How construction type schedulers can assist non-construction project managers

Abstract

For many members of PMI, the primary purpose of scheduling is to allocate scarce resources amongst a group of activities in a project, or projects in a portfolio. In construction, the prime emphasis is to complete a project in the least time possible. This form of scheduling has applicability in other fields, such as software and product development, where being “first to market” may be more important than the control of costs or full usage of available resources. Come join us as we explore how construction schedulers modify scheduling practices and software settings to achieve the earliest possible completion.

At the end of the session, the attendee will be able to:

  1. Distinguish Resource Allocation Scheduling from Critical Path Method Scheduling,
  2. Apply software settings, or modify network logic, to support calculation of earliest possible completion,
  3. Understand the limitations, and therefore be able to properly interpret, the output of CPM schedule analysis.

Introduction

In most of the Communities of PMI, members are involved in the scheduling of many tasks relating to projects, programs, and portfolios. In addition to pushing these forward, an important management goal is to properly allocate personnel, equipment, funding and other resources of the manager's employer. An emphasis is typically placed on the full utilization of available resources and this will override the needs of any one project or program. The good manager must juggle the needs of many projects and programs and the needs of the mother organization. Delaying one project to speed up another, or simply to smooth the allocation of resources, is desired and rewarded.

The world of construction differs in two important respects. First, in the world of construction, “Time is King.” To quote James J. O'Brien's seminal work, CPM in Construction Management (O'Brien & Plotnick, 2009, p.5).

“CPM was developed specifically for the planning of construction. The choice was fortuitous, since construction accounts for more than 10 percent of the annual gross national product. Almost every activity and every person is affected to some degree by new construction or the need for it. Most projects are started well after the need has been established, seeming to follow the whimsy, “If I'd wanted it tomorrow, I'd have asked for it tomorrow.”

The default in CPM scheduling (for construction) is to generally assume unlimited resources during initial planning, including selecting the scope of activities and placing the restraints (or links) necessary to showing how each logically relates to another. Only then should consideration be made to add restraints based upon limited resources, and to the extent possible, this step may be deferred up to the time that work is being performed. Except for the minority of activities, which are deemed critical (which in terms of CPM scheduling is defined as those that must start as soon as they may start if the project is to be completed as soon as possible,) it is preferred to show non-critical activities (defined as those that may be deferred without delaying the earliest completion of the project) as having a range of dates of performance between the earliest date the activity may and latest date the activity must be performed to complete the project as early as possible.

The provision of two sets of dates (early start and early finish, and late start and late finish) for each activity is the hallmark of CPM scheduling. Professional schedulers and project management understand that not all activities can actually be performed on their early dates, and that resources are not actually unlimited. However, the choice of which activities to perform and those to defer is left to the field superintendent's discretion, based upon circumstances in the weeks and days prior to such decision. On particularly large projects, where the number and complexity of such decisions may overwhelm even a team of managers, a separate and additional algorithm may be used to level resource usage to within specified maximums and possibly even to smooth resource usage to obtain consistent use of resources, maximize productivity of resources, and minimize cycles of hiring and layoffs (or standby times of other resources.) This algorithm will calculate a third set of dates, the leveled or scheduled start and finish. It is understood by all that these calculated dates are transitory in nature and will change as the project progresses.

Second, in the world of construction, it is rare that a project has one master. Construction projects are typically tied to contracts between two and usually many more independent entities. The parties will have agreed to meet a specified date, or agreed to complete as early as possible with a stipulated limit for resources. Changes in the scope of the project are anticipated, typically up to 25% of the initial contract value. No one entity may unilaterally limit or pull resources from the project without consequences. And each of the parties understands the cost consequences of untimely completion; actual or liquidated damages for failure to complete on time or to otherwise impede the start of ROI (return on investment), delay in release of retained payments, and substantial overheads by all parties are but a few. The disparate goals of these several parties thus converge upon the desire to complete as soon as possible.

