Project Management 3e. - Gray and Larson

Reducing Project DurationRationale for Reducing Project DurationTime Is Money: Cost-Time TradeoffsReducing the time of a critical activity usually incurs additional direct costs.Cost-time solutions focus on reducing (crashing) activities on the critical path to shorten overall duration of the project.Reasons for imposed project duration dates:Customer requirements and contract commitmentsTime-to-market pressuresIncentive contracts (bonuses for early completion)Unforeseen delaysOverhead and goodwill costsPressure to move resources to other projectsOptions for Accelerating Project CompletionWhen resources are not constrainedAdding ResourcesOutsourcing Project WorkScheduling OvertimeEstablishing a Core Project TeamDo It TwiceFast and Correctly

Options for Accelerating Project CompletionWhen resources are constrainedFast-TrackingCritical-Chain Project Management (CCPM)Reducing Project ScopeCompromise Quality

Critical-Chain Project ManagementIn practice, project managers manage slacksAdd slack at end of projectManage available slack within schedule by Using early start schedule Prohibit use of slackCarefully monitor % completeHelps to create & save slack and cover delay problemsCritical chainRecognizes that networks may be constrained by both resource & technical dependenciesBoth create task dependencies & may shift critical path

Critical-Chain Project ManagementCritical chainLongest chain of dependencies that exist on the projectConcept used to develop strategies for accelerating the completion of projectsChain vs. pathTo stress on resource dependencies rather than just technical dependencies

Time estimatesNatural tendency for people to add safety time to their estimates Has 80-90% chance of being completed on or before time rather than the 50/50 chanceMedian time is thus overestimated 30-40%Project managers add safety at endWhy, if there is a tendency to overestimate activity durations, and add safety times to the end of a project, do so many project come in behind schedule?Reasons for delaysParkinsons lawSelf protectionDropped batonExcessive multitaskingResource bottlenecksStudent syndrome (procrastination)Critical chain in actionInsist on people using true 50/50 activity time estimatesCorporate culture that values true estimates rather than blaming people for not meeting deadlinesReduce/ discourage reasons for delays Improve productivityRecommends inserting time buffers into schedule Where potential problems likely to occurTo act as shock absorbers to protect completion date against tasks taking longer than 50/50 estimateTypes of buffersProject bufferAdded to expected project durationApproximately 50% of aggregate safetyFeeder buffersAdd buffers to the network where noncritical paths merge with critical chainProtects critical chain from being delayedTypes of buffersResource buffersAdd time buffers where scare resources are needed for an activityTwo forms:Time buffer added to critical resource to ensure that the resource is on call & available when neededPreserves the relay raceTime buffer added to activities preceding the work of a scarce resourceProtects against resource bottlenecks by increasing the likelihood that the preceding activity will be completed when the resource is availableCritical chain vs. traditional schedulingTask estimates represent approximations of 50/50 ruleNot all activities on critical chain are technically linkedProject time buffers added at the end of scheduleFeeder buffers inserted at each point where a noncritical activity merges with critical chainBuffers vs. slackSlackBuffer Spare time inherent in schedule of noncritical activities Determined by difference between LS & ES of a specific activityUsed to adjust for resource requirements

Dedicated time blocks reserved to cover most likely contingencies and monitored closely so that if not needed, subsequent activities can proceed on scheduleUsed to insulate project against delay along CCCCPM & Splitting tasksBuffers do not address effects of task splittingCCPM recommendations to reduce impact of splittingReduce number of projects so people are not assigned to as many projects concurrentlyControl start dates of projects to accommodate resource shortagesContract (lock in) for resources before project beginsMonitoring project performanceUse buffersDivide into 3 zonesOk (Region III)Watch & Plan (Region II)Act (Region I)CCPM method todayApplied in many organizationsHarris semiconductors, Israeli aircraft industry, US Air Force & Navy, Boeing, LucentCriticsDoes not address problems of ill-defined & unstable scopeHuman behavior assumptionsLack of systematic evidence raises questions about general applicabilityExplanation of Project CostsProject Indirect CostsCosts that cannot be associated with any particular work package or project activity.Supervision, administration, consultants, and interestCosts that vary (increase) with time.Reducing project time directly reduces indirect costs.Direct CostsNormal costs that can be assigned directly to a specific work package or project activity.Labor, materials, equipment, and subcontractorsCrashing activities increases direct costs.Reducing Project Duration to Reduce Project CostCompute total costs for specific durations and compare to benefits of reducing project time.Search critical activities for lowest direct-cost activities to shorten project duration.Identifying direct costs to reduce project timeGather information about direct and indirect costs of specific project durations. Project CostDuration GraphFIGURE 9.1

Constructing a Project CostDuration Graph Find total direct costs for selected project durations.Find total indirect costs for selected project durations.Sum direct and indirect costs for these selected project durations.Compare additional cost alternatives for benefits.Constructing a Project CostDuration Graph Determining Activities to ShortenShorten the activities with the smallest increase in cost per unit of time.Assumptions:The cost relationship is linear.Normal time assumes low-cost, efficient methods to complete the activity.Crash time represents a limitthe greatest time reduction possible under realistic conditions.Slope represents a constant cost per unit of time.All accelerations must occur within the normal and crash times.

Activity GraphFIGURE 9.2CostDuration Trade-off ExampleFIGURE 9.3

CostDuration Trade-off Example (contd)FIGURE 9.3 (contd)

CostDuration Trade-off Example (contd)FIGURE 9.4 (contd)

CostDuration Trade-off Example (contd)

FIGURE 9.4 (contd)CostDuration Trade-off Example (contd)

FIGURE 9.4 (contd)Summary Costs by DurationFIGURE 9.5

Project CostDuration GraphFIGURE 9.6

Practical ConsiderationsUsing the Project CostDuration GraphCrash TimesLinearity AssumptionChoice of Activities to Crash RevisitedTime Reduction Decisions and SensitivityWhat if Cost, Not Time is the Issue?Commonly Used Options for Cutting CostsReduce project scopeHave owner take on more responsibilityOutsourcing project activities or even the entire projectBrainstorming cost savings optionsKey TermsCrash pointCrash timeDirect costsFast-trackingIndirect costsOutsourcingPhase project deliveryProject costduration graph