ScheduleRiskAnalysis y (SRA)

PedramDaneshmand AssociateDirector BlueVisionsManagementPtyLtd

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Content
ProjectTimeManagement Project Time Management Risk&Opportunities ProjectRiskManagement ScheduleRiskAnalysis y ResultsReview ActionPlan A ti Pl

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Project Ti P j t Time Management M t History

Everyprojectmustbemanagedagainstaschedule; Every project must be managed against a schedule; ProjectSchedulinghasbeenaroundalongtime; Schedulingisoneofthemostwidelypracticed projectmanagementdisciplines(Archibaldand Villoria 1967).
ProjectTimeManagementincludestheprocesses requiredtoaccomplishtimelycompletionofthe project(PMBOK,2004).
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Project Ti P j t Time Management M t Process

ActivityDefinition Activity Definition ActivitySequencing(logic) ActivityResourceEstimating ActivityDurationEstimating ScheduleDevelopment ScheduleControl Schedule Control
(PMBOK,2004)

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Project Ti P j t Time Management M t Schedule Development

TheScheduleDevelopmentprocessincludes The Schedule Development process includes selectingaschedulingMethod,schedulingTool, incorporatingprojectspecificdatawithinthat incorporating project specific data within that schedulingtooltodevelopprojectspecificschedule Model,andgeneratingProjectSchedule. Model and generating Project Schedule
(PMIPSforScheduling,2007)

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Schedule Development S h d l D l t Methods

LogicbasedSchedulingMethods(LSM) Logicbased Scheduling Methods (LSM)
Deterministic Techniques
E.g. E g Critical Path Method (CPM) Resource Optimisation Critical (CPM), Optimisation, Chain Method (CCM), etc.

Stochastic Techniques
E.g. Probabilistic Evaluation and Review Technique (PERT), PNET, Monte Carlo Simulation (MCS), etc.

RepetitiveSchedulingMethods(RSM) ( )
Line of Balance (LOB) Flowline Method
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Schedule Development S h d l D l t Inputs

Planners develop the project schedule by using:
Available templates; Available quantities resources and productivity rates; quantities, Available work/scope statements; Available construction logic and logic; Other assumptions/documents e.g. calendars, PMP, etc.
Alltheseadduncertaintiestoscheduleandreduce theconfidencelevel.Whataboutrisksand opportunitiesintheschedule?
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Schedule Development S h d l D l t Outputs

TheoutputsofScheduleDevelopmentprocessare: The outputs of Schedule Development process are:
(Deterministic) Project Schedule; (Deterministic) Schedule Model Data (Deterministic) Schedule Baseline (Deterministic) Resource Requirements

Withallthoseuncertainties intheinputsandthe possiblerisksandopportunities intheschedule,the questionis,howconfidentweareinthisschedule? i i h fid i hi h d l ?

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Schedule Development S h d l D l t Major Challenges

Uncertaintiesduetoassumptions; Uncertainties due to assumptions; Logic,constraints,resources,calendarsandactivity durationsarenotalwaysclearandagreed; durations are not always clear and agreed WhatIfScenarios;and RisksandOpportunities
Tohavearealisticschedule,ScheduleDevelopment processshouldbeimprovedbyusingScheduleRisk Analysis.InotherwordsProjectTimeManagement Analysis In other words Project Time Management andProjectRiskManagementneedtobeintegrated!
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Schedule Development S h d l D l t Risks & Opportunities

Everyschedulehasuncertainties/assumptions. Every schedule has uncertainties/assumptions. Everyschedulehasrisksandopportunities.
Effect Eff on project j
(positive or negative)

Time Scope Q Quality y Cost

So,RisksandOpportunities shouldbemanagedeffectively tominimizethesurprises!!

