Project Management,2011

Project Control

Vignesh.V
Project Planning, Control & Co-Ordinator
Avenir Engineering India Ltd.,
 Project Control

Recall: The 5 Phases of Project Management

FEASIBILITY DESIGN, CLOSEOUT

DEVELOPMENT CLOSEOUT OPERATIONS
PLANNING

Finance Organization Monitoring & Control

Evaluation Estimation Changes & Claims
Planning Quality & Reviews

Actual Start of Project

 Project Control

Monitoring & Control: A Feedback Process

Detect
deviations

Monitoring Control
1. Measurement 1. Actions
2. Performance Analysis) 2. Revised Plans, Cash Flows, Schedules, etc.

Correct
Deviations
 Project Control

Project Control: The Big Picture …

Given

Project is
Off-track
 Project Control

Project Control: The Big Picture …

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

Project Control: The Big Picture …

Resources for
Given PC (the 4-M’s)

Project is
Off-track
 Project Control

Project Control: The Big Picture …

Resources for
Given PC (the 4-M’s)

Project is
Off-track

Resources available to the Project Manager for Project Control:

- Money
- Manpower (labor)
- Materials
- Machinery (Equipment)
 Project Control

Project Control: The Big Picture …

Resources for
Given PC (the 4-M’s)
Mechanism and
Elements of PC
Project is
Off-track
Adjust the
resources

Adjust the project

characteristics:
size, scope, etc
 Project Control

Project Control: The Big Picture …

Resources for
Given PC (the 4-M’s)
Mechanism and
Elements of PC
Project is
Off-track
Adjust the
resources

Adjust the project

More labor? Better labor? characteristics:
resource
Better supervision? size, scope, etc
More materials? Better materials?
s
More equipment? Better equipment?
More money?
Reduce project size? Reduce project scope?
project
Terminate project?
 Project Control

Project Control: The Big Picture …

Resources for
Given PC (the 4-M’s)
Mechanism and
Elements of PC
Project is
Off-track
Adjust the
resources

Adjust the project

characteristics:
size, scope, etc
output

Project
brought
Was the Project Control successful? How can we tell?
back on-
track
 Project Control

Project Control: The Big Picture …

Resources for
Given PC (the 4-M’s)
Elements and
Mechanism of PC
Project is
Off-track
Adjust the
resources

Adjust the project

characteristics:
size, scope, etc
output

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

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

General Clues Specific Clues

Performance Cost Time “Primitive” Other

and Quality Indicators Indicators
How can we tell when Project Control is needed?

GENERAL CLUES (Meredith and Mantel, 2006)

„ Performance
- Unexpected technical problems arise
- Insufficient resources are unavailable when needed
- Quality or reliability problems occur
- Owner/Client requires changes in technical specifications
- Inter-functional complications and conflicts arise
- Market changes that increase/decrease the project’s value
How can we tell when Project Control is needed?

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
- Project budgeting for contractor cash flows not done right
- Changes in market prices of the inputs
How can we tell when Project Control is needed?

GENERAL CLUES (Meredith and Mantel, 2006)

„ Time
- Technical difficulties require more time to solve
- Scope of work increases
- Unexpected utilities needing relocation
- Task sequencing not done right
- Required material, labor/equipment unavailable when
needed
- Key preceding tasks were not completed on time.
1. How can we tell when PC is needed?
SPECIFIC CLUES
planned
„ “Primitive” indicators: Equipment-hours
actual

– More resources or less Total Man-hours

planned
actual
resources haven been used
than planned Amt of concrete used (tons)
planned
actual

0 500 1000 1500 2000

– Activities are taking long Amount input to date
than planned

– Cost of activity (or of

project to date) is higher
than expected
1. How can we tell when PC is needed?
SPECIFIC CLUES

„ “Primitive” indicators:
– More resources or less resources
haven been used than planned

– Activities are taking long than

planned
planned
Equipment-hours
actual
– Cost of activity (or of project to
date) is higher than expected Total Man-hours
planned
actual

planned
Amt of concrete used (tons)
actual

0 500 1000 1500 2000

Amount input to date
1. How can we tell when PC is needed?
SPECIFIC CLUES
JAN FEB MAR APR MAY JUN

„ “Primitive” indicators: Activity 1

planned
actual
– More resources or less resources
haven been used than planned
Activity 2

– Activities are taking long than

planned Activity 3

NOW
– Cost of activity (or of project to
date) is higher than expected

Legend
planned

actual
1. How can we tell when PC is needed?
SPECIFIC CLUES

„ “Primitive” indicators:
– More resources or less resources
haven been used than planned Program
(schedule)

– Activities are taking long than Progress

(actual)
planned $

– Cost of activity (or of project to 70%

Program
date) is higher than expected (schedule)
50%
Progress
(actual)

now time
1. How can we tell when PC is needed?
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
1. How can we tell when PC is needed?
SPECIFIC CLUES

Used for plotting the Used for plotting

Program S-curve the EVA S-curve
Work Work
Schedule Performed
(WS) (WP)

Budgeted Cost (BC) BCWS BCWP

Actual Cost (AC) ACWS ACWP

Used for plotting the

Progress S-curve
1. How can we tell when PC is needed?
SPECIFIC CLUES

$max

TIME VARIANCE
BCWS
ACWPt
RESOURCE FLOW VARIANCE
BCWSt COST VARIANCE
SCHEDULE VARIANCE
BCWPt

ACWP

BCWP

t-p t tmax Time

now
1. How can we tell when PC is needed?

