Project Control

PROJECT CONTROLHUMAYUN AKHTAR*SEMIANRS IN PROJECT MANAGEMENTRIPHAH INTERNATIONAL UNIVERSITY

CLOSEOUTDEVELOPMENTOPERATIONS DESIGN,PLANNING FEASIBILITYActual Start of ProjectOrganizationEstimationPlanningFinanceEvaluationMonitoring & ControlChanges & ClaimsQuality & ReviewsCLOSEOUTRecall: The 5 Phases of Project ManagementProject Control

Monitoring & Control: A Feedback Process

Correct DeviationsMonitoring1. Measurement2. Performance Analysis)Detect deviationsControl1. Actions2. Revised Plans, Cash Flows, Schedules, etc.Project Control

Project Control: The Big Picture GivenProject is Off-trackProject Control

Project Control: The Big Picture GivenProject is Off-trackMonitoring 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 GivenResources for PC (the 4-Ms)Project is Off-trackProject Control

Project Control: The Big Picture GivenResources for PC (the 4-Ms)Project is Off-trackResources available to the Project Manager for Project Control:- Money- Manpower (labor)- Materials- Machinery (Equipment)Project Control

Project Control: The Big Picture GivenMechanism and Elements of PCResources for PC (the 4-Ms)Adjust the resourcesAdjust the project characteristics: size, scope, etcProject is Off-trackProject Control

Project Control: The Big Picture GivenMechanism and Elements of PCResources for PC (the 4-Ms)Adjust the resourcesAdjust the project characteristics: size, scope, etcProject is Off-trackMore labor? Better labor?Better supervision?More materials? Better materials?More equipment? Better equipment?More money?Reduce project size? Reduce project scope?Terminate project?resourcesprojectProject Control

Project Control: The Big Picture GivenMechanism and Elements of PCoutputResources for PC (the 4-Ms)Project is Off-trackAdjust the resourcesAdjust the project characteristics: size, scope, etcProject brought back on-trackWas the Project Control successful? How can we tell?Project Control

Project Control: The Big Picture GivenElements and Mechanism of PCoutputResources for PC (the 4-Ms)Project is Off-trackAdjust the resourcesAdjust the project characteristics: size, scope, etcProject brought back on-trackProject Control

Outline of this Lecture:How can we tell when PC is needed?What resources are available for PC?What are the elements of PC? What is the mechanism of PC?Some important issues in Project ControlProject Control

Part 1

How can we tell when Project Control is needed?

Specific CluesGeneral CluesIs Project Control needed now?How can we tell?Primitive IndicatorsOtherIndicatorsPerformance and QualityCostTime

How can we tell when Project Control is needed? Performance- Unexpected technical problems arise- Insufficient resources are available when needed- Quality or reliability problems occur- Owner/Client requires changes in technical specifications- Inter-functional complications and conflicts arise- Technological breakthroughs or Market changes that increase/decrease the projects valueGENERAL CLUES (Meredith and Mantel, 2006)

How can we tell when Project Control is needed? 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- Budgeting was inadequate- Changes in market prices of the inputsGENERAL CLUES (Meredith and Mantel, 2006)

How can we tell when Project Control is needed? Time- Technical difficulties require more time to solve- Initial Time estimates optimistic- Task sequencing was incorrect- Required inputs of material, personnel, or equipment were unavailable when needed- Necessary preceding tasks were incomplete- Customer generated change orders required rework- Governmental regulations were alteredGENERAL CLUES (Meredith and Mantel, 2006)

1. How can we tell when PC is needed?Primitive indicators:More resources or less resources have been used than planned

Activities are taking long than planned

Cost of activity (or of project to date) is higher than expectedSPECIFIC CLUES

Chart3

1320950

1450820

12201020

Planned (Expected)

To date (Performed)

Amount input to date

actual

actual

actual

planned

planned

planned

Cost Based

A. Cost-based Program (Schedule)B. Cost-based Progress (based on Work Performed)C. Cost-based Work Schedule and Work Performed

Project has 1-year duration. Amounts shown are project expenditures in millions of dollarsProject has 1-year duration. Amounts shown are project expenditures in millions of dollars

JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember

Activity 11.10.6Activity 1

Activity 20.72.33.1Activity 2

Activity 32.23.77.86.13.22.21.2Activity 33.31.2



Monthy Total Expenditure1.11.32.35.33.77.86.13.23.42.72.30.9Monthy Total Expenditure0000003.31.2

