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Rev 1
1. Introduction
Having generated a number of options and selected either one or a small number of
alternatives the project enters phase 3 of the project process. For the purpose of these notes
we will assume the project team is left with only one preferred option as the process can
simply be repeated in whole or part for other options and dependant on the degree of
definition necessary to choose between them.
This session begins with an overview of phase 3 before introducing the Critical Path Method
of Project Planning. This is the most commonly used method of project planning and
through a simple example the principles behind the critical path method are introduced
Note: It would not be reasonable to expect students to develop full sanction grade schedules andcost estimates as part of individual and group projects. However, it is quite normal for more detailedschedules and cost estimates to be put together for the preferred option in support of a request for
funding and authorisation to undertake phase 3. Consequently, to the extent possible, you should tryto apply the same methodologies in developing the best schedules and estimates that you can withthe time and resources at your disposal. In all cases you should make clear the level of accuracy youhave achieved.
2. Overview of Phase 3
In this phase it is the project teams task is to
1) Fully define the scope of the preferred alternative
2) Develop a detailed execution plan3) Develop a Sanction Grade schedule
4) Develop a Sanction Grade capital cost estimate
5) Develop and/or Finalise the risk management strategy
6) Develop a detailed commercial case
7) Verify the project meets the business objectives.
8) Conduct a detailed economic analysis to meet funding requirements
9) Carry out final project sensitivity analysis
10) And finally prepare the business case
Session 6Scheduling
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So far we have managed to argue that each step we have encountered is the most
important or the hardest. That is true, the effective framing of a project/opportunity is
absolutely critical to ensure the project will set out to do what is required. The evaluation of
the range of possibilities is a common failure point; if this is not carried out effectively the
project will produce a sub-optimal result or be stalled as other possibilities are identified laterin the process. This 3rd step is also key, but for another reason. It is key for the timely and
cost effective execution of the work. The trick here is to ensure that only the really viable
alternatives are carried over from phase 2 and that if more than one was carried over that
these are as quickly as possible reduced to a single alternative. This phase can turn into a
costly and slow part of the Project Management process. For example, it is not unknown, in
the selection of well types and locations, for too many to be carried to Phase 3 and for this
phase to literally take years to carry out all the detailed evaluation work on all the options.
This is an expensive phase, as it involves all the detailed planning, evaluation and study
work to ensure the execution of the work goes well and often involves ordering long lead
items.
In this phase the alternative(s) for the project is/are fully scoped, detailed execution plans
developed, checks made to ensure the value of the project meets the business objectives,
estimates and economic analysis are tightened to check whether they meet funding
requirements, and approval for expenditure is sought.
Although Phase 3 is about adding more definition to, ideally one, preferred option there is
still room for creativity. The development of the preferred alternative will still encompass a
range of possibilities, technologies, techniques, material options, work methods, timings and
so on. The challenge is to find the best potential outcome for the project.
So, pursuing the preferred alternative(s) must:
Identify the single alternative to take forward to execution.
Identify the optimum method for the deployment of the preferred alternative.
Carry out all the pre-work necessary for the approval and organisation of the
execution phase (phase 4).
The key objectives of pursuit of the alternative(s) are to:
Develop detailed project plans.
Define and freeze the scope of work.
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Initiate detailed design, this may also be completed in this phase if required,
otherwise design will run in parallel with execution.
Prepare all business case documentation required which includes
understanding project sensitivities and ranges of potential outcomes.
Secure approval and funding for execution.
3. Planning vs. scheduling
The terms planning can be used to describe the same thing however from a project
perspective they do have very different meanings.
Planning Is the putting together of the strategy, including all the individual elements that
are required to deliver the desired project outcome
Scheduling Is the compiling time and resources into a structured format from which the
project control mechanisms can be derived
This session is primarily concerned with scheduling although the word plan has been used
extensively throughout these notes to refer to a schedule rather than the broader process of
planning. Planning in its broadest context is covered to a degree in session 9; however, it is
not feasible to go into great detail within the constraints of a single 15 credit module.
4. Scheduling
Before anything else can be done, the project schedule developed in phase 1 and
maintained through phase 2 (normally fairly high level and decision driven) will need
extending and expanding to capture the elements of this phase of the project.
Planning is an iterative process; it is never too early to develop a plan, as all a plan actually
is:
Your current thoughts on activities, responsibilities and
interdependencies reflecting both delivery and expenditure
The plan may also include resources, costs and revenue or may simply be a non-resourced
bar chart.
Avoid the trap of we dont know enough to pull a plan together; we should wait until we have
more information. This often results in missed activities, interdependencies not being
understood and lack of clarity over responsibilities. If you dont have enough information,
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show the activities on the plan which are gathering the information. Show who is responsible
for these activities. Show the development of a more detailed plan as an activity on the plan!
Every day/week/month/quarter the plan will be updated always catching your current
thoughts so there is never a time which is too early to start.
The schedule is a precedence network that is used as the basis for all progress
measurements plans and reports.
It takes strategies developed by the project team so far and develops them into a detailed
activity network that should achieve the defined goals and objectives
The project schedule should be
Realistic yet challenging
Transparent with regard to understanding the critical path and possible impact of
project risks
The appropriate level of detail to enable effective monitoring and control
Owned by the project team and approved by the parent organisation
Based on historical data, yet taking into account impact of current market, location
factors and any other resourcing constraints
Ideally only one plan! Too often different organisations have their own. Whilst
sometime unavoidable there should be a single high level plan at least to enable all
activities to be co-ordinated.
