Session 6 Planning Rev 1

7/28/2019 Session 6 Planning Rev 1

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Rev 1

1. Introduction

Having generated a number of options and selected either one or a small number of

alternatives the project enters phase 3 of the project process. For the purpose of these notes

we will assume the project team is left with only one preferred option as the process can

simply be repeated in whole or part for other options and dependant on the degree of

definition necessary to choose between them.

This session begins with an overview of phase 3 before introducing the Critical Path Method

of Project Planning. This is the most commonly used method of project planning and

through a simple example the principles behind the critical path method are introduced

Note: It would not be reasonable to expect students to develop full sanction grade schedules andcost estimates as part of individual and group projects. However, it is quite normal for more detailedschedules and cost estimates to be put together for the preferred option in support of a request for

funding and authorisation to undertake phase 3. Consequently, to the extent possible, you should tryto apply the same methodologies in developing the best schedules and estimates that you can withthe time and resources at your disposal. In all cases you should make clear the level of accuracy youhave achieved.

2. Overview of Phase 3

In this phase it is the project teams task is to

1) Fully define the scope of the preferred alternative

2) Develop a detailed execution plan3) Develop a Sanction Grade schedule

4) Develop a Sanction Grade capital cost estimate

5) Develop and/or Finalise the risk management strategy

6) Develop a detailed commercial case

7) Verify the project meets the business objectives.

8) Conduct a detailed economic analysis to meet funding requirements

9) Carry out final project sensitivity analysis

10) And finally prepare the business case

Session 6Scheduling


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So far we have managed to argue that each step we have encountered is the most

important or the hardest. That is true, the effective framing of a project/opportunity is

absolutely critical to ensure the project will set out to do what is required. The evaluation of

the range of possibilities is a common failure point; if this is not carried out effectively the

project will produce a sub-optimal result or be stalled as other possibilities are identified laterin the process. This 3rd step is also key, but for another reason. It is key for the timely and

cost effective execution of the work. The trick here is to ensure that only the really viable

alternatives are carried over from phase 2 and that if more than one was carried over that

these are as quickly as possible reduced to a single alternative. This phase can turn into a

costly and slow part of the Project Management process. For example, it is not unknown, in

the selection of well types and locations, for too many to be carried to Phase 3 and for this

phase to literally take years to carry out all the detailed evaluation work on all the options.

This is an expensive phase, as it involves all the detailed planning, evaluation and study

work to ensure the execution of the work goes well and often involves ordering long lead

items.

In this phase the alternative(s) for the project is/are fully scoped, detailed execution plans

developed, checks made to ensure the value of the project meets the business objectives,

estimates and economic analysis are tightened to check whether they meet funding

requirements, and approval for expenditure is sought.

Although Phase 3 is about adding more definition to, ideally one, preferred option there is

still room for creativity. The development of the preferred alternative will still encompass a

range of possibilities, technologies, techniques, material options, work methods, timings and

so on. The challenge is to find the best potential outcome for the project.

So, pursuing the preferred alternative(s) must:

Identify the single alternative to take forward to execution.

Identify the optimum method for the deployment of the preferred alternative.

Carry out all the pre-work necessary for the approval and organisation of the

execution phase (phase 4).

The key objectives of pursuit of the alternative(s) are to:

Develop detailed project plans.

Define and freeze the scope of work.


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Initiate detailed design, this may also be completed in this phase if required,

otherwise design will run in parallel with execution.

Prepare all business case documentation required which includes

understanding project sensitivities and ranges of potential outcomes.

Secure approval and funding for execution.

3. Planning vs. scheduling

The terms planning can be used to describe the same thing however from a project

perspective they do have very different meanings.

Planning Is the putting together of the strategy, including all the individual elements that

are required to deliver the desired project outcome

Scheduling Is the compiling time and resources into a structured format from which the

project control mechanisms can be derived

This session is primarily concerned with scheduling although the word plan has been used

extensively throughout these notes to refer to a schedule rather than the broader process of

planning. Planning in its broadest context is covered to a degree in session 9; however, it is

not feasible to go into great detail within the constraints of a single 15 credit module.

4. Scheduling

Before anything else can be done, the project schedule developed in phase 1 and

maintained through phase 2 (normally fairly high level and decision driven) will need

extending and expanding to capture the elements of this phase of the project.

Planning is an iterative process; it is never too early to develop a plan, as all a plan actually

is:

Your current thoughts on activities, responsibilities and

interdependencies reflecting both delivery and expenditure

The plan may also include resources, costs and revenue or may simply be a non-resourced

bar chart.

Avoid the trap of we dont know enough to pull a plan together; we should wait until we have

more information. This often results in missed activities, interdependencies not being

understood and lack of clarity over responsibilities. If you dont have enough information,


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show the activities on the plan which are gathering the information. Show who is responsible

for these activities. Show the development of a more detailed plan as an activity on the plan!

Every day/week/month/quarter the plan will be updated always catching your current

thoughts so there is never a time which is too early to start.

The schedule is a precedence network that is used as the basis for all progress

measurements plans and reports.

It takes strategies developed by the project team so far and develops them into a detailed

activity network that should achieve the defined goals and objectives

The project schedule should be

Realistic yet challenging

Transparent with regard to understanding the critical path and possible impact of

project risks

The appropriate level of detail to enable effective monitoring and control

Owned by the project team and approved by the parent organisation

Based on historical data, yet taking into account impact of current market, location

factors and any other resourcing constraints

Ideally only one plan! Too often different organisations have their own. Whilst

sometime unavoidable there should be a single high level plan at least to enable all

activities to be co-ordinated.

