Semianrs in Project Management

PROJECT CONTROL
HUMAYUN AKHTAR
1
SEMIANRS IN PROJECT MANAGEMENT
RIPHAH INTERNATIONAL
UNIVERSITY

CLOSEOUT
DEVELOPMENT
OPERATIONS
DESIGN,
PLANNING
FEASIBILITY
Actual Start of Project
Organization
Estimation
Planning
Finance
Evaluation
Monitoring & Control
Changes & Claims
Quality & Reviews
CLOSEOUT
Recall: The 5 Phases of Project Management
Project Control
Monitoring & Control: A Feedback Process

Correct
Deviations
Monitoring
1. Measurement
2. Performance Analysis)
Detect
deviations
Control
1. Actions
2. Revised Plans, Cash Flows, Schedules, etc.
Project Control
Project Control: The Big Picture

Given
Project is
Off-track
Project Control

Given
Project is
Off-track
Monitoring indicates that:
- Project is behind time-schedule, and/or
- Project has exceeded budget, and/or
- Quality of materials or finished work is below standard, and/or
- Productivity is lower than as planned, etc.
Project Control


Given
Resources for
PC (the 4-Ms)
Project is
Off-track
Project Control


Given
Resources for
PC (the 4-Ms)
Project is
Off-track
Resources available to the Project Manager for Project Control:
- Money
- Manpower (labor)
- Materials
- Machinery (Equipment)
Project Control


Given
Mechanism and
Elements of PC
Resources for
PC (the 4-Ms)
Adjust the
resources
Adjust the project
characteristics:
size, scope, etc
Project is
Off-track
Project Control


Given
Mechanism and
Elements of PC
Resources for
PC (the 4-Ms)
Adjust the
resources
Adjust the project
characteristics:
size, scope, etc
Project is
Off-track
More labor? Better labor?
Better supervision?
More materials? Better materials?
More equipment? Better equipment?
More money?
Reduce project size? Reduce project scope?
Terminate project?
resource
s
project
Project Control


Given
Mechanism and
Elements of PC
output
Resources for
PC (the 4-Ms)
Project is
Off-track
Adjust the
resources
Adjust the project
characteristics:
size, scope, etc
Project
brought
back on-
track
Was the Project Control successful? How can we tell?
Project Control


Given
Elements and
Mechanism of PC
output
Resources for
PC (the 4-Ms)
Project is
Off-track
Adjust the
resources
Adjust the project
characteristics:
size, scope, etc
Project
brought
back on-
track
Project Control
Outline of this Lecture:
1. How can we tell when PC is needed?
2. What resources are available for PC?
3. What are the elements of PC?
4. What is the mechanism of PC?
5. Some important issues in Project Control
Project Control

Part 1
How can we tell
when Project Control is
needed?

Specific Clues General Clues
Is Project Control needed now?
How can we tell?
Primitive
Indicators
Other
Indicators
Performance
and Quality
Cost
Time
How can we tell when Project Control is needed?
Performance
- Unexpected technical problems arise
- Insufficient resources are available when needed
- Quality or reliability problems occur
- Owner/Client requires changes in technical specifications
- Inter-functional complications and conflicts arise
- Technological breakthroughs or Market changes that
increase/decrease the projects value
GENERAL CLUES (Meredith and Mantel, 2006)

Cost
- Technical difficulties that require more resources
- Scope of work increases
- Bid amount (accepted for the contract award) is too low
- Reporting of the monitoring results are poor/late
- Budgeting was inadequate
- Changes in market prices of the inputs

Time
- Technical difficulties require more time to solve
- Initial Time estimates optimistic
- Task sequencing was incorrect
- Required inputs of material, personnel, or equipment were
unavailable when needed
- Necessary preceding tasks were incomplete
- Customer generated change orders required rework
- Governmental regulations were altered
Primitive indicators:
More resources or less
resources have been used
than planned

Activities are taking long
than planned

Cost of activity (or of
project to date) is higher
than expected
actual
actual
actual
planned
planned
planned
0 500 1000 1500 2000
Amt of concrete used (tons)
Total Man-hours
Equipment-hours
Amount input to date
SPECIFIC CLUES

More resources or less resources
haven been used than planned

Activities are taking long than
planned

Cost of activity (or of project to
date) is higher than expected
actual
actual
actual
planned
planned
planned
0 500 1000 1500 2000
Amt of concrete used (tons)
Total Man-hours
Equipment-hours
Amount input to date
SPECIFIC CLUES


planned

JAN FEB MAR APR MAY JUN
Activity 1
Activity 2
Activity 3
planned
actual
NOW
Legend
planned
actual
SPECIFIC CLUES

Program
(schedule)
Progress
(actual)

