Monday, April 20, 2009

Live Scheduling

The train is leaving the station. Are we on it?

Imagine a world where we can stop things from happening until we are ready for them to happen. Not ready to catch that flight? It can wait. Not ready for dinner? It can wait.

Clearly, these scenarios are non-starters. The rest of the world continues on its preset schedule. Why then, are we so willing to accept the existence of an out-of-date-schedule? Common excuses provided include: "The data is not ready". "We are waiting to hear from the contractor". "The equipment vendor has not got back to us as yet". "We are working on the man-loading". "The logic is not right, yet". Are these familiar? Are people working on the project? Is progress being made? If so, then you should be working to the plan. And this plan should be 'scheduled'. If you are not doing so, you could be held accountable, by your company, for mismanaging company resources.

Does this sound too severe? In the light of recent examples of poor management of funds and associated risks, it would seem that a little more accountability and a little less freedom with company and investor funds is not a bad thing.

In this article we discuss various aspects of managing projects and plant maintenance turnarounds. In particular, we review the barriers that are commonly placed in path of project visibility and address the various tools that can be used to attain the desired level of transparency, accuracy and timeliness in project reporting and analysis.

Time and Money - the twin company resources

The two primary aspects of project management, after safety, are the management of time and money. The discipline of project controls is designed to manage these two critical aspects of projects and turnarounds. If you can reduce the time (i.e. duration) and the money (i.e. cost) of your project, you can save money and this is considered a good thing. The project manager (PM) that consistently brings projects in ahead of schedule and under budget is a hero and a valuable person in the organization. A major tool that the PM needs is a clear view of the planned costs and schedule from the outset of the project. Before corporate managers approve a project, they too need to know the proposed budgeted and the schedule timeline for the project. The budget and schedule may initially take the form of a planned expenditure curve. This is also known as a cash flow curve and when the cumulative cash flow is plotted against time, the shape of the curve approximates the letter 'S' and is often referred to as the S-Curve. This Planned Cost S-curve is a single diagrammatic representation of the cost and schedule of a project. In order to effectively produce such a curve, all components of the project's work must be included in the process. In many construction-related projects, the major phases are Engineering, Procurement and Construction. For this reason, these are also known as EPC projects. A discussion of how to produce a plan and a schedule for EPC projects and Maintenance Turnarounds follows. We discuss ways to overcome the common pitfalls and obstacles to the time production of a live schedule.

Staging a Successful Project

A project evolves through a predictable sequence of stages. The transition from one stage to the next is called a Stage Gate. The project undergoes a metamorphosis when it transitions through the gate between one stage and the next. During the Scope Development and Approval stage, there is very little in the way of project detail. This lack of detailed information makes it difficult to estimate the cost of the project as well as its duration. Scope developers and estimators prepare an estimate that is based on broad parameters. For example, if the project is to build a pipeline for 100 miles, the costs of previously completed pipeline projects may be used as a basis for estimating. If the project is to install a heat exchanger, the estimator can use a table from a reference such as Richardson's or Mean's to estimate the time and relative cost of the project. This type of estimate is known as the 10% estimate. This is because there is 10% or less of the detail that the project will eventually have following the engineering phase. Management approves the project based on the costs and schedule that they see in this stage. The amount approved becomes the Original Budget. The timeline is the original baseline. Any changes that occur in the project that result in changes to the budget must be approved as a change authorization request (CAR). The Revised Budged is the aggregate of the original budget and the changes. Likewise, changes may impact the baseline and result in a revised baseline. Some companies refer to the budget and schedule as the target budget and target schedule.

The Engineering Stage kicks off the process of detailed engineering. During this phase, detailed design work results in the production of detailed drawings and analyses. Halfway through engineering, it may be possible to create what is commonly referred to as the 30% Estimate. This estimate, with its extra detail provides a more accurate view of the projected costs of the project. Management uses this new information to modify the project budget and schedule - usually by changing its scope. These changes result in a changed schedule as well. The Maintenance Turnaround equivalent of the Engineering stage is the Scope Development Phase. This occurs during the year prior to the major turnaround.

Toward the end of the Engineering stage the drawing's are 'Issued for Construction' (IFC). At this time a 100% estimate provides a much more accurate estimate of costs and duration. By this time, management may have already committed to the procurement of some equipment and materials that have a long-lead time for fabrication or manufacturing and delivery.