The in remainder of this session we will discussed planning techniques and tools at some

length but we will not be covering the use of project scheduling software such as MS-Project

or Primavera both due to time constraints and because this is more usually a job for the

project planner rather than the project manager himself. A project manager clearly needs to

be able to interpret plans and have a meaningful dialogue with project planners in order to

generate the plans however would not normally be expected to drive planning software

other than at the most basic level at the very start of a project. The course material do

contain a tutorial on MS-Project and it is loaded on the classroom PCs so can be used in

preparation of your project deliverables if you so desire. This session will assist you greatly

in understanding what is going on behind the scenes in MS project and may well be tested in

its own right in the examination for this module.


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5. Origins of Network Planning

Both the Critical Path Method (CPM) and the Programme Evaluation and Review Technique

(PERT) were developed in America in the 1950s. CPM was initially developed by the Du

Pont Company, for the planning and controlling of the maintenance of chemical processing

plants. This proved to be so successful (at one site, downtime for maintenance was reduced

by 37%) that the method soon found applications in other types of project work. PERT was

devised by the US Navy to co-ordinate the activities of the many contractors engaged in one

of the most complex projects ever undertaken until that time, the development of the Polaris

missile. It is claimed that, by using PERT, the programme was completed some two years

earlier than would otherwise have been the case. Both techniques employ the same basic

methodology, the representation of project activities as a network of lines and nodes. The

main difference between them is that PERT allows probabilistic estimates of activitydurations.

The general emphasis of these methods is usually on how quickly a task can be performed.

But, as well as time, we also want to monitor the control of other resources in order to bring

the project in on schedule and budget. Hence we are concerned with managing:

Time

Human Resources

Equipment and machinery

Cash

Clearly there must be a trade off between time and resources with generally high levels of

resource leading to shorter project durations. The smoothing of resources (discussed later)

will lead to better economy, especially when considered with cash flow constraints.

6. The Network Planning Procedure

The project network is a key part of the planning stages and from this project network the

basic elements of the project plan including the Gantt chart and resource profiles are

derived. The British Standards Institute defines the project network:

"A diagram representing the events, activities and their inter-dependence"

It should be remembered that the network represents a plan and it can therefore be updated

and improved with time.


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A project, or part of a project, can be divided and continuously (almost) sub-divided into

Events that are single points in time identifying the beginning or end of an activity.

These are hard to give names to.

Activities that take time to complete but are easy to name and required resources

can be shown.

There are two conventions used when developing graphical representation of networks.

Activity on Arrow (AOA) networks represent the events as circles (nodes on the network)

and the activities are shown as arrows (branches of the network). Alternatively we can use

Activity on Node Analysis(AON) where the activities occur at the nodes. The selection of

technique is simply a matter of choice although the AON method offers some advantages

over the AOA method. AON is usually the method selected for analysis on a computer (for

example Microsoft Project utilises this method), principally because the analysis data can be

easily displayed within the node. The MSc course does not address Activity on Arrow in any

great depth. You are however encouraged to investigate further by reading about it in

almost any textbook on Project Management.

In general project networks are usually developed using the aid of a project management

computer package (a tutorial for Microsoft project is provided within the course materials).

Therefore the aim of this section of the course is to ensure that you understand what the

package is doing behind the scenes.

The basic steps of the CPM technique (extended to include resourcing and S-Curves) are

outlined below; (Dont worry if you dont follow them at this point they will be explained later

in the session)

1) Define Project

Clearly identify the goal of the project, and the conditions which will signify both the

start of the project and its satisfactory completion

2) List Act ivit ies

Identify those activities, connecting the start and end of the project, which it is judged

appropriate to schedule and control.

3) Establish precedenc e Relationsh ips

For each activity, identify those other activities, if any, which must be completed before

the activity in question, can begin. This information will probably be presented on a

project activity chart


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4) Construct Network

Represent the project activities and their precedence relationships by a network of

nodes.

5) Est imate Act iv i ty Durat ions

For CPM a single estimate is made for each activity in the network. For PERT, three

estimates are made: optimistic, pessimistic and most likely times.

6) Make Forward Pass

Beginning with the starting node and ending with the last node, determine the earliest

start and finish times for each node. This step determines the expected completion

time for the project.

7) Make Backw ard Pass

Moving back through the network from the last node, determine the latest time for each

node.

8) Calculate floats

For each activity in the network calculate its total float and free float. Float indicates the

amount by which an activity may be delayed without delaying project completion.

9) Identify Crit ical Path(s)

This is the chain of activities which determines the duration of the project. At this stage

it may be necessary to alter the project plan if a completion deadline is to be met.

10) Prepare Activity Data Table

This table presents a description of each activity, its node references, duration, earliest

and latest start times, earliest and latest finish times, total float and free float. This is anextension of the project activity chart.

11) Schedu le Activit ies

Planned start and finish times for each activity are chosen, and presented on Gantt

chart.

12) Resourc e Ac tivit ies

At this stage the resources for each activity should be specified and any overloading on

resourcing identified. By the process of resource smoothing resource overload may be

mitigated although again this will have an impact on the project plan

13) Develop the Project S-Curve

After the plan has been developed the project S-Curve which tracks the cash spend or

man-hours utilised throughout the project can be developed. This will often form the

basis of project control.

14) Monito r Progress

As the project is implemented, actual progress is compared to the plan. If required and

possible, corrective action may be initiated. This is covered in detail in session 10.


