PERT, CPM, ARROW AND PRECEDENCE SCHEDULING

The suspected root cause of project failures is frequently attributed to “poor planning.” AACE International defines planning as

…the determination of a project’s objectives with identification of the activities to be performed, methods and resources to be used in accomplishing the tasks, assignment of responsibility and accountability, and establishment of an integrated plan to achieve completion as required. A project may be defined as any effort undertaken to accomplish some specific objective within a given time and budget restraints. Therefore, depending on the scope of a project, the required planning effort will vary significantly. The range of efforts may vary. It could be a one-page scope, schedule, or budget statement for a very simple project, or it could be a full project-control effort that involves an integrated computerized cost/schedule control system and a scope-of-work document. Such a complex document could include concomitant work and organizational breakdown structures for either a complex multicontractor development program or for a design and construction plan of a large manufacturing facility.

Scheduling, the establishment of specific activity dates within the constraints of the plan, was for many years done graphically by use of Gantt charts as

shown in Fig. 6.13. This time-scaled display of activities plotted as bars over a time line (with progress shown by varying the bar appearance) provides an excellent graphical portrayal for working schedules; it is still emulated by many current scheduling software programs. The primary difficulty with the Gantt chart is that the underlying logic for the plan as developed by the project managers and schedulers is in their minds at the time of schedule development and frequently is not documented. This situation makes it difficult to perform an assessment of overall schedule impacts. This was the status of general scheduling until the 1950s when the Critical Path Method (CPM) was developed. Also, in the early 1950s the programmed evaluation and review technique (PERT) was developed for the U.S. Navy’s Polaris missle program; it has since been modified to include cost.

CPM involves the development of networks that include both the identified activities and their logical dependencies. The development of networks has been approached in two formats: the arrow diagram method (ADM), and the precedence diagram method (PDM). ADM is called activity-on-arrow while PDM is called activity-on-node. Figures 6.24 and 6.25 show the basic differences graphically.

Project planning begins with a well-defined scope of work, a set of objectives, and an assigned management team. Although the scope will likely evolve as

the project continues, it is best to document the initial basis of a project plan to serve as a reference point for future adjustments. The assigned team should then develop a work breakdown structure (WBS) that will serve as the focal point for future control of the project.

The WBS is a product-oriented tree diagram that graphically portrays the project scope in terms of manageable blocks of work. Each level of the WBS details those products or deliverables that are required to support the next or higher level. With the WBS established, the team can select the level at which it intends to manage or control the project and can then begin the establishment of budgets and schedules for each work package.

Each work package should have the following characteristics: • The scope should be clearly defined.

• It should have a budget.

• It should be assignable to a single organizational element. • It should be clearly distinguished from other work packages. • It should have distinct start and completion dates.

• It should be possible to objectively measure progress.

Typically, during the initial stages of a project before development of the WBS, a master schedule or summary schedule would be developed for

management review. This schedule could be developed by the project team without the benefit of a totally integrated plan. As such, it would require significant expertise and understanding of the type of work being undertaken. The project planner would have to work closely with the team in developing the approximate blocks of time required for the significant phases of the project, whether it be engineering, procurement, or installation. The planner and the team would also have to work jointly to define the acceptable overlaps in these areas. During team review and discussion, a block diagram such as that previously shown in Fig. 6.7 might be developed to assist in presenting or

Figure 6.24 Arrow diagramming method (ADM).

visualizing critical aspects of the project, such as preestablished milestones or outages. This block diagram might then be used in preparing Gantt charts or milestone lists for management presentation.

With the project scope packaged, the project control engineer or planner and the project team are now responsible for developing the project CPM network. This process, although fairly straightforward, can vary significantly with the scope, the number of organizations involved, and the uniqueness and complexity of the project being undertaken. The planner and the team develop the logical relationships between the work packages, being careful to use only definite, precise relationships to assure maintaining maximum flexibility in the plan. It is the planner’s specific responsibility to question the team carefully and to ensure that relationships are not merely preferences but are indeed physical constraints. Figure 6.24 depicts a pure logic diagram in ADM format with events (or nodes) shown as rectangles; for example, A is the start, intermediate events are B, C,…, J, and the finish is K. The arrows between events are called activities. The dotted arrows between C and F, E and G, G and I, and H and J are logical restraints, sometimes called “dummy activities.” They consume no time, but they reflect interdependence between activities and are necessary for establishing a proper sequence in the network. Any activity beginning at an event cannot begin until all the activities leading to that event are completed.

