schedule risk analysis mini masterclass...risk analysis mini masterclass 2 content 1. software 2....
TRANSCRIPT
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Schedule Risk Analysis Mini Masterclass
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Content
1. Software 2. Schedule Risk Analysis
• Schedule Sense Check • Duration Uncertainty Inputs
• Correlations • Risk Inputs & Modelling
• Distributions
3. Monte Carlo Risk Analysis 4. Results
• What If / Stress Test 5. Benefits
Software Schedule Risk Analysis
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Software
Palisade @Risk • Excel Based • MSP • SRA Limitations • Cost Focused • Significant
Oracle Primavera Risk Analysis • Primavera, MSP, Others • Manipulate Plan • Large Schedules • Limited Distributions • Limited cost function
Schedule Risk Analysis What is it?
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Schedule Risk Analysis
• Software
• Schedule • Risk & Uncertainty
Analysis
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Project Schedule • A Project Schedule is a dynamic
representation of the project activities and their execution sequence.
• Dynamic Model – Not a Calendar
• Completion dates should be OUTPUTS not inputs
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Why do we schedule a project? • Plan out activities to understand
realistic targets • Understand resource requirements • Forecast and record performance • Compare performance against
targets (baseline) • Understand dynamics of plan and
identify changes required to meet targets etc
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Build A Schedule
Group Task • Build This Hotel • Less than 10
Activities • Durations • Logic Links
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Schedule Sense Check What is it?
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Project Schedule Best Practice
• Define WBS • Set consistent coding strategy • All tasks have dependencies • No constrained dates (or Minimum use if legit) • Activities based on work/durations not dates • Realistic durations • Realistic relationships
• Not date driven • No lags or negative lags
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Schedule issues
• Start to Start with Open End
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Construction 20
Engineering 20
Design 20
S-S
F-S
S-S
Commissioning 20
Delay
Delay
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Schedule issues • Finish to Finish with Open End
• Engineering completion becomes constrained by Design and Construction constrained by Engineering
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Construction
Engineering
Design
F-S
F-S
F-F
Delay
Delay
F-F
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Constraints
• Often used to set dates • Targets, contract dates, management dates • This is incorrect use and poor planning • ‘looks fine’ but negative float builds up
• Constraints can be legitimate • Date land access is to be granted • Date Vendor/Sub-Con has agreed to start • Resource leveling constraints
• Completion dates are OUTPUTS not inputs
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Duration Uncertainty Building A Model
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Duration Uncertainty
• Review Activity Durations • Are they realistic? • Optimistic? Pessimistic? • Durations are not always certain • Activities have natural variance. • 3 point range for better accuracy. Min, Most Likely and Maximum
durations
• Interview/Workshop with Planner, PM, Eng etc
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Risk & Uncertainty
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Time or Cost
Uncertainty Risk Event
Digging Foundations
Flooding Strike Hard Rock Equipment Failure Archeological Find
100% <100%
5 7
10 11(1) 17
(7)
24 (14)
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Estimating Impacts
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Group Task
• Build Uncertainty in your durations
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BASELINE
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Correlations
Risk Inputs Identify & Quantify
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Group Task
• Identify Risks
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Concrete Pour Failure
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Quantifying Risk Events • Each Risk given a Min, Most Likely & Max impact • Min = Optimistic but realistic outcome
• Most Likely (ML) = Expected most probable outcome • Max = Pessimistic worst case outcome
• Should not include force majeure or project stopping outcome
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Risk Impact
Num
ber o
f Occ
urre
nces
Min ML Max
Probability Min Most Likely Max
30% 1 week 4 weeks 8 weeks
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Distributions
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Distributions
Monte Carlo Schedule Risk Analysis
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Quantitative Risk Analysis - Distribution
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2 3 4 5 6 7 8 9 10 11 12
Total 136 264 425 513 703 857 690 600 373 307 132
0200400600800
1000
# O
ccur
ance
s
"Two Dices" - Histogram Simulation (5000x)
What is a Distribution? • Graphical representation of occurrences of a variable, e.g. cost, duration, date,
etc.