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Before each of them is considered in detail it is important to note that this is an iterative

process and that each stage will impact on later and earlier stages in the process and

therefore it should be remembered that each of these stages overlap significantly.

In order to demonstrate the development of a project plan the following outline project

definition will be utilised as an example for the development of a resourced project plan.

Project Definition

A Company has ordered a piece of equipment from a supplier of special-purpose

machines. The suppliers plant is sited in another country, and the machine, having

been constructed there, is currently undergoing proving trials. The project concerns

the transport of the machine from the suppliers plant to the company, and installing it

in a predetermined position in the companys plant. The project start will be signalled

by a telephone call from the companys representative at the proving trails, indicatingthat the machine has completed the trials successfully. The project will be deemed to

be complete when the machine is installed and running satisfactorily at the

companys plant.

Step 2: List Activities

In practice this step in the procedure may present some difficulty. The problem is that of the

resolution which is appropriate in identifying the projects constituent activities. If a coarse

resolution is applied to our example, the project might be considered to comprise only two

activities: t ransportmachine, and instal l machine. At the other extreme a fine resolution

might identify thousands of short duration activities making up the project.

Normally, the over-riding consideration in choosing a level of resolution will be the

economic implications of the number of activities specified. If there are too many, then the

resources required for scheduling them and monitoring their progress will incur costs which

outweigh any benefits obtained by employing such fine detail.

In the first instance it is probably best to err on the side of coarseness, later modifying the

network to provide finer detail where required. This is demonstrated under 9 Identify Critical

Path, where the project plan is modified to obtain a reduction in the duration of the project

by defining the project activities at a finer level.


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At this point, it is a good time to introduce the concept of work breakdown structure (WBS)

At the heart of the formal project management is the process of identifying in a structured

manner the activities that are required in order to complete the project scope. The key tool

in achieving this is the Work Breakdown Structure that provides a framework for organising

how the activities will be organised and recorded.

The first challenge in developing the WBS is to determine the level of accuracy that you

require at the task level. During the initial phases of the project (for example during the

conceptual design phase) it is unlikely that there are sufficient details available to identify all

the tasks required during the construction phase. However, there are likely to be common

elements from other projects that would allow the construction phase to be loosely specified

at this stage. As the amount of detail available increases then the WBS can be developed

further to include this.

In an ideal world each task should be selected so that it is small enough to be visualised as

a complete entity for estimating purposed. On the other hand, the size of a task must be

large enough to represent a measurable part of the whole project. The design and

manufacture of each sub assembly from a main piece of equipment might rank for

consideration as a task, whilst the final assembly of all those subassemblies into one whole

main assembly could be regarded as another. If the project was to build a water dam

serving a large part of Africa, a standalone task would not be open next bag of cement as

this would result in many very small tasks which would not form a measurable part of the

project.

Advantages of a well thought through WBS:

Structured approach

Work broken down into coherent packages

Allows work to be defined at an appropriate level of detail for scheduling and

estimating

Allows assignment of responsibility

The levels are set by

Size of the project

Level of definition required

Level of estimating accuracy

Level of control required


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The perceived risk of the activity. For example if you are certain (perhaps through

prior experience) that the design would take 10 days then a single level may be an

appropriate amount of detail. If you are uncertain of the time to perform the design it

would be appropriate to break it down into more identifiable tasks. The benefit of

doing this is that as the tasks get smaller it usually becomes easier to estimate howlong the task will take.

The acceptable number of man hours. Some organisations will specify that a single

identifiable task should have no more than (for example) 80hrs attached to it. If this

is not the case the organisations procedures would then specify a greater level of

detail.

The level of control required. As the number of tasks becomes greater and as detail

is introduced it is easier to see what has to be done and what has already beendone. For example in studying this module the task list could be simply complete

module. A more appropriate level of detail would include Session 1/2/3 etc. and

Assessment 1/2/3. Then as project manager you can see exactly where the project

is at a given date and exercise control based on this information.

As the tasks get smaller and smaller there is a cost attached to the management and

planning of these tasks. It is therefore often not cost efficient to manage at a micro

level of detail and the benefits of breaking down the activities in terms of control must

be weighed up against the increased costs attached to this.

If you wish to empower your staff and provide them with a feeling of ownership for a

section of the project excessive breakdown of activities can hinder this process.

If you plan only at a high level, you risk extending the project timescale by not

introducing flexibility about how activities are scheduled. For example if you plan

based upon three large phases (say design, construction, and commission) then you

limit yourself to completing each of these phases before moving onto the next phase.

Planning at a greater level of detail will allow you to identify alternative linkages within

the plan and provides more flexibility in terms of how you plan. For example you may

be able to identify elements of the design phase which once complete can allow

construction to start prior to completion of the whole design.

As a general rule your WBS should breakdown activities to the level at which you are

going to schedule and control the project.


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Other factors that need to be taken into account are

The standard cost structures that the organisations cost management system uses

e.g. SAP

The contracting strategy

An example WBS is as follows although clearly most sanction grade estimates go into much

greater detail

There are two common ways of developing WBS structures. The first of these is to start with

the project and break it down into smaller sections that encompass a logical grouping of

activities. If these groupings of activities are linked within a timeline framework they are

often referred to phases. You would then split these large groupings into smaller groupings

and so on until you reach the level of activity at which you wish to plan. This is referred to as

a top-down approach.

An alternative approach to the top-down approach is the bottomup approach where you

brainstorm the activities that would be required to complete the project and subsequently

make groupings of the activities. The approach you take will depend mainly upon personal

preferences.

