Schedule Risk Analysis y (SRA
Pedram Daneshmand Associate Director Blue Visions Management Pty Ltd
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Project Time Management Project Time Management Risk & Opportunities Project Risk Management Schedule Risk Analysis y Results Review Action Plan A ti Pl
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Project Ti P j t Time Management M t History
Every project must be managed against a schedule; Every project must be managed against a schedule; Project Scheduling has been around a long time; Scheduling is one of the most widely practiced project management disciplines (Archibald and Villoria 1967).
Project Time Management includes the processes required to accomplish timely completion of the project (PMBOK, 2004).
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Project Ti P j t Time Management M t Process
Activity Definition Activity Definition Activity Sequencing (logic) Activity Resource Estimating Activity Duration Estimating Schedule Development Schedule Control Schedule Control
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Project Ti P j t Time Management M t Schedule Development
The Schedule Development process includes The Schedule Development process includes selecting a scheduling Method, scheduling Tool, incorporating project specific data within that incorporating project specific data within that scheduling tool to develop project specific schedule Model, and generating Project Schedule. Model and generating Project Schedule
(PMI‐PS for Scheduling, 2007)
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Schedule Development S h d l D l t Methods
Logic‐based Scheduling Methods (LSM) Logic‐based Scheduling Methods (LSM)
E.g. E g Critical Path Method (CPM) Resource Optimisation Critical (CPM), Optimisation, Chain Method (CCM), etc.
E.g. Probabilistic Evaluation and Review Technique (PERT), PNET, Monte Carlo Simulation (MCS), etc.
Repetitive Scheduling Methods (RSM) ( )
Line of Balance (LOB) Flowline Method
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Schedule Development S h d l D l t Inputs
Planners develop the project schedule by using:
Available templates; Available quantities resources and productivity rates; quantities, Available work/scope statements; Available construction logic and logic; Other assumptions/documents e.g. calendars, PMP, etc.
All these add uncertainties to schedule and reduce the confidence level. What about risks and opportunities in the schedule?
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Schedule Development S h d l D l t Outputs
The outputs of Schedule Development process are: The outputs of Schedule Development process are:
(Deterministic) Project Schedule; (Deterministic) Schedule Model Data (Deterministic) Schedule Baseline (Deterministic) Resource Requirements
With all those uncertainties in the inputs and the possible risks and opportunities in the schedule, the question is, how confident we are in this schedule? i i h fid i hi h d l ?
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Schedule Development S h d l D l t Major Challenges
Uncertainties due to assumptions; Uncertainties due to assumptions; Logic, constraints, resources, calendars and activity durations are not always clear and agreed; durations are not always clear and agreed What‐If Scenarios; and Risks and Opportunities
To have a realistic schedule, Schedule Development process should be improved by using Schedule Risk Analysis. In other words Project Time Management Analysis In other words Project Time Management and Project Risk Management need to be integrated!
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Schedule Development S h d l D l t Risks & Opportunities
Every schedule has uncertainties/assumptions. Every schedule has uncertainties/assumptions. Every schedule has risks and opportunities.
Effect Eff on project j
(positive or negative)
Time Scope Q Quality y Cost
So, Risks and Opportunities should be managed effectively to minimize the surprises!!
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Project Ri k M P j t Risk Management t Process
AS/NZS ISO 31000:2009
COMMUN NICATE AND CONS A SULT Establish Context MONITOR AND REVIEW D W
RIS ASSESS SK SMENT
Identify Risks Analyse Risks
Evaluate Risks E l Ri k Treat Risks
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Project Ri k M P j t Risk Management t Risk Assessment
Risk Assessment include
Risk Identification (both Uncertainties and Events) Risk Analysis
Qualitative Quantitative (Schedule Risk Analysis or SRA)
The goal is to have a better understanding of risks / opportunities and their overall impact on project completion date. This will bridges the gap between completion date This will bridges the gap between traditional CPM schedule and the REAL project.
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Project Ri k M P j t Risk Management t Risk Analysis
Risk Analysis is the process to comprehend the Risk Analysis is the process to comprehend the nature of risks (or opportunities) and to determine the level of risks (or opportunities) in the schedule the level of risks (or opportunities) in the schedule
Risk analysis provides the basis for risk evaluation and decisions about risk treatment; and Risk Analysis includes risk estimation.
By Schedule Risk Analysis (SRA), we model the risks and opportunities (uncertainties and events) within the complexity of the interrelationships between the complexity of the interrelationships between the various tasks of the schedule.
