ceesp project management. units six and seven

7/29/2019 CEESP Project Management. Units Six and Seven

1/90

Project Management

Time and Cost Management

Lecturer: Javier Daz lvarez

Electrical EnergyConversion andPower Systems

Universidadde Oviedo


2/90

Time & Cost Management Project Definition

Resources estimation and asignation

Time planning

Base line

Management of changes

Evaluation

Termination strategy


3/90

What is time and cost control? Direct the progress

Cost-Time-Progress are terms which are closely related

Plannification process is not only finishing on time, it is also veryimportant when and how you finish.

Decide about actions

To reduce differences between the initial plan and reality Budget deviations management (more efficiency, productivity, external

and internal colaboration)


4/90

What is time and cost control? (II) Control results

Through a tactical and strategical planning.

Project is also conditioned by the organization strategy

Resources management

Always taking into account that resources are allways limited and it is

not easy to change them


5/90

Triple Restriction

Time

Scope

Cost


6/90

Triple Restriction- It contains the more clearly measurable indexes in project

management

- It allows us controlling the result of the project

- Nevertheless, at times it is very difficult to define good indexes

that measure the success or failure of the project. Sometimes,success or failure depends on the Public Relationships abilityof the project manager to interact with the stakeholders


7/90

Project Lifecycle

Concept

Planning

Execution

Monitoring and Controlling

Closing


8/90

Concept (I) Gather data

Identify needs

Stablish Targets

Finantial availability (basic)

Stakeholders

Risk level

Strategy

Possible team

Estimate resources


9/90

Concept (II) Identify alternatives

Present a proposal

Obtain approval for the next phase


10/90

Planning (I) Assign core team members

Conduct studies

Develope scope baseline Final items

Quality standards

Resources Activities

Stablish Master plan

Budget

Tasks definition

Policies and procedures


11/90

Planning (II) Risks evaluation

Present a summary Obtain approval for the next phase


12/90

Execution, monitoring and controlling (I) Create

Organization

Communications

Motivate team

Detail technical requirements

Stablish: Information control systems

Work items

Obtain goods and services Execute work items


13/90

Execution, monitoring and controlling (II) Direct / Follow / Anticipate / Control

Scope

Quality

Time

Cost

Risks Solve problems


14/90

Closing Finish work items

Review and accept Close accountability

Transfer product responsibility

Evaluate project Document results

Liberate and reallocate resources

Reallocate project team


15/90

Time and cost control documentation Project constitution document

Scope and requirements statement

Tasks breakdown


16/90

Project Constitution Document Document signed by a high level manager/director who has

functional authority over all resources and organizations that

works in the project. Its approval formally initiates the project.

A project manager is identified and assigned as early in the

project as it is feasible, preferably while the projectconstitution document is being developed and always prior tothe start of the planning.

It is reccommended fot the project manager to participate inthe development of the Project Constitution Document, as itprovides to the project manager with the authority to makeuse of resources to project activities.


17/90

Scope & requirements statement Document that describes the project

It can be from a high level document that describes the workto be done to a complete description of project requirements

It identifies all the requirements, restrictions and products ofthe project


18/90

Tasks breakdown It is the most important tool for the project manager

It consists on dividing the project into different products andeach product into different tasks

When you are breaking down the tasks you should only dividethem to the level you need to exert control over.

The breakdown should be done at the control level of theproject manager

Once it is done, the dependency determination could be done

and also the time and cost stimation


19/90

Exercise 6.1 Define the preliminary Tasks Breakdown (discussion) for the

following project:

Wind farm of 40 MW (2 MW x 20 turbines) in Len Mountains at 1.500masl.

Start from the DIA application

The closest concrete plant to the location is 45 km ahead.


20/90

Time & Cost Management Project Definition


Time planning Base line


Evaluation

Termination strategy


21/90

Resources estimation and assignation (I) What should be done?

The products.

Who and what is needed? Once the productos are known, it is possible to know who and what

personnel (attitudes, experience, etc.), equipment and materials will berequired.

