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Rev 1

Session 6 Scheduling

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 and cost estimates as part of individual and group projects. However, it is quite normal for more detailed schedules 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 try to apply the same methodologies in developing the best schedules and estimates that you can with the time and resources at your disposal. In all cases you should make clear the level of accuracy you have 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 plan 3) 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

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 later in 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.

3.

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.

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,

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.

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 activity durations. 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.

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 Activities Identify those activities, connecting the start and end of the project, which it is judged appropriate to schedule and control. 3) Establish precedence Relationships 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

4) Construct Network Represent the project activities and their precedence relationships by a network of nodes. 5) Estimate Activity Durations 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 Backward 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 Critical 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 an extension of the project activity chart. 11) Schedule Activities Planned start and finish times for each activity are chosen, and presented on Gantt chart. 12) Resource Activities 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) Monitor 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.

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, indicating that 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: transport machine, and install 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.

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

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 how long 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 been done. 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.

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
Project

Identify Product Requirements Technical Specifications Manufacturing Limitations

Conceptual Design Idea Generation Idea Selection Design Calculations

Detailed Design Initial Detailed Drawings Design Verif ication

Part A

Part B

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

Contract breakdown structures to identify what individual contractors are responsible for Product breakdown structures for complex products where the identifier would refer to specific parts of a product (e.g. chassis and engines).

There are some advantages (including improved control and reporting) in maintaining multiple breakdown structures. The use of these should however be balanced against the increased cost/time involved in maintaining them. Having taken some time to talk about how things are done in practice using a WBS we will simplify things for the purpose of this example, the initial activity list is as follows: Clear site Dig foundations Procure foundation materials Lay concrete foundations Transport machine Install machine Install electricity supply Connect machine to supply, and run

Step 3: Establish Precedence Relationships Three activities may commence when the project is initiated. The site, in the companys plant, where the machine is to be installed, may be cleared of any equipment or materials currently sited there. The sand, aggregate and cement required for the machines foundations may be purchased. The transport of the machine from the suppliers plant may be initiated. The digging of the foundations cannot begin until the clearing of the site is complete, and the laying of the foundations cannot start before the foundations have been dug, and the materials have been procured. The installation of the machine must wait until the machine has arrived, and the foundations are complete. However, whilst the installation of the

electricity supply to the site can only begin when the foundations have been laid, it does not require the presence of the machine. Finally, once both machine and electricity supply have been installed, the machine may be connected to the supply and set running. If the activities are labelled (A to H) these precedence relationships may be set alongside the list of activities, as shown overleaf:

Activity ID A B C D E F G H

Activity Clear Site Dig Foundations Procure Foundation Materials Lay concrete foundations Transport Machine Install Machine Install Electric supply Connect machine to supply and run

Immediate Predecessors Start A Start B,C Start D,E D 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. other relationships which are used.
Start Start (SS) The activity cannot start until its predecessor has started. This type of relationship can be used to compress the overall project duration by not insisting that one activity is completed before the next activity (which uses some of the previous activities inputs) is started. The activity cannot finish until its predecessor has finished. For example you cannot finish painting a structure before the structure is completely fabricated however you can start painting the structure before construction is completed. The activity cannot finish until its predecessor has started.

There are however a number of

Finish (FF)

Finish

Start (SF)

Finish

These relationships are often represented graphically as shown below.

B A

finish to start

B A

start to start

B A

finish to finish

B A

start to finish

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 this on 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.

Order

FS + 12wks

Receive

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.

Trench

Lay

Step 4: Develop the project network The activity-on-node convention (AON) is used. Noting from the activity list that three activities may start on initiation of the project, we can draw these activities into the network as shown below.

A C E

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.

A C E

B D

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 and therefore a line is also drawn connecting these two activities as shown below.

A C E

B D

The completion of the precedence network is straightforward, and is shown below

A C E

B D

G H F

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 A B C D E F G H Activity Clear Site Dig Foundations Procure Foundation Materials Lay concrete foundations Transport Machine Install Machine Install Electric supply Duration 2 3 2 3 10 4 4

Connect machine to supply and 2 run

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 by adding an extra column to the table above or by using a standard format for each activity

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).

