MGT 450 Ch 9 Reducing Project Duration

fast tracking a project

Doing critical path activities in parallel that were originally planned in series Moves activities in parallel to become at least partially concurrent Disadvantage -Often results in rework -Usually increases risk -Requires more attention to communication

time reduction decision

Go for optimum cost-time? - it depends -Risk must be considered -Logic of the cost-time procedure suggests managers should reduce the project duration to the lowest total cost point and duration -How far to reduce the project time from normal toward optimum depends on sensitivity of the project network

owner take more responsibility

Identify tasks customers can do themselves Homeowners frequently use this to reduce costs on home improvement projects Costs are lowered but original scope is the same

crash time

Is the SHORTEST estimated length of time in which the activity can be completed. The greatest time reduction possible under realistic conditions

slope (of cost duration graph)

Knowing the slope of activities allows managers to compare which critical activities to shorten The less steep the slope of an activity, the less it costs to shorten one time period A steeper slope means it will cost more to shorten one time unit

crash point

Maximum time an activity can be compressed

reduce project scope option (for accelerating completion)

Most common response to meeting unattainable deadlines Reduction in functionality of the project Can lead to big savings in time and money, it may come at a cost of reducing the value Key to reducing scope without reducing value is to reassess the true specifications of the project

determining activities to shorten

Most difficult task in constructing a cost duration graph is finding the total direct costs for specific project durations over a relevant range Central task is to decide which activities to shorten how far to carry the shortening process -Managers need to look for critical activities that can be shortened with the smallest increase in cost per unit of time Rationale for selecting critical activities depends on identifying the activity's normal and crash times and corresponding costs

sensitivity

Network is sensitive if it has several critical or near critical paths Network is insensitive is it has a dominant critical path

constructing (project cost duration graph)

Three major steps are required: 1.Find total direct costs for selected project 2.Find total indirect costs for selected project durations 3.Sum direct and indirect costs for these selected durations

crashing

Time / cost trade off Objective: determine the shortest project completion time based on crashing the activities that result in the smallest increase in total project cost Adding more resources to critical path while maintaining scope -Move resources from noncritical task -Add more resources -People -Equipment -Work overtime Disadvantage: Additional cost

Using (the Project Cost-Duration Graph)

Valuable in comparing any proposed alternative or change with the optimum cost and time Creation of such a graph keeps the importance of indirect costs in the forefront of decision making Calculating in the pre-project planning phase without an imposed duration is the first choice because normal time is more meaningful Creating the graph in the project planning phase with an imposed duration is less desirable because normal time is made to fit the imposed date and is probably not low cost

outsource project activities (or even entire project)

When estimates exceed budget, makes sense to not only re-examine the scope but also search for cheaper ways to complete the project Instead of relying on internal resources, it would be more effective to outsource segments or even entire projects, opening up work to external price competition

brooks law

adding more people to a late project makes the project later

unforeseen delays (rational for reducing duration)

adverse weather, design flaws, and equipment breakdown cases substantial delays midway in the project getting back on schedule requires compressing time on some of the remaining critical activities

establish a core project team

assigning professionals full time avoids hidden costs of multitasking devote undivided attention to a specific project singular focus creates a shared goral that can bind a diverse set of professionals into a highly cohesive team capable of accelerating completion

incentive contracts (rationale for reducing duration)

bonuses for early completion reduction of time rewarding both project contractor and owner

project constraints

cost constraint time constraint scope constraint quality constraint

pressure to reassign resources (rationale for reducing duration)

cost of compressing the project can be compared with the opportunity costs of not releasing key equipment or people

use critical chain management

designed to accelerate project completion Difficult to apply CCPM midstream in a project Requires considerable training and a shift in habits and perspectives

schedule overtime

easiest way to add more labor avoid additional costs of coordination and communication fewer distractions outside normal working hours disadvantages: -hourly worker usually paid time and a half, double for weekends and holidays -sustained by salaried employees may incur intangible costs such as divorce, burnout, and turnover

time to market (rationale for reducing duration)

intense global competition and rapid technological advances have made speed a competitive advantage companies have to spot new opportunities, launch project teams, and bring new products or services to marketplace in a flash survival depends on rapid innovation and adaptability

add resources

most common to assign additional staff and equipment to activities doubling workforce will not necessarily reduce completion time by half additional workers increase communications requirements additional delay of training and catch up

overhead costs (rationale for reducing duration)

sometimes high overhead costs are recognized before the project begins prudent to examine the direct costs of shortening the critical path vs the overhead cost savings usually there are opportunities to shorten a few critical activities at less than the daily overhead rate