The purpose of this paper and the presentation that it precedes it is to suggest that construction style scheduling also has an application to other market segments. Examples run from that of a product line turn-around, where every hour off-line represents lost revenue that dwarfs the savings from micro-management of resource allocation, to R&D or software development projects where being second to market means DOA (dead-on-arrival.)

Differences in Industry and Algorithms

Excerpts from the ENR (Engineering News Record) blog of the author, The Next Generation, further describes the differences in industries and algorithms to support two very different forms of scheduling.

There are really two completely different forms of scheduling. For most industries this means resource allocation, wresting the highest return on investment from the limited resources owned or otherwise controlled in a repetitive process. For construction, what is meant is CPM planning and scheduling, leveraging the much larger pool of resources beyond immediate control to complete a one-time project using the least time and lowest cost. Although there may be limits within a market of available resources, these resources also may be many times greater than any one company may control.

Complacency is the enemy of profitability. The facilities manager cannot depend on a captive market. The project manager must constantly assess the marketplace for the best products and services. The project manager does not use a small bulldozer where a larger one may be used to better effect simply because the facilities department has one—it is more profitable to rent the larger dozer and let the smaller sit idle. (Plotnick, 2009a)

If our choices include upgrading the machine shop or buying a new crane, knowledge of which will have the earliest financial impact may be useful in our decision making. But, these decisions exist while the choice is entirely mine and for my projects. In the A/E/C world, we have teams of independent players who have committed to and are obligated to our projects. (Plotnick, 2009b)

Resource allocation scheduling is all about not allowing assets to sit idle. CPM scheduling is all about selecting resources to make the project happen in the least amount of time and at the least cost. Maybe the titans of industry can learn from the construction model. (Plotnick, 2009a)

CPM was developed in 1956 to assist in the problem of bringing the maximum resources to bear on reducing the time it may take to shut down, revamp, and restart a chemical process line at DuPont's production facility.

Each hour the line was shut down represented a loss of revenue. If, while executing a carefully prepared schedule, some new issue was discovered (e.g., corrosion in a pipe, which was planned to be used from the old configuration), recalculation of the bar-chart was found to take an average of 40% of the initial scheduling effort.

The solution was to map a pure logic plan of the thought processes used to prepare a bar-chart, and let a computer calculate the schedule. Changing the plan to account for unforeseen conditions and changes could be done quickly; recalculation by the computer could be done even more quickly. The purpose of the entire operation was to speed completion of the work modeled.

Projects in the worlds of manufacturing, aerospace, and defense typically move ahead at the whim of one owner. Projects in the world of construction move ahead based upon collaboration and an enforceable contract between two or more “owners.” Here we cannot rob Peter to pay Paul. (Note that this term does apply to two construction projects, the Cathedrals of St. Peter and St. Paul—one was delayed to speed the completion of the other). (Plotnick, 2011)

The original algorithm developed in 1956, and still preferred for construction style scheduling, provides that an activity may start as soon as all predecessors are complete. A modified algorithm, developed for manufacturing and IT style scheduling, is more attuned to providing the best productivity for each activity by delaying work until it may be best performed without disruption or periods of work stoppage. To illustrate, let's look at a simple logic diagram.

Activity A of 10 days’ duration is followed by Activity B of 15 days’ duration, and Activity C of 10 days’ work, but note that Activity C cannot be completed until 5 days after Activity B is completed. Activity D, of 5 days’ duration follows Activities B and C. Activity E, of 20 days’ duration, can start when 50% of Activity C is complete. Activity F, of 5 days’ duration, follows Activities D and E.

Although not perfectly modeled, this logical plan and calculated schedule may be depicted below (Exhibit 1):

Logic Diagram

Exhibit 1 – Logic Diagram

You may note that the 10 days work of Activity C are graphically depicted and spread over a 20-day period, with at least the first 5 being performed “as soon as possible.” DuPont would be pleased to have this project complete in eight weeks. The manager of boilermakers working on Activity C will not be pleased to deploy her crew for 5 or more days, then withdraw the crew, and then redeploy her crew for either the last 1, 2, or 5 days (intent not being captured by the model).