• Example: “Two Dice”
Sum Dice#1 + Dice#2
# Occurrences Dice#1 + Dice#2 Combinations # Comb.
2 136 1+1 1 3 264 1+2; 2+1 2 4 425 1+3; 3+1; 2+2 3 5 513 1+4; 4+1; 2+3; 3+2 4 6 703 1+5; 5+1; 2+4; 4+2; 3+3 5 7 857 1+6; 6+1; 2+5; 5+2; 3+4; 4+3 6 8 690 2+6; 6+2; 3+5; 5+3; 4+4 5 9 600 3+6; 6+3; 4+5; 5+4 4
10 373 4+6; 6+4; 5+5 3 11 307 5+6; 6+5 2 12 132 6+6 1
Grand Total 5000
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Schedule Risk Analysis (SRA)
• Risk Mapping to Plan
• Can be multiple activities • Entering Schedule Delay impacts (Min, ML, Max)
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Schedule Risk Analysis (SRA) • Duration Uncertainty + Assigned Risks
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Schedule Risk Analysis (SRA) • Montecarlo Analysis plots potential finish dates for each activity/milestone
over 1000 iterations and creates an S-curve of probabilistic outcomes.
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03/02/2023 22/08/2023 09/03/2024
Distribution (start of interval)
0.0
10.0
20.0
30.0
40.0
50.0
Hits
0% 10/06/2023
5% 17/09/2023
10% 17/10/2023
15% 04/11/2023 20% 19/11/2023
25% 01/12/2023
30% 12/12/2023
35% 21/12/2023
40% 27/12/2023
45% 04/01/2024 50% 11/01/2024
55% 20/01/2024
60% 29/01/2024
65% 05/02/2024
70% 14/02/2024
75% 25/02/2024
80% 06/03/2024 85% 17/03/2024
90% 29/03/2024
95% 14/04/2024
100% 06/06/2024
Cumu
lative
Freq
uenc
y
Production Drilling: Mishrif (Pre-mitigated)Entire Plan : Finish Date
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Schedule Risk Analysis (SRA)
• Analysis calculates the probabilistic (Not actual) completion dates of milestones/activities
• Therefore P50, P90 etc are created from statistical outputs of 5000 different randomly generated outcomes based on input data.
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Baseline Risk Impact
Deterministic Finish
P50 or P90 Finish
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Schedule Risk Analysis (SRA) • Top Risks & Top sensitive Activities Identified
• These can then be areas of focus for improvement and mitigation • These can named or omitted on Insurance policies
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Schedule Risk Analysis (SRA) • “What If” Scenarios
• Tool to understand effect of mitigations and schedule changes
• Change Risk Profile and Run analysis to understand effect of mitigation of key risks
• Omitted risks etc
• Value Management • Option Selection/analysis • Identify key activities (Critical and Duration) • Change Schedule (parallel working, additional resource, reduced scope etc) • Reduce Schedule
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Post Mitigated / Target • Pre and Post mitigated probabilistic S-Curves
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30/10/19
30/8/19 15/5/19
24/6/19
13%
Benefits Projects
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Project Benefits • Key to ensuring project success
• Identification of project interdependencies
• Management of Risk to allow project completion of time and on budget
• Helps control the cost of a project
• Validation of Project Information
• Fosters a Clear Understanding of Challenges ahead
• Improved Project Communication
• Improved Schedule / Cost Performance
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Content
1. Software 2. Schedule Risk Analysis
• Project Schedule Review • Duration Uncertainty Inputs
• Correlations • Risk Inputs & Modelling
• Distributions
3. Monte Carlo Risk Analysis 4. Results
• What If / Stress Test 5. Benefits
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Training Courses - Project Risk Management
- Quantitative Risk
(Cost & Schedule)
- @Risk Software
Public & In House
Thank you