The in remainder of this session we will discussed planning techniques and tools at some
length but we will not be covering the use of project scheduling software such as MS-Project
or Primavera both due to time constraints and because this is more usually a job for the
project planner rather than the project manager himself. A project manager clearly needs to
be able to interpret plans and have a meaningful dialogue with project planners in order to
generate the plans however would not normally be expected to drive planning software
other than at the most basic level at the very start of a project. The course material do
contain a tutorial on MS-Project and it is loaded on the classroom PCs so can be used in
preparation of your project deliverables if you so desire. This session will assist you greatly
in understanding what is going on behind the scenes in MS project and may well be tested in
its own right in the examination for this module.
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5. Origins of Network Planning
Both the Critical Path Method (CPM) and the Programme Evaluation and Review Technique
(PERT) were developed in America in the 1950s. CPM was initially developed by the Du
Pont Company, for the planning and controlling of the maintenance of chemical processing
plants. This proved to be so successful (at one site, downtime for maintenance was reduced
by 37%) that the method soon found applications in other types of project work. PERT was
devised by the US Navy to co-ordinate the activities of the many contractors engaged in one
of the most complex projects ever undertaken until that time, the development of the Polaris
missile. It is claimed that, by using PERT, the programme was completed some two years
earlier than would otherwise have been the case. Both techniques employ the same basic
methodology, the representation of project activities as a network of lines and nodes. The
main difference between them is that PERT allows probabilistic estimates of activitydurations.
The general emphasis of these methods is usually on how quickly a task can be performed.
But, as well as time, we also want to monitor the control of other resources in order to bring
the project in on schedule and budget. Hence we are concerned with managing:
Time
Human Resources
Equipment and machinery
Cash
Clearly there must be a trade off between time and resources with generally high levels of
resource leading to shorter project durations. The smoothing of resources (discussed later)
will lead to better economy, especially when considered with cash flow constraints.
6. The Network Planning Procedure
The project network is a key part of the planning stages and from this project network the
basic elements of the project plan including the Gantt chart and resource profiles are
derived. The British Standards Institute defines the project network:
"A diagram representing the events, activities and their inter-dependence"
It should be remembered that the network represents a plan and it can therefore be updated
and improved with time.
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A project, or part of a project, can be divided and continuously (almost) sub-divided into
Events that are single points in time identifying the beginning or end of an activity.
These are hard to give names to.
Activities that take time to complete but are easy to name and required resources
can be shown.
There are two conventions used when developing graphical representation of networks.
Activity on Arrow (AOA) networks represent the events as circles (nodes on the network)
and the activities are shown as arrows (branches of the network). Alternatively we can use
Activity on Node Analysis(AON) where the activities occur at the nodes. The selection of
technique is simply a matter of choice although the AON method offers some advantages
over the AOA method. AON is usually the method selected for analysis on a computer (for
example Microsoft Project utilises this method), principally because the analysis data can be
easily displayed within the node. The MSc course does not address Activity on Arrow in any
great depth. You are however encouraged to investigate further by reading about it in
almost any textbook on Project Management.
In general project networks are usually developed using the aid of a project management
computer package (a tutorial for Microsoft project is provided within the course materials).
Therefore the aim of this section of the course is to ensure that you understand what the
package is doing behind the scenes.
The basic steps of the CPM technique (extended to include resourcing and S-Curves) are
outlined below; (Dont worry if you dont follow them at this point they will be explained later
in the session)
1) Define Project
Clearly identify the goal of the project, and the conditions which will signify both the
start of the project and its satisfactory completion
2) List Act ivit ies
Identify those activities, connecting the start and end of the project, which it is judged
appropriate to schedule and control.
3) Establish precedenc e Relationsh ips
For each activity, identify those other activities, if any, which must be completed before
the activity in question, can begin. This information will probably be presented on a
project activity chart
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4) Construct Network
Represent the project activities and their precedence relationships by a network of
nodes.
5) Est imate Act iv i ty Durat ions
For CPM a single estimate is made for each activity in the network. For PERT, three
estimates are made: optimistic, pessimistic and most likely times.
6) Make Forward Pass
Beginning with the starting node and ending with the last node, determine the earliest
start and finish times for each node. This step determines the expected completion
time for the project.
7) Make Backw ard Pass
Moving back through the network from the last node, determine the latest time for each
node.
8) Calculate floats
For each activity in the network calculate its total float and free float. Float indicates the
amount by which an activity may be delayed without delaying project completion.
9) Identify Crit ical Path(s)
This is the chain of activities which determines the duration of the project. At this stage
it may be necessary to alter the project plan if a completion deadline is to be met.
10) Prepare Activity Data Table
This table presents a description of each activity, its node references, duration, earliest
and latest start times, earliest and latest finish times, total float and free float. This is anextension of the project activity chart.
11) Schedu le Activit ies
Planned start and finish times for each activity are chosen, and presented on Gantt
chart.
12) Resourc e Ac tivit ies
At this stage the resources for each activity should be specified and any overloading on
resourcing identified. By the process of resource smoothing resource overload may be
mitigated although again this will have an impact on the project plan
13) Develop the Project S-Curve
After the plan has been developed the project S-Curve which tracks the cash spend or
man-hours utilised throughout the project can be developed. This will often form the
basis of project control.
14) Monito r Progress
As the project is implemented, actual progress is compared to the plan. If required and
possible, corrective action may be initiated. This is covered in detail in session 10.