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Project Ri k M P j t Risk Management t Process

AS/NZSISO31000:2009
COMMUN NICATE AND CONS A SULT Establish Context MONITOR AND REVIEW D W
RIS ASSESS SK SMENT

Identify Risks Analyse Risks

Evaluate Risks E l Ri k Treat Risks

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Project Ri k M P j t Risk Management t Risk Assessment

Risk Assessment include
Risk Identification (both Uncertainties and Events) Risk Analysis
Qualitative Quantitative (Schedule Risk Analysis or SRA)

Risk Evaluation
Thegoalistohaveabetterunderstandingofrisks/ opportunitiesandtheiroverallimpactonproject completiondate.Thiswillbridgesthegapbetween completion date This will bridges the gap between traditionalCPMscheduleandtheREALproject.
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Project Ri k M P j t Risk Management t Risk Analysis

RiskAnalysisistheprocesstocomprehendthe Risk Analysis is the process to comprehend the natureofrisks(oropportunities)andtodetermine thelevelofrisks(oropportunities)intheschedule the level of risks (or opportunities) in the schedule
Risk analysis provides the basis for risk evaluation and decisions about risk treatment; and Risk Analysis includes risk estimation.
ByScheduleRiskAnalysis(SRA),wemodeltherisks andopportunities(uncertaintiesandevents)within thecomplexityoftheinterrelationshipsbetween the complexity of the interrelationships between thevarioustasksoftheschedule.
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Schedule Ri k Analysis S h d l Risk A l i (SRA)

SRAisaprobabilisticanalysistoquantifythe SRA is a probabilistic analysis to quantify the impactstoaproject,programorportfolioasa resultofcarryinguncertaintiesand/orrisksand result of carrying uncertainties and/or risks and opportunitiesortosimulatethepossiblewhatif scenarios. scenarios

Relyingonaaccuratemostlikelyscheduleasa base,SRAtakestheprojecttimemanagementto thenextlevelofaccuracyandconfidence. h l l f d fid

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Schedule Ri k Analysis S h d l Risk A l i Overview

Available data gathering Schedule Review Technical Research Risks & Opportunities Register
Both Uncertainties and Events

Schedule Risk Model ScheduleRiskModel Simulation ResultsandDiscussions Res lts and Disc ssions
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Schedule Ri k A l i S h d l Risk Analysis Data Gathering

Required information for a SRA
Welldevelopedprojectscope; Qualityestimate excludingcontingencyandescalation; Quality estimate excluding contingency and escalation; Schedulereflectingtheestimate; Riskmanagementpolicy/processesinyourorganisation; Risk management policy/processes in your organisation Riskchecklistpresentingtypicalrisksandopportunities; Risk&OpportunitiesTemplate; Ri k & O t iti T l t ScheduleRiskTemplates/Models;and Samplereportoftheprocessandrecommendations. S l f h d d i
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Schedule Ri k A l i S h d l Risk Analysis Schedule Review

How to review the deterministic schedule?
Validation of all quantities (most likely); Validation of all productivity rates (most likely); Validation of all durations (most likely); Minimum number of constraints constraints; Complete logic network; Reasonable d ti f t k and R bl duration for tasks; d Reasonable Critical Path.

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SRA S h d l R i Schedule Review Sample Report

Confidential

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Schedule Ri k A l i S h d l Risk Analysis Technical Research

Whentheteamisconfidentthattheproject When the team is confident that the project deterministicschedulereflectsthemostlikelycase, thetechnicalresearchcanbegin. the technical research can begin
Historical data research Interviews Internet searches, etc.
Issuesmayincludeitemssuchassiteaccess, EnvironmentalApprovals,inclementweather, constructionproductivityconcerns,construction construction productivity concerns construction modifications,equipmentandmaterialdeliver,etc.
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Schedule Ri k A l i S h d l Risk Analysis Risk Register

The Technical Research will enable the schedule risk analyst to complete the Risk Register file:
The identified risks & opportunities Likelihood of the identified risks and opportunities Impacted activities Schedule and/or Cost Impact/s Schedule d/ Cost Variations S h d l and/or C t V i ti Correlation of risks and opportunities to one another Notes, t N t etc.
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Schedule Ri k A l i S h d l Risk Analysis Risk Register (Sample)

