Unit-4

1. Project Monitoring & Control Process

 Evaluation and comparison of actual measured results against those planned
is the fundamental principle of project monitoring process.
 Whenever there is a variance, corrective action is required to keep the
project on schedule and to budget.
 The inputs are the project plan and progress reports that contain data
collected from the project team.
 Where progress deviates significantly, and this usually means outside of a
predetermined tolerance limit, it is important to identify the underlying
causes and take corrective action.

Following diagram shows the project monitoring cycle to be followed at regular

period of intervals of the project duration
2. Monitoring Process (on a regular basis)
 Collect.
o Get the data about the current status of your project.
 Measure and Compare.
o Compare with baseline plan, highlight any deviation, make a
projection based on current data.
 Assess and Re-plan.
o Decide whether corrective actions are necessary.
o If so, plan, document, and take the corrective actions

2.1 Monitoring and controlling activities

 Involves tracking, reviewing, and regulating project progress

 Includes status reporting, progress measurement, and forecasting
 Reports on scope, schedule, cost, resources, quality, and risks
 Controls project and project document changes
  Includes control of scope, schedule, costs, and risks
 Formalizes acceptance of deliverables
 Records quality control results
 Implements risk treatment plans and actions
 Administers suppliers
2.2 Key Results from monitoring process

 Progress and status reports

 Plan updates
 Risks registers
 Change requests
 Work products/deliverables

3. Techniques to evaluate project performance

3.1 Earned Value Analysis

Objective:

 To measure the progress of an activity, deliverable and/or project by

comparing the actual value to planned value, thereby indicating the
probability of meeting the scope, time & cost budget of the activity,
deliverable and/or project, and need for any corrective actions.
 To analyze the project performance, calculate the variance for schedule and
cost and indicates where the project stands in comparison to the estimates
calculated earlier for this point in time.

Many a times one could easily be on time, however may overspend, or may be on
time & within budget however scope may be incomplete. In simple terms, EV
analysis is better than comparing actual to planned results or by simply guessing
the project status.
Definitions

Originally
planned cost of
the work that
Planned Value (PV) or Budgeted Cost of Work Scheduled (BCWS) should have
been done by
this time

Actual cost
expenses on
Actual Cost (AC) or Actual Cost of Work Performed (ACWP)
this project
upto this time

Estimated cost
of budgeted
Earned Value (EV) or Budgeted cost of Work Performed (BCWP)
work
completed
 Total budget
Budget at Completion (BAC)
for the project
Estimated final
Estimate At Completion (EAC) cost of the
project
Estimated cost
of the
Estimate To Completion (ETC) remaining
work of the
project
Description EVA Formulas Result
Positive value is good.
Cost Variance (CV) CV = EV – AC Negative value
unfavourable.
Value below 1.0 = below
par performance. Value
above 1.0 = above par
Schedule Variance (SV) SV = EV – PV performance The further
away the ratio is from
1.0 the more urgent need
to investigate
>1 means project
Cost Performance CPI = EV / AC, compares performed to
efficient, <1 means
Indicator (CPI) actual cost
project inefficient
>1 means project ahead
Schedule Performance SPI = EV / PV, compares work
of schedule, <1 means
Indicator (SPI) performed to work planned
project behind schedule
Estimate At Completion
EAC = BAC/CPI
(EAC)
Estimate To Complete
ETC = (BAC – EV) / CPI
(ETC)