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Before each of them is considered in detail it is important to note that this is an iterative
process and that each stage will impact on later and earlier stages in the process and
therefore it should be remembered that each of these stages overlap significantly.
In order to demonstrate the development of a project plan the following outline project
definition will be utilised as an example for the development of a resourced project plan.
Project Definition
A Company has ordered a piece of equipment from a supplier of special-purpose
machines. The suppliers plant is sited in another country, and the machine, having
been constructed there, is currently undergoing proving trials. The project concerns
the transport of the machine from the suppliers plant to the company, and installing it
in a predetermined position in the companys plant. The project start will be signalled
by a telephone call from the companys representative at the proving trails, indicatingthat the machine has completed the trials successfully. The project will be deemed to
be complete when the machine is installed and running satisfactorily at the
companys plant.
Step 2: List Activities
In practice this step in the procedure may present some difficulty. The problem is that of the
resolution which is appropriate in identifying the projects constituent activities. If a coarse
resolution is applied to our example, the project might be considered to comprise only two
activities: t ransportmachine, and instal l machine. At the other extreme a fine resolution
might identify thousands of short duration activities making up the project.
Normally, the over-riding consideration in choosing a level of resolution will be the
economic implications of the number of activities specified. If there are too many, then the
resources required for scheduling them and monitoring their progress will incur costs which
outweigh any benefits obtained by employing such fine detail.
In the first instance it is probably best to err on the side of coarseness, later modifying the
network to provide finer detail where required. This is demonstrated under 9 Identify Critical
Path, where the project plan is modified to obtain a reduction in the duration of the project
by defining the project activities at a finer level.
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At this point, it is a good time to introduce the concept of work breakdown structure (WBS)
At the heart of the formal project management is the process of identifying in a structured
manner the activities that are required in order to complete the project scope. The key tool
in achieving this is the Work Breakdown Structure that provides a framework for organising
how the activities will be organised and recorded.
The first challenge in developing the WBS is to determine the level of accuracy that you
require at the task level. During the initial phases of the project (for example during the
conceptual design phase) it is unlikely that there are sufficient details available to identify all
the tasks required during the construction phase. However, there are likely to be common
elements from other projects that would allow the construction phase to be loosely specified
at this stage. As the amount of detail available increases then the WBS can be developed
further to include this.
In an ideal world each task should be selected so that it is small enough to be visualised as
a complete entity for estimating purposed. On the other hand, the size of a task must be
large enough to represent a measurable part of the whole project. The design and
manufacture of each sub assembly from a main piece of equipment might rank for
consideration as a task, whilst the final assembly of all those subassemblies into one whole
main assembly could be regarded as another. If the project was to build a water dam
serving a large part of Africa, a standalone task would not be open next bag of cement as
this would result in many very small tasks which would not form a measurable part of the
project.
Advantages of a well thought through WBS:
Structured approach
Work broken down into coherent packages
Allows work to be defined at an appropriate level of detail for scheduling and
estimating
Allows assignment of responsibility
The levels are set by
Size of the project
Level of definition required
Level of estimating accuracy
Level of control required
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The perceived risk of the activity. For example if you are certain (perhaps through
prior experience) that the design would take 10 days then a single level may be an
appropriate amount of detail. If you are uncertain of the time to perform the design it
would be appropriate to break it down into more identifiable tasks. The benefit of
doing this is that as the tasks get smaller it usually becomes easier to estimate howlong the task will take.
The acceptable number of man hours. Some organisations will specify that a single
identifiable task should have no more than (for example) 80hrs attached to it. If this
is not the case the organisations procedures would then specify a greater level of
detail.
The level of control required. As the number of tasks becomes greater and as detail
is introduced it is easier to see what has to be done and what has already beendone. For example in studying this module the task list could be simply complete
module. A more appropriate level of detail would include Session 1/2/3 etc. and
Assessment 1/2/3. Then as project manager you can see exactly where the project
is at a given date and exercise control based on this information.
As the tasks get smaller and smaller there is a cost attached to the management and
planning of these tasks. It is therefore often not cost efficient to manage at a micro
level of detail and the benefits of breaking down the activities in terms of control must
be weighed up against the increased costs attached to this.
If you wish to empower your staff and provide them with a feeling of ownership for a
section of the project excessive breakdown of activities can hinder this process.
If you plan only at a high level, you risk extending the project timescale by not
introducing flexibility about how activities are scheduled. For example if you plan
based upon three large phases (say design, construction, and commission) then you
limit yourself to completing each of these phases before moving onto the next phase.
Planning at a greater level of detail will allow you to identify alternative linkages within
the plan and provides more flexibility in terms of how you plan. For example you may
be able to identify elements of the design phase which once complete can allow
construction to start prior to completion of the whole design.
As a general rule your WBS should breakdown activities to the level at which you are
going to schedule and control the project.
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Other factors that need to be taken into account are
The standard cost structures that the organisations cost management system uses
e.g. SAP
The contracting strategy
An example WBS is as follows although clearly most sanction grade estimates go into much
greater detail
There are two common ways of developing WBS structures. The first of these is to start with
the project and break it down into smaller sections that encompass a logical grouping of
activities. If these groupings of activities are linked within a timeline framework they are
often referred to phases. You would then split these large groupings into smaller groupings
and so on until you reach the level of activity at which you wish to plan. This is referred to as
a top-down approach.
An alternative approach to the top-down approach is the bottomup approach where you
brainstorm the activities that would be required to complete the project and subsequently
make groupings of the activities. The approach you take will depend mainly upon personal
preferences.