Other Breakdown Structures

When identifying each task, it is clear that many of the tasks will fall under a natural header

or group and that there may be more than one set of logical structures which could be used

to break the work down. These other groups commonly include:

Cost breakdown structures where the breakdown is performed by cost centre

Organisational breakdown structures where the breakdown is performed on a basis of

which part of the organisation (or individual) is responsible for each work package.

Location breakdown structures when the project is operating on multiple sites

Conceptual

Design

Identify Product

Requirements

Detailed

Design

IdeaGeneration

IdeaSelection

TechnicalSpecifications

ManufacturingLimitations

DesignCalculations

Initial DetailedDrawings

DesignVerification

Project

Part A Part B


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Activity ID Activity Immediate

Predecessors

A Clear Site StartB Dig Foundations A

C Procure Foundation Materials Start

D Lay concrete foundations B,C

E Transport Machine Start

F Install Machine D,E

G Install Electric supply D

H Connect machine to supply and run F,G

This type of precedence relationship, where one activity must be finished before the next

activity can start (referred to as a finish to start relationship (FS)) is the simplest type of

relationship that is used in the network planning process. There are however a number of

other relationships which are used.

Start Start (SS) The activity cannot start until its predecessor has started. Thistype of relationship can be used to compress the overall projectduration by not insisting that one activity is completed beforethe next activity (which uses some of the previous activitiesinputs) is started.

Finish Finish(FF)

The activity cannot finish until its predecessor has finished.For example you cannot finish painting a structure before thestructure is completely fabricated however you can startpainting the structure before construction is completed.

Start Finish(SF)

The activity cannot finish until its predecessor has started.

These relationships are often represented graphically as shown below.

A AB finish to start

A AB

A AB

A AB

start to start

finish to finish

start to finish


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When deciding upon the precedence relationship it is also important to decide whether there

are any leads and lags between the activities that effectively make the relationship between

the activities have a positive or negative duration (the relationships usually have duration of

zero). For example there might be an item which must be procured on a project, which from

the date of the order being submitted will take 12 weeks to arrive. One method to show thison a project network would be to have an activity that has duration of 12 weeks entitled

procures X. This however is a distortion of reality has duration this 12 week there will be no

resource committed to this activity and therefore a better method would be to represent this

through a lag from the order being placed to order being received as shown below.

Leads and lags can be used with the more complex relationships (such as start-start

relationships) to represent more complex relationships on projects. For example imagine a

domestic underground gas pipe-laying project to lay 5 km of pipe. You are unlikely to dig

the 5kms of trench prior to laying any of the pipe. A more realistic method would be to be

trenching 2 days in advance of the pipe laying. This could be represented by a start-to-start

relationship with a lag of 2 days as shown below.

Step 4: Develop the project network

The activity-on-node convention (AON) is used. Noting from the activity list that threeactivities may start on initiation of the project, we can draw these activities into the network

as shown below.

Order ReceiveFS + 12wks

Trench Lay

C

A

E


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Returning to the list, we find that only one activity, B is dependent on A. This allows us to

place activity B into the network, where a line from activity A to activity B indicates the

precedence. We then find that B and C are the immediate predecessors of a single activity,

D; no other activities are directly dependent on either B or C. The lines from B and C can

therefore be drawn to activity D. When an activity has two or more predecessors it is

referred to as a merge event.

Activities G and F are dependent upon activity D. These activities are therefore placed in

the network with individual lines connecting them to activity D. When an activity has two

activities that are dependent upon it, the creation of two paths through the network is

referred to as a burst event. Note that activity F is also dependent upon activity E andtherefore a line is also drawn connecting these two activities as shown below.

The completion of the precedence network is straightforward, and is shown below

C

A

E

B

D

C

A

E

B

D

G

F

C

A

E

B

D

G

F

H


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Step 5: Estimate Activity Durations

Each activity is now considered, and an estimate made of how long it will take to complete.

Where the activity is similar to one carried out on an earlier project, it is likely that an

accurate estimate can be readily made. Where an activity is to be carried out which is of a

type not experienced before, it may be difficult to establish a single estimate of its duration

with any confidence. In such circumstances, the three-estimate probabilistic approach of

PERT might be worth considering.

For our example, we will assume that single-estimate values for the activity durations are

obtained without difficulty.

Activity ID Activity Duration

A Clear Site 2

B Dig Foundations 3

C Procure Foundation Materials 2

D Lay concrete foundations 3

E Transport Machine 10

F Install Machine 4

G Install Electric supply 4

H Connect machine to supply and

run

2

Analysing the Network

The aim of analysing the network is to calculate the earliest that activities can start, the latest

that activities can start if the project is to be completed on time and the critical path through

the network. Although for a small project as shown above the procedure may seem simple a

structured method is required when the project increases in complexity.

Step 6: Make Forward Pass

The first stage in analysing the network is to calculate, based upon the activity durations, the

earliest any individual activity can start (ES) and the earliest any activity can finish (EF).

This earliest start is calculated by moving through the network from the first activities to the

last activities. This procedure is referred to as a forward pass. This can either be done byadding an extra column to the table above or by using a standard format for each activity


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node on the network into which the data is entered. The latter approach is simpler and

allows easier checking and therefore is utilised here.

The standard format for the activity box is shown below where LS and LF refer to late start

and late finish (see next section for how to calculate these).

Activity

ES EFDuration

LS LFFloat

Care should be taken when interpreting software package outputs as they may well not be

the same as this where in doubt check.