Example

Assume a project that has exactly one task. The task was baselined at 100 hours,
but 110 hours have been spent and the estimate to complete is 10 additional hours.
The task was to have been completed already. Assume an hourly rate of $100 per
hour.
Description Formulae Result
Hourly Rate * Total Hours
PV 100*100 = 10,000
Planned or Scheduled
Hourly Rate * Total Hours
AC 100*110 = 11,000
Spent
AC divided by estimated cost at
% Complete completion which is 11,000 11000/(11000+1000) = 91.667%
plus cost of 10 additional hours
Baselined Cost * % Complete 9166.667 (baseline of 10,000 *
EV
Actual 91.667% complete)
10000 (100 hours * 100) indicates
Baselined Effort in hours *
BAC initially budget signed off for the
Hourly Rate
project
12000 (11000 + 1000) notice this
EAC AC + ETC
is over budget
-2000 (10000 – 12000) indicates
VAC BAC – EAC additional funds required to
complete work
% Completed
PV / BAC 100% (10000/10000)
Planned
% Completed 91.7% (11000/12000) lesser than
AC / EAC
Actual planned completion
-833.33 (9166.667 – 10000)
Earned Value (EV) – Planned
SV negative schedule variance or
Value (PV)
behind schedule
0.9167 (9166.667 /
SPI SPI = EV / PV 10000) indicating poor schedule
performance
Earned Value (EV) – Actual -1.833.33 (9166.67 – 11000)
CV
Cost (AC) indicating a cost overrun
Earned Value (EV) /Actual 0.833 (9166.667 / 11000)
CPI
Cost (AC) indicating over budget
3.2 The Critical Ratio

 The critical ratio (CR) is the product of CPI and SPI. It can also be called the
cost-schedule index (CSI).
 It is used as an indicator of the overall project health

CR = CPI x SPI.

For the above project, CR = 0.833*0.9167 = 0.764.

 A CR of 1.00 indicates that the overall project performance is on target.

 This may result from both CPI and SPI being close to target, or, if one of
these indices suggests poor performance, the other must be indicating
good performance.
 This allows some trade-offs to reach the desired project goals.

A graph of the critical ratio over time provides a quick indicator of trends in the
overall project performance, and of the impact of any corrective actions. These
graphs may be very effective in project reviews
3.3 Line of Balance

The Line of Balance (LOB) Scheduling Technique was originated by the

Goodyear Company in the early 1940’s for the programming and control of both
repetitive and non‐repetitive projects.

The Line‐of‐Balance also known as the Repetitive Scheduling Method (RSM),

Location Based Scheduling, Vertical Production Method or Vertical Scheduling
Method
  Line of Balance (LOB) is a method of showing the repetitive work that may
exist in a project as a single line on a graph.
 A LOB Chart shows the rate at which the work that makes up all of the
activities has to be undertaken to stay on schedule.
 The relationship of one trade or process to the subsequent trade or process
is defined by the space between the lines.

A simple diagram in which line shows location and time at which a certain crew
will be working on a given operation is known as LOB. It is used on repetitive
work such as constructing multiple dwelling units, when used on linear work such
as roads and railways the technique is more accurately called Time/Location
Charts

The purpose of the LOB method is to ensure that the many activities of a repetitive
production process stay “in balance” that is, they are producing at a pace which
allows an even flow of the items produced through a process and at a speed
compatible with the goals set forth in a plan.

Advantages of LOB schedule

 Clearly shows the amount of work taking place in a certain area at a specific
time of the project.
 Has the ability to show and optimize the resources used for large number
of repeated activities, executed in several zones or locations.
  Easier cost and time optimization analysis because of all the information
available for each activity in the project.
 Ease of setup and its superior presentation and visualization.
 Easier to modify, update and change the schedule.
 Better managing of all the various sub-contractors in the project.
 Allows for simpler and clearer resource management and resource
optimization functions.
 Visualization of productivity and location of crews.
 It allows project managers to see, in the middle of a project, whether they
can meet the schedule if they continue working as they have been.

3.4 Graphical Evaluation and Review Technique (GERT)

Graphical Evaluation and Review Technique, commonly known as GERT, is a

network analysis technique used in project management that allows probabilistic
treatment of both network logic and estimation of activity duration. The technique
was first described in 1966 by Dr. Alan B. Pritsker of Purdue University and W.W.
Happ.

Advantages:

 GERT approach addresses the majority of the limitations associated with

PERT/CPM technique. GERT allows loops between tasks.
 Allows for conditional and probabilistic treatment of logical relationships
 GERT considers both deterministic and probabilistic branching unlike PERT.
It incorporates both in the network analysis.
 GERT allows additional branching features not provided by CPM or PERT.