Other Breakdown Structures
When identifying each task, it is clear that many of the tasks will fall under a natural header
or group and that there may be more than one set of logical structures which could be used
to break the work down. These other groups commonly include:
Cost breakdown structures where the breakdown is performed by cost centre
Organisational breakdown structures where the breakdown is performed on a basis of
which part of the organisation (or individual) is responsible for each work package.
Location breakdown structures when the project is operating on multiple sites
Conceptual
Design
Identify Product
Requirements
Detailed
Design
IdeaGeneration
IdeaSelection
TechnicalSpecifications
ManufacturingLimitations
DesignCalculations
Initial DetailedDrawings
DesignVerification
Project
Part A Part B
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Activity ID Activity Immediate
Predecessors
A Clear Site StartB Dig Foundations A
C Procure Foundation Materials Start
D Lay concrete foundations B,C
E Transport Machine Start
F Install Machine D,E
G Install Electric supply D
H Connect machine to supply and run F,G
This type of precedence relationship, where one activity must be finished before the next
activity can start (referred to as a finish to start relationship (FS)) is the simplest type of
relationship that is used in the network planning process. There are however a number of
other relationships which are used.
Start Start (SS) The activity cannot start until its predecessor has started. Thistype of relationship can be used to compress the overall projectduration by not insisting that one activity is completed beforethe next activity (which uses some of the previous activitiesinputs) is started.
Finish Finish(FF)
The activity cannot finish until its predecessor has finished.For example you cannot finish painting a structure before thestructure is completely fabricated however you can startpainting the structure before construction is completed.
Start Finish(SF)
The activity cannot finish until its predecessor has started.
These relationships are often represented graphically as shown below.
A AB finish to start
A AB
A AB
A AB
start to start
finish to finish
start to finish
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When deciding upon the precedence relationship it is also important to decide whether there
are any leads and lags between the activities that effectively make the relationship between
the activities have a positive or negative duration (the relationships usually have duration of
zero). For example there might be an item which must be procured on a project, which from
the date of the order being submitted will take 12 weeks to arrive. One method to show thison a project network would be to have an activity that has duration of 12 weeks entitled
procures X. This however is a distortion of reality has duration this 12 week there will be no
resource committed to this activity and therefore a better method would be to represent this
through a lag from the order being placed to order being received as shown below.
Leads and lags can be used with the more complex relationships (such as start-start
relationships) to represent more complex relationships on projects. For example imagine a
domestic underground gas pipe-laying project to lay 5 km of pipe. You are unlikely to dig
the 5kms of trench prior to laying any of the pipe. A more realistic method would be to be
trenching 2 days in advance of the pipe laying. This could be represented by a start-to-start
relationship with a lag of 2 days as shown below.
Step 4: Develop the project network
The activity-on-node convention (AON) is used. Noting from the activity list that threeactivities may start on initiation of the project, we can draw these activities into the network
as shown below.
Order ReceiveFS + 12wks
Trench Lay
C
A
E
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Returning to the list, we find that only one activity, B is dependent on A. This allows us to
place activity B into the network, where a line from activity A to activity B indicates the
precedence. We then find that B and C are the immediate predecessors of a single activity,
D; no other activities are directly dependent on either B or C. The lines from B and C can
therefore be drawn to activity D. When an activity has two or more predecessors it is
referred to as a merge event.
Activities G and F are dependent upon activity D. These activities are therefore placed in
the network with individual lines connecting them to activity D. When an activity has two
activities that are dependent upon it, the creation of two paths through the network is
referred to as a burst event. Note that activity F is also dependent upon activity E andtherefore a line is also drawn connecting these two activities as shown below.
The completion of the precedence network is straightforward, and is shown below
C
A
E
B
D
C
A
E
B
D
G
F
C
A
E
B
D
G
F
H
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Step 5: Estimate Activity Durations
Each activity is now considered, and an estimate made of how long it will take to complete.
Where the activity is similar to one carried out on an earlier project, it is likely that an
accurate estimate can be readily made. Where an activity is to be carried out which is of a
type not experienced before, it may be difficult to establish a single estimate of its duration
with any confidence. In such circumstances, the three-estimate probabilistic approach of
PERT might be worth considering.
For our example, we will assume that single-estimate values for the activity durations are
obtained without difficulty.
Activity ID Activity Duration
A Clear Site 2
B Dig Foundations 3
C Procure Foundation Materials 2
D Lay concrete foundations 3
E Transport Machine 10
F Install Machine 4
G Install Electric supply 4
H Connect machine to supply and
run
2
Analysing the Network
The aim of analysing the network is to calculate the earliest that activities can start, the latest
that activities can start if the project is to be completed on time and the critical path through
the network. Although for a small project as shown above the procedure may seem simple a
structured method is required when the project increases in complexity.
Step 6: Make Forward Pass
The first stage in analysing the network is to calculate, based upon the activity durations, the
earliest any individual activity can start (ES) and the earliest any activity can finish (EF).
This earliest start is calculated by moving through the network from the first activities to the
last activities. This procedure is referred to as a forward pass. This can either be done byadding an extra column to the table above or by using a standard format for each activity
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node on the network into which the data is entered. The latter approach is simpler and
allows easier checking and therefore is utilised here.
The standard format for the activity box is shown below where LS and LF refer to late start
and late finish (see next section for how to calculate these).
Activity
ES EFDuration
LS LFFloat
Care should be taken when interpreting software package outputs as they may well not be
the same as this where in doubt check.