Who can do the work? After answering the previous question, the following step is to find

people in the organization that complies with the requirements.

Which resources do we need?

Human resources, specialized machines, materials, etc.


22/90

Resources estimation and assignation (II) Who and what is available?

Availability of resources in and out of the organization

What level of experience and attitude is required? According to the quality standards of the project and the required time

by the customer

How can the resources affect time and cost? It is important to take into account the level and experience of the

resources (human and machinery) to estimate time and cost


23/90

Resources and responsibilities matrixResource 1 Resource 2 Resource 3 Resource 4

Task 1

Task 2

Task 3

Task 4

R- Responsible. Department / person that performs the task or assists

in its execution.

A- Accountable. Department / person owner of the task. The

responsible of its approval.

C- Consulted. Departmente / person that is consulted before making a

decision or action.

I- Informed. Department / person to be informed of the decisions or

taken actions.


24/90

Estimation tools (I) Analogous Estimating.

Uses the values of parameters sucha as scope, cost, budget and durationor measures of scale such as size, weight and complexity. From a

previous, similar project as the basis for estimating the same parametersor measures for a current project.

It is a gross value estimating approach, sometimes adjusted for knowndifferences in project complexity.

It is frequently used when there is a limited amount of detailedinformation about the project.

It is generally less costly and time consuming than other techniques, butit is also generally less accurate.


25/90

Estimation tools (II) Cost Estimating Relationship (CER).

Uses a statistical relationship between historical data and othervariables (square footage in construction, lineal meters in power lines

construction, etc.) to calculate an estimate for activity parameters, suchas cost, budget and duration.

This technique can produce higher levels of accuracy depending on thesophistication and underlying data built into the model.

It can be applyed to a total project or segments of a project, inconjunction with other estimating methods.


26/90

Estimation tools (III) Quotation of the bidders

They are an excellent source of information.

It is very important for the requirements to be very clear in order for thequotation to be homogeneous.


27/90

Estimation tools (IV) Bottom-Up Estimating

It is a method of estimating a component of work. The cost of individualwork packages or activities is estimated with the greatest level of

specified detail. The detailed cost is summarized or rolled up to higher levels for

subsequent reporting and tracking purposes.

The cost and accuracy of bottom-up cost estimating is typically

influenced by the size and complexity of individual activity or workpackage.


28/90

Estimation tools (V-a) Three Points Estimating

The accuracy of the previous Bottom-Up Estimating can be improved byconsidering uncertainty and risk.

This concept originated with the program evaluation and reviewtechnique (PERT).

Standard deviation


29/90

Estimation tools (V-b) Standard deviation of a path using PERT method


30/90

Cost types and categories Categories

Direct. Clearly associated with the project or product.

Indirect. It is not identificable or it is more likely that they will beconsidered as structure cost.

Types Fixed. Associated to the project and not to the production volume.

Variable. They depend on the consumption or production.


31/90

Exercise 6.2 Calculate Estimated Cost and Standard Deviation of each task

and the whole path

Task OptimisticMostLikely Pesimistic

EstimatedCost

StandardDeviation

1 4 5 6

2 2 5 9

3 4 6 10


32/90

Exercise 6.2. Solution Calculate Estimated Cost and Standard Deviation of each task

and the whole path

Task OptimisticMostLikely Pesimistic

EstimatedCost

StandardDeviation

1 4 5 6 5,00 0,33

2 2 5 9 5,17 1,17

3 4 6 10 6,33 1,00

1,57


33/90

How to review an Estimation

Review system definition: know what we are estimating

Study basic rules, restrictions and asumptions: know the

environment Focus on data sources: Where do they come from?

Compare the estimation with established standards (if they

exists) Determine if the methodology is acceptable: are estimations

reasonable? Are we evaluating all the costs?