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Schedule Ri k Analysis S h d l Risk A l i (SRA)
SRA is a probabilistic analysis to quantify the SRA is a probabilistic analysis to quantify the impacts to a project, program or portfolio as a result of carrying uncertainties and/or risks and result of carrying uncertainties and/or risks and opportunities or to simulate the possible what‐if scenarios. scenarios
Relying on a accurate most likely schedule as a base, SRA takes the project time management to the next level of accuracy and confidence. h l l f d fid
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Schedule Ri k Analysis S h d l Risk A l i Overview
Available data gathering Schedule Review Technical Research Risks & Opportunities Register
Both Uncertainties and Events
Schedule Risk Model Schedule Risk Model Simulation Results and Discussions Res lts and Disc ssions
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Schedule Ri k A l i S h d l Risk Analysis Data Gathering
Required information for a SRA
Well‐developed project scope; Quality estimate excluding contingency and escalation; Quality estimate excluding contingency and escalation; Schedule reflecting the estimate; Risk management policy/processes in your organisation; Risk management policy/processes in your organisation Risk checklist presenting typical risks and opportunities; Risk & Opportunities Template; Ri k & O t iti T l t Schedule Risk Templates/Models; and Sample report of the process and recommendations. S l f h d d i
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Schedule Ri k A l i S h d l Risk Analysis Schedule Review
How to review the deterministic schedule?
Validation of all quantities (most likely); Validation of all productivity rates (most likely); Validation of all durations (most likely); Minimum number of constraints constraints; Complete logic network; Reasonable d ti f t k and R bl duration for tasks; d Reasonable Critical Path.
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SRA – S h d l R i Schedule Review Sample Report
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Schedule Ri k A l i S h d l Risk Analysis Technical Research
When the team is confident that the project When the team is confident that the project deterministic schedule reflects the most likely case, the technical research can begin. the technical research can begin
Historical data research Interviews Internet searches, etc.
Issues may include items such as site access, Environmental Approvals, inclement weather, construction productivity concerns, construction construction productivity concerns construction modifications, equipment and material deliver, etc.
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Schedule Ri k A l i S h d l Risk Analysis Risk Register
The Technical Research will enable the schedule risk analyst to complete the Risk Register file:
The identified risks & opportunities Likelihood of the identified risks and opportunities Impacted activities Schedule and/or Cost Impact/s Schedule d/ Cost Variations S h d l and/or C t V i ti Correlation of risks and opportunities to one another Notes, t N t etc.
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Schedule Ri k A l i S h d l Risk Analysis Risk Register (Sample)
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SRA – Ri k R i t Risk Register (Sample) (S l ) Rain details
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SRA – Ri k Register Risk R i t Quality Check
Major risks and opportunities been identified; The likelihood and impacts been assessed; Risk Matrix aligned with the company’s risk management policy; Impacts checked against the allocated calendars; ; Correlations between risks been identified; Stage the opportunities if required; and Duplications are minimised and addressed addressed.
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SRA – S h d l Risk M d l Schedule Ri k Model Uncertainties & Events
Developing the Schedule Risk Model involves Developing the Schedule Risk Model involves modelling the potential impacts and the likelihood of the risks and opportunities on the project and of the risks and opportunities on the project and then applying those to the schedule. Two aspects of the risks and opportunities should Two aspects of the risks and opportunities should be modelled within the schedule:
Estimate Uncertainties (Optimistic, Most Likely and E i U i i (O i i i M Lik l d Pessimistic) Events including probabilistic branching (probability and Events including probabilistic branching (probability and the impacts)
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SRA – S h d l Risk M d l Schedule Ri k Model Probability Distributions
Probability Distribution is a way to indicate the Probability Distribution is a way to indicate the likelihood of values between the optimistic and pessimistic values. pessimistic values Probability Distribution can be:
Uniform (flat), U if (fl ) Normal (bell shaped), Beta (skinny bell shaped), (k b ll h ) Triangle (pyramid shaped), or Customised (user defined).
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SRA – S h d l Risk M d l Schedule Ri k Model Probability Distributions
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SRA – S h d l Risk M d l Schedule Ri k Model Special Conditions
Special conditions which needs extra attention: Special conditions which needs extra attention:
Probabilistic Branching – which considers the situation where the outcome of an event can cause in two or where the outcome of an event can cause in two or multiple possible courses of activities. Correlation between risks
Positive Correlation: occurs when one risk goes higher, so must the other. Negative or Adverse Correlation: occurs when one risk increases, the other must decrease.