The team then assesses each activity to estimate an elapsed duration for completing each package of work. Activity descriptions are also added to describe what is being physically accomplished within the work package. They are usually brief and should be limited to a descriptive action verb/ object combination such as “prepare boiler specification.” In Fig. 6.26, the same network is shown with activity descriptions and durations. The abbreviations used on the figure are LB for large-bore piping, SB for small- bore piping, and H/T for hydrostatic testing. Activity A-B is to erect 25% of the large-bore piping in 25 days. This brief activity description should be supplemented within the work package scope, or a supplemental punchlist should be provided to delineate the specific areas necessary to complete the work package. Restraints are shown with no duration and there is a milestone shown for mechanical completion at the termination of activity J-K.

Figure 6.27 lists the original duration for each activity. This is the time for the planners to begin calculation of the project critical path—the longest calculated path duration between the start and finish of the project’s activities. The first step in this calculation is called the forward-pass calculation, the determination of the earliest dates activities can be started and completed. As the planners progress through the network, they take an activity’s original duration and add to it the early finish of a preceding activity, thereby determining its earliest possible finish. At each junction point the planner must select the latest finish of all incoming activities to determine the earliest possible start for succeeding activities. Looking at activity F-I (in Fig. 6.27), the planner must decide what its early start is based on the completion of prior activity logic. Activity string A-B, B-C, C-F (logical restraint) would be

complete by day 45 (25+20+0), while string A-B, B-F would be complete by day 55 (25+30). Therefore the earliest that activity F-I could start would be on day 56. When calculating the forward pass, the latest arrival date of all incoming activities must be used. Figure 6.28 includes a tabulation of early starts and finishes for the network activities and shows that the earliest possible completion date for this project is day 130.

The next step in the critical path determination is the backward-pass calculation, in which the latest possible start and finish dates are determined for each activity (see Fig. 6.29). The calculations are made beginning at project completion (event K) and working backward through the network. At events where there are two or more activities going forward, the earlier date is chosen. At event G, the latest possible day activity G-H could start is K minus the activity durations for J-K, H-J (logical restraint), and G-H, which turns out to be day 90 (130–10–0–30). The latest day activity G-I (logical restraint) could begin is K minus the activity durations for J-K, I-J, and G-I, or day 95 (130–10–25–0). Therefore, if we’re not going to impact project completion at day 130, we must complete any activity coming into event G

by the earlier of the two dates, day 90. Then activity F-G would have to start no later than day 66 to support completion of the project by day 130. Figure 6.29 tabulates the late start/finish dates from the backward pass calculation, along with the early dates.

In comparing the early and late start dates for an activity such as B-F, the difference of 10 days is considered total float. Although B-F could finish as early as day 55, delaying its completion to day 65 would not impact project completion by day 130 since activity F-G can start as late as day 66. The tables on Fig. 6.29 and 6.30 tabulate the schedule comparison and total float for each activity. Activities having zero total float must be finished within the allotted duration and are considered to be on the critical path of the network, because delays in their completion will have a direct impact on project completion by day 130 unless alternative actions are taken. Note that if the required completion of the project were day 150, the project would have 20 days of total float; however, the critical path would remain through activities A-B, B-C, C-D, D-E, E-G, G-H, and J-K. There are other paths, but they are subcritical because they have some total float at the outset of the project. These subcritical activities must still be monitored since significant slippage that occurs in excess of the current float would still impact the project completion

date. Many project managers have been unpleasantly surprised by finding out too late that a “subcritical” task has become critical owing to lack of attention.

The other method of diagramming project networks is the precedence

diagramming method (PDM), wherein activities are described within boxes

rather than on arrows as shown previously in Fig. 6.30. Activity A1 is “install equipment foundations,” with a duration of 65 days. When this activity is 50% complete, activity B1 can be started, but B1 cannot be finished until A1 is completed. (Activity B1 requires 40 days to complete.) When activity B1 is 50% complete, activity C1 can be started.

In practice, regardless of which network diagram method is used, data for CPM schedules are normally input to commercially available computer software packages for the calculation of the critical paths. These software packages allow for different duration units, different calendars, and variable holidays; they also permit the use of coding structures that serve as a focal point for other project scheduling areas of concern, such as resources and cost control.

When establishing activity durations, the project team members make some assumptions about resources based on their experience. To be sure that the project can be adequately supported, it is best to look at resources from three points of view. First, with dates constrained, when and in what quantities are resources required? Second, how can peak labor requirements be leveled out for better control of the project? And third, with a limited availability of resources, what completion dates are possible and/or reasonable? Although these studies can often be done on a manual basis for simple projects, it is not practical to do an extremely complex project without the aid of computers. Even for moderate projects, computer systems have made the process much easier. Using the developed network activities, the budgeted resources can be appropriately allocated by the project team, and anticipated resource requirements over time can be readily calculated and displayed (as shown for labor in Fig. 6.11). The use of computerized project control systems also facilitates multiproject resource assessment in cases where a limited pool of resources must be shared between a number of different projects.