Cumulative Expenditure1.12.44.71013.721.527.630.834.236.939.240.1Cumulative Expenditure0000003.34.5

MonthyCumulativeMonthyCumulativeCumulative (Program)Cumulative (Progress or performed)

January1.11.1January00January1.10

February1.32.4February00February2.40

March2.34.7March00March4.70

April5.310April00April100

May3.713.7May00May13.70

June7.821.5June00June21.50

July6.127.6July3.33.3July27.63.3

August3.230.8August1.24.5August30.84.5

September3.434.2SeptemberSeptember34.2

October2.736.9OctoberOctober36.9

November2.339.2NovemberNovember39.2

December0.940.1DecemberDecember40.1

Cost Based

Monthy

Cumulative

Month

Project Expenditure ($millions)

Work Based

Monthy

Cumulative

Month


Sheet3

Cumulative (Program)

Cumulative (Progress or performed)

Month




Month


A. Work-based Program (Schedule)B. Work-based Progress (Work Performed)C. Work-based Work Schedule and Work Performed

Project has 1-year duration. Amounts shown are volume of concrete cast in 1000's of tonsProject has 1-year duration. Amounts shown are volume of concrete cast in 1000's of tonsProject has 1-year duration. Amounts shown are volume of concrete cast in 1000's of tons


Activity 13.852.1Activity 11.81.92.45

Activity 22.737.1311.16Activity 22.458.289.251.5

Activity 37.2613.7224.4819.5212.165.74.08Activity 37.9211.9517.6811.224.56



Monthy Total Work Done3.854.837.1318.4213.7224.4819.5212.1610.029.488.523.14Monthy Total Work Done1.84.3510.7317.1713.4517.6811.224.56

Cumulative Work Done3.858.6815.8134.2347.9572.4391.95104.11114.13123.61132.13135.27Cumulative Work Done1.86.1516.8834.0547.565.1876.480.96


January3.853.85January1.81.8January3.851.8

February4.838.68February4.356.15February8.686.15

March7.1315.81March10.7316.88March15.8116.88

April18.4234.23April17.1734.05April34.2334.05

May13.7247.95May13.4547.5May47.9547.5

June24.4872.43June17.6865.18June72.4365.18

July19.5291.95July11.2276.4July91.9576.4






Monthy

Cumulative

Month

Project Work Done (1000s of tons)

Monthy

Cumulative

Month

Project Work Done (1000's of tons)

00

00

00

00

00

00

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00

00

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Month


00

00

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JANFEBMARAPRMAYJUN

Activity 1

Activity 2

Activity 3

Planned (Expected)To date (Performed)

Amt of concrete used (tons)1320950

Total Man-hours1450820

Equipment-hours12201020

Planned (Expected)

To date (Performed)


actual

actual

actual

planned

planned

planned

1. How can we tell when PC is needed?Primitive indicators:More resources or less resources haven been used than planned


Cost of activity (or of project to date) is higher than expectedSPECIFIC CLUES

Chart2

13201590

14501750

12201584

Planned (Expected)

To date (Performed)


actual

actual

actual

planned

planned

planned

Cost Based

A. Cost-based Program (Schedule)B. Cost-based Progress (based on Work Performed)C. Cost-based Work Schedule and Work Performed

Project has 1-year duration. Amounts shown are project expenditures in millions of dollarsProject has 1-year duration. Amounts shown are project expenditures in millions of dollars




Activity 32.23.77.86.13.22.21.2Activity 33.31.2



Monthy Total Expenditure1.11.32.35.33.77.86.13.23.42.72.30.9Monthy Total Expenditure0000003.31.2

Cumulative Expenditure1.12.44.71013.721.527.630.834.236.939.240.1Cumulative Expenditure0000003.34.5


January1.11.1January00January1.10

February1.32.4February00February2.40

March2.34.7March00March4.70

April5.310April00April100

May3.713.7May00May13.70

June7.821.5June00June21.50

July6.127.6July3.33.3July27.63.3






Cost Based

Monthy

Cumulative

Month


Work Based

Monthy

Cumulative

Month


Sheet3



Month




Month


A. Work-based Program (Schedule)B. Work-based Progress (Work Performed)C. Work-based Work Schedule and Work Performed

Project has 1-year duration. Amounts shown are volume of concrete cast in 1000's of tonsProject has 1-year duration. Amounts shown are volume of concrete cast in 1000's of tonsProject has 1-year duration. Amounts shown are volume of concrete cast in 1000's of tons


