A contract WBS is agreed between owner and contractor. This is a decompo- sition of the scope of work into the main elements that will be used for progress measurement, control and payment of the contract price. It may include less detail than a Project WBS. To summarize, WBS is a deliverable-oriented decomposition of the project scope Project Management Institute until a sufficient level of granularity enables easy definition of all information required to execute and manage detailed tasks.
WBS chart based on the case story by E. Turban and J. Depending on the portions of work scope, the project may need engineering skills, procurement capabilities, construction labor, management staff, etc. The Organization Breakdown Structure is a practical method to decompose the pool of human resources needed to execute all of the tasks into different competence areas and then into project roles, independently of the number of individuals that will be assigned the specified role Fig.
It is imper- ative during the monitoring and controlling phase of the construction project that there is a responsible person for each activity.
To summarize the planning process thus far, we have created the WBS and have now incorporated a responsible committee or person to each element of the WBS. The CBS is a system for dividing a project into hardware elements and sub elements, functions and sub functions and cost categories.
It is a hierarchical structure that classifies resources into cost accounts, typically labor, materials, and other direct costs. In addition it represents the economic breakdown of the project into budgets per work package.
This will allow the project manager to track project progress and expenditure according to planning breakdown of activities and responsibilities. A CBS includes all direct full cost of labor, material, as well as the so-called project overhead, which is still a direct cost required to execute the project. There are two main approaches to direct cost breakdown structuring.
Which is used in a particular circumstance depends on the different purposes of cost accounting. The first one makes use of the WBS as the project cost control structure, so that the CBS and WBS are the same structure and each cost account is consistent with a work package or detailed task. In other words, the accounting structure is the same WBS that has been filled with cost information: the end result is a hierarchical structure of cost to be used by the project team for both budgeting, accounting and control.
The advantage is that project budgeting and tracking develop on the WBS exactly in the way the facility is going to be built, with detailed analysis at the final level of decomposition of the WBS: the cost of an elementary activity may include a combined summation of full cost of labor, quantity of material, equipment, and lump-sum cost of subcontract or service. To define the budget, a different methodology may apply to parts of the break- down depending on the specific nature of items or elements.
Subcontractor quotes are of practical use when a specialized subcontractor is assigned a job. Quantity takeoffs are obtained by multiplying the measured quantities by the unit cost, which includes material, equipment and labor as a whole.
Challenges here are the tremen- dous detail complexity of line items, the dependence of the estimated quantities on construction methods, and the determination of unit cost based on historical data.
Material takeoff estimation is needed when data about unit costs for complete instal- lation of materials are unknown. For each line item in the cost breakdown, a quantity of material required, Q, must be determined. For each item the unit cost of material, M, can be estimated using quotes from local material suppliers. For most line items equipment is involved in the construction process, and an equipment rate of cost, EM cost per unit of material , must be determined.
In addition, labor costs — which are often greater than material cost — must be incorporated by multiplying the hourly wage rate, W, and the labor cost per unit of material productivity L. Labor cost estimation W is affected by several components, namely wages, insurance, social security, benefits and premiums.
Productivity L impacts a project in many ways. As time progresses they become more efficient in their work with repetition due to the effects of learning: an effect expressed in learning curves Kerzner However, some projects have little repetitive tasks, and therefore must account for this factor in the project estimate.
When productivity is less than initially expected a project may begin to fall behind schedule. As a result the project manager may increase pressure in order to finish more quickly. However, as hours per day of work increase, worker productivity per hour is known to decrease. Productivity also suffers greatly over the medium- and long-term as workers become fatigued and lose motivation.
This reciprocal process can be damaging to the success of a project if it is not realized. Productivity can be measured, but the results of corrective actions are highly uncertain. In this realm, a project manager with good experience and a good understanding of his personnel can identify problems and attempt to remedy them — ideally before the time such problems begin to be evident in project reports and failure to meet the schedule of values.
Lost time due to low productivity can be incorporated into an updated cost estimation, but prior to construction this addi- tional cost is most easily calculated as a contingency. Applying probabilistic models to estimation calculations allows planners to gain a deeper insight into the effects of uncertainty in costs.
Even if the probabilistic distribution is not fully known, the effects of changing the range of outcomes can help planners see where major problems may occur. Finding the variance of just one portion of a project can give insight into the effects of increased costs will have on the total project cost see Section 8.