Beginning with activities with no predecessors (A C E) enter the earliest start in the top left

quadrant of the node. This entry might be a known calendar date, but for our purpose 0 will

be entered to represent the beginning of the first day of the project. The earliest finish date

is calculated by adding the duration to the ES. Therefore the earliest finish of Activities A, C

and E are 2, 2 and 10 respectively.

EF = ES + Duration

Calculation of the earliest start for activity B is simple as there is only one predecessor,

activity A. Therefore the ES for activity B is the same as the EF for activity A. Therefore

activity B has an ES of 2 and an EF of 5. The calculation of the ES of activity D is slightly

more complicated. This activity has two predecessors B and C. The ES of activity D is the

greater of the two EFs of the predecessors. Therefore as B has an EF of 5 and C has a EF

of 2 then the ES of activity D is 5. The simple rule is that at a merge event the ES of the

activity is the latest EF of its predecessors. This information can be entered into the

network as shown below.

Following this logical approach the ES and EF times of the other activities in the network can

be calculated. As D is Gs only direct predecessor the ES of G is the same as the EF of D

C

0 22

LS LFFloat

A

0 22

LS LFFloat

E

0 1010

LS LFFloat

B

2 53

LS LFFloat

D

5 83

LS LFFloat


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and is therefore 8. Activity F has two direct predecessors, D and E. The situation is the

same as at activity D a merge activity. We therefore select the latest EF of the

predecessors D and E. Therefore the ES of activity F is 10. The completed network is

shown below.

C

0 22

LS LFFloat

A0 22

LS LFFloat

E

0 1010

LS LFFloat

B2 53

LS LFFloat

D

5 83

LS LFFloat

G

8 124

LS LFFloat

F

10 144

LS LFFloat

H

14 162

LS LFFloat

From the network it can be seen that with estimated activity durations the minimum time to

complete the project is 16 days.

Step 7: Backward Pass

A similar procedure is now carried out to determine the latest start (LS) and finish (LF) times

for each activity with these being entered in the appropriate position. In this case we begin

with the final node and work backwards towards the project start seeking the longest path

back to the activity being considered.

Obviously, the latest finish time for activity H will be the duration of the project 16 days.

The latest start time can then be simply calculated by taking the activity duration away from

the latest finish time (LS = LF Duration). Therefore the LS for activity H is 14. If we now

consider activity G. The latest finish time for this activity will be the latest start time of the

activity following it. Therefore the LF for G is 14 which gives the LS of 10. Similar for activity

F the LF will be 14 giving an LS of 10.

We can now, moving backwards through the network consider node D. As the late start time

for both of its successors is the same then it is clear that the latest finish time of this activity

is 10 and therefore its latest start time is 7. If we had the case where the LS of activities G

and F were different we would simply take the lower LF of the two activities. In the same

way we can work back through the network to complete the LF and LS of all the activities.

Activity

Before turning the page calculate the LS and LF of the remaining activities in the

project network.


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C

0 22

5 7Float

A

0 22

2 4Float

E

0 1010

0 10Float

B

2 53

4 7Float

D

5 83

7 10Float

G

8 124

10 14Float

F

10 144

10 14Float

H

14 162

14 16Float

Step 8: Calculate Floats

The float of an activity is the amount of flexibility that there is in when an activity takes place.

We have used the term float here however some variation may be encountered interminology in further reading on this subject. Some textbooks use the term slack instead

of float whereas other texts have different meaning for slack

Consider activity C. It may start as early as the first day of the project, or finish as late as the

end of day 7. That is, provided the activity takes place within this 7-day period the project

completion time will not be jeopardised. Since the duration of the activity is only two days,

the timing of the activity can vary (or float) by 5 days.

This float, the activitys total float, is calculated as the maximum time available minus the

duration of the activity or more formally

Float = LS ES or Float = LF EF

We can therefore easily calculate the total f loat for each activity and this is shown below.

C

0 22

5 75

A

0 22

2 42

E

0 1010

0 100

B

2 53

4 72

D

5 83

7 102

G

8 124

10 142

F

10 144

10 140

H

14 162

14 160


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The total float for activity D is calculated to be 2 days. However, it should be appreciated

that this float is shared with activity C. If all of activity Cs total float is consumed, either by

scheduling it for latest finish or by the activity taking longer than estimated, then the total

float of D will also be used up. The free float of an activity allows this to be quantified it is

defined as the amount by which the activity may slip, without affecting the total float ofsubsequent activities. This information can be useful when scheduling or monitoring the

progress of non-critical activities.

The total float and free float for each of the project activities are listed here.

Float

ID Activity Free Total

A Clear site 0 2

B Dig foundations 0 2C Procure foundation material 3 5

D Lay concrete foundations 0 2

E Transport machine 0 0

F Install machine 0 0

G Install electricity supply 2 2

H Connect machine to supply and run 0 0

Step 9: Identify Critical Path

Notice that there are three activities (E, F and H) which have no float. They form the longest

chain of activities, the critical path, which determines the expected duration of the project. If

any of these activities takes longer than estimated, then the project completion time will be

extended accordingly. It is usual to highlight the critical path on the project network.

C

0 22

5 75

A

0 22

2 42

E

0 1010

0 100

B

2 53

4 72

D

5 83

7 102

G

8 124

10 142

F

10 144

10 140

H

14 162

14 160

Critical Path

Often it is found that the expected project duration is longer than desired. If the project

duration is to be reduced to an acceptable time, the critical path must be shortened.

