PMP_How to make a WBS
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Transcript of PMP_How to make a WBS
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Work Breakdown Structure
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The purpose of the work breakdown structure (WBS) is to sub-divide the scope of work into
manageable work packages which can be estimated, planned and assigned to a responsible
person or department for completion.
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The WBS was originally developed in the 1960's as part of the drive towards improved project
definition and it soon became the backbone of the planning and control system.
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The WBS is an excellent tool for quantifying the scope of work as a list of work packages and is an
essential tool for ensuring the estimate or quotation includes the complete scope of work.
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The WBS can also be considered as a hierarchical form of mind map which helps to break
complexity down into simple manageable components.
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Turner defines the WBS as: "…….a cascade of deliverables, in which the overall product or
objective of the project is broken into sub-products, assemblages and components. "
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The first step towards mastering the WBS technique is to fully understand the structured methodology for
sub-dividing the scope of work. The main components of the WBS are:
• Structure• Methods of sub-division• Numbering or coding system• Level of detail• Number of WBS levels• Roll-up• Integrating the WBS/OBS to assign responsibility.
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The WBS Structure
There are two methods of presenting the WBS:
1. Graphically in boxes2. Text indents.
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The WBS is a hierarchical structure which is best presented by a graphical sub-division of the scope of work in boxes. This logical sub-division of all
the work elements is easy to understand and assimilate, thus helping the project participants to quantify their responsibility and gain their
commitment and support.
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House Project WBS Sub-Divided into Boxes
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Although boxes are an excellent means of presentation it is a cumbersome document to develop
and edit on the computer. Boxes lend themselves more to graphic software than planning software and the printout for a large project would look best from a large flat bed printer rather than sticking A4 or A3
sheets together.
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The other method of presentation shows the scope of work as text indents, where each level is tabbed to represent its level in the hierarchy. If you are using
planning software you will have to setup this structure anyway as you input the project data.
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WBS Horizontal Presentation (a simple rotation)
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• 1.0.0 House Project1.1.0 Civil
1. 1. I Foundations1. 1. 2 Walls and roof
1.2.0 Plumbing1.2.1 Piping1.2.2 Sewerage
1.3.0 Electrical1.3.1 Wiring1.3.2 Appliances
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Method of Sub-Division
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Designing the WBS requires a delicate balance to address the different needs of the various disciplines and project locations. There is not necessarily a right or wrong structure because what may be an excellent fit for one discipline may be an awkward burden for
another.
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As you will see there are many methods of sub-dividing the scope of work, your imagination is the only limiting factor. The best method is the one that works for you and you may use more than one
method as the project progresses.
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Except for the project life-cycle al I the other breakdown structures (in the text) are simply a sub-division of the scope of work, there are no
logical relationships between the work packages - that will come later in the CPM.
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Product Breakdown Structure (PBS): This represents a hierarchical view of the physical assemblies,
sub-assemblies, components and parts needed to manufacture the product. Consider the sub-division
of an airplane:
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Product Breakdown Structure (Airplane)
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Organization Breakdown Structure (OBS): This represents a hierarchy of the company managing the project. By linking the OBS with the WBS or PBS this will identify who is responsible for performing
the work packages.
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The OBS could contain any of the following sub-divisions:
• Department or discipline• Contractor or supplier• Project team or person.
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Organization Breakdown Structure
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Cost Breakdown Structure (CBS): This represents the financial breakdown of the project into budgets
per work package.
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Cost Breakdown Structure (by cost center andsupplier)
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Contract Breakdown Structure also (CBS): This represents the relationships between the client with
the contractor. At the lowest level this could link the purchase orders with the account invoices.
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Contract Breakdown Structure (by sub-contractor and supplier)
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Location Breakdown Structure: This represents the physical location of the work and would be
appropriate for a project which has pockets of work dotted all over the place. Consider a power line project where there may be a number of similar
substations.
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Location Breakdown Structure (power line project)
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Transport Breakdown Structure: Projects which are characterized by large loads may find that transport and cranage limitations determine their breakdown
structure.
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Transport Breakdown Structure (with largest units that can be transported by road)
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System Breakdown Structure: This represents a systems breakdown which may cut across other breakdown structures, but would be useful when
commissioning the product. Consider the following house building project.
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System Breakdown Structure (House project)
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Project Life-Cycle Structure: This represents a logical sub-division of the sequence of work into
project phases. This is discussed in the Project Life-Cycle chapter.
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Project Life-Cycle Structure
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Each element in the WBS needs to be identified by a short description. Although the length of the
description may be restricted by the size of the box, the meaning should be clear. As these examples have
shown there are many ways of sub-dividing a project, with some methods being more appropriate than others. The best results are generally gained by
using an iterative and heuristic approach which considers a range of sub-divisions until an
appropriate structure is derived.
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WBS Templates
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In practice companies that use the WBS, set up a standard WBS proforma or template for their
projects. Instead of starting each project with a blank sheet of paper, consider using a WBS from a
previous project as a template.
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A standard WBS ensures consistency and completeness as it becomes a planning checklist with
all the components that your particular type of project would contain. Having a structured check list
also reduces the risk of omitting the obvious.