Confidential

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SRA Ri k R i t Risk Register (Sample) (S l ) Rain details

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SRA Ri k Register Risk R i t Quality Check

Major risks and opportunities been identified; The likelihood and impacts been assessed; RiskMatrixalignedwiththecompanysrisk managementpolicy; Impacts checked against the allocated calendars; ; Correlations between risks been identified; Stage the opportunities if required; and Duplications are minimised and addressed addressed.
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SRA S h d l Risk M d l Schedule Ri k Model Uncertainties & Events

DevelopingtheScheduleRiskModelinvolves Developing the Schedule Risk Model involves modellingthepotentialimpactsandthelikelihood oftherisksandopportunitiesontheprojectand of the risks and opportunities on the project and thenapplyingthosetotheschedule. Twoaspectsoftherisksandopportunitiesshould Two aspects of the risks and opportunities should bemodelledwithintheschedule:
EstimateUncertainties(Optimistic,MostLikelyand E i U i i (O i i i M Lik l d Pessimistic) Eventsincludingprobabilisticbranching(probabilityand Events including probabilistic branching (probability and theimpacts)
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SRA S h d l Risk M d l Schedule Ri k Model Probability Distributions

ProbabilityDistributionisawaytoindicatethe Probability Distribution is a way to indicate the likelihoodofvaluesbetweentheoptimisticand pessimisticvalues. pessimistic values ProbabilityDistributioncanbe:
Uniform(flat), U if (fl ) Normal(bellshaped), Beta(skinnybellshaped), (k b ll h ) Triangle(pyramidshaped),or Customised(userdefined).
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SRA S h d l Risk M d l Schedule Ri k Model Probability Distributions

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SRA S h d l Risk M d l Schedule Ri k Model Special Conditions

Specialconditionswhichneedsextraattention: Special conditions which needs extra attention:
ProbabilisticBranching whichconsidersthesituation wheretheoutcomeofaneventcancauseintwoor where the outcome of an event can cause in two or multiplepossiblecoursesofactivities. Correlation betweenrisks
PositiveCorrelation:occurswhenoneriskgoeshigher,somust theother. NegativeorAdverseCorrelation:occurswhenoneriskincreases, theothermustdecrease.

InclementWeather orotherexternalinfluences Inclement Weather or other external influences

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SRA S h d l Risk M d l Schedule Ri k Model Inclement Weather

InclementWeathercanbeasignificantfactorina Inclement Weather can be a significant factor in a projectschedule.Veryoftenthereisgooddata availablebutunderstandingtheimpactonthe available but understanding the impact on the scheduleischallenging. Apropermodellingwillallowtheteamtodefine A proper modelling will allow the team to define riskassessmentcriteriaforinclementweather conditionsintheschedule,andincludethese conditions in the schedule and include these uncertainweatherconditionsintheriskanalysis.
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SRA S h d l Risk M d l Schedule Ri k Model Inclement Weather

Therearetwodistinctwaysofdefininginclement There are two distinct ways of defining inclement weatherevents:
Eventwithresultsinanuncertainnumberofnon Event with results in an uncertain number of non workingdaysscatteredthroughoutaperiod,e.g.rainor snow. Eventwithresultsinasingleblockofnonworkingtime withaprobabilityofoccurrence,e.g.chanceofa hurricaneinaperiod.