Identify cost drivers Consider triple restriction

Consider customer expectatives


34/90

Important message

Estimations are only

predictions and budgets areonly estimations


35/90

Time & Cost Management

Project Definition




Evaluation Termination strategy


36/90

Sequence Activities The input for this work is the tasks breakdown

A decomposition of the tasks in work packages is required.These could be tasks from the task breakdown or smallerpackages


37/90

Tasks breakdown and Network Diagram

Tasksbreakdonw

1.1

1.1.1 1.1.2

1.2

1.2.1 1.2.2

1.3

1.3.1 1.3.2

To build the Network Diagram, work packages (1.1.1,

1.1.2, , 1.3.2) should only be used


38/90

Tasks breakdown and Network Diagram

Start 1.1.1 1.1.2 1.2.2 Fin

1.2.1 1.3.1 1.3.2


39/90

Project time validation The customer, the organization and the team need to know:

When can we start?

When should we finish?

Which is the business neccesity that defines the delivery date?

Which are the restrictions that could affect the time?

Which are the main risks?


40/90

Consider risks in Time Estimations Identify information related to known risks

Recognize schedule risks

Incorporate time reserve or contingency Reduce or eliminate time reserves

Documentate risks

Remember Murphy law


41/90

Network diagram It is a graphic representation of the logic relationships

between the activities of the project.

They are usually drawn from left to right to reflect thecronology of the project


42/90

Basic rules of the network diagram There is only a starting point

There is only a finishing point

All activities have at least a predecessor one (except thestarting activity)

All activities hava al least a successor one (except the finishingactivity)

There must not be any loops or disconnected paths

The logic of the diagram must be reviewed and continuouslyupdated


43/90

How to draw a Network Diagram Make a list with the activities and their relationships

Create a starting node

Draw an arrow from the starting node to the first activity node Arrange all the activities sequencially

Repeat the process for all the activities starting from thesuccessor

Create a final node

Check that all the nodes and relationships are considered


44/90

How to draw a Network DiagramActivity Predeccessor Estimated time

(a) Digging - 5

(b) Foundations a 2

(c) External plumbing a 6

(d) Divisions b 12

(e) Internal plumbing d 10

(f) Electrical installation d 9

(g) Roof d 5

(h) Bricks b 9

(i) Plumbing inspection c, e 1

(j) Collocate tiles g 2(k) Cover walls f, i, j 3

(l) Internal finishing k 9

(m) External finishing h, g 7

(n) Gardening M 8


45/90

How to draw a Network Diagram

Start (a) Digging

(c) External

plumbing

(i) Plumbing

inspection

(k) Cover

walls

(l) Internal

finishing

(b)

Foundations

(d)

Divisions

(e) Internal

plumbing

(f) Electrical

installation End

(j) Tiles

(g) Roof(m) Externalfinishing

(n)Gardening

(h) Bricks


46/90

Time planning

Network calculation from the begining to the end


47/90

Stablish starting date for the first activity

Start to work on the left. Continue always from left toright and from top to bottom

Early Start (ES) +Duration = Early Finish (EF)

When a successor activity has multiple predecessors,use the later early finish (EF) of the predecessor as itsearly start (ES)

Continue to the end of the network

47

Network calculation from the begining to the end(End-Start relationships)

Network calculation from the begining to the end


48/90

48

Network calculation from the begining to the end(End-Start relationships)

0 5 5 11 29 30 30 33 33 42

Start (a) Digging

(c) External

plumbing

(i) Plumbing

inspection

(k) Cover

walls

(l) Internal

finishing

5 7 7 19 19 29

(b)

Foundations

(d)

Divisions

(e) Internal

plumbing

19 28 42

(f) Electrical

installation End

24 26

(j) Tiles

19 24 24 31 31 39

(g) Roof

(m) External

finishing

(n)

Gardening

7 16

(h) Bricks


49/90

Stablish as the Late Finish (LF) the Early Finish (EF) ofthe last activity (or the date stablished by the customer)

Start to work on the right. Continue always from rightto left and from top to bottom

Late Finish (LF) - Duration = Late Start (LS).