Program
(schedule)
Progress
(actual)
now time
50%
70%

planned

$
SPECIFIC CLUES
Why are they primitive?
- May be biased.
- Do not consider that progress may be
overestimated or underestimated due to:
- execution of unscheduled work done, or
- execution of more work of low value and less work of high
value
SPECIFIC CLUES

Part 2
Resources
for
Project Control
2. Resources for Project Control
Money
Machinery (Equipment)
Materials and Supplies
Manpower (Labor and Supervision)
Money as a PC Resource
Not a direct resource
Rather, used to influence the amounts
or quality of the other resources
Using Equipment for PC
Often used to augment labor in order to
speed up project

Can be expensive

May involve renting or purchasing
Materials and Supplies as a PC Resource
Increase in quality or quantity may be
necessary to enhance project control

Improved inventory systems for
materials
Manpower as a PC Resource
Project problems (time delays, excess costs,
poor performance, etc.) are partly due to the
human element (action or inaction)

In using Manpower as a tool for project
control, PM encounters human emotions
(anger, fear, frustration, etc.)

Part 3

Elements
of
Project Control

Project-related Resources-related
Elements of Project Control
3. Elements of Project Control
Manpower-related control
Machinery-related control
Money-related control
Material-related control
3A. Resource-related
Re-allocate resources

Manpower
Machinery
Money
Materials
Also referred to as Human Resource Control
- Lay-off/fire any under-performing staff
- Hire staff with needed skills
- Assign staff with specific skills to specific
activities

Issues:
- PM may be seen as a stern disciplinarian
- PM must avoid heavy handed actions,
- Fix problems without blaming people

Manpower
Machinery
Money
Materials
Also referred to as Physical Asset Control
- Decommission any under-performing equipment
- Bring in equipment with appropriate capabilities
- Re-assign specific equipment to specific activities

Manpower
Machinery
Money
Materials
Also referred to as Physical Asset Control
- Decommission any under-performing equipment
- Bring in equipment with appropriate capabilities
- Re-assign specific equipment to specific activities

Issues:
- Equipment decisions may involve some economic
analysis
- Equipment-based control easier than manpower-
based control
- Some trade-off may exist between manpower and
equipment utilization.

Manpower
Machinery
Money
Materials
Also referred to as Financial Resource Control
- How much money should be spent?
- How should it be spent?
- PM assisted by:
- Project accountant
- Project Finance Manager

Manpower
Machinery
Money
Materials
- Discontinue use of sub-standard material
- Seek new sources of superior material

Options:
- Reduce project size?
- Reduce project scope?
- Terminate project?
3B. Project-related

Part 4

Mechanisms
of
Project Control
Mechanisms of Project Control
Types of Mechanisms:
- Cybernetic
- Go/No-go
- Post-control

Types of Control Mechanisms
Cybernetic
- Cyber means Steer or helmsman
(Greek language)
- May be First-, Second-, or Third-order

Cybernetic control mechanisms

Process
Comparator
Standards
Effector
and
Decision-
maker
Outputs
Inputs
Mechanism:
- System output monitored by
sensor
- Sensor measurements
transmitted to Comparator
- Measurements compared
with predetermined standards
-- Deviation from standard
sent to decision-maker
-If deviation from standard is
too large, signal sent to
Effector
Monitoring mechanism (e.g.
sensor)


Process
Comparator
Standards
Effector
and
Decision-
maker
Outputs
Inputs
Mechanism:
- System output monitored by
sensor
- Sensor measurements
transmitted to Comparator
- Measurements compared
with predetermined standards
-- Deviation from standard
sent to decision-maker
-If deviation from standard is
too large, signal sent to
Effector
sensor)
This is a First-order cybernetic control
system. (Standards are fixed)
Example: Thermostat that keeps room
temperature to 70F all year round.


Process
Comparator
Standards
Effector
and
Decision-
maker
Outputs
Inputs
Mechanism:
- Same as described for First-
order Cybernetic systems, but:
- Standards are not fixed, but
the manner they change is
fixed.
sensor)
This is a Second-order cybernetic control system (standards vary according to a fixed set of rules)

Examples: Thermostat that keeps room temperature to 70F in winter and 65F in summer,
Robot installations, Automated inventory systems, Automated record keeping systems
Memory Pre-programmed Responses


Process
Comparator
Standards
Effector
and
Decision-
maker
Outputs
Inputs
Mechanism:
- Same as described for First-
order Cybernetic systems, but:
- Standards are not fixed but
are variable. Also, the manner
they change is variable because
there is a consciousness
(human element) involved.
sensor)
This is a Third-order cybernetic control system (standards vary according to a variable set of
rules)