This practical first way of accounting for cost based on project activities is usually adopted when a firm does not have a specific cost control accounting system. A second approach to CBS budgeting is to use the corporate multiple-project cost control structure as the project cost accounting system. With this method, each WBS activity has to be associated with a cost account by the means of a cost code.
An illustration of how a cost code is often represented is below in Fig. CBS is also utilized in different approaches by means of delivery. In such circumstances, the solution is to keep the revenue and cost separate. The sum of the contract work packages is paid cost plus and the contract price is paid on a project progress basis.
Since the revenue is a function of cost, then the project WBS should reflect the CBS, if corporate cost control is required. If this is required, then it is recommended to use the higher level of CBS codes, and then break down according to the job needs. In summary, planning tasks include scope of work definition and budgeting, as a fundamental precursor to scheduling the estimated time to perform a project, as discussed in the following paragraphs.
However, it may be one of the most impor- tant because it both lowers chance of delay and assists in recovering from delay, resolving responsibility.
Indeed, delays often result simply from poor planning. Accurate scheduling assists in reasoning about a huge number of details e. Scheduling also allows for accountability. Setting milestones from the beginning allows for the project managers or the owners to pinpoint exactly what went wrong and who or what was responsible for a delay.
A schedule is also a good communication tool, between the managers, the owners, investors, and the general public. Some payment schemes are based on scheduling. Some offer incentives for finishing the job on time or ahead of sched- ule. With an accurate schedule, these sorts of incentives can be offered fairly in the contract from the very beginning.
Also, in the case of a lawsuit, a good schedule can serve as great evidence in support of the parties. To put a schedule into effect it is recommended to avoid any imbalanced use such as to use it early on and discarding later , to game for liability reasons i. In contrast, schedules should be used as shared management tools to get to an integrated point of view for both the owner and the contractor.
Schedule documents can be subsumed mainly in two types. One is the Master Schedule that is used as the contract baseline, usually under the form of a milestone chart, as in Fig. The other is the Project Schedule which is used to monitor and control the actual progress of the project. This schedule is usually based on the WBS and is very metic- ulous.
It usually includes detailed plans, such as engineering schedules, construction sequencing, quality-assurance activities, as well as procurement plans. For example, a procurement detailed schedule involves trying to schedule when materials will be ready and available on site for installation.
This is often difficult to estimate, especially for custom built items, though it is very important to keep work on pace. Without the proper materials on site, workers may be sitting around and money will be spent on entertaining them. For the project schedule, typically there are revisions performed on a weekly, monthly, or other periodic system. Then, these revisions are used to track progress against the original schedule.
This allows for the managers to make any changes, if necessary, to the work see later Chap. There are several forms of schedules and several methods used to determine accurately the schedule.
The following methods will be discussed in greater detail in the following: task matrix, Gantt chart, network diagram, and line-of-balance scheduling. It is usually used for small, less complex projects because of this simplicity. Table 8. This example shows an original schedule and then makes comparisons based on the reviews every 8 weeks. In the week 16 review, the delays began in the electrical design.
However, it is unclear whether the design review caused the delay in the SW development, or whether that was due to something else. The next method we discuss shows more clearly those relationships. Here we begin to see a more clear relationship between tasks, though not completely. For example, we know that design has to take place before construction, but construction could begin before the design is completed. So there is some intuition as to which tasks are related, but not an explicit statement of dependencies.
Each bar represents the amount of time that its respective task will take. This type of chart is very easy for anyone to understand and allows for the owner or manager to more effectively communicate how the project will proceed. There may also be WBS levels of scheduling. However, we need a more detailed way of showing relationships of activities. Using this method of scheduling, it is fairly easy to use software tools to calculate project duration and optimize allocation of labor and resources.
It is also relatively easy to find the areas in the schedule which are more flexible to change. Costs can also be assigned to each task based on the original cost estimates or trough assignment of human resources, materials and equipment to each task. In any case, the common assumption in deterministic estimation is that all activity attributes can be determined as certain values with very little margin of error in a later section we will discuss about probabilistic estimation of task attributes.
In other words, if task B cannot be started until task A is finished, that relationship is defined in this method. This often implies iteration: if the solution of the net- work acceptable in terms of total project duration and resource allocation, then terminate. The first step is to list the activities that need to be performed. This is done by taking the tasks defined in the WBS and listing them. The following shows an illustration of listing the activities from WBS detailed in Table 8.
