LET'S KILL GANTT

A few months ago Profesor Gui Ponce de León from University of Michigan came to Perú and gave us a speech called “Gantt Chart rest in peace”, of course I was there.

In that speech he introduced us a new tool called GPM to represent and review the schedule of a Project, pointing out its advantages over Gantt. I´m not going to describe here what’s GPM because I haven’t used it yet, but those who are willing to know more about could try on this link http://pmatechnologies.com/ , here you could get more information regarding GPM from creator’s mouth.

In fact, just as Gui, I belong to the “Let´s kill Gantt Club”. Neverthless I confess that I have tried several times to kill Gantt and it is not only that I haven´t got  it, but Gantt emerged more powerful after each attack. That’s why I think Gantt continues as the best way to represent time of a Project.

For instance this was my last try:

Issue

In Construction, generally, manpower is grouped in crews which go from one work station to another and so on through Project’s life. Knowing how the crews move would be very useful for planning a Construction Project but it is no possible in Gantt chart, let’s check why.

Henry Gantt invented his famous chart in 1915, for automobile industry and during Ford age, it means assembly line was already operating. One of the biggest differences between automobile industry and construction industry is that while in the first one manpower is static, materials goes towards them by using conveyor belts,  in the second one manpower is moving all the time in search of  work to complete.

So, how can we check crew rotation?. I didn’t have to go any further, the answer is in the same Gantt chart.

Analysis

Gantt chart has two dimensions: the first one is the timeline located in horizontal axis and the second one is the work breakdown structure located in vertical axis (See Chart 01)

Chart 01: Gantt’s structure

We would need a third dimension to show crew rotation up; and there is only one moment in which Gantt chart acquires a third dimension, it is when we identify critical activities and non critical activities by using colors. Therefore it is possible to get this third dimension calling for colors.

In order to get an easy way to visualize this crew rotation, it would be very useful to make a structure which shows a timeline in the horizontal axis and a list of work stations where crews are moving through in the vertical axis (See Chart 02).

Chart 02: Crew movement structure

We can notice timeline matches with Gantt’s, but list of work stations doesn’t with work breakdown structure necessarily. So the only one condition, not so hard to achieve, is that items on list of work stations and activities of Gantt work breakdown structure must be the same.

Finally, the most recommended for an easy visualizing is to set work stations on the last detail level as above and in the previous level we should place disciplines or types of crews, therefore it would be as follows:

Level 1: Project name

Level 2: Disciplines

Level 3: Work stations

Instructions

1-      Creating Project name.- In our example we will try a Hydropower plant (See Chart 03).

Chart 03: Detail level 1, Project name

2-    Creating Disciplines.- Work crews in a Powerhouse construction can be divided into four disciplines: Tests, Excavations, Civil Works and Mechanical – Electrical (See Chart 04).

Chart 04: Detail level 2, Crew disciplines

3-    Creating Work Stations.- In our example we create the tasks, but keeping in mind they must be work stations too (See Chart 05).

Chart 05: Detail level 3, Work stations

4-    Calculating durations and linking activities.- Generally crews into a discipline have the same amount of people, in others words they have the same performance too, therefore each duration is established by dividing quantity of work in each task over a performance rate of the corresponding discipline’s crew. In addition, we must link activities too, according to planned construction process. See Chart 06.

Chart 06: Durations and links assigning

5-    Identifying some possible paths for crews. For example between tasks ID16: CONCRETE ON POWERHOUSE (1^ST STAGE) and ID17: CONCRETE ON POWERHOUSE (2^ND STAGE) there is a 39 days gap, which can be filled by a non-linked task like ID27: CABLES TUNNEL with 40 days for duration. So we take advantage of these "non-linked" activities in order to get a continue work for the crew going through. We assign a color to identify each specific crew running through its activities or work stations. We have chosen green for this crew (See Chart 07).