Disadvantages:

 GERT technique is the complex programme (Monte Carlo simulation)

required to model the GERT system

3.5 Review Meetings

 The most important resources in projects are people.

 The actions that project people take towards their assigned tasks leads to
task completion on-time or delayed.
 In a worst case scenario, a task would not be completed.
  Project control techniques targeted at people must enable the timely
completion of tasks.

Delays and incomplete tasks could lead to project delays, depending on whether
the activities are in the critical path. In addition, project costs get impacted
negatively. Delayed tasks translate to effort that has not been budgeted for,
therefore cost of that task to completion goes up.

Some simple, yet effective, project control techniques that you can use to ensure
timely completion of tasks are:

 Conducting Daily Team Meetings: As the name implies, this activity

involves having a project huddle in which team members give a status
update of their tasks. Daily team meetings also involve identifying
dependencies and risks to the assigned tasks.
 Conducting Project Health Meetings: These meetings involve the larger
team since many projects are broken into sub-projects, intra-project
dependencies are analyzed. Various factors are used to access the project
health. For example, you can use earned value analysis, team motivation,
and client satisfaction.

4. Project Crashing and Time-Cost Trade-Off

Project duration can often be reduced by assigning more labor to project activities,
in the form of overtime, and by assigning more resources (material, equipment, and
so on). However, additional labor and resources increase the project cost. Thus, the
decision to reduce the project duration must be based on an analysis of the trade-
off between time and cost.

Project crashing

 It is a method for shortening the project duration by reducing the time of

one (or more) of the critical project activities to less than its normal activity
time.
 This reduction in the normal activity time is referred to as crashing.
 Crashing is achieved by devoting more resources to the activities to be
crashed.

“Crashing an activity” (“Crashing the network”):

  Reducing the time required to complete an activity (in hopes that this will
reduce the completion time of the entire project) by assigning additional
resources to that activity.
 But reducing the duration time of the activities on the critical path may
change the critical path.

Some of the terms generally used in this process are

 Normal Time (NT): the expected time to complete an activity

 Normal Cost (NC): the cost to complete the activity in its normal time
 Crash Time (CT): the shortest possible time in which the activity can be
completed
 Crash Cost (CC): the cost to complete the activity in the shortest possible
time (ie., the cost to complete the activity in its crash time)
 Crash Cost per time period(Cost Slope) = (CC – NC) / (NT – CT)

 As projects continue over time, they consume indirect costs, including the
cost of facilities, equipment, and machinery, interest on investment, utilities,
labor, personnel costs, and the loss of skills and labor from members of the
project team who are not working at their regular jobs.
  Financial penalties for not completing a project on time were also incurred.
For example, many construction contracts and government contracts have
penalty clauses for exceeding the project completion date.
 Project crashing costs and indirect costs have an inverse relationship;
crashing costs are highest when the project is shortened, whereas indirect
costs increase as the project duration increases. This time-cost relationship is
illustrated in the above figure. The best, or optimal, project time is at the
minimum point on the total cost curve.

Project crashing Example:

Critical path for the house building network in following figure is activities 1-2-3-
4-6-7 and the project duration was 9 months, or 36 weeks. Suppose the home
builder needed the house in 30 weeks and wanted to know how much extra cost
would be incurred to complete the house by this time.

Following table represents the time and costs before and after project crashing

Normal Crash Total allowable Crash

Normal Crash
Activity Time Time Crash Time Cost per
Cost Cost
9Weeks) (Weeks) (Weeks) Week
1-2 12 7 3000 5000 5 400
2-3 8 5 2000 3500 3 500
2-4 4 3 4000 7000 1 3000
3-4 0 0 0 0 0 0
4-5 4 1 500 1100 3 200
4-6 12 9 50000 71000 3 7000
5-6 4 1 500 1100 3 200
6-7 4 3 15000 22000 1 7000
Total 75000 110700

The total cost of crashing the project to 30 weeks is 2,500. The contractor could
inform the customer that an additional cost of only 2,500 would be incurred to
finish the house in 30 weeks.