„ So we know Project Control is needed (at time t)

particularly when:
- RVt is –ve,
- RIt < 1
- CVt is –ve
- CIt <1
- SVt is –ve
- SIt is < 1
- TVt is –ve
- TIt is < 1
 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
 Elements of Project Control

Resources-related Project-related
3. Elements of Project Control
3A. Resource-related

Re-allocate resources

„ Manpower-related control

„ Machinery-related control

„ Money-related control

„ Material-related control
Elements of Project Control
3A. Resource-related

Re-allocate resources

„ Manpower Also referred to as ”Human Resource Control”

- Lay-off/fire any under-performing staff
- Hire staff with needed skills
Machinery
- Assign staff with specific skills to specific
activities

Money
Issues:
-PM may be seen as a “stern disciplinarian”
Materials - PM must avoid heavy handed actions,
- Fix problems without blaming people
Elements of Project Control
3A. Resource-related

Re-allocate resources

Manpower Also referred to as ”Physical Asset Control”

- Decommission any under-performing equipment
- Bring in equipment with appropriate capabilities
„ Machinery - Re-assign specific equipment to specific activities

Money

Materials
Elements of Project Control
3A. Resource-related

Re-allocate resources

Manpower Also referred to as ”Physical Asset Control”

- Decommission any under-performing equipment
- Bring in equipment with appropriate capabilities
„ Machinery - Re-assign specific equipment to specific activities

Issues:
Money - Equipment decisions may involve some economic
analysis
- Equipment-based control easier than manpower-
Materials based control
- Some trade-off may exist between manpower and
equipment utilization.
Elements of Project Control
3A. Resource-related

Re-allocate resources

Manpower

Machinery
Also referred to as ”Financial Resource Control”
- How much money should be spent?
„ Money - How should it be spent?
- PM assisted by:

Materials - Project accountant

- Project Finance Manager
Elements of Project Control
3A. Resource-related

Re-allocate resources

Manpower

Machinery

Money

„ Materials - Discontinue use of sub-standard material

- Seek new sources of superior material

Elements of Project Control
3B. Project-related

„ Options:

- Reduce project size?

- Reduce project scope?

- Terminate project?
 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

Monitoring mechanism (e.g.

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

Monitoring mechanism (e.g.

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

Monitoring mechanism (e.g.

sensor)
Inputs Mechanism:
Process Outputs
- Same as described for First-
order Cybernetic systems, but:
Effector
and Comparator - Standards are not fixed, but
Decision- the manner they change is
maker fixed.
Standards

Memory Pre-programmed Responses

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
 Cybernetic control mechanisms

Monitoring mechanism (e.g.

sensor)
Inputs Mechanism:
Process Outputs
- Same as described for First-
order Cybernetic systems, but:
Effector
and Comparator - Standards are not fixed but
Decision- are variable. Also, the manner
maker they change is variable because
Standards there is a consciousness
(human element) involved.
Consciousness Memory, Selection

This is a Third-order cybernetic control system (standards vary according to a variable set of
rules)

Examples: Most Project management systems.

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
Some Interesting Issues in Project Control

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!
Some Interesting Issues in Project Control

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)
 Some Interesting Issues in Project Control

Tradeoffs
Acceleration ⇒ $
(Overtime, shift work, Need for rework imposes
Rework, higher-end
equipment, better crews etc.)
Slow progress ⇒ $
$ high expenses
High quality needs can lead
to costly miscalculations
Delayed occupation, on labor time
Higher interest on Less $ ⇒ Low progress
const. loan Trying to save $
Resource reduction
Loss of tenants Can lead to substitution,
Selection of poor quality workers
Opportunity cost lower quality
Default of contractor/subs
workmanship

Time Quality
Quality level impacts speed of work,
Level of rework

Quality problems result from

overtime, shift work, new hires
Some Interesting Issues in Project Control

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 Interesting Issues in Project Control

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!
Some Interesting Issues in Project Control

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
Some Interesting Issues in Project Control

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
 Some Interesting Issues in Project Control

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
Some Interesting Issues in Project Control

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
Thank You…!
Alert…! Question Time…?

Vignesh.V
Project Planning, Control & Co-Ordinator
Avenir Engineering India Ltd.,