Beginning with activities with no predecessors (A C E) enter the earliest start in the top left
quadrant of the node. This entry might be a known calendar date, but for our purpose 0 will
be entered to represent the beginning of the first day of the project. The earliest finish date
is calculated by adding the duration to the ES. Therefore the earliest finish of Activities A, C
and E are 2, 2 and 10 respectively.
EF = ES + Duration
Calculation of the earliest start for activity B is simple as there is only one predecessor,
activity A. Therefore the ES for activity B is the same as the EF for activity A. Therefore
activity B has an ES of 2 and an EF of 5. The calculation of the ES of activity D is slightly
more complicated. This activity has two predecessors B and C. The ES of activity D is the
greater of the two EFs of the predecessors. Therefore as B has an EF of 5 and C has a EF
of 2 then the ES of activity D is 5. The simple rule is that at a merge event the ES of the
activity is the latest EF of its predecessors. This information can be entered into the
network as shown below.
Following this logical approach the ES and EF times of the other activities in the network can
be calculated. As D is Gs only direct predecessor the ES of G is the same as the EF of D
C
0 22
LS LFFloat
A
0 22
LS LFFloat
E
0 1010
LS LFFloat
B
2 53
LS LFFloat
D
5 83
LS LFFloat
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and is therefore 8. Activity F has two direct predecessors, D and E. The situation is the
same as at activity D a merge activity. We therefore select the latest EF of the
predecessors D and E. Therefore the ES of activity F is 10. The completed network is
shown below.
C
0 22
LS LFFloat
A0 22
LS LFFloat
E
0 1010
LS LFFloat
B2 53
LS LFFloat
D
5 83
LS LFFloat
G
8 124
LS LFFloat
F
10 144
LS LFFloat
H
14 162
LS LFFloat
From the network it can be seen that with estimated activity durations the minimum time to
complete the project is 16 days.
Step 7: Backward Pass
A similar procedure is now carried out to determine the latest start (LS) and finish (LF) times
for each activity with these being entered in the appropriate position. In this case we begin
with the final node and work backwards towards the project start seeking the longest path
back to the activity being considered.
Obviously, the latest finish time for activity H will be the duration of the project 16 days.
The latest start time can then be simply calculated by taking the activity duration away from
the latest finish time (LS = LF Duration). Therefore the LS for activity H is 14. If we now
consider activity G. The latest finish time for this activity will be the latest start time of the
activity following it. Therefore the LF for G is 14 which gives the LS of 10. Similar for activity
F the LF will be 14 giving an LS of 10.
We can now, moving backwards through the network consider node D. As the late start time
for both of its successors is the same then it is clear that the latest finish time of this activity
is 10 and therefore its latest start time is 7. If we had the case where the LS of activities G
and F were different we would simply take the lower LF of the two activities. In the same
way we can work back through the network to complete the LF and LS of all the activities.
Activity
Before turning the page calculate the LS and LF of the remaining activities in the
project network.
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C
0 22
5 7Float
A
0 22
2 4Float
E
0 1010
0 10Float
B
2 53
4 7Float
D
5 83
7 10Float
G
8 124
10 14Float
F
10 144
10 14Float
H
14 162
14 16Float
Step 8: Calculate Floats
The float of an activity is the amount of flexibility that there is in when an activity takes place.
We have used the term float here however some variation may be encountered interminology in further reading on this subject. Some textbooks use the term slack instead
of float whereas other texts have different meaning for slack
Consider activity C. It may start as early as the first day of the project, or finish as late as the
end of day 7. That is, provided the activity takes place within this 7-day period the project
completion time will not be jeopardised. Since the duration of the activity is only two days,
the timing of the activity can vary (or float) by 5 days.
This float, the activitys total float, is calculated as the maximum time available minus the
duration of the activity or more formally
Float = LS ES or Float = LF EF
We can therefore easily calculate the total f loat for each activity and this is shown below.
C
0 22
5 75
A
0 22
2 42
E
0 1010
0 100
B
2 53
4 72
D
5 83
7 102
G
8 124
10 142
F
10 144
10 140
H
14 162
14 160
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The total float for activity D is calculated to be 2 days. However, it should be appreciated
that this float is shared with activity C. If all of activity Cs total float is consumed, either by
scheduling it for latest finish or by the activity taking longer than estimated, then the total
float of D will also be used up. The free float of an activity allows this to be quantified it is
defined as the amount by which the activity may slip, without affecting the total float ofsubsequent activities. This information can be useful when scheduling or monitoring the
progress of non-critical activities.
The total float and free float for each of the project activities are listed here.
Float
ID Activity Free Total
A Clear site 0 2
B Dig foundations 0 2C Procure foundation material 3 5
D Lay concrete foundations 0 2
E Transport machine 0 0
F Install machine 0 0
G Install electricity supply 2 2
H Connect machine to supply and run 0 0
Step 9: Identify Critical Path
Notice that there are three activities (E, F and H) which have no float. They form the longest
chain of activities, the critical path, which determines the expected duration of the project. If
any of these activities takes longer than estimated, then the project completion time will be
extended accordingly. It is usual to highlight the critical path on the project network.
C
0 22
5 75
A
0 22
2 42
E
0 1010
0 100
B
2 53
4 72
D
5 83
7 102
G
8 124
10 142
F
10 144
10 140
H
14 162
14 160
Critical Path
Often it is found that the expected project duration is longer than desired. If the project
duration is to be reduced to an acceptable time, the critical path must be shortened.
