lecture 10 monitor and control

7/29/2019 Lecture 10 Monitor and Control

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Project Monitoring and Control

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Monitoring collecting, recording, andreporting information concerning projectperformance that project manger and others

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wish to know Controlling uses data from monitor activity

to bring actual performance to planned

performance


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Why do we monitor? What do we monitor?

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How do we monitor?


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Why do we monitor?

Simply because we know that thingsdont always go according to plan (no

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To detect and react appropriately todeviations and changes to plans


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What do we monitor?

Men (humanresources)

Machines

Space Time

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Materials

Money Quality/Technical

Performance


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What do we monitor?

Inputs

Time

Money

Outputs

Progress

Costs

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Material Usage

Tasks

Quality/TechnicalPerformance

Job starts

Job completion

Engineering / Designchanges

Variation order (VO)


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When do we monitor?

End of the project Continuously

Regularly

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Logically While there is still time to react

As soon as possible

At task completion At pre-planned decision points (milestones)


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Where do we monitor?

At head office?At the site office?

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Depends on situation and the whats


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How do we monitor

Through meetings with clients, parties involved inproject (Contractor, supplier,etc.)

For schedule Update CPA, PERT Charts, UpdateGantt Charts

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Using Earned Value Analysis Calculate Critical Ratios

Milestones

Reports Tests and inspections

Delivery or staggered delivery

PMIS (Project Management Info Sys) Updating


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Meetings Some monitoring issues

What problems do you have and what is being doneto correct them?

What problems do you anticipate in the future?

Do ou need an resources ou do not et have?

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Do you need information you do not have yet? Do you know anything that will give you schedule

difficulties?

Any possibility your task will finish early/late? Will your task be completed under/over/on budget?


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Project Control Cycle

PLANSpecificationsProject ScheduleProject budget

ACTION

Correct

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Vendor contracts MONITORRecord statusReport progressReport cost

COMPARE

Actual statusagainst plan

-Schedule

-Cost

ev a onsfrom plan

RE-PLAN asnecessary


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Project Control

Control process and activities needed tocorrect deviations from plan

Control the triple constraints

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time (schedule) cost (budget, expenses, etc)

performance (specifications, testing results, etc.)


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Techniques for monitoring andcontrol

Earned Value Analysis Critical Ratio

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Earned Value Analysis

A way of measuring overall performance (notindividual task) is using an aggregate performancemeasure - Earned Value

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for those tasks in progress found by multiplying theestimated percent physical completion of work foreach task by the planned cost for those tasks. The

result is amount that should be spent on the task sofar. This can be compared with actual amount spent.


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Methods for estimating percent completion The 50-50 estimate. 50% is assumed when task is begun, and

remaining 50% when work completed.

0-100% rule. This rule allows no credit for work until task iscomplete, highly conservative rule, project always seem late

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until the very end of project when everything appears tosuddenly catch up

Critical input rule. This rule assigns progress according toamount of critical input that has been used. Labor or skilleddependent, machine critical input buy machine complete task

may be misinformation Proportional rule. This rule divides planned (or actual) time-to-

date by total scheduled time(or budgeted (or actual ) cost-to-date by total budgeted cast] to calculate percent complete. Thisis commonly used rule.


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Refer to earned value chart basis for evaluatingcost and performance to date

If total value of the work accomplished is in balance

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,

top mgmt has no particular need for a detailedanalysis of individual tasks

Earned value concept combines cost reporting &

aggregate performance reporting into onecomprehensive chart


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Baseline cost to completion referred to asbudget at completion (BAC)

Actual cost to date referred to as estimated cost

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Identify several variances according to twoguidelines

1. A negative variance is bad

2. Cost and schedule variances are calculated as earnedvalue minus some other measure


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Earned Value Chart basis for evaluatingcost & performance to date

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Earned Value Analysis - Variances

4 types of variances;

Cost (spending)variance (CV) differencebetween budgeted cost of work performed (earnedvalue) (BCWP) and actual cost of that work (ACWP)

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Schedulevariance (SV) difference betweenearned value (BCWP) and cost of work we scheduledto perform to date (BCWS)

Timevariance (TV)difference between timescheduled for work performed (STWP) and actualtime to perform it (ATWP)


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Earned Value Variance - Formula

CV = BCWP ACWP (negative value - cost overrun)SV = BCWP BCWS (negative value - behind schedule)

TV = STWP ATWP (negative value - delay)

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In ex RatiosCost Performance Index (CPI) = BCWP/ACWP

Schedule Performance Index (SPI) = BCWP/BCWS

Time Performance Index (TPI) = STWP/ATWP


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EXAMPLE

Assume that operations on a Work Package cost RM 1,500 tocomplete. They were originally scheduled to finish today. At thispoint, we actually spent RM1,350. And we estimate that wehave completed two thirds (2/3) of the work. What are the costand schedule variances?

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CV = BCWP ACWP = 1500 (2/3) 1350 = - 350SV = BCWP BCWS = 1500 (2/3) 1500 = - 500

CPI = BCWP/ACWP = 1500(2/3)/1350 = 0.74

SPI = BCWP/BCWS = 1500(2/3)/1500 = 0.67

Spending higher than budget, and given what we have spent,we are not as far along as we should be (have not completedas much work as we should have)


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Possible to have one of indicators to befavorable while the other unfavorable

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costs

Six possibilities (see figure next slide)


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6 Possibilities Earned Value Analysis

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EXERCISE (Text P.544 Problem 4)

A project to develop a country park has an actual cost in month

17 of $350,000, a planned cost of $475,000, and a valuecompleted of $300,000. Find the cost and schedule variancesand the three indexes.

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Month 17

$ Planned (Baseline) 475,000

Actual cost 350,000

Value completed 300,000 BCWP

ACWP

BCWS

Time t


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SolutionBCWS = 475,000

BCWP = 300,000ACWP = 350,000

CV = 300 000 350 000 = -50 000 ne ative value - cost overrun

CV = BCWP ACWPSV = BCWP BCWS

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SV = 300,000 475,000 = -175,000 (negative value - behind schedule)Cost Performance Index (CPI) = BCWP/ACWP = 300/350 = 0.86

Schedule Performance Index (SPI) = BCWP/BCWS = 300/475 = 0.63

Time Performance Index (TPI) = STWP/ATWP

Scheduled Time Work Performed (STWP) can be estimated

Time t = Schedule Variance/Slope of Planned costs =

-175,000/ (475,000/17) = - 6.26 months

Time Difference= 17- 6.26 = 10.74

TV = 10.74/17 = 0.63


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Critical ratio

Sometimes, especially large projects, it may

be worthwhile calculating a set of criticalratios for all project activities

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actual progress x budgeted costscheduled progress actual cost

If ratio is 1 everything is probably on target

The further away form 1 the ratio is, the more wemay need to investigate


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Critical ratio exampleCalculate the critical ratios for the following activities andindicate which are probably on target and need to be

investigated.Activity Actual

progressScheduledProgress

BudgetedCost

Actualcost

Criticalratio (CR)

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B 3 days 2 days 50 50

C 2 days 3 days 30 20

D 1 day 1 day 20 30

E 2 days 4 days 25 25


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Critical ratio example

Can be on schedule and below budget (Act A)Why so good? Cutting corners?

Can be behind schedule but below budget

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Can be on budget but physical progresslagging (Act E)

Can be on schedule but cost running higherthan budget (Act D)

On budget ahead of schedule (Act B)


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Summary

Need proper project monitoring and controlmechanisms

Tools available to help in monitoring and

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controlling activities There are human control and management

aspects not covered here

lecture 10 monitor and control

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