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Schedule Ri k A l i S h d l Risk Analysis Simulation Methods

TheSRAperformsmultiplesimulationsofthe The SRA performs multiple simulations of the projectusingrandomsamplingsoftherelevant risksandopportunitiesconsideringtheirprobability risks and opportunities considering their probability andimpact. Twopopularmethods: Two popular methods
MonteCarloSimulation (MCS) fastermethodbuthasa largerpossibilityofsamplingerror larger possibility of sampling error LatinHypercubeSampling(LHS) slowermethodbut lesssamplingerrors less sampling errors
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Schedule Ri k A l i S h d l Risk Analysis Simulation Process

Analysisdoesthesimulationthroughmultiple Analysis does the simulation through multiple samplingsoriterations. Eachiterationispickingonesamplepointfrom Each iteration is picking one sample point from eachactivityandcalculatingtheprojectoutcome. Userdefinesthenumberofiteration(e.g.1000, 5000,etc)dependingonthecomplexityofthe projectanditsriskmodel.

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Schedule Ri k A l i S h d l Risk Analysis Simulation Tools

Maintoolsbeenwidelyusedforsimulationare: Main tools been widely used for simulation are:
PrimaveraRiskAnalysis(previouslyknownas Pertmaster) @RiskforProject CrystalBall Crystal Ball

Thenextslidesarepresentingresultsfrom simulationsbyusingPrimaveraRiskAnalysis. simulations by using Primavera Risk Analysis.

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Schedule Ri k A l i S h d l Risk Analysis Sample Programme

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Schedule Ri k A l i S h d l Risk Analysis Finish Date Histogram

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Schedule Ri k A l i S h d l Risk Analysis Histogram & Statistics

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Schedule Ri k A l i S h d l Risk Analysis Criticality Index Tornado

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TheCriticalityIndexofan e ca y de o a activityistheproportionof theiterationsinwhichthe activitywascritical.Usually activity was critical Usually moreattentionwillbegiven totheactivitieswith CriticalityIndexofmorethan Criticality Index of more than 50%.

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Schedule Ri k A l i S h d l Risk Analysis Criticality Path Report

Confidential

TheCriticalityPathReport highlightsthepaththrough theprojectcontainingthe taskswiththehighest g CriticalityIndexvalues. PercentCriticalityisthe Percent Criticality is the probabilitythatanactivity willbeonthecriticalpath; thisindicatestherelative this indicates the relative importanceoftheactivityto otheractivitiesinthe programme.
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Schedule Ri k A l i S h d l Risk Analysis Criticality Distribution Profile

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CriticalityDistributionProfile plotsthespreadofCriticality Indexinaprojectwhichgives anindicationofthenumber andthreatofneartocritical path. Ahighpercentage(morethan 40%)indicatesarelatively tightprogramme. tight programme

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Schedule Ri k A l i S h d l Risk Analysis Action Plan

TheaccuracyoftheSRAoutcomesshouldbe The accuracy of the SRA outcomes should be improvedthroughanumberofiterationsofthis process. process Basedontheinitialresults,theteamshould:
Reviewtheriskregisterandmakemodificationswhererequire; R i th i k it d k difi ti h i Makechangestotheriskmodelaccordingly; Runthesimulationagainandrepeattheprocesstoachievethe Run the simulation again and repeat the process to achieve the mostcosteffectiveriskmitigationplan; FinalisetheRiskActionPlanaswellastheContingencyPlan;and Communicatethisschedulewiththeteamandthenmonitorit.
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About the Author

PedramDaneshmand,AssociateDirector Pedram Daneshmand Associate Director BlueVisionsManagement
Pedram is a civil engineer with over 15 years experience in the construction industry He is industry. highly skilled and technically proficient in many aspects of construction including Programming, Programme Performance Measurement, Quantitative Risk Analysis, Contract Management, Schedule Risk Analysis (SRA), Cost Risk Analysis (CRA), Project Monitoring & Controls (PMC) Systems, Earned Value Performance Measurement technique (EVPM) and POW (Program of Work) Planning & Controls. As an industry innovation award winner for his programming and risk analysis skills, Pedram is currently an Associate Director with Blue Visions Management leading a team of planning and controls professionals within the infrastructure sector. With more than 15 articles in the professional conferences/journals he is been regularly invited to the conferences/journals, technical presentations as one of the industry leaders in his field.
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