Typically this will be achieved by allocating additional resources to certain of the critical

activities, thereby reducing their durations. For example, activity F might be reduced from


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four days to, say, three days by allocating more personnel to the activity, or possibly by

hiring more productive (but probably more expensive) equipment for the installation of the

machine. However, as we shall see, for a given reduction in project completion time, other

initially non-critical activities may also have to be shortened. Alternatively, after more

detailed consideration (i.e. finer resolution) of the critical activities it may be possible torestructure the project to reduce its duration.

For our example we will use a combination of restructuring the project and allocating

additional resources. Such a technique is known as crashing and the cost analysis of this

is covered in a later session

Restructuring the project

If any attempt is made to shorten the project it would be probably best to examine activity E.

It has a duration much longer than the majority of the activities and it lies on the critical path.

When activity E is examined closely, it is found that it entails dismantling the machine into

major components, at the suppliers factory, before transporting them.

For the expense of an additional transport, the time for activity E can be reduced, as follows.

Firstly, dismantle the power unit (pu) and control cabinet (cc), which takes one day, before

transporting them, taking six days. When they arrive at the companys plant they can be

installed in two days. Whilst the power unit and control cabinet are being transported, the

machine frame (mf) and fixture (f) can be dismantled (two days). They can then be

transported (six days) and installed (two days). The project activity chart for this

restructured project is shown below

Activity Description Duration

(Days)

Immediate Predecessors

A Clear site 2 Start

B Dig foundations 3 A

C Procure foundation material 2 Start

D Lay concrete foundations 3 B,CE1 Dismantle PU and CC 1 Start

E2 Transport PU and CC 6 E1

E3 Dismantle MF + F 2 E1

E4 Transport MF + F 6 E3

F1 Install PU and CC 2 D,E2

F2 Install MF + F 2 D, E4

G Install electricity supply 4 D

H Connect machine to supply and run 2 F1,F2,G

Activity

Before turning the page draw the new network for yourself and check the durations of the

activities. Has the duration of the project changed?


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The restructured network is shown above. A new critical path has arisen (A-B-D-G-H), with

an expected completion time of 14 days, two days less than before.

Alternative dependencies

All of the networks developed until this point have used the simplest type of dependency

which is referred to as the finish to start dependency. That is that for an activity to start the

previous activity must be finished. For many project activities this type of dependency is

suitable but at times it is useful to utilise alternative types of dependencies and also toinclude leads and lags between the activities.

Step 10: Prepare Project Activity Chart

To assist in the scheduling and subsequent progress-monitoring of the project, a table of key

activity information can now be drawn up.

Activity Dur Pred ES EF LS LF Float FreeFloat

A 2 Start 0 2 0 2 0 0

B 3 A 2 5 2 5 0 0

C 2 Start 0 2 3 5 3 3

D 3 B,C 5 8 5 8 0 0

E1 1 Start 0 1 1 2 1 0

E2 6 E1 1 7 4 10 3 1

E3 2 E1 1 3 2 4 1 0

E4 6 E3 3 9 4 10 1 0

F1 2 D,E2 8 10 10 12 2 2

F2 2 D, E4 9 11 10 12 1 1

G 4 D 8 12 8 12 0 0

H 2 F1,F2,G 12 14 12 14 0 0

C

0 22

3 55

A

0 22

0 20

E1

0 11

1 21

B

2 53

2 50

D

5 83

5 80

G

8 124

8 120

F1

8 102

10 122

H

12 142

12 140

E2

1 76

4 103 F2

9 112

10 121


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Step 11: Schedule Activities

It now remains for target dates to be set for the start and finish of each activity. For

example, activity C can start at any time between the beginning of day 1 and the end of day

3. Generally, activities are scheduled to start as early as possible (all other things being

equal), since any float available will then give the maximum protection if the activity takes

longer than was originally estimated.

Sometimes, particularly when very large capital investments are involved, activities may be

scheduled to finish close to the latest finish time. This risk is taken to save substantial

interest charges on the capital being invested. For example, a module of a nuclear power

station may cost many millions of pounds, and its construction activities may have float

measured in years. Some activities may contend for the same scarce resources to carry

them out. It may be possible to ease this contention by scheduling some of the non-critical

activities to start somewhat later than the earliest start. This can be seen in the Gantt chart

which follows (Figure 3.22), where all of the activities are scheduled for earliest start, except

activity F2. This activity is scheduled to start at the beginning of day 11 to avoid contention

with activity F1, which requires the same category of installation personnel. This technique

is resource smoothing which is covered in more detail later in this session.

It is common to include the float on the Gantt chart to indicate which activities have the

potential to slip. This is shown below where the narrower lines indicate the float.


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In projects it is often necessary to impose constraints on specific activities. For example

there may be activities that cannot start before a certain date (for example availability of

equipment or resource) or activities that must be finished by specific dates (including the

overall project). Most project management software systems allow the inclusion of

constraints with MS Project offering start no earlier/later/on and finish no earlier/ no later /on

constraints. These can be used usefully although overuse of constraints in the planning

process can overly constrain the plan that you develop and limit the ability of the plan to be

flexed to optimise it.

Step 12: Resource Allocation and Smoothing

In the ideal world, when a project was planned, the plan would result in all resources being

uniformly utilised. However, projects are generally like the proverbial No 9 bus - nothing for

ages then three come along together. The result is that time is wasted when resources are

under-utilised, and projects run late because the resource is needed by three projects

simultaneously. The project manager does have a degree of control over this by consideringloading on each resource throughout a period. This would ordinarily be a laborious task but

has been considerably eased by the use of project management software.