Typically this will be achieved by allocating additional resources to certain of the critical
activities, thereby reducing their durations. For example, activity F might be reduced from
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four days to, say, three days by allocating more personnel to the activity, or possibly by
hiring more productive (but probably more expensive) equipment for the installation of the
machine. However, as we shall see, for a given reduction in project completion time, other
initially non-critical activities may also have to be shortened. Alternatively, after more
detailed consideration (i.e. finer resolution) of the critical activities it may be possible torestructure the project to reduce its duration.
For our example we will use a combination of restructuring the project and allocating
additional resources. Such a technique is known as crashing and the cost analysis of this
is covered in a later session
Restructuring the project
If any attempt is made to shorten the project it would be probably best to examine activity E.
It has a duration much longer than the majority of the activities and it lies on the critical path.
When activity E is examined closely, it is found that it entails dismantling the machine into
major components, at the suppliers factory, before transporting them.
For the expense of an additional transport, the time for activity E can be reduced, as follows.
Firstly, dismantle the power unit (pu) and control cabinet (cc), which takes one day, before
transporting them, taking six days. When they arrive at the companys plant they can be
installed in two days. Whilst the power unit and control cabinet are being transported, the
machine frame (mf) and fixture (f) can be dismantled (two days). They can then be
transported (six days) and installed (two days). The project activity chart for this
restructured project is shown below
Activity Description Duration
(Days)
Immediate Predecessors
A Clear site 2 Start
B Dig foundations 3 A
C Procure foundation material 2 Start
D Lay concrete foundations 3 B,CE1 Dismantle PU and CC 1 Start
E2 Transport PU and CC 6 E1
E3 Dismantle MF + F 2 E1
E4 Transport MF + F 6 E3
F1 Install PU and CC 2 D,E2
F2 Install MF + F 2 D, E4
G Install electricity supply 4 D
H Connect machine to supply and run 2 F1,F2,G
Activity
Before turning the page draw the new network for yourself and check the durations of the
activities. Has the duration of the project changed?
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The restructured network is shown above. A new critical path has arisen (A-B-D-G-H), with
an expected completion time of 14 days, two days less than before.
Alternative dependencies
All of the networks developed until this point have used the simplest type of dependency
which is referred to as the finish to start dependency. That is that for an activity to start the
previous activity must be finished. For many project activities this type of dependency is
suitable but at times it is useful to utilise alternative types of dependencies and also toinclude leads and lags between the activities.
Step 10: Prepare Project Activity Chart
To assist in the scheduling and subsequent progress-monitoring of the project, a table of key
activity information can now be drawn up.
Activity Dur Pred ES EF LS LF Float FreeFloat
A 2 Start 0 2 0 2 0 0
B 3 A 2 5 2 5 0 0
C 2 Start 0 2 3 5 3 3
D 3 B,C 5 8 5 8 0 0
E1 1 Start 0 1 1 2 1 0
E2 6 E1 1 7 4 10 3 1
E3 2 E1 1 3 2 4 1 0
E4 6 E3 3 9 4 10 1 0
F1 2 D,E2 8 10 10 12 2 2
F2 2 D, E4 9 11 10 12 1 1
G 4 D 8 12 8 12 0 0
H 2 F1,F2,G 12 14 12 14 0 0
C
0 22
3 55
A
0 22
0 20
E1
0 11
1 21
B
2 53
2 50
D
5 83
5 80
G
8 124
8 120
F1
8 102
10 122
H
12 142
12 140
E2
1 76
4 103 F2
9 112
10 121
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Step 11: Schedule Activities
It now remains for target dates to be set for the start and finish of each activity. For
example, activity C can start at any time between the beginning of day 1 and the end of day
3. Generally, activities are scheduled to start as early as possible (all other things being
equal), since any float available will then give the maximum protection if the activity takes
longer than was originally estimated.
Sometimes, particularly when very large capital investments are involved, activities may be
scheduled to finish close to the latest finish time. This risk is taken to save substantial
interest charges on the capital being invested. For example, a module of a nuclear power
station may cost many millions of pounds, and its construction activities may have float
measured in years. Some activities may contend for the same scarce resources to carry
them out. It may be possible to ease this contention by scheduling some of the non-critical
activities to start somewhat later than the earliest start. This can be seen in the Gantt chart
which follows (Figure 3.22), where all of the activities are scheduled for earliest start, except
activity F2. This activity is scheduled to start at the beginning of day 11 to avoid contention
with activity F1, which requires the same category of installation personnel. This technique
is resource smoothing which is covered in more detail later in this session.
It is common to include the float on the Gantt chart to indicate which activities have the
potential to slip. This is shown below where the narrower lines indicate the float.
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In projects it is often necessary to impose constraints on specific activities. For example
there may be activities that cannot start before a certain date (for example availability of
equipment or resource) or activities that must be finished by specific dates (including the
overall project). Most project management software systems allow the inclusion of
constraints with MS Project offering start no earlier/later/on and finish no earlier/ no later /on
constraints. These can be used usefully although overuse of constraints in the planning
process can overly constrain the plan that you develop and limit the ability of the plan to be
flexed to optimise it.
Step 12: Resource Allocation and Smoothing
In the ideal world, when a project was planned, the plan would result in all resources being
uniformly utilised. However, projects are generally like the proverbial No 9 bus - nothing for
ages then three come along together. The result is that time is wasted when resources are
under-utilised, and projects run late because the resource is needed by three projects
simultaneously. The project manager does have a degree of control over this by consideringloading on each resource throughout a period. This would ordinarily be a laborious task but
has been considerably eased by the use of project management software.
