Project Planning, Scheduling, and Control

ENMG 632

Project Control
Lesson 1: Basic Concepts
 Introduction
 Project schedules are, without a doubt, considered a valuable tool only if used
properly.

 Colorful bar charts and precedence networks can be no more than decoration on
the walls of the job trailer. They can also be a mere fulfillment of bid or contract
requirements.

 But if well prepared and then used seriously, consistently, and intelligently
throughout the life cycle of the project, they can be an effective tool that schedulers
and the project management team can rely upon to manage projects.

ENMG 632: Project Planning, Scheduling, and Control 3

 Introduction (cont‟d)
 The most important use of schedules is project control.

 The scheduler compares actual performance with baseline performance and

discerns any deviation.

 The project management team then deals with this deviation, analyzes it, and
suggests solutions to bring the schedule back on track, if possible.

ENMG 632: Project Planning, Scheduling, and Control 4

 Introduction (cont‟d)
 Project control can thereby be reduced to 4 basic components:

• Monitoring work progress: understanding what is happening on a project & obtaining

information about it
• Comparing work progress with baseline schedule and budget
• Finding any deviations, determining where and how much, and analyzing to discover the
causes
• Taking corrective action whenever and wherever necessary to bring the project back on
schedule and within budget

 It is not sufficient to simply know what is happening on a project. There is a

responsibility to respond to the available information; hence the difference
between Project Monitoring and Project Control.
ENMG 632: Project Planning, Scheduling, and Control 5
Lesson 2: Schedule Updating
 Definition
 Careful monitoring of a project is an effective means of giving insights to
management about the need for action.

 However, the schedule is an effective management tool only as long as it bears a

reasonable resemblance to the actual project.

 When discrepancies are noted , adjustments must be made to the CPM network.
This process is known as schedule updating.

ENMG 632: Project Planning, Scheduling, and Control 7

 Definition (cont‟d)
 Schedule updating is just one part of the project control process.

• It reflects actual project information at a given data date regarding completed and in-
progress activities.

• It indicates as well any changes to future work beyond the data date (i.e. remaining
activities).

• It involves incorporating approved changes into the baseline schedule.

ENMG 632: Project Planning, Scheduling, and Control 8

 Reasons for Updating
 Updating may be necessitated for a number of reasons:

• The person who originally developed the network may have envisioned one way of
sequencing the project activities, while the field superintendent now thinks another
approach is more convenient.
• In some cases, the logic of the network must be reorganized in order to accommodate new
constraints imposed on the project, such as limited resources.
• In some other cases, the logic must be reorganized simply because some of the activity
durations exceeded expectations.

 Overall, schedule updating is not needed if all duration estimates are accurate and
if the sequencing of the activities is exactly as originally scheduled.

ENMG 632: Project Planning, Scheduling, and Control 9

 Frequency of Updating
 Construction schedules may be updated monthly, biweekly, weekly, or according to
another time interval.

 Weekly and biweekly are probably the most common frequencies.

 Project managers must achieve a delicate balance between a period between

updates that is too long and one that is too short.

ENMG 632: Project Planning, Scheduling, and Control 10

 Frequency of Updating (cont‟d)
 Waiting too long to update a schedule may eliminate the effectiveness of updating as a
control tool. Managers may not have the time or opportunity to take corrective action.

 The amount of work progress that occurred during the period may overwhelm the
scheduler.

 Also, the field personnel or project manager may forget when an activity actually started
or finished if the activity occurred a month ago and was not formally documented.

 Having a long reporting period may encourage procrastinators to put off corrective
measures by using the logic „„We‟ll do it later. There is plenty of time!‟‟

ENMG 632: Project Planning, Scheduling, and Control 11

 Frequency of Updating (cont‟d)
 Conversely, a reporting period that is too short may be costly in terms of time
consumption, overhead, and reporting costs.

 It may also become a nuisance to the management team.

 Typically, the frequency of updating increases at certain times, such as in the last
month or two of a project, or during a „„crunch time,‟‟ such as before a deadline.

 It is worth noting that project updating is tied to payment requests so the frequency
of updating affects when requests are issued.

ENMG 632: Project Planning, Scheduling, and Control 12

 Steps for Updating a Schedule
 The project manager (or field personnel) prepares a list of actual progress, changes
for individual activities, and all related information on a schedule status form.

Sample Activity Status Reports to Monitor Project Schedule Status

ENMG 632: Project Planning, Scheduling, and Control 13
 Steps for Updating a Schedule (cont‟d)
 The scheduler then feeds the information into the computer scheduling program
and updates the schedule.