The allocation of tasks to a project team can be eased by the use of a responsibility matrix.

Where there are clear skills requirements for tasks, these should be met first, with the less

constrained resources matched to the remaining tasks. A responsibility matrix is shown

overleaf.


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During the early stage of the planning and estimating phase the required resources are

identified as part of the process of allocating estimated activity durations. The resource

requirements are subsequently developed for the project; but this is based upon each

activity commencing on its earliest start date. It is however possible to balance resource

allocations by considering activities based on a later commencement date up to the latest

start date. This process is known as Resource Loading.

Resource levelling attempts to minimise resource-category fluctuations on a day to day

basis. Clearly, resource levelling is a stepwise process, undertaken in the sequence: -

Network> Gantt > Histogram

In order to demonstrate the process of resource levelling consider the following project

activity chart.

ACT Duration Dependencies Resources

A 5 Start 4

B 3 Start 4

C 6 Start 4

D 5 A 3

E 3 A,B 2

F 5 D 4

G 3 E 3

H 2 F,G 3

I 3 C,G 3

Activity

In order to perform the process of resource levelling it is necessary to develop the

project network, the network calculations and the Gantt chart. If you feel unsure

about generating these please take the time just now to work through this project

following the process outlined earlier in the session.


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The activity on node network for the project is as shown below

B

A

C

G

D

E

F

H

I

From this network and the network calculations the Gantt chart can be developed as shown

below based upon earliest starts for all activities.

Day

Activity 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

A

B

C

D

E

F

G

H

I

Critical Path

Based on ES

Float

The resources required in this example are taken as being of the same type but further

columns could be added for further categories or resource both human and plant and

equipment. Within this example only one type of resource is considered for clarity.

Whilst the Gantt chart could have been drawn for latest start/latest finish, it is conventional to

address resource allocation on the earliest nodal values at this stage. Based upon the ES

for an activity the resource histogram is developed in the following way. For each day of the

project identify which activities (assuming ES) are active. Tabulate the resources required

on each day of the project based upon this information.


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Day

Activity 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

A 4 4 4 4 4

B 4 4 4

C 4 4 4 4 4 4

D 3 3 3 3 3

E 2 2 2

F 4 4 4 4 4

G 3 3 3

H 3 3

I 3 3 3

Total 12 12 12 8 8 9 5 5 6 6 7 7 7 7 4 3 3

The resource histogram is simply a graphical representation of this data (with the output

from MS Project shown below).

In order to illustrate the levelling process we make the assumption that a constraint is

imposed on the available resources of eight operatives. It is clear from the Resource

Histogram that the availability is exceeded. It is possible though to re-schedule the activities

within the nodal value constraints. Another observation from the first draft resource

histogram is that there is an under utilisation of resources on days 7, 8 and 9 and it may not

be possible to downsize the project team until day 10 and then re-establish the previous

level. Even without the over allocation of resource this uneven usage of resources is not

desirable for a number of reasons:


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The management of uneven resource loadings is significantly more time

consuming than the management of constant resources.

Staff who work constantly on a single project are more likely to be productive

than staff dipping in and out of projects. This relates to the both the amount

of information that these staff may have about the project (i.e. getting up to

speed) as well as motivation issues relating to ownership of the project.

It may well not be economical to have uneven loading of staff resulting from

transport issues (a significant constraint in the offshore industry),

requirements for lengthy safety inductions (in the Nuclear industry a site

safety induction can easily last 3 days) or through the increase costs

associated with the use of short term contractors.

In order to start the levelling process we start by making the assumption that activities thatlie on the critical path are fixed both in terms of timing and resource allocation. They are

therefore put on the next draft of the histogram first as shown.

Now consider activity B which has a float of 6 days, and must be finished by project day 9

and requires a total of 12 operatives (3 days at 4 per day). We can also make use of float in

activity C to move whole days worth of resources around (i.e. assume that the number of

resources required must be available on any particular day the activity is occurring). Doing

this (by moving B and C) gives at best

0

1

2

3

4

5

6

7

8

9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Day

ResourceU

sage

D

F

H

A


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Step 13: Develop the S-Curve

A recognised method of measuring performance is by establishing a planned S-curve and

then plotting actual performance on the same graph. A number of choices are available as

to which variable is plotted on the S-curve. One of the most popular methods is to plot

percentage completion against project elapsed time. Others options include cumulative costs

and cumulative resource quantities, both against project elapsed time. For example, the

project team may have cash flow data available to it. Consequently, if it is known how much

project resources cost and it is known know how much has been spent and at say week eight,

spending is more or less what was expected by week eight, it is clear that the project is

progressing satisfactorily. Consider the following graph generated from planned and actual

project data: -

This is exceptionally good news for the PMT; or is it? The under-spend may be because of

delays caused by weather or lack of production and the programme may in fact be

substantially behind schedule. Therefore the graph may well be wrong. However it may well

be right. Consequently, all that can be said is that it provides inconclusive information that

can be addressed by the use of earned value analysis which is detailed in session 10.

Nevertheless, S-Curves can be an extremely useful tool to the Project Manger provided they

are not taken at first sight.

0

20

40

60

80

100

120

0 10 20 30 40 50

%Bud

get

Time (Weeks)

Cumulative Project Costs

Actual

Planned

`

Time Now


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The following sections describe in detail the steps that are gone through to establish an S-

curve that shows planned values. The illustration is most easily presented by referring to a

Gantt chart; in this example case it is kept simple and minimal. The example project is

described by the following project activity chart.