The Construction stage ushers in the contractors and vendors that are responsible for building the project. The input provided by these organizations further contributes to the fine-tuning of the budget and the schedule. In Maintenance Turnarounds this is known as the Maintenance Period.

While construction proceeds during the Execution stage, and maintenance proceeds through the maintenance period, the progress provided and the field conditions encountered cause a new and accurate schedule to be available virtually every day. This is a live schedule that shows the way that work is unfolding each day and each shift, if needed. A Baseline schedule is maintained for the project. This is the approved budget and schedule. As the project or turnaround progresses, additional scope is discovered and included in the project based on field considerations. These changes are reflected on a 'current' schedule. A comparison between the current schedule and the baseline shows variances that may need further approvals by management. You company's business rules determine the processes for managing the documentation, approval and inclusion of scope changes in the current plan.

During each of the project stages a new schedule emerges. However, we prefer to see all of these schedules as the same schedule - just in different stages - just like the project itself. If we maintain the schedule in the same environment (software, database, etc.) then we can have the baseline to track the evolution of the project though its multiple stages. In the next section, we discuss the components of an integrated scheduling system.

Components of an Integrated Project Scheduling tool

Each project is broken down into component pieces according to a variety of breakdowns. The WBS or work breakdown structure is the most common tool for coding aspects of the project. For estimating and planning purposes, it is common practice to break a project down into work packages. An estimate work package is not the same as a plan work package. An estimate package is focused on materials (commodities), their quantities and unit rate costs for them. Labor costs are included based on standard installation rates. Plan packages, on the other hand are focused on the physical installation at the site. An integrated estimating and scheduling tool allows the costs of an estimate to be spread accurately along the duration of work items in the plan.

While a project progresses, there may be changes in the numbers associated with the project. These include the following:

  • Quantity of materials (commodities)
  • Unit rate cost of materials (commodities)
  • Unit rate cost of labor
  • Productivity
  • Duration of the work
  • Physical Quantity to be completed

Changes to any of these items results in changes to the cost and the schedule. An integrated project scheduling tools provides the means to track changes to these items, document them, get them approved and display their impact graphically as changes to the baseline and current target cost as well as completion dates for the work inclusive of the changes.

Changes - be aware of them and track them

Knowing the source of each change makes tracking the reasons for the changes a much easier and accurate and believable process. This tracking should occur automatically, without the need for onerous data entry and approval cycles. For example, if the client's field manager asks the foreman to work on an out of scope valve in the vicinity of the in scope work that is being done, the foreman may simply deploy his people to do the work (safely!). The system should allow a new work item and work package, if needed, to be added by the foreman or his/her timekeeper. Adding a work item 'on-the-fly' is critical in order to allow the plan to accurately reflect the actual work as it is done in the field - rather than being forced into the pre-built schedule. Think about this for a moment! We are saying here that a schedule should accurately reflect what is going on in the field. This is not a crazy idea. Yet how often do we see a schedule change due to field input? The weekly or monthly report that includes the schedule simply continues to report progress based on the baseline schedule. It pretends that what is happening in the field is not important enough to be reflected on the schedule. No wonder that the field often gets the work done despite, and independently of, the schedule. The foremen resort to Excel spreadsheets to outline the work for their crews and to record their progress. A disconnect grows each day that the field is disconnected from the plan and the schedule.

The main issue is to have a system be a reflection of the work as it is happening. By doing this well, it can also serve as tool for management to see where things are really going. In addition, the field is now co-opted into maintaining a much more accurate plan and schedule. This means that they are more likely to actually use the schedule to help them in their daily what-if analyses. Such as: 'Should we work 4 weeks of 12 hour days to crash the schedule?" or "Should we simply hit the critical path work for the next 4 weeks and 2 12 hour shifts?". Again, a live, and living, schedule is a tool that many projects are simply not using today.

Remove the Obstacles

Why is this? Too often, on the scheduling 'island', schedulers see their mission as to simply produce a schedule on a bi-weekly or monthly basis. They are simply auditors of the project execution. They are not integrated into the actual execution process. This is an expensive way to go. The scheduling function in this scenario is an overhead that the project cannot afford. The cost-effectiveness of a schedule and the scheduling process should be proved every day during the execution phase. When the field personnel use the schedule to help them deploy their resources and to report progress, then the schedule is doing its work for the project. This is a desirable outcome, and the way that it is achieved is by closely incorporating field input into the plan and the schedule that is derived from the plan. In real terms, this means that the plan and the schedule are owned by all of the people on the project - and not simply by the scheduling group of 'expert' schedulers. Once it is clear to field personnel that they are integral to the plan and schedule creation and maintenance, they will provide the best and most accurate and useful input into the schedule. This input results in far more accurate earned and actual data for each of the work items and work packages in the project's scope of work. When this data is rolled up to the project-level summary report, management has believable data that is built on, effectively, real-time input from the field.