Once the tasks are listed, one has to assign precedence relationships. Sometimes activities can overlap; sometimes they have to occur in series. So we define a matrix of precedence to capture this idea Table 8. As per the above diagram, the relationships between activities reflect the con- straints in sequencing the tasks, such as regulatory or contractual, physical or functional, financial, managerial, and environmental constraints.
Also, resource availability may restrain multiple tasks in parallel: for example, if only one crew is available to perform the job all construction tasks have to be performed in series. Finally, representation is required to capture the above relationship matrix in diagram form, again to allow the scheduler to clearly understand how activities will unfold. AOA representation keeps similarities to a Gantt format. In this method, Nodes represent start and finish events for each activity. Arrows represent the tasks that need to be done to get to the next activity.
The diagram in Fig. These nodes arise when one task has two or more precedent activ- ities, as in the example. Because a node may only have one incoming arrow, dummy nodes need to be created. Once all the nodes are accurately represented, one may construct the final diagram. A task is represented in Fig. Also, as with the Gantt chart, we are able to illustrate a hierarchy of networks, as in Fig.
So setting different levels of hierarchy may help in presentation, where a client or a top manager may not need to know the details of the construction, but may just want an overall view of the process. PDM nuances will be better discussed in the following paragraph coping with critical paths and time floats.
Another way of modeling network dependencies is using bar charts with prece- dence notation, as shown in Fig. By adding arrows to a Gantt chart, it is possible to capture the AON precedence relationships, while being able to maintain the easy-reading of the Gantt chart. This diagram allows for representing the production rate of an activity: the slope of the production line is expressed in terms of units of distance per time i.
From the example in Fig. The CPM consists of specifying the activities to be carried out and its associated information such as duration and running a scheduling algorithm in order to yield some scheduling recommendations and constraints.
The CPM runs on a network-based scheduling system. The basic steps to fol- low are: define activities from WBS work packages, estimate the cost, duration and resources for each one of the activities and define the precedence relationships between them. Once all is clearly defined, the system needs to be iterated in order to optimize and manage the network, using the CPM algorithm.
If the results obtained are acceptable, the iteration must stop. Otherwise, some extra dependencies need to be added or some additional resources need to be considered. Because all pre- ceding activities must finish before a successor, early start of a given node is the maximum of early finishes of preceding nodes.
As a practical example, the forward pass determines the shortest time to complete a sequence of tasks. Because preceding activ- ity must finish before any following activity, late finish of a given activity is minimum of late starts of successors. In practice, given the final completion time of a sequence of tasks, the backward pass allows calculating the latest point in time the sequence has to be initiated.
Both notions are quite common-sense reasoning that we use all the time for daily life tasks e. Below is an example for the construction of a small residential unit. Consider the project described with the precedence matrix in Table 8. With these tasks and their predecessors in mind, the network diagram looks like the one in Fig. The next Fig. Now, as we know the durations of the activities, we subtract them from the Late Finish to get their Late Starts. With also Late Start and Finish dates in hand, it is possible to calculate floats for each one of the activities.
In the project above, for example, activity 7 has no float, while activity 6 has a 7-week float. After all the network is solved, we just need to look at that path whose activities have no float. This path is defined as the Critical Path CP and it is the longest of all paths in the network system.
In the example above, the CP is the one comprised of activities In all projects where the total finish date is calculated as the late duration of the network, there is at least one critical path, and the activities in this path must be completed on time, otherwise the entire project will be delayed. Read the overview below and download it using links given at the end of the post. Naylor M. This text evolved from a one-semester course given to two-year Construction Management students.
Half the students had worked in the construction industry and the rest came directly from secondary school or trades training. The course material started at an introductory level because most students had no background in planning or operational thinking. The teaching materials evolved each year over a twenty-five-year period as the result of student comments and other feedback, culminating in this text. Moreover, an advisory committee of construction managers reviewed the material over this long period.
The book is about the basic scheduling of projects. It does not consider the connections to budgeting, cost control, or the many other disciplines that require a schedule as a base because there are many good texts that deal with these subjects.
The examples have a construction focus but the techniques apply to any kind of project from theatrical productions to military maneuvers.
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