Compare how this will now be calculated by P6 R8, or as an option of the older P3, or current Risk Analysis (aka Pertmaster) below: (Exhibit 2)

Current Risk Analysis

Exhibit 2 – Current Risk Analysis

The manager of boilermakers is now happy. She will get her maximum of productivity (which will be reported to her boss) from her crew. Of course, she will be looking over the weekly (or daily) updates to see if Activity B is on schedule, and if there is any delay expected, she will further delay deployment of her crew, delaying the project even further.

If it looks like Activity B will be finished early, what do you think the chances are of an early deployment? Are two weeks of additional downtime for the process line going to be noticed by upper management? Some may lament that “it used to be done faster,” but we can see, right from the computer generated schedule, this is the best we can expect. (Plotnick, 2011)

The majority of members of PMI and attendees of the NAGC (North America Global Conference) may agree with our manager of boilermakers. If productivity may be maximized by each department, the savings may very well exceed the larger overheads of individual projects and reduced return on investment for projects completed later than may be otherwise possible. But, if the goal is to bring one or several projects in as quickly as possible, one must choose the correct software (having the original algorithm as at least an option) or modify the logic diagram to “fudge” or bypass this consolidation feature of more prevalent software products tuned to the manufacturing world.

What can we do as professional planner/schedulers to work within the constraints placed by our software?

First, we should note whether our software supports interruptible durations. Assuming not, we should convert all FF lags into FS by splitting the impacted activity into two parts, explicitly stating the scope of the portion that cannot be completed until the “predecessor” is complete. (Exhibit 3)

New Process

Exhibit 3 – New Process

…Of course the manager of boilermakers may now complain that the schedule is unwieldy, calls upon her to do two separate activities that are better done as one, or reports to her boss that she is late in starting when all she wanted to do was consolidate her work and save the company money(Plotnick, 2011)

The real question is whether the organizations involved desire to maximize profitability by focusing upon the savings from the higher productivity of continuous and contiguous work, or the higher ROI and lower overheads from the earlier completion of projects.

Conclusion

Construction, or “first to market” style scheduling may have uses for individuals in non-construction industries and a project manager is well advised to be aware of the option of this alternate method of scheduling.

O'Brien, J. & Plotnick, F.L. (2009) CPM in Construction Management, 7th Edition, New York, NY: McGraw Hill

Plotnick, F. L. (2009a, December 7) What GM and Boeing Can Learn from Fluor and Bechtel Retrieved from http://enr.construction.com/opinions/blogs/plotnick.asp?plckController=Blog&plckBlogPage=BlogViewPost&newspaperUserId=22476063-01bc-473c-b749-f6727dcea14a&plckPostId=Blog%3a22476063-01bc-473c-b749-f6727dcea14aPost%3a3bd15810-529d-400b-8bae-70ca65b59518&plc

Plotnick, F. L. (2009b, October 20) Don't Leave the Heart of A/E/C CPM Scheduling in San Francisco Retrieved from http://enr.construction.com/opinions/blogs/plotnick.asp?plckController=Blog&plckBlogPage=BlogViewPost&newspaperUserId=22476063-01bc-473c-b749-f6727dcea14a&plckPostId=Blog%3a22476063-01bc-473c-b749-f6727dcea14aPost%3ab9d74456-4942-418a-91fa-903dfc874599&plc

Plotnick, F. L. (2011, February 23) Oracle's P6 R8 – A Successful Operation, but Let's Make the Software Model How We Want to Do the Work Retrieved from http://enr.construction.com/opinions/blogs/plotnick.asp?plckController=Blog&plckBlogPage=BlogViewPost&newspaperUserId=22476063-01bc-473c-b749-f6727dcea14a&plckPostId=Blog%3a22476063-01bc-473c-b749-f6727dcea14aPost%3a9b33de26-0605-4ab5-953c-dc790fb84593&plc

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2011, Fredric L. Plotnick, Ph.D., Esq., P.E.
Published as a part of 2011 PMI Global Congress Proceedings – Dallas Texas

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