It just does not get any better than this! No PM wants to live in a dream world. Not for long, anyway. The timely field will keep the project grounded, every time.

Takeaways for Live Scheduling

We now summarize the salient issues involved with Live Scheduling.

  • Always have a schedule - no matter what the phase of the project. As the project evolves into its various stages, the plan and the schedule that is based on the plan should be 'fleshed-out' with detail. Use the 'do not schedule' flag to prevent work items and work packages from being included in the schedule before they are ready to be included (ex. while you are building the detailed schedule), or after you create a more detailed schedule.
  • From inception of the project, establish a regimen of a daily schedule. This means you collect progress and actual data daily. It also means that the schedule is computed daily from the plan. This ensures that it is a living entity that the engineering, procurement, maintenance and construction personnel can use each day as they execute the work.
  • Ensure that change management is built into the planning process by implementing company business rules. This ensures that the plan and schedule will always reflect what is happening in the field - and not just what was planned to happen. Do not be afraid of changes! They will happen anyway.
  • Integrate your timekeeping with the plan. If your actuals are charged to the work in the plan they will, by definition, be accurate. The use of work orders or WBS codes in the timekeeping process is the single biggest area where bad data is collected in an organized way into the system. Using your plan and schedule in this way ensure accuracy in an area of heavy data acquisition - which means that this is an inexpensive way to get great data.
  • Provide your field supervision (foreman, superintendents) with tools to let them view the current live plan and schedule as well as enter the latest field conditions into the system. This integrates them more closely with the project process. This results in better information, more quickly and in both directions - to the field and from the field. Amazingly, this also reduces their workload (no timesheets to be filled!) and helps them to 'work smart' by leveraging the information that they have into change management, progress reporting, timekeeping as well as workforce deployment for the next day's or next shift's work.

OK - Now we know what must be done - what tools do we need?

TeamWork Group has built a suite of tools that are configurable to each client's business rules while ensuring adherence to conventionally accepted project management practices as outlined in various PMI publications.

TeamWork Solutions includes the following apps:

  • Cost - This is a WBS-based tool for managing the quantity and unit rate based estimating process from take-off from drawings to the approval process to the creation of a budget. Change management is included in the module. In addition, this module proves the means for tracking cost commitments and cost expenditures in order to provide an accurate picture of project status. Links are available to 'move' the budgeted labor, equipment, materials and contracted costs to the plan in order to obtain a time-based spread of the budgeted costs. Progress from the budget can also be sent to the plan and schedule or be sent back from the plan to the budget - based on business rule implementation.
  • Plan - This is a work package-based planning system. It provides the means for the execution team to break the project down into chunks of work (work packages) that can be planned and scheduled as logically integrated sequences of work. These work packages reflect the way that the work will be done. Planners plan each of the work packages. The built-in scheduling engine schedules and, optionally, levels the limited resources to produce a workable schedule based on business rules that govern prioritization, work type, work in progress, etc. Field personnel access their daily work list from the system and use the system to provide daily progress on work done. Built-in Change Management ensures that all changes are assimilated and documented and available for analysis.
  • Incur - This tool is focused on managing and tracking work done by the workforce on the work items in the work plans in the project. Links between Incur and the work that is planned in Plan ensures that time (actual or incurred hours) is accurately charged to real open work items. Each contractor that contributes personnel to the workforce may use the system. In addition, time data may be imported into the system from contractor timekeeping systems.
  • Project - This tool is designed to be a quick query tool that permits project managers and other corporate and project personnel to gain a quick view of the health of a project. Quick access to project reports is available. Also, drilldowns into the detailed levels of a project are available.

TeamWork Group has worked hard to ensure that companies that are in need of this technology can easily access it. We have done this by leveraging the internet to help you and your company to easily and securely gain access to the web-based tools that you need to get your work done efficiently and with the least amount of wasted time. You will not need to get approval from your IT group in order to install our software on your system. The only tool that you need is your internet browser.

We are also available to answer your questions - in a number of ways including all of the usual ones: email, phone, IM, SMS texting, etc.

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