Figure 6.29 CPM example showing backward-pass calculation for latest start and

With a scope in hand, with the organization necessary to manage that scope, with a plan to complete the scope, and with the necessary resources to support the plan, the project may be executed and its progress may be monitored. With large projects, diverse organizations, involved schedules, and complex monitoring, reports must be tailored to provide enough information so a user can guide and review project progress and yet avoid being overwhelmed by unneeded detail, as so frequently happens with computerized systems. The project planners must take an active role in reviewing tabulated reports and graphics with the end-users, and they must play a role in limiting and/or expanding the available data as necessary. With the coding, sorting, and selecting ability of most computerized CPM systems, it is easy to customize reports.

The simple Gantt chart is still a very suitable means of portraying project progress vs. time, and it can be readily generated by most available CPM software programs at any level of detail desired. Figure 6.8 is a detailed bar chart of an outage project in units of hours. Although bar charts are good overview aids, many supervisors prefer to have a list of tasks along with the

Figure 6.30 CPM example showing final calculation of early and late start, early and

schedule. This list can be obtained for the entire project by using direct output from the CPM software, or it may be obtained by listing tasks summed up for an individual activity within the network, which also may be obtained directly from the software.

These lower level detailed schedules, or “punchlists,” may in turn be individually computerized. In the case of material deliveries for large projects, the use of a spreadsheet or database in conjunction with a CPM model may be advisable. This would help ensure that procurement documents include all of the required equipment and also that the specified delivery dates are in concert with the construction installation schedule. Cross-referencing material and equipment to procurement documents, to construction areas, and/or to design documentation can be very helpful, even essential, during project implementation on large or fast-paced projects. This can be an immense aid to planning and managing when engineering, procurement, and construction all overlap and must be tightly coordinated with each other.

Progress reporting must also be tailored to the project and to the project team. Reporting can range from a manual table of progress by group over a 2-week period for a small project, as seen on Fig. 6.17, to a time-scaled chart of scheduled vs. target progress for each group within a large plant modernization project, as shown in Fig. 6.18. Graphical portrayals are excellent tools for quickly detecting problems. If problems are apparent, a more detailed analysis of the data may be required and more complex tabular reports may be generated, such as those from two refinery projects shown in Fig. 6.19 and

6.20. Using the coding capability of CPM software, a family of curves might be generated to depict different levels of data and different families of data for analysis. Figure 6.21 shows the progress for a total project, while Fig. 6.22

shows progress of four different aspects of the electrical contractor’s effort;

Fig. 6.23 shows indirect costs.

While many progress reports compare actual progress to planned progress, a more complete analysis is possible by analyzing costs or reviewing resource usage data. This allows a project manager to look at not just progress status but inefficiencies in the project as well, using earned value comparisons. This technique, which was discussed previously in Chapter 5, is commonly used in United States government projects under the Department of Energy’s “Cost and Schedule Control System Criteria.” It is commonly referred to as C/ SCSC. With C/SCSC, comparisons are made between:

• Budgeted cost of work performed (BCWP), or earned value for work accomplished

• Budgeted cost of work scheduled (BCWS), work scheduled to be accomplished

• Actual cost of work performed (ACWP), costs incurred on the work accomplished

By looking at these additional factors, comparisons can be made to show whether resources are being applied as planned (ACWP vs. BCWS), and

whether those resources are being used as efficiently as expected (ACWP vs. BCWP).

All reports, graphics, and available data are merely tools for the project team. Project control engineers must be an integral part of the team, and they must take an active role in reviewing the tools that are used to assess project variances and problems. They must participate in the formulation of “workarounds” with the team to bring about successful resolutions of conflicts and problems. Ultimately, they have the greatest impact upon a successful project completion.

RECOMMENDED READING

Bent, J.A. (1996). Humphreys, K.K., ed. Effective Project Management Through

Applied Cost and Schedule Control. New York: Marcel Dekker.

CII (1990). The Impact of Changes on Construction Cost and Schedule. Publication 6–10, Austin, TX: Construction Industry Institute.

Gehrig, G.B., et al. (1990). Concepts and Methods of Schedule Compression, Source

Document 55. Austin, TX: Construction Industry Institute.

Gido, J. (1985). An Introduction to Project Planning. 2nd ed. New York: Industrial Press, Inc.

Kerzner, H. (2002). Project management: a systems approach to planning. Scheduling

and Controlling. 8th ed. New York: John Wiley & Sons, Inc.

7

Cost Indexes, Escalation, and