EIS PM Controlling

8/10/2019 EIS PM Controlling

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VBB 4043 ENGINEERSIN SOCIETY:

PROJECT MANAGEMENT

LECTURE :PROJECT CONTROL AND

TERMINATION


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Recap from Previous

Lecture

Lect. 1 Main Duties of Project Manager:

POLC

Control


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Lecture outline

Control definition

Control mechanisms at various stage of

project life

Control During Construction : Time Control Control During Construction: Cost Control

Earn Value and S-curve

Resource Leveling

Control for Project Termination Control for Completion and Handing Over


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Control Definition

Measuring what is actually achieved in a projectwith regard to the OBJECTIVES (t, c, q),comparing it with a baseline (referenced/original)performance and monitoring and taking correctivemeasures should there be unacceptable deviationfrom the baseline

Or simply tracking, monitoring and steering aproject so that the objectives will be met

Q. What to control? Control the project resources

and project quality ( by other )

Q. How often is the measuring done?

Q. How is it generally done? Control cycle
http://localhost/var/www/apps/conversion/tmp/scratch_10/resource%20control.ppthttp://localhost/var/www/apps/conversion/tmp/scratch_10/controlcycle.ppthttp://localhost/var/www/apps/conversion/tmp/scratch_10/controlcycle.ppthttp://localhost/var/www/apps/conversion/tmp/scratch_10/resource%20control.ppt


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3.1 Control systems

throughout the project

Control systems / mechanisms must be

provided at each stage of the project

Defining or Initiation Stage

- Needed for understanding of the business

environment & making sure all necessary controls are

incorporated into the Project

- Mechanism e.g. : Cos Benefit Analysis; Budget ;

Project Charter (wrt cost, time and quality)

Planning and Design Stage

- To ensure that the final product will satisfy the client

and meet the specifications of the Project Charter

- Mechanism e.g. Benchmarking using models or

prototypes or mock structure


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Execution (Construction / production) stage

- To ensure all Plans are being executed and strictly

followed(Schedule Plan, Cost Plan, Quality Plan)

- Mechanism e.g. Time control (Schedule Baseline,Progress Comparison Bar Charts, Re-scheduling/Updates, etc.); Cost control (Earn Value and S-curve);Resource leveling, Quality Control Tests

Delivering stage

- To check the efficiency or quality of the productdelivered

- Mechanism e.g : Hand-over Document, Defects List,Defects Liability/ Guarantee Period, PerformanceBond, As-built Drawings

3.1 Control systems

throughout the project (cont.)


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3.2 Control During

Construction/Production

Control during this stage is most important

Two types of control

Time (Schedule) Control and

Cost Control


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3.2.1 Time or Schedule Control

Time or Schedule Control is concerned

with

Determining the current status of the project

schedule

Determining if the project schedule has changed

Influencing the factors that create schedule

changes

Managing the actual changes as they occur


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3.2.1 Time or Schedule Control (cont.)

Main Inputs Main Outputs

1. OriginalSchedule -Schedule as planned,

acts as basis for

comparison

2. Approved

schedule changes

- Information onapproved schedule

changes

3.Performance

reports

- information on time

performance such as

the actual progress;which planned dates

have been met and

which have not etc.

3.

1. Schedulecomparison bar

charts-Displays two bars for

each activity, one

shows current /actual

status, the other the

original schedule

2. Performance

measurement

measure variations in

project schedule

that may occur

eg using S-curve.

3. Project Mgmt

software-Track actual progress

dates vs planned

dates and forecast

effect of changes

1. Updated Schedule-updates to changes in

start and finish dates

2. Recommended

corrective actions

-Anything done to

bring future projectschedule in line with

the approved original

project schedule

baseline.

Tools & Techniques
http://localhost/var/www/apps/conversion/tmp/scratch_10/SIRIM%20Project%20Gantt%20Chart.ppthttp://localhost/var/www/apps/conversion/tmp/scratch_10/SIRIM%20Project%20Gantt%20Chart.ppt


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3.2.1 Time or Schedule Control:

Progress Monitoring Using

Comparison Bar Charts

Duration(Days) Amount Units 3/30 4/6 4/13 4/20 4/27 5/4 5/11 5/18 5/25 6/1 6/8 6/15 6/22 6/24 7/6 7/13 7/20 7/27 8/3

1 Move-in 5 -

2 Clear & Grub 20 SF

3 Earth moving 60 CY

4 Site Grading 45 SF

5 Subbase 45

6 Base 25

7 Paving 25

QuantityNo Acitivity

Week Ending

5/1

Reporting

date

Memorial day

holiday

Work planned

Work

completed

Assume the progress of the activity as a directlinear function of the elapsed time

Example: Road construction


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3.2.2 Cost Control

Cost Control includes

Influencing the factors that create changes to

the cost baseline Recording and monitoring cost performance to

detect and understand changes from the costbaseline

Assuring that potential cost overruns do notexceed the authorized funding periodically and

in total for the project.

Informing appropriate stakeholders of approvedchanges

Acting to bring expected cost overruns withinacceptable limits


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3.2.2 Cost Control (cont.)

Main Inputs Tools & Techniques Main Outputs

1. Cost estimatesCost estimates as

planned, act as

basis for

comparison

2. Performancereports-Provide Info on

cost performance

3. Approved

change

requests-Include

modifications to the

cost of the contract

(VO)

1. Cost change

control system

- defines proceduresfor changing cost

baseline eg JKRs.