LS advancement or LS + Delay = LF of thepredecessors

When a predeccessor activity has multiple successors,use the earlier Late Start (LS) of the successor as itsLast Finish (LF)

Continue to the beggining of the network

49

Network calculation from the end to the begining


50/90

50

Network calculation from the end to the begining

0 5 5 11 29 30 30 33 33 42

Start (a) Digging

(c) External

plumbing

(i) Plumbing

inspection

(k) Cover

walls

(l) Internal

finishing

0 5 23 29 29 30 30 33 33 42

5 7 7 19 19 29

(b)

Foundations

(d)

Divisions

(e) Internal

plumbing

5 7 7 19 19 29

19 28 42

(f) Electrical

installation End

21 30 42

24 26

(j) Tiles

28 30

19 24 24 31 31 39

(g) Roof

(m) External

finishing

(n)

Gardening

22 27 27 34 34 42

7 16(h) Bricks

18 27


51/90

Time that an activity could be delayed from its Early Start(ES) without delaying the end of the project

Slack = LF (Late Finish) EF (Early Finish) Slack = LS (Late Start) ES (Early Start)

The activities, not the projects, can have slack

51

Slack, Float or Path Float


52/90

The path which, any delay in its activities, will impact onthe project duration

The largest path of the project The path which has the activities with slack = 0

The shortest time to complete a project

52

Critical Path


53/90

53

Critical Path

0 5 5 11 29 30 30 33 33 42

Start (a) Digging

(c) External

plumbing

(i) Plumbing

inspection

(k) Cover

walls

(l) Internal

finishing

0 5 23 29 29 30 30 33 33 42

5 7 7 19 19 29

(b)

Foundations

(d)

Divisions

(e) Internal

plumbing

5 7 7 19 19 29

19 28 42

(f) Electrical

installation End

21 30 42

24 26

(j) Tiles

28 30

19 24 24 31 31 39

(g) Roof

(m) External

finishing

(n)

Gardening

22 27 27 34 34 42

7 16

(h) Bricks

18 27


54/90

Lag (delay): A modification of a logic relationship thatimposes a delay in the begining of the following task (FS + 2)

Example: When a foundation is finished, you have to wait 4weeks (FS + 20) to begin the erection of the wind turbine

Lead: A modification of a logic relationship tha allows theacceleration of the succesor task (FS 1)

Example. When the laying of the wires is almost finished(the covering works are not finished yet), you can start theterminals of the wires which are inside of the wind turbinesone week before (FS 5)

54

Lag and Lead


55/90

FS: Finish Start. The following activity starts when theprevious is finished

Finish the electro-mechanical erection start tests of the

subestation Finish the road start wind turbines transportation

55

Types of relationships

Activy A Activity B


56/90

SS: Start Start. The following activity stars at the sametime (or with the stablished delay) of the previous one.For example SS +2.

Start electrical installation; Start plumbing installation

56


Activy A

Activity B


57/90

FF: Finish Finish. Both activities have to be finished atthe same time.

Cook turkey; boil rice Select project ; asign funding

57


Activy A

Activity B

f l h


58/90

SF: Start Finish (with the stablished delay). Thefollowing activity finishes the stablished delay from thestart of the previous one

Maintenance team start to work (A) and two days after,erection teams finish their works SF + 2

58


Activy A

Activity B

M h d f d i j d i


59/90

Crashing. Reduce the duration of the tasks of the criticalpath (anyway possible).

Network crashing. Study alternatives of cost and durationin order to obtain the maximun of compression atminimun cost

Fast tracking. Carry out at the same time activities thatshould be done in a sequential way.