 The scheduler discusses the new situation with the project manager and makes
sure that no more changes or adjustments are needed (in other words, he or she
obtains the project manager‟s approval for producing the reports).

 The scheduler prints new reports that show the updated schedule and delivers them
to the project manager who, in turn, distributes them to the involved parties:
(different reports to different parties).

ENMG 632: Project Planning, Scheduling, and Control 14

 Steps for Updating a Schedule (cont‟d)
 The scheduler may also give the project manager a short descriptive analysis report.

 For example, if the expected finish date of the project was pushed back a few days,
the scheduler may give the reason (e.g., a predecessor activity was supposed to
finish by a certain date but did not).

 The scheduler tracks the delay from the end and works his or her way back to the
activity or activities that caused the delay.

ENMG 632: Project Planning, Scheduling, and Control 15

 Steps for Updating a Schedule (cont‟d)
 After producing the reports, the scheduler may receive feedback from different
parties, some of which may have an impact on the schedule.

 The scheduler must filter any such feedback through the project manager.

 Only one point of contact (usually the project manager) should have the authority to
approve any information before it is implemented in the schedule.

 Some schedule feedback received after the reports are printed may be kept till the
next update.

 When the next updating cycle is due, the same steps are repeated.
ENMG 632: Project Planning, Scheduling, and Control 16
Lesson 3: Schedule Updating- Example
 Example – Original Baseline Schedule

ENMG 632: Project Planning, Scheduling, and Control 18

 Example – Progress Report
 Ten days after the project has started, you receive the following progress
report :

• Activities A and D are complete, actual dates: A (0, 2), D (5, 9).
• Activity B started on day 5. Remaining duration = 2 days.
• Activity C started on day 2. Some problems were encountered. Remaining
duration = 4 days.
• The duration for activity F was adjusted to 8 days.
• Activity J has been canceled.
• The duration for a new activity P is 4 days, its IPAs are E and F and its
immediately succeeding activity (ISA) is K.

ENMG 632: Project Planning, Scheduling, and Control 19

 Example – Updating the Schedule
P
4

5,9

ENMG 632: Project Planning, Scheduling, and Control 20

 Example – Updated Schedule
10,12 12,18 22,26 26,31

B E P K
2 6 4 5
17,19 19,25 25,29 29,34

10, 10 14,22
10,14 34,37
F
C 8 22,34 N
Data Date 4 3
14,22 I
10,14 12 34,37
14,22 22,26
22,34
10,10
G M
8 4
10,18 22,28
14,22 30,34
H L
8 6
20,28 28,34

ENMG 632: Project Planning, Scheduling, and Control 21

 Example – Discussion
Original Baseline Schedule Updated Schedule

CP: A,C,G,I,N CPs: C,G,I,N & C,F,I,N

Project Duration is 35 days Project Duration is 37 days

ENMG 632: Project Planning, Scheduling, and Control 22

Lesson 4: Earned Value Analysis (EVA)
 Background
 The critical path method system is largely time-oriented even though preceding
discussions have often involved the analysis of project costs.

 Something that has not yet been discussed in detail is the extent to which CPM can be
used as a cost-monitoring system.

 But is it possible to also determine how well the project is adhering to its “cost
schedule,” or cost estimate ?

 The integration of cost and schedule control systems is of natural interest to

professionals, because the true “status” of a project can only be assessed if both cost
and schedule data are examined in conjunction with one another.

ENMG 632: Project Planning, Scheduling, and Control 24

 Background (cont‟d)
 For example, a project may appear to be well under budget based on the amount of
money spent to date compared to what was projected.

 However, this figure alone could be very misleading; costs may be very low because
the project is well behind its schedule!

 It is necessary to know what actual project costs are relative to expected costs while
also knowing where the project is on a time basis.

ENMG 632: Project Planning, Scheduling, and Control 25

 Background (cont‟d)
 A common question asked in project management is, “What is the stage of
completion of the project?” A common reply might be 30% or 85%.

 But what is the basis of that assessment? It could be based on the percent of time
that has been utilized, the percentage of the value of construction put in place, or
some other measure.

 In the early to mid-1960s, the U.S. defense agencies promulgated guides and
requirements related to the integration of cost and schedule data into a single
system  EARNED VALUE

ENMG 632: Project Planning, Scheduling, and Control 26

 Earned Value Analysis
 The Earned Value Analysis (EVA) is an integrated cost-schedule approach used to
monitor and analyze the progress of a project.