imposed deadlines (and contract commitments -rationale for reducing duration)

statements become project objectives without any consideration of the problems or costs of meeting such a date Duration time is set while project is in its concept phase before or without any detailed scheduling of all the activities in the project Leads to a higher cost project than one that is planned using low cost and detailed planning Quality is sometimes compromised

outsource project work

subcontract an activity -subcontractor may have access to superior technology to expertise that will accelerate the completion

crash

term for shortening the duration of an activity or a project beyond when it normally can be done

rationale (for reducing project duration)

time to market pressures unforeseen delays incentive contracts imposed deadlines and contract commitments overhead costs pressure to reassign resources to other projects

do it twice - fast and correctly

when in a hurry, building a "quick and dirty" short term solution then go back and do it the right way

improve project team efficiency

Team may be able to improve productivity by implementing more efficient ways to do their work Can be achieved by improving the planning and organization of the project or eliminating barriers to productivity such as excessive bureaucratic interference and red tape

brainstorm

Team members can offer tangible ways for reducing project costs Just ask if there is a cheaper, better way

crash cost

The estimated cost to complete the activity in the crash time

assumptions underlying graph

1. Cost-time relationship is linear 2. Normal time assumes low-cost efficient methods to complete the activity 3. Crash time represents a limit- the greatest time reduction possible under realistic conditions 4. Slope represent cost per unit of time 5. All accelerations must occur within the normal and crash times

steps to crash a project

1. Determine crash cost per time unit and maximum crash time for each task 2. Draw the network 3. Determine all paths through the network 4. Determine the lengths of all paths 5. Try to reduce the length of the CP by 1 -Find activity on CP with lowest crash cost -Crash the activity by 1 time unit, if possible 6. Reduce the length of all paths with this activity 7. Are there activities that can still be crashed? If yes go to step 3

resources NOT constrained (options for accelerating project completion)

1. add resources 2. outsource project work 3. schedule overtime 4. establish a core project team 5. do it twice - fast and correctly

Resources ARE constrained (options for accelerating project completion)

1. improve project team efficiency 2. fast tracking 3. use critical chain management 4. reduce project scope 5. compromise quality

project cost duration graph

A graph that plots project cost against time; it includes direct, indirect, and total cost for a project over a relevant range of time. used to compare additional cost alternatives for benefits

direct costs

Are costs that assigned directly to a work package and activity Examples: labor, materials, equipment, sometimes subcontractors Represent normal costs (low-cost, efficient methods for a normal time) Because direct costs are assumed to be developed for normal methods and time, and reduction in activity time should add to the costs of the activity Sum of the costs of all the work packages or activities represents the total direct costs for the project

linearity assumption

Assumes the cost for crashing each day is constant Reasonable but quick comparisons can be made using the linear assumption

indirect costs

Continue for the life of the project Are costs that cannot be associated with any particular work package or activity if indirect costs are a significant percentage of the total project costs, reductions in project time can represent vert real savings Examples: overhead costs such as supervision, administration, consultants, and interest

factors beyond cost (to be considered w/ choice of activities to crash)

Cost-time crashing method relies on choosing the cheapest method for reducing duration factors: First, the inherent risks involved in crashing particular activities Some are riskier to crash than others Second, the timing of activities needs to be considered -Crashing an early activity may be prudent if there is concern that subsequent activities are likely to be delayed, and absorb the time gained Third, crashing frequently results in overallocation of resources -Resources required to accelerate a cheaper activity may suddenly not be available -Resource availability, not cost, may dictate which activities are crashed Fourth, the impact of crashing would have on the morale and motivation of the project team needs to be assesses

cost is the issue (not time)

Especially true for fixed bid project where profit margin is derived from the difference between the bid and actual cost of the project Each dollar saved is a dollar in your pocket Commonly used options for cutting costs are: -reduce project scope -have owner take more responsibility -outsource project activities (or even entire project) -brainstorm

normal cost

Estimated cost to complete the project in normal time

normal time

Estimated length of time required to perform the activity under normal conditions (low-cost, efficient methods), according to the project plan

compromise quality

Rarely acceptable or used May reduce time of an activity on the critical path

fast tracking

Rearrange the logic of the project network so that critical activities are done in parallel (concurrently) rather than sequentially Most common way for restructuring activities is to change a finish to start relationship to a start to start relationship Has risk - Late design changes can produce wasted effort & rework

reduce project scope (if cost is the issue not time, cut cost)

Scaling back scope can gain time Delivering less than what was originally planned produces savings Time is not the issue, you do not need to focus on critical activities