ES LS

Duration EF Activity Float LF

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.
0 L S 0 L S 0 L S 2 A F lo a t 2 C F lo a t 1 0 E F lo a t L F L F 1 0 L S L F 2 L S 2 2 3 B F lo a t L F 5 3 D F lo a t L F 8 5

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

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.
0 LS 0 LS 0 LS 2 A Float 2 C Float 10 E Float LF LS LF 10 LS LF 2 LS 2 2 3 B Float LF 5 3 D Float LF 10 4 F Float LF 14 LS 8 LS 5 8 4 G Float LF 14 2 H Float LF 16 12

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.

0 2 0 5 0 0

2 A Float 2 C Float 10 E Float

2 4 2 7 10 10

2 4

3 B Float

5 7 5 7 3 D Float 10 8

8 10

4 G Float

12 14 14 14 2 H Float 16 16

10 10

4 F Float

14 14

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 in terminology 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 float for each activity and this is shown below.

0 2 0 5 0 0

2 A 2 2 C 5 1 0 E 0

2 4 2 7 1 0 1 0

2 4

3 B 2

5 7 5 7 3 D 2 1 0 8

8 1 0

4 G 2

1 2 1 4 1 4 1 4 2 H 0 1 6 1 6

1 0 1 0

4 F 0

1 4 1 4

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 of subsequent 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 Total 2 2 5 2 0 0 2 0

ID A B C D E F G H

Activity Clear site Dig foundations Procure foundation material Lay concrete foundations Transport machine Install machine Install electricity supply Connect machine to supply and run

Free 0 0 3 0 0 0 2 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.

0 2 0 5 0 0

2 A 2 2 C 5 1 0 E 0

2 4 2 7 1 0

2 4

3 B 2

5 7 5 7 3 D 2 1 0 8

8 1 0

4 G 2

1 2 1 4 1 4 1 4 2 H 0 1 6 1 6

C r i t i c a lP a t h 1 0

1 0 1 0

4 F 0

1 4 1 4

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

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. restructure 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). transported (six days) and installed (two days). restructured project is shown below
Activity A B C D E1 E2 E3 E4 F1 F2 G H Description Clear site Dig foundations Procure foundation material Lay concrete foundations Dismantle PU and CC Transport PU and CC Dismantle MF + F Transport MF + F Install PU and CC Install MF + F Install electricity supply Connect machine to supply and run Duration (Days) 2 3 2 3 1 6 2 6 2 2 4 2 Immediate Predecessors Start A Start B,C Start E1 E1 E3 D,E2 D, E4 D F1,F2,G

Alternatively, after more

detailed consideration (i.e. finer resolution) of the critical activities it may be possible to

They can then be

The project activity chart for this

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?

0 0 0 3

2 A 0 2 C 5

2 2 2 5

2 2

3 B 0

5 5 5 5 3 D 0 8 8

8 8

4 G 0

1 2 1 2 1 2 1 2 2 H 0 1 4 1 4

8 1 0

2 F 1 2

1 0 1 2

1 4 0 1 1 E 1 1 2 1

6 E 2 3

7 9 1 0 1 0 2 F 2 1 1 2 1 1

The restructured network is shown path has arisen (A-B-D-G-H), with E 3 above. A new critical E 4
2 of 14 1 days, 4 two days 4 1 than 1 0 an expected completion time less 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 to include 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 A B C D E1 E2 E3 E4 F1 F2 G H

Dur 2 3 2 3 1 6 2 6 2 2 4 2

Pred Start A Start B,C Start E1 E1 E3 D,E2 D, E4 D F1,F2,G

ES 0 2 0 5 0 1 1 3 8 9 8 12

EF 2 5 2 8 1 7 3 9 10 11 12 14

LS 0 2 3 5 1 4 2 4 10 10 8 12

LF 2 5 5 8 2 10 4 10 12 12 12 14

Float 0 0 3 0 1 3 1 1 2 1 0 0

Free Float 0 0 3 0 0 1 0 0 2 1 0 0

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.

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 considering loading 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.

Activity Person A B C D E F G
X: Executes the task D: Makes decisions solely d: Makes decisions jointly PD C I P: Manages progress C: Must be consulted I: Must be informed I A

1
A X

3
PXT

4
PX

5
PX

6
PX

10
PX

X X X X X X PX D C X

PX

PX

T: Provides on the job tuition A: Available to advise

The previous sections have shown that the process of developing the plan so far have entailed: List activities Allocate activity durations and resources Prepare a project network (AOA or AON) Draw a Gantt chart Draw a resource histogram

On the face of it the accomplishment of these steps should be straightforward but for anything other than the simplest projects, it will not be as easy as that. It is inevitable that there will be constraints. Having drafted the network in the most logical and cost effective sequence it is possible that further examination of available resources will reveal shortfalls. It may also be possible to aggregate and balance resources to minimise their utilisation without affecting the Total Project Time (TPT). Adjusting resources so that the project

completion date can be met whilst respecting early and late values is known as Resource Levelling. If however it is not possible to schedule activities within the constraints of available resources while maintaining nodal earliest and latest values, extension of the TPT may be inevitable. This process is known as Resource Restrained levelling.