The allocation of tasks to a project team can be eased by the use of a responsibility matrix.
Where there are clear skills requirements for tasks, these should be met first, with the less
constrained resources matched to the remaining tasks. A responsibility matrix is shown
overleaf.
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During the early stage of the planning and estimating phase the required resources are
identified as part of the process of allocating estimated activity durations. The resource
requirements are subsequently developed for the project; but this is based upon each
activity commencing on its earliest start date. It is however possible to balance resource
allocations by considering activities based on a later commencement date up to the latest
start date. This process is known as Resource Loading.
Resource levelling attempts to minimise resource-category fluctuations on a day to day
basis. Clearly, resource levelling is a stepwise process, undertaken in the sequence: -
Network> Gantt > Histogram
In order to demonstrate the process of resource levelling consider the following project
activity chart.
ACT Duration Dependencies Resources
A 5 Start 4
B 3 Start 4
C 6 Start 4
D 5 A 3
E 3 A,B 2
F 5 D 4
G 3 E 3
H 2 F,G 3
I 3 C,G 3
Activity
In order to perform the process of resource levelling it is necessary to develop the
project network, the network calculations and the Gantt chart. If you feel unsure
about generating these please take the time just now to work through this project
following the process outlined earlier in the session.
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The activity on node network for the project is as shown below
B
A
C
G
D
E
F
H
I
From this network and the network calculations the Gantt chart can be developed as shown
below based upon earliest starts for all activities.
Day
Activity 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
A
B
C
D
E
F
G
H
I
Critical Path
Based on ES
Float
The resources required in this example are taken as being of the same type but further
columns could be added for further categories or resource both human and plant and
equipment. Within this example only one type of resource is considered for clarity.
Whilst the Gantt chart could have been drawn for latest start/latest finish, it is conventional to
address resource allocation on the earliest nodal values at this stage. Based upon the ES
for an activity the resource histogram is developed in the following way. For each day of the
project identify which activities (assuming ES) are active. Tabulate the resources required
on each day of the project based upon this information.
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Day
Activity 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
A 4 4 4 4 4
B 4 4 4
C 4 4 4 4 4 4
D 3 3 3 3 3
E 2 2 2
F 4 4 4 4 4
G 3 3 3
H 3 3
I 3 3 3
Total 12 12 12 8 8 9 5 5 6 6 7 7 7 7 4 3 3
The resource histogram is simply a graphical representation of this data (with the output
from MS Project shown below).
In order to illustrate the levelling process we make the assumption that a constraint is
imposed on the available resources of eight operatives. It is clear from the Resource
Histogram that the availability is exceeded. It is possible though to re-schedule the activities
within the nodal value constraints. Another observation from the first draft resource
histogram is that there is an under utilisation of resources on days 7, 8 and 9 and it may not
be possible to downsize the project team until day 10 and then re-establish the previous
level. Even without the over allocation of resource this uneven usage of resources is not
desirable for a number of reasons:
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The management of uneven resource loadings is significantly more time
consuming than the management of constant resources.
Staff who work constantly on a single project are more likely to be productive
than staff dipping in and out of projects. This relates to the both the amount
of information that these staff may have about the project (i.e. getting up to
speed) as well as motivation issues relating to ownership of the project.
It may well not be economical to have uneven loading of staff resulting from
transport issues (a significant constraint in the offshore industry),
requirements for lengthy safety inductions (in the Nuclear industry a site
safety induction can easily last 3 days) or through the increase costs
associated with the use of short term contractors.
In order to start the levelling process we start by making the assumption that activities thatlie on the critical path are fixed both in terms of timing and resource allocation. They are
therefore put on the next draft of the histogram first as shown.
Now consider activity B which has a float of 6 days, and must be finished by project day 9
and requires a total of 12 operatives (3 days at 4 per day). We can also make use of float in
activity C to move whole days worth of resources around (i.e. assume that the number of
resources required must be available on any particular day the activity is occurring). Doing
this (by moving B and C) gives at best
0
1
2
3
4
5
6
7
8
9
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Day
ResourceU
sage
D
F
H
A
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Step 13: Develop the S-Curve
A recognised method of measuring performance is by establishing a planned S-curve and
then plotting actual performance on the same graph. A number of choices are available as
to which variable is plotted on the S-curve. One of the most popular methods is to plot
percentage completion against project elapsed time. Others options include cumulative costs
and cumulative resource quantities, both against project elapsed time. For example, the
project team may have cash flow data available to it. Consequently, if it is known how much
project resources cost and it is known know how much has been spent and at say week eight,
spending is more or less what was expected by week eight, it is clear that the project is
progressing satisfactorily. Consider the following graph generated from planned and actual
project data: -
This is exceptionally good news for the PMT; or is it? The under-spend may be because of
delays caused by weather or lack of production and the programme may in fact be
substantially behind schedule. Therefore the graph may well be wrong. However it may well
be right. Consequently, all that can be said is that it provides inconclusive information that
can be addressed by the use of earned value analysis which is detailed in session 10.
Nevertheless, S-Curves can be an extremely useful tool to the Project Manger provided they
are not taken at first sight.
0
20
40
60
80
100
120
0 10 20 30 40 50
%Bud
get
Time (Weeks)
Cumulative Project Costs
Actual
Planned
`
Time Now
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The following sections describe in detail the steps that are gone through to establish an S-
curve that shows planned values. The illustration is most easily presented by referring to a
Gantt chart; in this example case it is kept simple and minimal. The example project is
described by the following project activity chart.