 

Chart 07: Crew rotation planning

6-    In the same way, we can move some tasks or connect each other ones just being careful on keeping deadline date. In our example we can visualize crews rotation, for instance green crew of CIVIL WORKS discipline runs through the following path: ID16: CONCRETE ON POWERHOUSE (1^ST STAGE) -> ID27: CABLES TUNNEL -> ID17: CONCRETE ON POWERHOUSE (2^ND STAGE) -> ID19: CONNECTION TUNNEL -> ID23: DISCHARGE TUNNEL (1^ST STAGE) -> ID28: OUTSIDE INSTALLATIONS -> ID18 CONCRETE ON POWERHOUSE (3^RD STAGE) -> ID24: DISCHARGE TUNNEL (2^ND STAGE) and then green crew leaves the Project, as shown in Chart 08.
 

Chart 08: Project planning using colors to identify crews rotation

Advantages

-       It doesn't only offers advantages of Gantt chart, but also describes perfectly crew movement through Project execution. If any changes happen during Project, planner can visualize exactly which will be the impact on manpower force planning, in case of added scope it is easy include these new works according to crew releasing and in case of reduction on scope it is also possible determine when the involved crew will be in stand by and to reassign them to another work station.

-       It is not necessary make a resource assignment in each activity if working on a planning software (MS Project, Primavera, etc.) to get the manpower’s curve.

For example if we change Chart 08 in order to have only crew life in the Project, not showing work stations, something like Chart 09 would result:

Chart 09: Crew life through Project

And if we drop down each bar on the horizontal axis as in Chart 10, manpower’s curve will show up immediately. For example, in Chart 10  we see the are two peaks in manpower’s curve, the highest is located just on the first quarter of 2011 and it is perhaps  the most crowded time of Project, because in this peak we have Light blue crew, Light gray crew, Green crew, Pink crew, Sky blue crew, Light red crew and Cherry crew working at the same time. 

Chart 10: Manpower's curve

Conclusions

-        Sorry, I couldn’t kill Gantt this time, but I’ll be back. I swear.

Reccomendations

-       The most recommended softwares to carry this out are those that offer several layouts for setting colors, for instance Primavera Project Planner, because we can use a first color layout to identify critical path, as usual; a second color layout to identify crews rotation; and a third color layout to visualize rotation of a critical resource we need to focus in, aside manpower.

EARNED TIME METHOD

Earned Value Method, created and spread by PMI, has basically two types of parameters: Cost parameters (AC, CV and CPI) and Time parameters (PV,SV and SPI); these rates can help us to determine the performance of any Project regarding both fields. This paper thinks over accuracy of Time parameters, developing new indicators that reflect, in a more detailed analysis, the exact estimated Project’s deadline.

Introduction

Earned Value Method is currently the most accepted for tracking and controlling a Project, developed by PMI offers big advantages: it is simple and effective to compare performed with planned. This method narrows down the costs of a Project to a group of parameters that give an idea about how aligned to original plan is performed work. Moreover these indicators help us to track where the variations are, and to analize why they happened in order to correct or enhance them.

Earned Value Method is very accurate in costs topics, but they are not too developed in time topics, there is an empty space that even PMI admits while describing SPI (Schedule Performance Index) in PMBOK Fourth edition. It comments about applying SPI to the critical path too; but PMBOK neither goes deeper nor explains how to do it, leaving the door open to a method aimed to be for Schedule as Earned Value is for Budget. That is why this paper proposes this new method, called, reminding PMI, Earned Time Method.

Earned Time Method Parameters

Earned Time Method applies to measure Project’s performance from a Time point of view, not from Cost point of view, by creating, if possible, equivalent parameters to those stated in Earned Value Method.

Earned Value of Critical Path (EV_CP) is the value of work, belonging to critical path, performed to control date and expressed in monetary units according to Project Budget.

Planned Value of Critical Path (PV_CP) is the value of work, belonging to critical path, originally planned to control date and expressed in monetary units according to Project Budget.