ID Duration Predecessors Resource Man days

A 5 1 5

B 10 2 20

C 12 3 36

D 10 1 3 30

E 6 2,4 2 12

F 9 3 1 9

If we construct the Gantt chart for this project based upon the ES of each activity it is as

shown below. Attached to each day on the Gantt chart is the resource usage of that day

(this assumes that resource is used linearly across the activity) which allows us to calculate

the total resource usage for any day of the project and the cumulative resource usage for the

project.

Day

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

a 1 1 1 1 1

b 2 2 2 2 2 2 2 2 2 2

c 3 3 3 3 3 3 3 3 3 3 3 3d 3 3 3 3 3 3 3 3 3 3

e 2 2 2 2 2 2

f 1 1 1 1 1 1 1 1 1

Total Men Each Day

6 6 6 6 6 8 8 8 8 8 6 6 4 4 4 3 3 3 3 3 3

Cumulat ive total

6 12 18 24 30 38 46 54 62 70 76 82 86 90 94 97 100 103 106 109 112

The cumulative number of man-days through time can be plotted as an S-curve as shown

overleaf.


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It is obviously a simple task to convert this to a percentage usage of resource throughout the

project (to do this you simply divide through by the total resource usage which in this case is

112). It is also common to show S-Curves in terms of the cashflow of the project. This

allows the inclusion of procured items as wells as the resource usage. In order to illustrate

this let us assume that the resource available to the project incurs a cost of 225/day and

that on days 15 and 20 of the project payments are made, of 5000 and 12,000 to

subcontractors for delivery of materials. We can now generate the overall project S-curve b

based upon this data as shown below.

0

20

40

60

80

100

120

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

CumulativeResourceUSage

Time

Project Day Daily resource Resource Cost Additional Costs Total Cost

1 6 2400 2400

2 12 4800 4800

3 18 7200 7200

4 24 9600 9600

5 30 12000 12000

6 38 15200 15200

7 46 18400 18400

8 54 21600 21600

9 62 24800 24800

10 70 28000 28000

11 76 30400 30400

12 82 32800 32800

13 86 34400 34400

14 90 36000 36000

15 94 37600 5000 42600

16 97 38800 43800

17 100 40000 45000

18 103 41200 46200

19 106 42400 47400

20 109 43600 12000 55600

21 112 44800 61800


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The S-Curve as shown below is often referred to as the Budgeted Cost of Work Scheduled

(BCWS) and is used extensively used in project control when earned value analysis

(described in session 10) is utilised.

Critical Path Method Summary

The extensive discussions above outline the process that you would go through in

developing a project plan based upon the critical path method. It is worthwhile noting that

the plan that you produce is only as good as the information you put into the plan and

therefore whilst the overall process is relatively simple, the actual development of the inputs

for the plan are more difficult than the actual development of the plan.

7. PERT

The previous discussions have focussed on the use of the critical path method of project

planning. There are however a number of alternative methods of project planning including

the milestone plan methods described in session 2 and a technique called Programme

Evaluation and Review Technique (PERT).

0

10000

20000

30000

40000

50000

60000

70000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Planned

ProjectCashflow()

Time


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In some projects, difficulty may be experience in obtaining estimates of activity durations.

For example, the manager responsible for the research and development activities required

to launch a new product may be unwilling to commit to deterministic estimates. This is not

unreasonable, since these activities may involve the solution of problems that cannot be

foreseen at the outset. However, the same manager is likely to respond positively to thefollowing three questions:

How long is the activity likely to take if no unforeseen problems arise ? (Optimist ic

Time (a))

How long is the activity likely to take if everything that can go wrong does go wrong?

(Pessimis tic Time(c))

Between these extremes what do you think is the most likely duration for the activity?

(Most Lik ely Time (b))

The PERT procedure then makes the arbitrary assumption that the activity duration exhibits

a skewed probability distribution, the beta distribution. This distribution is depicted below.

The mean of this distribution is taken as the expected activity duration, and is usedin the subsequent network calculations (as in CPM). In this context the mean is often

referred to as the expected activity duration and is given by

expected activity duration = (a+4b+c) / 6

variance = (c-a)2/ 6

It is claimed that the variance of the project completion time is well-approximated by simply

summing the variances of the critical path activities. This assumes that the activity durations

optimistic pessimistic

Most likely

time

frequency


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are distributed independently of each other, which may be unrealistic in many

circumstances. For example, in a construction project many of the outdoor activities will be

influenced by the same adverse weather conditions. A common result of using PERT is

that the overall duration of the project becomes extended. This is the result of difference

between the pessimistic estimate and the most likely estimate being greater than thedifference between the most likely and the optimistic estimates.

Planning software is available to help with the application of PERT. MS Project has PERT

facilities but individuals are also encouraged to examine Pertmaster(www.pertmaster.com).

8 Summary

This session has focussed on the detailed mechanics of developing a project plan using the

critical path method. You should however note that the development of a project network

and related Gantt charts and Histograms does not constitute the development of a full

project plan and within the completed plan there will be many other elements such as details

on progress reporting, project communication, knowledge management and the like. These

issues are dealt with in the context of developing a project execution plan later in the course

References

Aberdeen University MSc in Project Management
http://www.pertmaster.com/http://www.pertmaster.com/http://www.pertmaster.com/http://www.pertmaster.com/

Documents

Session 6 Planning Rev 1