Inclement Weather or other external influences Inclement Weather or other external influences
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SRA – S h d l Risk M d l Schedule Ri k Model Inclement Weather
Inclement Weather can be a significant factor in a Inclement Weather can be a significant factor in a project schedule. Very often there is good data available but understanding the impact on the available but understanding the impact on the schedule is challenging. A proper modelling will allow the team to define A proper modelling will allow the team to define risk assessment criteria for inclement weather conditions in the schedule, and include these conditions in the schedule and include these uncertain weather conditions in the risk analysis.
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SRA – S h d l Risk M d l Schedule Ri k Model Inclement Weather
There are two distinct ways of defining inclement There are two distinct ways of defining inclement weather events:
Event with results in an uncertain number of non Event with results in an uncertain number of non working days scattered throughout a period, e.g. rain or snow. Event with results in a single block of non working time with a probability of occurrence, e.g. chance of a hurricane in a period.
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Schedule Ri k A l i S h d l Risk Analysis Simulation Methods
The SRA performs multiple simulations of the The SRA performs multiple simulations of the project using random samplings of the relevant risks and opportunities considering their probability risks and opportunities considering their probability and impact. Two popular methods: Two popular methods
Monte Carlo Simulation (MCS) – faster method but has a larger possibility of sampling error larger possibility of sampling error Latin Hypercube Sampling (LHS) – slower method but less sampling errors less sampling errors
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Schedule Ri k A l i S h d l Risk Analysis Simulation Process
Analysis does the simulation through multiple Analysis does the simulation through multiple samplings or iterations. Each iteration is picking one sample point from Each iteration is picking one sample point from each activity and calculating the project outcome. User defines the number of iteration (e.g. 1000, 5000, etc) depending on the complexity of the project and its risk model.
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Schedule Ri k A l i S h d l Risk Analysis Simulation Tools
Main tools been widely used for simulation are: Main tools been widely used for simulation are:
Primavera Risk Analysis (previously known as Pertmaster) @Risk for Project Crystal Ball Crystal Ball
The next slides are presenting results from simulations by using Primavera Risk Analysis. simulations by using Primavera Risk Analysis.
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Schedule Ri k A l i S h d l Risk Analysis Sample Programme
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Schedule Ri k A l i S h d l Risk Analysis Finish Date Histogram
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Schedule Ri k A l i S h d l Risk Analysis Histogram & Statistics
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Schedule Ri k A l i S h d l Risk Analysis Criticality Index Tornado
The Criticality Index of an e ca y de o a activity is the proportion of the iterations in which the activity was critical. Usually activity was critical Usually more attention will be given to the activities with Criticality Index of more than Criticality Index of more than 50%.
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Schedule Ri k A l i S h d l Risk Analysis Criticality Path Report
The Criticality Path Report highlights the path through the project containing the tasks with the highest g Criticality Index values. Percent Criticality is the Percent Criticality is the probability that an activity will be on the critical path; this indicates the relative this indicates the relative importance of the activity to other activities in the programme.
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Schedule Ri k A l i S h d l Risk Analysis Criticality Distribution Profile
Criticality Distribution Profile plots the spread of Criticality Index in a project which gives an indication of the number and threat of near to critical path. A high percentage (more than 40%) indicates a relatively tight programme. tight programme
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Schedule Ri k A l i S h d l Risk Analysis Action Plan
The accuracy of the SRA outcomes should be The accuracy of the SRA outcomes should be improved through a number of iterations of this process. process Based on the initial results, the team should:
Review the risk register and make modifications where require; R i th i k it d k difi ti h i Make changes to the risk model accordingly; Run the simulation again and repeat the process to achieve the Run the simulation again and repeat the process to achieve the most cost‐effective risk mitigation plan; Finalise the Risk Action Plan as well as the Contingency Plan; and Communicate this schedule with the team and then monitor it.
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About the Author
Pedram Daneshmand, Associate Director Pedram Daneshmand Associate Director Blue Visions Management
Pedram is a civil engineer with over 15 years experience in the construction industry He is industry. highly skilled and technically proficient in many aspects of construction including Programming, Programme Performance Measurement, Quantitative Risk Analysis, Contract Management, Schedule Risk Analysis (SRA), Cost Risk Analysis (CRA), Project Monitoring & Controls (PMC) Systems, Earned Value Performance Measurement technique (EVPM) and POW (Program of Work) Planning & Controls. As an industry innovation award winner for his programming and risk analysis skills, Pedram is currently an Associate Director with Blue Visions Management leading a team of planning and controls professionals within the infrastructure sector. With more than 15 articles in the professional conferences/journals he is been regularly invited to the conferences/journals, technical presentations as one of the industry leaders in his field.
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