Examples: Most Project management systems.
Consciousness Memory, Selection
Cybernetic control in Project Management
1. PM must clearly define outputs in terms of relevant
project characteristics
2. PM must establish standards for each characteristic
3. Monitoring mechanisms (sensors) must be established to
measure the characteristics at regular intervals
4. For each characteristic, the trigger point or maximum
deviation (difference between attained level and
standard level) should be established.
5. If triggered, appropriate action should be taken to minimize
the deviation between Attained Level and Standard Level
of performance.
Go/No-go Mechanisms of Project Control
Testing to see if some specific precondition has been
achieved

Yes/No (discrete)

Control in most PM fall into this category (Cooper,
1994; Meredith and Mantel, 2006)

Example: Was Activity X completed within 6 months?

Did Activity Y cost exceed its budget of $1.5 million?

Some engineering judgment is necessary in exercising
these types of controls.
Post-Control Types of Project Control
Also called: Post-performance control, Post-performance
review
Is done after the activity or project is over
Like a post-mortem or report card
Is it Locking the barn door after the horse has
escaped?
Or is it We need to learn from the past to avoid future
mistakes?
Generates lessons from current projects so that future
projects can be controlled better.

Desired characteristics of a project control mechanism
Flexible PC should be able to react to changes in system
performance
Cost-effective Value of PC should exceed cost of PC
Useful Must really satisfy the needs of project, not the
whims of the PM
Timely Be able to react quickly before the problem
overwhelms the project
Simple Easy to understand and operate
Adjustable Capable of being adjusted to reflect changing
priorities
Documented so that training is possible
Some Interesting Issues in Project Control
Flexibility
Trade-offs
Some things to watch out for
Impediments to Project acceleration
Cost-only and time-only actions to control
projects
Value of Flexibility in Project Planning
Flexibility is primary defense against risk

Planning too tightly may highly complicate control

Flexibility in construction is key during control

Want adequate float and contingency to change plans if
needed
Be careful on value engineering that limits flexibility!
Trade-offs between Performance Measures
during Project Control
Can sometimes only correct for one
performance measure at a time
Time
Cost
Quality
Need to understand tradeoffs and triage
Pick where to make tradeoffs (e.g. non-critical
activities)
Tradeoffs
Time
Quality
$
Acceleration $
(Overtime, shift work,
Rework, higher-end
equipment, better crews etc.)
Less $ Low progress
Resource reduction
Selection of poor quality workers
Default of contractor/subs

Quality problems result from
overtime, shift work, new hires
Quality level impacts speed of work,
Level of rework
Need for rework imposes
high expenses
High quality needs can lead
to costly miscalculations
on labor time
Trying to save $
Can lead to substitution,
lower quality
workmanship
Slow progress $
Delayed occupation,
Higher interest on
const. loan
Loss of tenants
Opportunity cost
Trade-offs: The Time-Quality-Money Triage
In many cases, the best we can do is to pick
the areas where tradeoffs do the least harm
e.g.
Move resources from non-critical activities
Accelerate only critical activities
Sacrifice quality on non-critical items that can
be remedied after substantial completion
Some things to watch out for:
Overreacting/Improvisation, etc.)
When trying to correct, often bump up against other limiting
factors
Space constraints/Hiring time/Morale/Coordination
difficulties
Improvisation dangerous (working w/o planning)
Often can lead to Snowballing (increased problems at a
rapidly accelerating rate)
Confusion, discoordination, cascading unanticipated
effects, suboptimal work efficiency, lack of morale
Breaking Job rhythm and learning curves can really
inhibit productivity!
Controlling the Time Schedule Project Crashing
Adding new project resources
Changing the production function (Change the
technology)
Change operation conditions by altering the
precedence, sequence, or timing of work
Fast-track, activity overlapping
Overtime
Shift work
Changes in the tools, methods, operating conditions
Work in more sheltered location
Impediments to Project Acceleration
Human resources
Multiple-shift work
Environmental/safety issues, High cost, Neighborhood objections
Overtime/extended workdays
Fatigue, Lower morale, Rework
Increasing # of workers
Training (takes time of most experienced!), Space constraints, Hiring time
Technology
Using more, larger or more efficient equipment
Training/learning curve, Procurement time, Space constraints
Using faster-installing materials
Procurement, Submittals for owner approval
Alternate construction methods
Skill set, Learning curve, Unknown side-effects