59

Methods of reducing project duration

B l i


60/90

The process of replanning tasks with slack in order tosolve resources problems

Determine ES, EF, LS and LF

Evaluate available resources for each cronogram

Identify slack

Adjust tasks analizing their slack to balance the resources

Determine new cronogram

60

Balancing

E i 6 3 D th t k di


61/90

61

Exercise 6.3. Draw the network diagramID Nombre de tarea Duration Predecessors Successors

1 Parque en Len 806 days

2 Inicio proyecto 0 days 4,6,7,8,9,10

3 Estudios previos 265 days

4 Estudio de viento 265 days 2 12

5 Estudios restricciones 265 days

6 Medio Ambiente 265 days 2 12

7 Evacuacin 45 days 2 12

8 Ingeniera 90 days 2 12

9 Propiedad 30 days 2 12

10 Administrativo 30 days 2 1211 Estudio econmico 40 days

12 Elaborar estudio 15 days 4,6,7,8,9,10 13

13 Aprobacin direccin 25 days 12 15

14 Tramitacin inicial 275 days

15 Elaborar anteproyecto 15 days 13 16

16 Declaracin de Impacto Ambiental 130 days 15 17

17 Elaborar proyecto ejecucin 30 days 16 18,19

18 Autorizacin Administrativa 90 days 17 6,31,35,22FF

19 Calificacin Urbanstica 60 days 17 20

20 Licencia de Obras 40 days 19 6,31,35,22FF

21 Compras 75 days

22 Elaborar pliego licitacin 40 days 18FF,20FF 23

23 Ofertas 25 days 22 24

24 Adjudicacin 10 days 23 26,31,35

25 Construccin 163 days

26 Obra civil parque 100 days 18,20,24 7SS+30 days

27 Obra electromecnica parque 80 days 26SS+30 days 8SS+50 days

28 Izado aerogeneradores 50 days 27SS+50 days 9SS+40 days

29 Pruebas aerogeneradores en vaco 20 days 28SS+40 days 0SS+10 days

30 Pruebas aerogeneradores con tensi 20 days 29SS+10 days,3 40

31 Obra civil lnea area 90 days 18,20,24 2SS+30 days

32 Izado apoyos lnea area 80 days 31SS+30 days 3SS+40 days

33 Tendido lnea area 70 days 32SS+40 days 3434 Pruebas lnea area 1 day 33,37 38

35 Obra civil subestacin 90 days 18,20,24 6SS+60 days

36 Equipos electromecnicos subestaci 45 days 35SS+60 days 37

37 Pruebas en vaco subestacin 10 days 36 34,38

38 Energizacin subestacin 2 days 34,37 30

39 Tramitacin final 28 days

40 Tramitacin con REE 15 days 30 41

41 Pruebas con REE 3 days 40 42

42 Inscripcin en el RIPRE 10 days 41 43

43 Fin proyecto 0 days 42

1/1

2/3

Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2

1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half 1st Half 2 l

Ti & C t M t


62/90


Project Definition





Base Line Foundations


63/90

A base line is the original plan which is approved and/orscope changes approved.

The base line stablishes a reference which is used byproject directors to check the real advance of the project

63

Base Line Foundations

Cost Base Line


64/90

It is obtained using estimates of work that will benecessary. Money time.

Back Up: it is money or time that is provided in the planto attend risks of cost, time or performance

64

Cost Base Line

CTC: Cost to complete

BAC: Budget at Completion

Base Line Review


65/90

Ensure that all stakeholders agree with the Base Line.

Work to stablish strategies of risks before stablishing theBase Line.

Clarify when and how the project director could haveaccess to the back up.

Know objective measures to identify when the Base Lineis out of control.

Know when and how you must change the Base Line.

Remake the Base Line only as last resource. The Base Line can only be changed when the change is

approved and authorized

65

Base Line Review



66/90


Project Definition





Origin of changes


67/90

Customer

Members of team project

Government Environment

Products obsolescence

Management alterations Technological advances

Financing changes

67

Origin of changes

Real Vs Planning


68/90

68

Real Vs Planning

Two months of delay 50 k of overrun

Process of Changes Management


69/90

Identify andpresente

change requestRequest review

Impactvaluation

Obtaincustomerapproval

Inform

stakeholders

Implement and

document

Distribute

69

Process of Changes Management

Document change Requests


70/90

Who?

What?

When? Impact.

Authorization.