Schedule At Complete (SAC) is the duration planned for the Project and expressed in time units.

Performance Indicators

Schedule Performance Index of Critical Path (SPI_CP) defines in which percentage critical path planned goals were achieved to the control date. The SPI_CP is obtained by dividing EV_CP over PV_CP:

  SPI_CP = EV_CP / PV_CP 

 A SPI_CP less than one means critical path is behind of schedule and a SPI_CP more than one means critical path is ahead of schedule.

Critical Path Estimated Duration

The Critical Limit (CL) is defined as maximum total float from which an activity is considered critical and expressed in time units. In other words, if CL is X days so every activity with a total float equal or less than X is a critical activity. As wide as CL is, the deadline analysis gets more accurate but longer to calculate.

The Analysis Limit (AL) is the scope of the analysis according to the chosen CL. The AL is equal to SAC minus CL and expressed in time units.

 AL = SAC - CL

From above-mentioned, a Project can have several critical paths, which will be more if we increase CL value. So it is possible to refer to critical paths using the next terminology: Critical Path 1 (CP1) which has a total float equal to 0; Critical Path 2 (CP2) which is the next in total float magnitude (could be equal to 0 too); and so on until Critical Path n (CPn) which is the last critical path inside CL rank.

So Critical Path Duration (CPD) is defined as follows: CPD1 is Critical Path 1 duration, which is not necessarily Project duration; CPD2 is Critical Path 2 duration; and so on until CPDn or duration of Critical Path n.

The next step is calculate SPI on each analized critical path. It means, SPI_CP1 will be schedule performance index on Critical Path 1; SPI_CP2 will be schedule performance index on Critical Path 2; and so on until SPI_CPn or schedule performance index on Critical Path n.

Finally to obtain the Estimated Time at Complete of Critical Paths (ETAC_CPn), each duration (CPDn) must be divided by each corresponding schedule performance index (SPI_CPn):

 ETAC_CPn = CPDn / SPI_CPn

ETAC_CPn is expressed in time units and depicts Critical Path n duration forecast, assuming the same SPI_CPn to the end.

Critical Path Variance

Schedule Variance of Critical Path (SV_CPn) is expressed in time units and is used to measure diferences between planned and estimated durations for each critical path (ETAC_CPn). The SV_CPn is obtained from CPDn minus ETAC_CPn:

 SV_CPn = CPDn - ETAC_CPn

SV is determined on each analized critical path, as follows: SV_CP1 is Critical Path 1 variance; SV_CP2 is Critical Path 2 variance; and so on until SV_CPn which is variance on Critical Path n.

If SV_CPn is more than 0, Critical Path n should be finishing before originally planned; if SV_CPn is less than 0, Critical Path n should be finishing after originally planned.

Estimated Project Duration

To calculate estimated Project duration it is necessary to compare analized critical path estimated durations and determine which of them imposes on others.

In order to those estimations, we define Total Float (TF_CPn) on each analized critical path, keeping the same terminology, it means TF_CP1 is total float on Critical Path 1 and equal to 0; TF_CP2 is total float on Critical Path 2; and so on until TF_CPn or total float on Critical Path n.

Estimated Schedule at Complete of Critical Path n (ESAC_CPn) is obtained substracting SV_CPn and TF_CPn from SAC.

 ESAC_CPn = SAC - SV_CPn - TF_CPn  

ESAC_CPn is an estimated Project duration based only on Critical Path n performance. It means ESAC_CP1 is estimated duration of Project but based only on Critical Path 1 performance; ESAC_CP2 is estimated duration of Project but based only on Critical Path 2 performance; and so on.

Finally estimated duration of Project or Estimated Schedule at Complete (ESAC) will be the highest value of AL and each ESAC_CPn.

 ESAC = MAX (AL, ESAC_CP1, ESAC_CP2, ....., ESAC_CPn)

Project Variance

Scheduled Variance (SV) of Project is the difference between SAC and ESAC and is expressed in time units:

 SV = SAC - ESAC

If SV is more than 1, Project is ahead of schedule; if SV is less than 1, Project is behind of schedule.