Impediments to Project Acceleration
Human resources
Multiple-shift work
Environmental/safety issues, High cost, Neighborhood objections
Overtime/extended workdays
Fatigue, Lower morale, Rework
Increasing # of workers
Training (takes time of most experienced!), Space constraints, Hiring time
Technology
Using more, larger or more efficient equipment
Training/learning curve, Procurement time, Space constraints
Using faster-installing materials
Procurement, Submittals for owner approval
Alternate construction methods
Skill set, Learning curve, Unknown side-effects
Time-only or Cost-Only Control Actions
Sometimes, reduce time without increasing cost
Change operating methods and process to increase
work efficiency and product quality
Outsourcing

Sometimes, reduce cost without increasing time
Outsourcing
Substitute with less expensive but acceptable
materials or equipment
Control as a Function of
Management
The purpose of controlling is always the
same: to bring the actual schedule, budget,
and deliverables of the project into reasonably
close congruence with the planned schedule,
budget, and deliverables

The job of the project manager is to set
controls that will encourage those behaviors
that are deemed desirable and discourage
those that are not
Cybernetic Controls
Human response to steering controls tends to
be positive
Steering controls are usually viewed as helpful
rather than a source of unwelcome pressure
Response to steering controls also depends on
the acceptance that the goals of the control
system are appropriate
Go/No-go Controls
Response to go/no-go controls tends to be
neutral or negative
Barely good enough results are just as
acceptable as perfect results
The system makes it difficult for the worker to
take pride in high quality work because the
system does not recognize gradations of quality
The fact that this kind of control emphasizes
good enough performance is no excuse for the
nonchalant application of careless standards

Postcontrols
Postcontrols are seen as much the same as a
report card
They may serve as the basis for reward or
punishment, but they are received too late to
change current performance
Because postcontrols are placed on the process of
conducting a project, they may be applied to such
areas as: communication, cooperation, quality of
project management, and the nature of interaction
with the client

Balance in a Control
System
General features of a balanced control system:
Built with cognizance of the fact that investment in
control is subject to sharply diminishing returns
Recognizes that as control increases past some point,
innovative activity is more and more damped, and then
finally shut off completely
Directed toward the correction of error rather than
toward punishment
Exerts control only to the degree required to achieve its
objectives
Utilizes the lowest degree of hassle consistent with
accomplishing its goals
Control of Creative
Activities
The more creativity involved, the greater the
degree of uncertainty surrounding outcomes
Too much control tends to inhibit creativity
Control is not necessarily the enemy of creativity,
nor does creative activity imply complete
uncertainty of
There are three general approaches to control
creative projects:
Progress review
Personnel reassignment
Control of input resources

Progress Review
The progress review focuses on the process of
reaching outcomes rather than on the outcomes
per se
The process is controllable even if the precise
results are not
Control should be instituted at each project
milestone
The object of control is to ensure that the
research design is sound and is being carried out
as planned or amended
Personnel Reassignment
This type of control is straightforward -
individuals who are productive are kept
Those who are not, are moved to other jobs or
to other organizations
While it is not difficult to identify those who fall
in the top and bottom quartiles, it is usually
quite hard to make clear distinctions between
the people in the middle quartiles
Control of Input Resources
The focus is on efficiency
The ability to manipulate input resources carries
with it considerable control over output
Considerable resource expenditure may occur
with no visible results, but suddenly many
outcomes may be delivered
The milestones for application of resource control
must be chosen with great care
Control of Change and Scope Creep
Coping with changes and changing priorities is perceived as
the most important single problem facing the project
manager
The most common changes are due to the natural tendency
of the client and project team members to try to improve
the product or service
The later these changes are made in the project, the more
difficult and costly they are to complete
Without control, a continuing accumulation of little changes
can have a major negative impact on the projects schedule
and cost

Control of Change and Scope
Creep
The project managers best hope is to control the process
by which change is introduced and accomplished
This can be done with a formal change control system
that is able to:
Review all requested changes and identify all task impacts
Translate those impacts into project performance, cost, and
schedule
Evaluate the benefits and costs of the requested changes
Accept or reject the changes and communicate to all concerned
parties
Ensure that changes are implemented properly
Effective Change Control Procedure
The following guidelines, applied with reasonable
rigor, can be used to effectively control changes:
All project contracts or agreements must include a
description of how requests for a change in the
projects plan, budget, schedule, and/or
deliverables, will be introduced and processed.
Any change in a project will be in the form of a
change order that will include a description of the
agreed-upon change together with any changes in
the plan, budget, schedule, and/or deliverables that
result from the change

Effective Change Control
Procedure
3. Changes must be approved, in writing, by the
clients agent as well as by an appropriate
representative of senior management of the firm
responsible for carrying out the project
4. The project manager must be consulted on all
desired changes prior to the preparation and
approval of the change order. The project
managers approval, however, is not required
5. Once the change order has been completed and
approved, the project master plan should be
amended to reflect the change, and the change
order becomes part of the master plan

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