Activity 13.852.1Activity 11.81.92.45

Activity 22.737.1311.16Activity 22.458.289.251.5

Activity 37.2613.7224.4819.5212.165.74.08Activity 37.9211.9517.6811.224.56



Monthy Total Work Done3.854.837.1318.4213.7224.4819.5212.1610.029.488.523.14Monthy Total Work Done1.84.3510.7317.1713.4517.6811.224.56

Cumulative Work Done3.858.6815.8134.2347.9572.4391.95104.11114.13123.61132.13135.27Cumulative Work Done1.86.1516.8834.0547.565.1876.480.96


January3.853.85January1.81.8January3.851.8

February4.838.68February4.356.15February8.686.15

March7.1315.81March10.7316.88March15.8116.88

April18.4234.23April17.1734.05April34.2334.05

May13.7247.95May13.4547.5May47.9547.5

June24.4872.43June17.6865.18June72.4365.18

July19.5291.95July11.2276.4July91.9576.4






Monthy

Cumulative

Month

Project Work Done (1000s of tons)

Monthy

Cumulative

Month


00

00

00

00

00

00

00

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00

00

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Month


00

00

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JANFEBMARAPRMAYJUN

Activity 1

Activity 2

Activity 3

Planned (Expected)To date (Performed)

Amt of concrete used (tons)13201590

Total Man-hours14501750

Equipment-hours12201584

Planned (Expected)

To date (Performed)


actual

actual

actual

planned

planned

planned

1. How can we tell when PC is needed?Primitive indicators:More resources or less resources haven been used than planned


Cost of activity (or of project to date) is higher than expectedplannedactualNOWLegendplannedactualSPECIFIC CLUES

1. How can we tell when PC is needed?nowtime50%70%Primitive indicators:More resources or less resources haven been used than planned


Cost of activity (or of project to date) is higher than expected$SPECIFIC CLUES

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

Part 2

Resources for Project Control

2. Resources for Project ControlMoneyMachinery (Equipment)Materials and SuppliesManpower (Labor and Supervision)

Money as a PC ResourceNot a direct resource Rather, used to influence the amounts or quality of the other resources

Using Equipment for PCOften used to augment labor in order to speed up project

Can be expensive

May involve renting or purchasing

Materials and Supplies as a PC ResourceIncrease in quality or quantity may be necessary to enhance project control

Improved inventory systems for materials

Manpower as a PC ResourceProject 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

Elementsof Project Control

Project-relatedResources-relatedElements of Project Control

3. Elements of Project ControlManpower-related controlMachinery-related controlMoney-related controlMaterial-related control3A. Resource-relatedRe-allocate resources

Elements of Project ControlManpowerMachineryMoneyMaterials3A. Resource-relatedRe-allocate resourcesAlso referred to as Human Resource Control- Lay-off/fire any under-performing staff- Hire staff with needed skills Assign staff with specific skills to specific activities

Issues: PM may be seen as a stern disciplinarian PM must avoid heavy handed actions, Fix problems without blaming people

Elements of Project ControlManpowerMachineryMoneyMaterials3A. Resource-relatedRe-allocate resourcesAlso referred to as Physical Asset Control- Decommission any under-performing equipment- Bring in equipment with appropriate capabilities- Re-assign specific equipment to specific activities

Elements of Project ControlManpowerMachineryMoneyMaterials3A. Resource-relatedRe-allocate resourcesAlso referred to as Physical Asset Control- Decommission any under-performing equipment- Bring in equipment with appropriate capabilities- Re-assign specific equipment to specific activities

Issues: Equipment decisions may involve some economic analysis Equipment-based control easier than manpower- based control Some trade-off may exist between manpower and equipment utilization.

