contract cash flow & performance analysis - cash flow analysis.pdf · 1 contract cash flow...
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1
Contract Cash Flow &
Performance Analysis
PERCEPTION® Helping The
Shipyard Stay On Budget
2
Shipyards that know their true costs are more likely to be
profitable and are in a better position to challenge their
competition.
They can focus their efforts and resources on those areas
that can benefit the most from productive change.
A shipyard would never know this unless it had a means
for measuring benefits and their relative impact upon
profits.
3
World-class shipyards have a strong focus on
maximizing the efficiency of their manufacturing and
assembly processes. They strive to perform work at
the most productive stages of construction, eliminate
wasted time, and simplify shipyard production
processes.
These shipyards execute effective production plans
and work hard to successfully stay on budget and on
schedule. They know where they are and where they
are going.
4
Critical to the success of any project is the management
of project resources. Ultimately, the resource that
matters most is money.
PERCEPTION tasks and forecasts money resources at
all levels of a project work breakdown structure.
The system produces reports that clearly identify
project status and trends in straight-forward, no
nonsense money terms.
Turn VISABILITY into ACTION
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PERCEPTION summarizes performance at all levels of a project. The
following presentations describe those that are critical to the management
of any project.
1. Tracking progress and estimates at completion: these reports track
budget (BAC), earned value (BCWP), actual costs (ACWP), budgeted cost
of work scheduled (BCWS), and estimate at completion (EAC), as well as
cost/schedule variances, trends, and management reserves (MR).
2. Measuring and summarizing work order performance in terms of costs
and schedules. The system can focus on any selection of work orders for
in-depth analysis of detail performance.
3. Measuring and summarizing work center performance in terms of costs
and schedules. The system can focus on any selection of work orders for
in-depth analysis of production process performance.
4. Measuring and summarizing cash flow requirements. The system tracks
cash flow requirements for labor, material & overhead. The system
details commitments, receipts, and usage of direct purchase material,
subcontract work, owner-furnished material and general stock.
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Tracking Actual Costs
PERCEPTION tracks project cash flows of actual costs
broken down for labor, material & overhead.
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Tracking Actual Costs
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
12/10/02 01/29/03 03/20/03 05/09/03 06/28/03 08/17/03 10/06/03
Actual Labor Cost
Actual Labor + Overhead
Actual Overhead Cost
Material Cost Received
Material Cost Used
Total ACWP
(Labor+Material+Overhead)
8
Tracking Cash Budgets &
Estimates At Completion
PERCEPTION tracks project cash flows of actual costs
(labor, material & overhead) against budgets (BAC),
management reserves( (MR) and estimates at
completion (EAC).
The system employs a number of methods for
determining EACs, most of which are based directly
upon actual accumulating cost performance of a project
and their trends towards completion.
9
Total Cash Budget Versus EAC
(Labor, Material & Overhead)
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
09/01/02 12/10/02 03/20/03 06/28/03 10/06/03 01/14/04 04/23/04 08/01/04 11/09/04
Do
lla
rs
Total BAC + Reserves
Total EAC
Total Budget
Total ACWP
Total BCWP
Extended Total BAC
Extended EAC
Extended Total ACWP-Cubic
Total BCWS
10
Tracking Earned Values Costs
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
12/10/02 01/29/03 03/20/03 05/09/03 06/28/03 08/17/03 10/06/03
Labor Cost BCWP
Material Cost Used
Material BCWP
Material Cost Received
Total BCWP
(Labor+Material+Overhead)
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Tracking Cash Flow Schedules
PERCEPTION measures and tracks cash flow schedules
(budgeted cost of work scheduled, or BCWS) broken
down for labor, material & overhead.
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Tracking Cash Flow Schedules
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
12/10/02 01/29/03 03/20/03 05/09/03 06/28/03 08/17/03 10/06/03
Labor BCWS
Material BCWS
Overhead BCWS
Total BCWS
13
Tracking Cash Flow
Requirements
PERCEPTION measures and tracks cash flow
requirements on an incremental basis broken down for
labor, material & overhead.
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Tracking Cash Flow Requirements Per Week
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
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/23
/20
02
1/6
/20
03
1/2
0/2
00
3
2/3
/20
03
2/1
7/2
00
3
3/3
/20
03
3/1
7/2
00
3
3/3
1/2
00
3
4/1
4/2
00
3
4/2
8/2
00
3
5/1
2/2
00
3
5/2
6/2
00
3
6/9
/20
03
6/2
3/2
00
3
7/7
/20
03
7/2
1/2
00
3
8/4
/20
03
8/1
8/2
00
3
9/1
/20
03
Ca
sh
Flo
w P
er
We
ek
Total BCWP/Week
Total BCWS/Week
Total ACWP/Week
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Tracking Material Costs
PERCEPTION tracks material and subcontract costs
and relating them to budgets, management reserves,
and estimates at completion.
PERCEPTION tracks material values at all stages of
material control: purchased, received, used in
production, and invoiced by vendors.
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17
Tracking Earned Value Costs
PERCEPTION measures and tracks earned value
(budgeted cost of work performed, or BCWP) costs
broken down for labor, material & overhead.
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Total Cost Performance
(Labor, Material & Overhead)
$509,8
80
$7,1
30,5
01
$7,6
40,3
81
$4,6
99,0
17
$3,8
94,3
92
$4,3
33,6
79
$6,7
41,6
95
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
Total MR Total BAC Total BAC +
MR
Total BCWS Total BCWP Total ACWP Total
EAC(SPAR)
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Total Cost Performance
(Labor, Material & Overhead)
7.2%
100.0%
107.2%
65.9%
54.6%
60.8%
94.5%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
Total M
R
Total B
AC
Total B
AC +
MR
Total B
CW
S
Total B
CW
P
Total A
CW
P
Total E
AC(S
PAR)
Perc
en
t o
f T
ota
l B
ud
get
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Total Cost Performance
(Labor, Material & Overhead)
6.7%
93.3%
100.0%
61.5%
51.0%56.7%
88.2%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
Total M
R
Total B
AC
Total B
AC +
MR
Total B
CW
S
Total B
CW
P
Total A
CW
P
Total E
AC(S
PAR)
Perc
en
t
To
tal B
ud
get
& M
an
ag
em
en
t R
eserv
e
21
Overall Performance Index
(Labor, Material & Overhead)
89.9%
82.9%
74.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Cost Perf. Index - CPI Schedule Perf. Index - SPI Combined CPI x SPI - SCI
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Comparing Total EAC Methods
(Labor, Material & Overhead)
$6,7
41,6
95
$7,9
34,8
20
$8,2
38,4
05
$8,6
78,8
57
$7,8
98,4
44
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
Total
EAC(SPAR)
Total EAC(CPI) Total EAC(SPI) Total EAC(SCI) Total
EAC(Average)
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Comparing Total EAC Methods
(Labor, Material & Overhead)
7.2%
100.0%
107.2%
94.5%
111.3%115.5%
121.7%
110.8%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
Total M
R
Total B
AC
Total B
AC +
MR
Total E
AC(S
PAR)
Total E
AC(C
PI)
Total E
AC(S
PI)
Total E
AC(S
CI)
Perc
en
t o
f T
ota
l B
ud
get
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SPAR Associates, Inc.
Over 40 Years Providing
•Shipyard management software
•Software development services
•Training & maintenance support
•Planning & scheduling services
•Cost estimating services
•Management consulting
25
Over 40 Years Serving the Shipbuilding &
Repair Industry