70

Document change Requests

Make the change


71/90

Evaluate incidence in:

Triple restriction

Functional areas

Team

Project

Policies

Organization

71

Make the change

Facing the changes


72/90

Project plan update:

Cost

Time

Resources

Milestones

Documentation

Communicate changes. It should be done in a systematicand organized way (use a document for each change anda register for the documents of change).

Protect team members Close project

72

Facing the changes



73/90

g

Project Definition





Evaluation


74/90

Evaluation consists on an exam and oficial verification of:

Advancement

Status

Finantial health (of the project)

74

Control


75/90

The process of:

Comparing actual with planned performance

Analyzing variations

Evaluating trends to

To make process improvements and alternatives

To recommed appropriate corrective actions

Control

Should be done regularly

It should be concentrated in specific tasks and performanceanalysis

Its relative cost is low

75

Time and Cost Control


76/90

Time control

It compares planned project advance Vs real project advance

It defines a strategy to limit the variation in time

It manages activities to mantain an acceptable variation of thetime base line

Cost control It compares planned project costs Vs real project costs

It defines a strategy to limit the variation in the costs base line

of the project It manages activities to mantain budget

76

Earned Value Technique (EVT)


77/90

What is it?

An objective assessment of variations

A standard calculation

A consistent measure among all project manage

Compare the planned costs to the actual costs of theperformed work.

77

Earned Value Technique (EVT). Definitions


78/90

Planned Value (PV): The sum of the approved costestimates for activities scheduled to run within aspecified period.

Actual Cost (AC): The total cost incurred in theperformance of work for a specified period.

Earned Value (EV): The sum of the approved cost

estimates for completed activities in a specified period oftime.

Budget at Completion (BAC): The sum of the approved

cost estimates for all project activities

78

Earned Value Technique (EVT). Definitions


79/90

Cost Variance (CV): The difference between the plannedcost of work completed and the actual cost of that work.

Schedule Variance (SV): The difference between thescheduled end of one activity and the really amount ofwork performed expressed in money.

Cost Performance Index (CPI): The return of spent money.

The value of work completed by each spent euro.

Schedule Performance Index (SPI): The performance ofthe invested money. The value of completed work by

each euro planned to be completed

79

Earned Value Technique (EVT). Formulas


80/90

SV = EV PV

CV = EV AC

SPI = EV / PV

CPI = EV / AC

Completed percentage. PC = EV / BAC

Wasted percentage. PS = AC / BAC

Estimate to completion (the expected additional cost tocomplete the project or some specific activities). ETC =AC + ETC

Estimate at completion (the expected total cost of theentire project or specific activities). EAC = AC + (BAC EV) = AC + ((BAC-EV)/CPI)

80

Earned Value Technique (EVT)


81/90

81



82/90

Project Definition





Project closure


83/90

Three points to take into account:

Scope verification

Agreements closing

Administrative closing

83

The process of closing strategy


84/90

Fulfill contractualobligations

Conduct final

review of theWBS

Organize files

Finish therelationship with

the customer

Celebratingsuccess

Manage closure

84

Fulfill contractual obligations


85/90

Identify pending deliverables

Client analysis

Internal analysis

Identify broke promises

Written

Oral

Review budget

Deliver products

Ensure client acceptance

85

Conduct final review of the WBS


86/90

Has each work package been completed?

Yes. Document the closing date, who decided to close it, etc.

No. Document why not, who decided not to complete it, etc.

86

Organize files


87/90

Make a complete dossier of the project documentation.

Make the final revision of learnt lessons

Circulate a preliminary list of learnt lessons

Make a workshop with the team members to documentnew best practices and learnt lessons.

87

Finish the relationship with the customer


88/90

Sign of TOC and all the certificates.

Start next responsibilities:

Maintenance

Audit

88

Celebrating Success


89/90

Celebration

Awards

Remember memorable moments

89

Manage closure


90/90

Reassign team members to other projects

Reassign materials

File documentation for historical reference

90

ceesp project management. units six and seven

Documents