Elements of Project ControlManpowerMachineryMoneyMaterials3A. Resource-relatedRe-allocate resourcesAlso referred to as Financial Resource Control- How much money should be spent?- How should it be spent? PM assisted by: Project accountant Project Finance Manager

Elements of Project ControlManpowerMachineryMoneyMaterials3A. Resource-relatedRe-allocate resources Discontinue use of sub-standard material Seek new sources of superior material

Elements of Project ControlOptions:- Reduce project size? - Reduce project scope?- Terminate project?3B. Project-related

Part 4

Mechanismsof Project Control

Mechanisms of Project ControlTypes of Mechanisms:- Cybernetic- Go/No-go- Post-control

Types of Control MechanismsCybernetic- Cyber means Steer or helmsman (Greek language)- May be First-, Second-, or Third-order

Cybernetic control mechanisms ProcessComparatorStandardsEffector and Decision-makerOutputsInputsMechanism: System output monitored by sensor Sensor measurements transmitted to Comparator Measurements compared with predetermined standards- Deviation from standard sent to decision-makerIf deviation from standard is too large, signal sent to EffectorMonitoring mechanism (e.g. sensor)

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

Cybernetic control mechanisms ProcessComparatorStandardsEffector and Decision-makerOutputsInputsMechanism: Same as described for First-order Cybernetic systems, but: Standards are not fixed, but the manner they change is fixed.Monitoring mechanism (e.g. sensor)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 systemsMemory Pre-programmed Responses

Cybernetic control mechanisms ProcessComparatorStandardsEffector and Decision-makerOutputsInputsMechanism: Same as described for First-order Cybernetic systems, but: Standards are not fixed but are variable. Also, the manner they change is variable because there is a consciousness (human element) involved.Monitoring mechanism (e.g. sensor)This is a Third-order cybernetic control system (standards vary according to a variable set of rules)

Examples: Most Project management systems.Consciousness Memory, Selection

Cybernetic control in Project ManagementPM must clearly define outputs in terms of relevant project characteristicsPM must establish standards for each characteristic Monitoring mechanisms (sensors) must be established to measure the characteristics at regular intervalsFor each characteristic, the trigger point or maximum deviation (difference between attained level and standard level) should be established.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 ControlTesting 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 ControlAlso called: Post-performance control, Post-performance review Is done after the activity or project is over Like a post-mortem or report cardIs 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 mechanismFlexible 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 ControlFlexibilityTrade-offsSome things to watch out forImpediments to Project accelerationCost-only and time-only actions to control projects

Value of Flexibility in Project PlanningFlexibility 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 neededBe careful on value engineering that limits flexibility!Some Interesting Issues in Project Control

Trade-offs between Performance Measures during Project ControlCan sometimes only correct for one performance measure at a time TimeCostQualityNeed to understand tradeoffs and triagePick where to make tradeoffs (e.g. non-critical activities)Some Interesting Issues in Project Control

TradeoffsTimeQuality$Acceleration $ (Overtime, shift work, Rework, higher-end equipment, better crews etc.)Less $ Low progress Resource reduction Selection of poor quality workers Default of contractor/subs

Quality problems result from overtime, shift work, new hiresQuality level impacts speed of work, Level of reworkNeed for rework imposes high expensesHigh quality needs can lead to costly miscalculations on labor timeTrying to save $Can lead to substitution, lower quality workmanshipSlow progress $ Delayed occupation, Higher interest on const. loan Loss of tenants Opportunity costSome 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 activitiesAccelerate only critical activitiesSacrifice quality on non-critical items that can be remedied after substantial completionSome Interesting Issues in Project Control

Some things to watch out for: Overreacting/Improvisation, etc.)When trying to correct, often bump up against other limiting factorsSpace constraints/Hiring time/Morale/Coordination difficultiesImprovisation 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 moraleBreaking Job rhythm and learning curves can really inhibit productivity!Some Interesting Issues in Project Control

Controlling the Time Schedule Project CrashingAdding new project resourcesChanging the production function (Change the technology)Change operation conditions by altering the precedence, sequence, or timing of workFast-track, activity overlappingOvertimeShift workChanges in the tools, methods, operating conditionsWork in more sheltered locationSome Interesting Issues in Project Control

Impediments to Project AccelerationHuman resourcesMultiple-shift workEnvironmental/safety issues, High cost, Neighborhood objectionsOvertime/extended workdaysFatigue, Lower morale, ReworkIncreasing # of workersTraining (takes time of most experienced!), Space constraints, Hiring timeTechnologyUsing more, larger or more efficient equipmentTraining/learning curve, Procurement time, Space constraintsUsing faster-installing materialsProcurement, Submittals for owner approvalAlternate construction methodsSkill set, Learning curve, Unknown side-effectsSome Interesting Issues in Project Control