 Popescu and Charoenngam (1995) defined it as „„the performance measurement

to report the status of a project in terms of both cost and time at a given data
date‟‟.

 While the earned value concept was originally oriented toward owners/clients, it
found its way into other systems such as contractor systems.

ENMG 632: Project Planning, Scheduling, and Control 27

 Earned Value Analysis (cont‟d)
 The Earned Value Analysis (EVA) is simple. At any given point, take the following
five steps:

• Determine how much work you have done and how much you should have done
according to the plan.

• Determine how much money you have earned and how much money you have spent.

• Calculate the time (schedule) and money (budget) deviations (variances) so far.

• Analyze the causes for the major deviations and determine possible remedies.

• Extrapolate these deviations to the end of the entire project.

ENMG 632: Project Planning, Scheduling, and Control 28

 EVA Metrics
• BAC: Budgeted Cost at Completion

• % Complete
• At the activity level, % Complete (a) = Actual Quantity/Total Quantity
• At the project level, % Complete (p) = ∑ %Complete (Act i) * allocated weight (Act i)

• BCWS: Budgeted Cost of Work Scheduled OR Planned Value (PV)

• BCWP: Budgeted Cost of Work Performed OR Earned Value (EV)

• BCWP (activity level)= % Complete (a) * activity budget
• BCWP (project level)= ∑ BCWP (Act i) OR = % Complete (p) * BAC

• ACWP: Actual Cost of Work Performed OR Actual Cost (AC)

ENMG 632: Project Planning, Scheduling, and Control 29
 EVA Metrics (cont‟d)
• SV: Schedule Variance
SV($)= BCWP–BCWS (SV >0: ahead of schedule, SV<0:behind schedule)
SV (days)= SV($)/ Daily planned budget

• CV: Cost Variance

CV($)= BCWP–ACWP (CV>0:under budget, CV<0:over budget)

• SPI: Schedule Performance Index

SPI= BCWP/BCWS (SPI > 1: ahead of schedule, SPI <1: behind of schedule)

• CPI: Cost Performance Index

CPI= BCWP/ACWP (CPI >1:under budget, CPI <1:over budget)

• EAC: Estimated Cost at Completion

EAC = ACWP + (BAC - BCWP) = BAC-CV
ENMG 632: Project Planning, Scheduling, and Control 30
 EVA Metrics (cont‟d)
• FSV: Forecasted Schedule Variance
FSV= SV(days)/%Complete At the activity level,
% Complete (a) = Actual Quantity/Total Quantity

At the project level,

• FCV: Forecasted Cost Variance % Complete (p)= ∑ %Complete (Act i) * allocated weight (Act i)

FCV= CV/%Complete

ENMG 632: Project Planning, Scheduling, and Control 31

 EVA & S-Curves

General Concepts of Earned Value Analysis.

ENMG 632: Project Planning, Scheduling, and Control 32
Lesson 5: EVA - Example
 Example- Given
The total estimated duration of the mass excavation activities in an office building
project is 40 days. After 15 days, the project manager receives the following
information about the three mass excavation sub-activities. Perform an EV analysis.

NOTE: The work is sequential and not parallel  the contractor works on the first task till it is finished then
starts the next one and so on.
ENMG 632: Project Planning, Scheduling, and Control 34
 Example- Solution

Total Duration is 40 days

Data Date is Day 15

50,000
7,800/20,000 = 39%
17,950
%Complete * Act. Budget= 39% * 50,000= 19,500
Act. Budget * 15/40= 50,000* 15/40= 18,750
BCWP-ACWP= 19,500-17,950=1,550
BCWP-BCWS= 19,500-18,750=750
SV($)/Daily planned budget= 750/[(50,000+44,000+82,500)/40]= 0.17
BCWP/ACWP= 19,500/17,950=1.09
BCWP/BCWS= 19,500/18,750=1.04
CV/%Complete = 1,550/0.39= 3,974
SV (days)/%Complete = 0.17/0.39= 0.44
ENMG 632: Project Planning, Scheduling, and Control 35
 Example- Solution (cont‟d)

Activity Level Project Level

0.283 0.249 0.468 50,000+44,000+82,500=176,500

39 * (0.283)+ 15 *(0.249) + 38.18*(0.468) = 32.64
17,950+5,850+35,900 = 59,700
19,500+6,600+31,500 = 57,600
18,750+16,500+30,938 = 66,188
BCWP-ACWP = 57,600-59,700 = -2,100
BCWP-BCWS = 57,600-66,188 = -8,588
SV($)/ daily planned budget = -8,588/ (176,500/40)= - 1.95
BCWP/ACWP = 57,600/59,700 = 0.96
BCWP/BCWS = 57,600/66,188 = 0.87
CV /% Complete = -2,100/ 0.3264= -6,434
SV(days) /% Complete = -1.95/ 0.3264= - 5.97