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Even if the complete WBS cannot be used, there may be portions which are similar and can be copied across. Using proven structures will greatly speed up
the planning process and helps to structure your thinking.
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The next Figure outlines a WBS where the first level is sub-divided by location, the second level by
discipline and the third level by expense. This format could be used as a standard WBS for the company.
The only changes per project would be to the description rather than the structure. Note: FOB =
free on board a ship, train or road transport.
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WBS Standard Format or Template (which can be used on similar types of projects)
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How Many WBS Levels?
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With each level of the WBS the scope of work is sub-divided into more work packages with a
corresponding increase in the level of detail. For practical purposes three or four levels should be
sufficient to achieve the desired level of planning and control - any more than that and like a Pyramid
the base of the WBS would start to become unwieldy.
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The number of levels is influenced by:
• level of detail• level of risk• level of control• estimate accuracy• work package value• work package man-hours.
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If more than three or four levels are required this can be addressed by using sub-projects, where the lowest
level work package of one project constitutes the highest level of another project.
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This situation is common on projects where a main contractor uses many subcontractors. In this way, the
WBS can effectively increase the number of breakdown levels, with each project manager
focusing on their own scope of work and responsibility.
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WBS Breakdown by Sub-Projects
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Project Control: The appropriate level of control relates to the complexity and risks embedded in the
project. Project control is the ability to steer the project to a successful completion. The earned value
technique may suggest an appropriate $ value, duration or work hours for the work packages.
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WBS (sub-divided by level of risk and uncertainty)
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Risk and Uncertainty: The WBS structure should reflect the level of risk and uncertainty. Where the
level of risk is high the WBS should be sub-divided further to generate more information and thus reduce
the risk.
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Estimating
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If your company wins contracts by competitive bidding it is important to have a system for
generating accurate quotations quickly. The WBS offers a top down sub-division of the work, while
estimating at the work package level, offers a bottom up roll-up of project costs.
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The Numbering System
• One of the beneficial features of the WBS is its ability to uniquely identify by a number or code all the elements of work in a numerical and logical manner. With a unique number, all work packages can be linked to the project's accounts, the corporate accounts and the client's accounts.
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The numbering system can be alphabetic, numeric, or alphanumeric (letters and numbers), in most of the
examples here the numbering systems will be numeric. Consider the following example:
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• Level 0: The first number [ 1.0.0] represents the first work element on the level zero. It is normal practice to have only one item at this level i.e. the total project. The project may have its own unique number, see figures 14 and 15 below.
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• Level 1: At the first level of sub-division the first work element will be numbered [1.1.0] and the second work element numbered [1.2.0]. Thus the other work elements will be numbered sequentially; [1.3.0], [1.4.0], [1.5.0] etc.
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• Level 2: These numbers are then further sub-divided at the second level from the first element at the second level into [1.1.1 ], [ 1.1.2], [ 1.1.3], [1.1.4] etc.
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WBS Sub-Division by Numbering System
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WBS Numbering System (this example shows how the numbering system can lead to very long work
package numbers)
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Project Number: Most projects are given a project number and a description to distinguish them from all the other projects the company may be working
on.
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The project number may come from a number of sources:
• estimate number• quotation number• contract number• invoice number• purchase order number• client's order number
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Many projects also have a name (marine projects would use the ship's name), or a humorous nickname
to help association. With increased computer graphics a project icon is also a consideration.
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WBS Roll-up
• The roll-up facility is normally used to roll-up project costs for budget planning and control purposes. By suitably structuring the WBS, budgets can be established per department, per location or per sub-contractor.
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Roll-Up House Project
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The WBS roll-up technique lends itself to anything that flows in the project, i.e. man-hours, cubic meters
of concrete thrown, tones of steel erected, bricks laid, drawings completed, square meters of paint etc.
Any of these could be planned, tracked and controlled using the WBS.
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Consider a Drawing Office project where it would be more appropriate to plan and track man-hours rather than costs. This is because the chief draughtsman can
estimate the time required to complete a drawing from experience, but may not have the data
necessary to estimate the costs involved.
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Drawing Office Project (where Mh = man-hours)
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Responsibility
• Assigning responsibility for performing project work is one of the key project management functions. This can be achieved through the interface between the WBS and the organization breakdown structure (OBS). The WBS / OBS links clearly indicates the work packages and the person responsible for carrying out the work, however it is a rather cumbersome presentation as the level of detail increases. For this reason it is best suited to high level links.
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WBS / OBS Links
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The WBS/OBS links can also be shown on the schedule bar chart, by either using a responsibility
field (also called a responsibility matrix) or printing the person's name after the activity.
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Foreign Currency
• Some projects are characterized by international procurement from a number of countries. As these exchange rates are prone to fluctuate, then your risk management analysis will need to determine the extent of your exposure to foreign currency. This can be achieve by structuring the WBS to roll-up a number of foreign currencies and report the total requirement for each.
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WBS by Foreign Currency
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The WBS does not indicate when the foreign currency is required, for this you will have to
develop the cash-flow statement through the critical path method (CPM) which is the topic of the
following chapter.
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Key Points:
• The WBS sub-divides the project into manageable work packages.
• On fixed price contracts the WBS helps to ensure the quotation includes the full scope or work.
• The WBS numbering systems uniquely identifies all the work packages.