Time-only or Cost-Only Control Actions Sometimes, reduce time without increasing costChange operating methods and process to increase work efficiency and product qualityOutsourcing

Sometimes, reduce cost without increasing timeOutsourcingSubstitute with less expensive but acceptable materials or equipment Some Interesting Issues in Project Control

Control as a Function of ManagementThe purpose of controlling is always the same: to bring the actual schedule, budget, and deliverables of the project into reasonably close congruence with the planned schedule, budget, and deliverables

The job of the project manager is to set controls that will encourage those behaviors that are deemed desirable and discourage those that are not

Cybernetic ControlsHuman response to steering controls tends to be positiveSteering controls are usually viewed as helpful rather than a source of unwelcome pressureResponse to steering controls also depends on the acceptance that the goals of the control system are appropriate

Go/No-go ControlsResponse to go/no-go controls tends to be neutral or negativeBarely good enough results are just as acceptable as perfect resultsThe system makes it difficult for the worker to take pride in high quality work because the system does not recognize gradations of qualityThe fact that this kind of control emphasizes good enough performance is no excuse for the nonchalant application of careless standards

PostcontrolsPostcontrols are seen as much the same as a report cardThey may serve as the basis for reward or punishment, but they are received too late to change current performanceBecause postcontrols are placed on the process of conducting a project, they may be applied to such areas as: communication, cooperation, quality of project management, and the nature of interaction with the client

Balance in a Control SystemGeneral features of a balanced control system:Built with cognizance of the fact that investment in control is subject to sharply diminishing returnsRecognizes that as control increases past some point, innovative activity is more and more damped, and then finally shut off completelyDirected toward the correction of error rather than toward punishmentExerts control only to the degree required to achieve its objectivesUtilizes the lowest degree of hassle consistent with accomplishing its goals

Control of Creative ActivitiesThe more creativity involved, the greater the degree of uncertainty surrounding outcomesToo much control tends to inhibit creativityControl is not necessarily the enemy of creativity, nor does creative activity imply complete uncertainty ofThere are three general approaches to control creative projects:Progress reviewPersonnel reassignmentControl of input resources

Progress ReviewThe progress review focuses on the process of reaching outcomes rather than on the outcomes per seThe process is controllable even if the precise results are notControl should be instituted at each project milestoneThe object of control is to ensure that the research design is sound and is being carried out as planned or amended

Personnel ReassignmentThis type of control is straightforward - individuals who are productive are keptThose who are not, are moved to other jobs or to other organizationsWhile it is not difficult to identify those who fall in the top and bottom quartiles, it is usually quite hard to make clear distinctions between the people in the middle quartiles

Control of Input ResourcesThe focus is on efficiencyThe ability to manipulate input resources carries with it considerable control over outputConsiderable resource expenditure may occur with no visible results, but suddenly many outcomes may be deliveredThe milestones for application of resource control must be chosen with great care

Control of Change and Scope CreepCoping with changes and changing priorities is perceived as the most important single problem facing the project managerThe most common changes are due to the natural tendency of the client and project team members to try to improve the product or serviceThe later these changes are made in the project, the more difficult and costly they are to completeWithout control, a continuing accumulation of little changes can have a major negative impact on the projects schedule and cost

Control of Change and Scope CreepThe project managers best hope is to control the process by which change is introduced and accomplishedThis can be done with a formal change control system that is able to:Review all requested changes and identify all task impactsTranslate those impacts into project performance, cost, and scheduleEvaluate the benefits and costs of the requested changesAccept or reject the changes and communicate to all concerned partiesEnsure that changes are implemented properly

Effective Change Control ProcedureThe following guidelines, applied with reasonable rigor, can be used to effectively control changes:All project contracts or agreements must include a description of how requests for a change in the projects plan, budget, schedule, and/or deliverables, will be introduced and processed.Any change in a project will be in the form of a change order that will include a description of the agreed-upon change together with any changes in the plan, budget, schedule, and/or deliverables that result from the change

Effective Change Control Procedure3. Changes must be approved, in writing, by the clients agent as well as by an appropriate representative of senior management of the firm responsible for carrying out the project4. The project manager must be consulted on all desired changes prior to the preparation and approval of the change order. The project managers approval, however, is not required5. Once the change order has been completed and approved, the project master plan should be amended to reflect the change, and the change order becomes part of the master plan

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Project Control

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