ENMG 632: Project Planning, Scheduling, and Control 36

 Example- Results Discussion

CE Clay Rock

 Looking at the overall budget, we find that the Mass Excavation operation is slightly over budget by $ 2,100

EAC= ACWP + (BAC –BCWP)= BAC –CV = 176,500 – (-2100) = $178,600

ENMG 632: Project Planning, Scheduling, and Control 37

 Example- Results Discussion (cont‟d)
CE Clay Rock

 Looking at the overall schedule, we find that the Mass Excavation operation is behind schedule by 2 days

Expected project duration = 40+2= 42 days

ENMG 632: Project Planning, Scheduling, and Control 38

 Example- Results Discussion (cont‟d)
CE Clay Rock

 Looking at forecasted variances indicates that, if work continues at the same pace and in the same pattern,
the Mass Excavation operation will finish 6 days behind schedule and with a $6,434 deficit.

Expected project duration = 40+6= 46 days & EAC = BAC –FCV = 176,500 – (-6434) = $ 182,934

ENMG 632: Project Planning, Scheduling, and Control 39

Lesson 6: EVA vs. CPM
 EVA vs. CPM
 It is important to note that the EV analysis and CPM-based schedule updating may
yield conflicting results.

 The schedule variance (SV) may be positive, but the schedule update may show that
the project is behind, or vice versa.

 This situation occurs mainly because the EV analysis is budget-driven, whereas

schedule updating focuses on the critical path, without regard to monetary issues.

ENMG 632: Project Planning, Scheduling, and Control 41

 EVA vs. CPM (cont‟d)
 For example, the contractor may get a positive schedule variance in EVA by
completing noncritical activities ahead of schedule while the critical path may be
behind.

 CPM-based schedule updating still gives the most accurate readings on whether the
project is ahead of or behind schedule.

ENMG 632: Project Planning, Scheduling, and Control 42

Lesson 7: Concluding Remarks
 Conclusion
 Controlling a project involves evaluating the impacts of deviations on the scheduling
of future activities and the project as a whole.

 To be an effective project control tool, it is important that the schedule have the
following attributes:

• Accurate enough to reflect the way the job is actually executed.

• Sufficiently flexible to accommodate changes and predict their impact.

• Suitably versatile to allow for corrections as necessary to keep the schedule current or up
to date.
ENMG 632: Project Planning, Scheduling, and Control 44
 Conclusion (cont‟d)
 It is vital that main project participants have viable measures of project performance.

 With front-end loading on billings, it is clear that the cash position on a project can be
very misleading.

 A project could have a strong cash position in terms of costs and revenues, yet be headed
for a net loss.

 A negative cash-flow position may not be an automatic indication of an impending loss

on a project.

 The measure that is needed to establish the proper status of a project must not be
biased.
ENMG 632: Project Planning, Scheduling, and Control 45
 Conclusion (cont‟d)
 Earned value measurements provide the means of assessing the status of a project
without the bias introduced by many other measures commonly used in project
management.

 For the owner wishing to monitor the progress of a contractor, the pitfalls of using the
schedule of values/BOQ must be recognized.

 While the owner may have little recourse other than using the budgeted costs as a
measure, the schedule of values and the project schedule should be carefully
evaluated before using these as a means of evaluating performance.

 Only then can earned value be a reliable method of monitoring progress.

ENMG 632: Project Planning, Scheduling, and Control 46
 Conclusion (cont‟d)
How to take corrective actions?

 Often the response consists of simply notifying subcontractors and suppliers of

changes in the dates that their services or products will need to be available.

 It may not be always possible to accommodate these changes.

 An evaluation must be made of how to get the project back on schedule and what it
will cost.

 Alternatives must be identified: line up a new sub, accelerate the project, allow project
to slip, etc.
ENMG 632: Project Planning, Scheduling, and Control 47
 Conclusion (cont‟d)
 These must be evaluated according to the economic costs and benefits as
determined by performing time–cost trade-offs with critical path method networks
and principles.

 Only the shortening of the duration of one or more subsequent activities on the
critical path will permit a recovery from the project‟s delay (i.e. recovery schedules).

ENMG 632: Project Planning, Scheduling, and Control 48

Thank You