2. Performance

measurement

analysis- Assess magnitude

of any variances that

will occur e.g. using

Earned Value .

3. Forecasting

-Predict futureconditions of project

based on current info

4. Project Mgmt

software

1. Cost estimate

(updates)

2. Performance

measurements

- Cost variance andSchedule variance

for each activity

3. Forecasted

completion cost

4. Recommended

corrective action-Anything done tobring expected future

performance of

project to match

original plan


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3.3.3 Earn Value and S-Curve

Earn value analysis compares the cost value of workdone with the value of work that should have beendone (i.e. the base-line)

Value of work done comprises of:

Indirect costs

Cost of materials delivered on sit

Cost of actual physical work on site

Earn value can also be presented in the form of S-

curvesimpler and more widely used

S-curve examines and compares the value of workdone with the actual value or progressin terms oftime (delays) or amount (over or under-achievement)


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Important Terms

Time-now is the date when progress is measured

Budget at Completion (BAC)is the original cost estimateindicating the funds required to complete work

Percentage Complete(PC) (planned)is the plannedwork progress up to time-now

Percentage Complete(PC) (actual)is the actual workprogress up to time-now

Earned Value (EV)is the budgeted cost of work actuallycompleted on that point of time (based on budgeted rates).

EV = PC(actual) x BAC eg 25% x RM 2,500,000 =RM 625,000

Planned Value (PV)is the portion of cost of work plannedto have been spent between start date and time-now

PV = PC (planned) x BAC

Actual Cost (AC) is the total actual cost incurred between

the start date and time-now


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EARNED VALUE ANALYSIS

Time-now

Cost

Variance

Overs

pend

Slippage

ScheduleVariance

Budget At Completion (BAC)

Time of completion

AC(total actual

cost)

100%

PV(planned wk

done wrt

budget)

Time

EV(actual wkdone wrt

budget)


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SCURVE

0%

100%

Valueof

work

Time

Job

Start

Completion

Time-now

Delay

Unachieved

Work

Q. Why S shape ?

Planned / scheduled

Actual /(Earned

SIRIMexample revisited
http://localhost/var/www/apps/conversion/tmp/scratch_10/SIRIM%20Project%20Gantt%20Chart.ppthttp://localhost/var/www/apps/conversion/tmp/scratch_10/SIRIM%20Project%20Gantt%20Chart.ppt


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3.4 Resource Allocation and

Leveling

Resources of a project need to be scheduled i.e. right amount of resources must be

allocated to a given task at the required time

leveled i.e. distributed accordingly at the required time

to avoid or minimize fluctuations in day-to-day use.

Resource Leveling (RL) makes use of floats ortime tolerances in the schedule to re-schedule

resources and bring back any deviation of actual

progress from schedule to within acceptable limits

RL applies to resources which are hired i.e. labour

and equipment as the need for these resourcesfluctuates greatly as some activities start (requiring

resources) while other finish (releasing resources)

RL improves efficiency and minimize project cost

(by optimizing labour usage and cost)


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Leveling (cont.)

STEPS:

Determine critical path and floats from networkor other techniques

Identify key resource and produce bar chartusing network data

Plot histogram of resource demand

Reschedule timing of activities using float toobtain a more even demand profile

Redraw the resource profile


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Leveling (cont.)

Example: Flooring Project

ACTIVITY DESCRIPTIONIPA* DURATION LABOUR

A DELIVERY OF

MATERIALS

- 5 2

B REMOVE OLD

TILES

- 7 4

C INSTALL

CERAMIC TILES

A 3 3

D INSTALL VINYLTILES

A,B 5 3

E CLEAN UP AND

INSPECT

C,D 2 2

* Immediately Preceding Activity
http://localhost/var/www/apps/conversion/tmp/scratch_10/RESOURCELEVEL.xlshttp://localhost/var/www/apps/conversion/tmp/scratch_10/RESOURCELEVEL.xls


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3.5 Control in Project

Termination

The Project Manager will continuously monitor,control and manage the project to ensure the goodprogress.

But if PM finds the performance is very

unsatisfactory and/or contractor is no longercapable of continuing the project, then PM mayrecommend to S.O. Termination of the project.Performance Bond of the contract will also beforfeited.

The procedure for issuing notice of terminationmust follow conditions of contract e.g. adequatetime given for contractor to improve performanceand adequate notice or warning letters given toterminate the contract.


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Completion and Handing Over

If then project has been successfully completed,then PM must certify this

In construction projects, completion refers toPractical Completion - a stage where the

project constructed has achieved its intendedfunction, or can be occupied or used despitesome outstanding work to be completed, orsome repair work which, if carried out, will notcause inconvenience to the user or occupier.

The control mechanism used is Certificate ofPractical Completionissued to the contractor,together with a list of outstanding works anddefects observed in project to be carried out ormade good during a Defects Liability Period


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DLP is a guarantee period during whichthe contractor has to complete anyoutstanding works or carry out repairs to

any defects in the completed facility,failing which the Performance Bond willbe forfeited.

Upon completion of the the project, a

Handing Over Document is prepared andsigned by the client.This starts thehanding over of responsibility to the clientfor the whole project.


Completion and Handing

Over (cont.)


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End of Lecture

Thank you

EIS PM Controlling

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