Estimated Cost of Project

Cost of Project based on schedule performance is related to indirect costs and reward/penalty, but they are not related to direct cost. Direct Cost are only related to efficiency or changes on scope, not to time topics.

Indirect Cost at Complete (ICAC) is the indirect cost amount inicially assigned in budget to the Project end and is expressed in monetary units.

Indirect Cost Time Rate (ICTR) which is expressed in monetary units and obtained by dividing ICAC over SAC.

 ICTR = ICAC / SAC

It is also necessary to determine Estimated indirect Costs at Complete (EICAC), which is a new indirect cost amount assigned according to the estimated duration of the Project. EICAC is obtained multiplying ESAC by ICTR.

 EICAC = ESAC x ICTR

The ratio Reward/Penalty for Project Finishing (RPPF), is expressed in monetary units over time units and refers to additional income for finishing Project before deadline or penalties for finishing Project after deadline. If owner of Project is an external, this rate is defined in the contract; if Project is inside the organization, we should calculate opportunity cost related instead of rewards/penalties.

Budget at Complete (BAC) is total direct cost assigned to the Project and expressed in monetary units.

Finally, Estimated Total Budget at Complete (ETBAC) or estimated total cost to the end of Project is expressed in monetary units and obtained from BAC plus EICAC minus RPPF multiplied by SV.

 ETBAC = BAC + EICAC - RPPF x SV

Example 1: Project ahead of schedule

We have the following information:

SAC = 100 days

BAC = $ 10 000.00

ICAC = $ 2000.00

RPPF = $ 100.00/day

CL = 10% SAC = 10 days

CPD1 = 95 days

EV_CP1 = $ 500.00 

PV_CP1 = $ 200.00 

TF_CP1 = 0 days

CPD2 = 90 days

EV_CP2 = $ 300.00 

PV_CP2 = $ 100.00 

TF_CP2 = 7 days

So Applying Earned Time Method:

SPI_CP1 = EV_CP1 / PV_CP1 = 500/200 =2.50

SPI_CP2 = EV_CP2 / PV_CP2 = 300/100 =3.00

AL = SAC – CL = 100 – 10 = 90 days

ETAC_CP1 = CPD1 / SPI_CP1 = 95/2.50 = 38 days

ETAC_CP2 = CPD2 / SPI_CP2 = 90/3.00 = 30 days

SV_CP1 = CPD1 - ETAC_CP1 = 95 – 38 = 57 days

SV_CP2 = CPD2 - ETAC_CP2 = 90 - 30 = 60 days

ESAC_CP1 = SAC - SV_CP1 - TF_CP1 = 100 – 57 – 0 = 43 days

ESAC_CP2 = SAC - SV_CP2 - TF_CP2 = 100 – 60 – 7 = 33 days

ESAC = MAX(AL, ESAC_CP1, ESAC_CP2) = MAX (90,43,33) = 90 days

SV = SAC – ESAC = 100 – 90 = 10 days

ICTR = ICAC / SAC = 2000/100 = $ 20/day

EICAC = ESAC x ICTR = 90 x 20 = $ 1800.00

ETBAC = BAC + EICAC – RPPF x SV = 10 000.00 + 1800.00 – 100x10 = $ 10 800.00

Finally this Project should last 90 days (ESAC) and cost $ 10 800.00 (ETBAC)

Example 2: Project behind schedule

We have the following information:

SAC = 100 days

BAC = $ 10 000.00

ICAC = $ 2000.00

RPPF = $ 100.00/day

CL = 10% SAC = 10 days

CPD1 = 95 days

EV_CP1 = $ 1000.00 

PV_CP1 = $ 200.00 

TF_CP1 = 0 days

CPD2 = 90 days

EV_CP2 = $ 100.00 

PV_CP2 = $ 300.00 

TF_CP2 = 7 days

So Applying Earned Time Method:

SPI_CP1 = EV_CP1 / PV_CP1 = 1000/200 = 5.00

SPI_CP2 = EV_CP2 / PV_CP2 = 100/300 = 0.33

AL = SAC – CL = 100 – 10 = 90 days

ETAC_CP1 = CPD1 / SPI_CP1 = 95/5.00 = 19 days

ETAC_CP2 = CPD2 / SPI_CP2 = 90/0.33 = 270 days

SV_CP1 = CPD1 - ETAC_CP1 = 95 – 19 = 76 days

SV_CP2 = CPD2 - ETAC_CP2 = 90 - 270 = -180 days

ESAC_CP1 = SAC - SV_CP1 - TF_CP1 = 100 – 76 – 0 = 24 days

ESAC_CP2 = SAC - SV_CP2 - TF_CP2 = 100 – (-180) – 7 = 273 days

ESAC = MAX(AL, ESAC_CP1, ESAC_CP2) = MAX (90,24,273) = 273 days

SV = SAC – ESAC = 100 – 273 = -173 days

ICTR = ICAC / SAC = 2000/100 = $ 20/day

EICAC = ESAC x ICTR = 273 x 20 = $ 5460.00

ETBAC = BAC + EICAC – RPPF x SV = 10 000.00 + 5460.00 – 100x(-173) = $ 32 760.00

Finally this Project should last 273 days (ESAC) because of performance on Critical Path 2 and cost $ 32 760.00 (ETBAC)

Conclusions
Profit regarding time performance can only be estimated on Indirect Cost Level, not on Direct Cost Level. In other words, if your Peoject is planned to be completed in four years and you finish it in three years, your time good performance profit is 1 year of Indirect Costs and extra rewards stated in contract.
Dividing Indirect Cost into Fixed Indirect Costs and Time Variable Indirect Cost could output more accurate results.

Reccommendations
Planning softwares like MS Project and Primavera Project Planner don't have any option to input Indirect Costs and therefore you can't include them in the costs calculation. These Indirect Costs added to PMI's Earned Value, which is into softwares, could give us the most accurate information about Project performance regarding Time, Cost and both together.
This method could not be accurate if there is some time constrains in analized critical paths, it is always useful comparing with software results.

 

WHY MODERN TIMES?

The first time Charles Chaplin watched a "Sound Film" he knew it was the future of cinema. Modern Times, marvelous film, is his record book about that moment, a before and after, a turning point from which the seventh art would never be the same. In the same way, first time I saw in Youtube a video called "30 story building built in 15 days" I likely felt as Charlie about talking pictures, new times have come in Construction Industry, so this business will never be the same anylonger.

Charlie was likely afraid at first, which is natural when you live so quiet and suddenly winds of change blow around this world, where you felt so sure and comfortable. And that's exactly how I got horrified when watching "30 story building built in 15 days". I asked my self: How can we compete with that?; the chinese company that made it can go to any country in the world and humillate the biggest contractors working there: are these chinese firms the new masters of construction industry?

The answer is may be, but there is always something we can do and nobody knows better than Chaplin, that's is exactly what he does in his great movie. He started his career in 1914 and got success very soon, turning into the authentic king of silent film, nobody appealed more people than him and nobody earned more money than him, he was simply the best. But in Modern Times (1936) there is a wonder, during the last five minutes we can hear, finally, Charlie Chaplin's voice, the voice hidden for more than twenty years.

What Charlie tells us is adapt you to new times, don't stay in the past although many people is going to do it. Great silent film stars such as Buster Keaton and John Gilbert couldn't pass this change of ages, they decided to stay into the silent movies and were forgotten soon.

The great change that is threatening Construction Industry Establishment these days is called Globalization, and it is shaking everything not only Construction, which is like a truck: either you get on it or you will be run down by.

Posts in this blog will think over how we can adapt to these modern times, risky times, but plentiful of opportunities too.