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 A B C D E F G H I Duration 5 3 6 5 3 5 3 2 3 Dependencies Start Start Start A A,B D E F,G C,G Resources 4 4 4 3 2 4 3 3 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.

The activity on node network for the project is as shown below

F H

From this network and the network calculations the Gantt chart can be developed as shown below based upon earliest starts for all activities.
Day 8 9

Activity A B C D E F G H I

10

11

12

13

14

15

16

17

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.

Activity A B C D E F G H I Total

1 4 4 4

2 4 4 4

3 4 4 4

4 4 4

5 4 4

Day 8 9 10 11 12 13 14 15 16 17

4 3 2

3 2

3 2

3 4 3 4 4 4 4 3 3 3

12 12 12

3 7

3 7

3 7

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:

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 that lie on the critical path are fixed both in terms of timing and resource allocation. therefore put on the next draft of the histogram first as shown.
9 8 7

They are

Resource Usage

6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Day A D F H

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

9 8 Avaliable resource C B C G E
A D

7
Resource Usage

6 5 4 3 2 1 0 1

C I I

F H

9
Day

10 11 12 13 14 15 16 17

The resulting resource histogram shows that the imposed resources constraint has still not been met and in this example it will not be possible to achieve that without modifying some of the non critical path activities and possibly some of the critical path activities also. Clearly one viable option is to reconsider the work pattern for activity C. If two workers could be used on 2 days to complete the work that will require 4 people for 1 day then it would be possible to meet the resource constraints. A further method to attain the required resource constraints is by extending the total project time (TPT) by a minimal amount. If we were to extend the project by 1 day (giving a total project time of 18 days) the resource over utilisation would be easily rectified. To summarise, there will be two considerations to be accounted for when levelling resources. 1. The project TPT must be adhered to, in which case the maximum required resources allocation would require a degree of flexibility. This is Time-Constrained Levelling. 2. The available resources are finite and cannot be sensibly extended. When non-Critical Path activities have been re-scheduled the only option left may be to extend Critical Path activities with the attendant increase in TPT. This is known as Resource Constraint Levelling.

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: -

Cumulative Project Costs


120

Time Now
100 80 % Budget 60
`

Planned

Actual

40 20 0 0 10 20 30 40 50 Time (Weeks)

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.

The following sections describe in detail the steps that are gone through to establish an Scurve 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 A B C D E F Duration 5 10 12 10 6 9 Predecessors Resource 1 2 3 3 2 1 Man days 5 20 36 30 12 9

1 2,4 3

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 b 2 2 2 2 c 3 3 3 3 d e f Total Men Each Day 6 6 6 6

1 2 3

2 3 3

2 3 3

2 3 3

2 3 3

2 3 3

3 3

3 3

3 1

3 1 4

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

Cumulative 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.

120 100 Cumulative Resource USage 80 60 40 20 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Time

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.
Project Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Daily resource 6 12 18 24 30 38 46 54 62 70 76 82 86 90 94 97 100 103 106 109 112 Resource Cost 2400 4800 7200 9600 12000 15200 18400 21600 24800 28000 30400 32800 34400 36000 37600 38800 40000 41200 42400 43600 44800 12000 5000 Additional Costs Total Cost 2400 4800 7200 9600 12000 15200 18400 21600 24800 28000 30400 32800 34400 36000 42600 43800 45000 46200 47400 55600 61800

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.

70000

60000

Planned Project Cashflow ()

50000

40000

30000

20000

10000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Time

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).

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 the following three questions: How long is the activity likely to take if no unforeseen problems arise? (Optimistic Time (a)) How long is the activity likely to take if everything that can go wrong does go wrong? (Pessimistic Time(c)) Between these extremes what do you think is the most likely duration for the activity? (Most Likely 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.

frequency

Most likely

optimistic

pessimi stic

time

The mean of this distribution is taken as the expected activity duration, and is used in 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

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 the difference 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