ID Duration Predecessors Resource Man days
A 5 1 5
B 10 2 20
C 12 3 36
D 10 1 3 30
E 6 2,4 2 12
F 9 3 1 9
If we construct the Gantt chart for this project based upon the ES of each activity it is as
shown below. Attached to each day on the Gantt chart is the resource usage of that day
(this assumes that resource is used linearly across the activity) which allows us to calculate
the total resource usage for any day of the project and the cumulative resource usage for the
project.
Day
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
a 1 1 1 1 1
b 2 2 2 2 2 2 2 2 2 2
c 3 3 3 3 3 3 3 3 3 3 3 3d 3 3 3 3 3 3 3 3 3 3
e 2 2 2 2 2 2
f 1 1 1 1 1 1 1 1 1
Total Men Each Day
6 6 6 6 6 8 8 8 8 8 6 6 4 4 4 3 3 3 3 3 3
Cumulat ive total
6 12 18 24 30 38 46 54 62 70 76 82 86 90 94 97 100 103 106 109 112
The cumulative number of man-days through time can be plotted as an S-curve as shown
overleaf.
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It is obviously a simple task to convert this to a percentage usage of resource throughout the
project (to do this you simply divide through by the total resource usage which in this case is
112). It is also common to show S-Curves in terms of the cashflow of the project. This
allows the inclusion of procured items as wells as the resource usage. In order to illustrate
this let us assume that the resource available to the project incurs a cost of 225/day and
that on days 15 and 20 of the project payments are made, of 5000 and 12,000 to
subcontractors for delivery of materials. We can now generate the overall project S-curve b
based upon this data as shown below.
0
20
40
60
80
100
120
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
CumulativeResourceUSage
Time
Project Day Daily resource Resource Cost Additional Costs Total Cost
1 6 2400 2400
2 12 4800 4800
3 18 7200 7200
4 24 9600 9600
5 30 12000 12000
6 38 15200 15200
7 46 18400 18400
8 54 21600 21600
9 62 24800 24800
10 70 28000 28000
11 76 30400 30400
12 82 32800 32800
13 86 34400 34400
14 90 36000 36000
15 94 37600 5000 42600
16 97 38800 43800
17 100 40000 45000
18 103 41200 46200
19 106 42400 47400
20 109 43600 12000 55600
21 112 44800 61800
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The S-Curve as shown below is often referred to as the Budgeted Cost of Work Scheduled
(BCWS) and is used extensively used in project control when earned value analysis
(described in session 10) is utilised.
Critical Path Method Summary
The extensive discussions above outline the process that you would go through in
developing a project plan based upon the critical path method. It is worthwhile noting that
the plan that you produce is only as good as the information you put into the plan and
therefore whilst the overall process is relatively simple, the actual development of the inputs
for the plan are more difficult than the actual development of the plan.
7. PERT
The previous discussions have focussed on the use of the critical path method of project
planning. There are however a number of alternative methods of project planning including
the milestone plan methods described in session 2 and a technique called Programme
Evaluation and Review Technique (PERT).
0
10000
20000
30000
40000
50000
60000
70000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Planned
ProjectCashflow()
Time
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In some projects, difficulty may be experience in obtaining estimates of activity durations.
For example, the manager responsible for the research and development activities required
to launch a new product may be unwilling to commit to deterministic estimates. This is not
unreasonable, since these activities may involve the solution of problems that cannot be
foreseen at the outset. However, the same manager is likely to respond positively to thefollowing three questions:
How long is the activity likely to take if no unforeseen problems arise ? (Optimist ic
Time (a))
How long is the activity likely to take if everything that can go wrong does go wrong?
(Pessimis tic Time(c))
Between these extremes what do you think is the most likely duration for the activity?
(Most Lik ely Time (b))
The PERT procedure then makes the arbitrary assumption that the activity duration exhibits
a skewed probability distribution, the beta distribution. This distribution is depicted below.
The mean of this distribution is taken as the expected activity duration, and is usedin the subsequent network calculations (as in CPM). In this context the mean is often
referred to as the expected activity duration and is given by
expected activity duration = (a+4b+c) / 6
variance = (c-a)2/ 6
It is claimed that the variance of the project completion time is well-approximated by simply
summing the variances of the critical path activities. This assumes that the activity durations
optimistic pessimistic
Most likely
time
frequency
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are distributed independently of each other, which may be unrealistic in many
circumstances. For example, in a construction project many of the outdoor activities will be
influenced by the same adverse weather conditions. A common result of using PERT is
that the overall duration of the project becomes extended. This is the result of difference
between the pessimistic estimate and the most likely estimate being greater than thedifference between the most likely and the optimistic estimates.
Planning software is available to help with the application of PERT. MS Project has PERT
facilities but individuals are also encouraged to examine Pertmaster(www.pertmaster.com).
8 Summary
This session has focussed on the detailed mechanics of developing a project plan using the
critical path method. You should however note that the development of a project network
and related Gantt charts and Histograms does not constitute the development of a full
project plan and within the completed plan there will be many other elements such as details
on progress reporting, project communication, knowledge management and the like. These
issues are dealt with in the context of developing a project execution plan later in the course
References
Aberdeen University MSc in Project Management
http://www.pertmaster.com/http://www.pertmaster.com/http://www.pertmaster.com/http://www.pertmaster.com/