear to be in
a float position, with major equipment deliveries
forming the key element of the critical path.

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 EXHIBIT L.
OVERALL BREAKDOWN - MEDIUM SIZED PROJECTS

This standard percentage-progress chart is

similar to the one for large projects. The data
base for this chart is some 50 project completed
by various contractors and owners in the period
1955-1970, with project costs ranging from $0.5
to $100 million. Most of the projects were less
than $20 million.

This medium-sized-project standard is used

in the same manner as the large-project standard.

EXHIBIT K.
OVERALL BREAKDOWN - LARGE PROJECTS.

This standard percentage-progress bar chart

shows major accounts with related progress curves
for engineering, material commitment and construc-
tion on a percentage-of-time basis. The data base
is seven large projects constructed in the period
of 1969 to 1976. We define a large project as
one requiring approximately 500,000 home office
manhours and 5 million field manhours.
EXHIBIT M.
Once schedule duration has been established OVERALL CONSTRUCTION SCHEDULE.
from the Standard Project Master Schedule, specific
project schedule and progress curves can be drawn, This standard is used in conjunction with
using these percentage relationships plus specific the overall breakdown and project master schedule.
job related information. Together these can provide a complete summary
schedule, with progress curves for engineering,
A detailed contractor schedule which lies material commitments and construction. As their
significantly outside the bar chart sequence or underlying data has been derived from many process
progress curves alerts personnel that it is an plant projects , planned or actual project perfor-
exception to the norm and must be evaluated in mance deviating from this pattern is an alarm
detail to determine the causes of the variation. signal for detailed evaluation and corrective
If actual performance falls below a leading progress action. If the deviation is favorable, evaluation
curve on such a chart, it is probable that succeed- is just as important, since it can be a guide to
ing progress curves will not be achieved. This improvement for future projects.
can indicate completion date slippage, or the
need for special efforts to recover the situation.
In many cases, thelatterwill increase costs.
-

EXHIBIT N.
CONSTRUCTION SUBCONTRACT CONTROL.

Today's projects tend to have an increasing

subcontract content. In some instances, contractors
have failed to realize that for effective project
control their proven direct-hire control tech-
niques must be supplemented by equivalent sub-
contract control techniques.

Project schedules frequently require that

subcontracts be let on a unit-price basis. This
is a compromise between lump-sum subcontracts,
which require full engineering definition; and
reimbursable subcontracts, which sometimes are
entered into with almost no definition.

For effective execution, unit-price sub-

contracts require high-quality bid packages in
which contractual conditions and work unit descri- that specific realistic objectives, with efficient
ptions are clearly defined. Time and expertise control systems, are accepted and utilized at all
are required to put these together. Exhibit N working levels. Cost and schedule objectives, to
shows subcontract preparation activities, and be realistic, must encompass consideration of both
activity duration. The time requirements shown today's conditions and the harsh realities of
are based on many years of experience. historical project performance experience. But
most important to successful planning and scheduling
CONCLUSION is the performance of the individuals who make up
the owner/contractor project team.
Successful planning and scheduling operations
are essential to successful project performance.
Their success is directly related to the degree

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