1.040/1.401/ESD.018
Project Management, Spring 2007
Lecture 15
Project Control
Samuel Labi and Fred Moavenzadeh
Department of Civil and Environmental Engineering
Massachusetts Institute of Technology
Project Control
Recall: The 5 Phases of Project Management
FEASIBILITY
Finance
Evaluation
DESIGN,
PLANNING
Organization
Estimation
Planning
CLOSEOUT
DEVELOPMENT CLOSEOUT
Monitoring & Control
Changes & Claims
Quality & Reviews
Actual Start of Project
OPERATIONS
Project Control
Monitoring & Control: A Feedback Process
Detect
deviations
Monitoring
Control
1. Measurement
2. Performance Analysis)
1. Actions
2. Revised Plans, Cash Flows, Schedules, etc.
Correct
Deviations
Project Control
Project Control: The Big Picture …
Given
Project is
Off-track
Project Control
Project Control: The Big Picture …
Given
Project is
Off-track
Monitoring indicates that:
- Project is behind time-schedule, and/or
- Project has exceeded budget, and/or
- Quality of materials or finished work is below standard, and/or
- Productivity is lower than as planned, etc.
Project Control
Project Control: The Big Picture …
Given
Project is
Off-track
Resources for
PC (the 4-M’s)
Project Control
Project Control: The Big Picture …
Given
Resources for
PC (the 4-M’s)
Project is
Off-track
Resources available to the Project Manager for Project Control:
- Money
- Manpower (labor)
- Materials
- Machinery (Equipment)
Project Control
Project Control: The Big Picture …
Given
Project is
Off-track
Resources for
PC (the 4-M’s)
Mechanism and
Elements of PC
Adjust the resources
Adjust the project
characteristics: size,
scope, etc
Project Control
Project Control: The Big Picture …
Given
Resources for
PC (the 4-M’s)
Project is
Off-track
Mechanism and
Elements of PC
Adjust the resources
resources
project
More labor? Better labor?
Better supervision?
More materials? Better materials?
More equipment? Better equipment?
More money?
Reduce project size? Reduce project scope?
Terminate project?
Adjust the project
characteristics: size,
scope, etc
Project Control
Project Control: The Big Picture …
Given
Project is
Off-track
Resources for
PC (the 4-M’s)
Mechanism and
Elements of PC
Adjust the resources
Adjust the project
characteristics: size,
scope, etc
Was the Project Control successful? How can we tell?
output
Project
brought back
on-track
Project Control
Project Control: The Big Picture …
Given
Project is
Off-track
Resources for
PC (the 4-M’s)
Elements and
Mechanism of PC
Adjust the resources
Adjust the project
characteristics: size,
scope, etc
output
Project
brought back
on-track
Project Control
Outline of this Lecture:
1.
How can we tell when PC is needed?
2.
What resources are available for PC?
3.
What are the elements of PC?
4.
What is the mechanism of PC?
5.
Some important issues in Project Control
Part 1
How can we tell
when Project Control is
needed?
Is Project Control is needed now?
How can we tell?
General Clues
Performance
and Quality
Cost
Time
Specific Clues
“Primitive”
Indicators
Other
Indicators
How can we tell when Project Control is needed?
GENERAL CLUES (Meredith and Mantel, 2006)

Performance
- Unexpected technical problems arise
- Insufficient resources are unavailable when needed
- Quality or reliability problems occur
- Owner/Client requires changes in technical specifications
- Inter-functional complications and conflicts arise
- Market changes that increase/decrease the project’s value
How can we tell when Project Control is needed?
GENERAL CLUES (Meredith and Mantel, 2006)

Cost
- Technical difficulties that require more resources
- Scope of work increases
- Bid amount (accepted for the contract award) is too low
- Reporting of the monitoring results are poor/late
- Project budgeting for contractor cash flows not done right
- Changes in market prices of the inputs
How can we tell when Project Control is needed?
GENERAL CLUES (Meredith and Mantel, 2006)

Time
- Technical difficulties require more time to solve
- Scope of work increases
- Unexpected utilities needing relocation
- Task sequencing not done right
- Required material, labor/equipment unavailable when
needed
- Key preceding tasks were not completed on time.
1. How can we tell when PC is needed?
SPECIFIC CLUES

“Primitive” indicators:
– More resources or less
resources haven been used
than planned
– Activities are taking long
than planned
– Cost of activity (or of
project to date) is higher
than expected
planned
actual
Equipment-hours
planned
Total Man-hours
actual
planned
actual
Amt of concrete used (tons)
0
500
1000 1500 2000
Amount input to date
1. How can we tell when PC is needed?
SPECIFIC CLUES

“Primitive” indicators:
– More resources or less resources
haven been used than planned
– Activities are taking long than
planned
– Cost of activity (or of project to
date) is higher than expected
planned
actual
Equipment-hours
planned
actual
Total Man-hours
planned
actual
Amt of concrete used (tons)
0
500
1000 1500 2000
Amount input to date
1. How can we tell when PC is needed?
SPECIFIC CLUES

JAN
“Primitive” indicators:
– More resources or less resources
haven been used than planned
FEB
MAR
planned
Activity 1
APR
MAY
actual
Activity 2
– Activities are taking long than
planned
Activity 3
NOW
– Cost of activity (or of project to
date) is higher than expected
Legend
planned
actual
JUN
1. How can we tell when PC is needed?
SPECIFIC CLUES

“Primitive” indicators:
– More resources or less resources
haven been used than planned
– Activities are taking long than
planned
– Cost of activity (or of project to
date) is higher than expected
Program
(schedule)
Progress
(actual)
$
70%
50%
Program
(schedule)
Progress
(actual)
now
time
1. How can we tell when PC is needed?
SPECIFIC CLUES
Why are they “primitive”?
- May be biased.
- Do not consider that progress may be
overestimated or underestimated due to:
-
execution of unscheduled work done, or
execution of more work of low value and less work of high
value
1. How can we tell when PC is needed?
SPECIFIC CLUES
Used for plotting the
Program S-curve
Work
Schedule
(WS)
Work
Performed
(WP)
Budgeted Cost (BC)
BCWS
BCWP
Actual Cost (AC)
ACWS
ACWP
Used for plotting
the EVA S-curve
Used for plotting the
Progress S-curve
1. How can we tell when PC is needed?
SPECIFIC CLUES
$max
TIME VARIANCE
BCWS
ACWPt
BCWSt
BCWPt
RESOURCE FLOW VARIANCE
COST VARIANCE
SCHEDULE VARIANCE
ACWP
BCWP
t-p
t
now
tmax
Time
1. How can we tell when PC is needed?

So we know Project Control is needed (at time t)
particularly when:
- RVt is –ve,
- RIt < 1
- CVt is –ve
- CIt <1
- SVt is –ve
- SIt is < 1
- TVt is –ve
- TIt is < 1
Part 2
Resources
for
Project Control
2. Resources for Project Control

Money

Machinery (Equipment)

Materials and Supplies

Manpower (Labor and Supervision)
Money as a PC Resource


Not a direct resource
Rather, used to influence the amounts
or quality of the other resources
Using Equipment for PC

Often used to augment labor in order to
speed up project

Can be expensive

May involve renting or purchasing
Materials and Supplies as a PC Resource

Increase in quality or quantity may be
necessary to enhance project control

Improved inventory systems for materials
Manpower as a PC Resource

Project problems (time delays, excess costs,
poor performance, etc.) are partly due to the
human element (action or inaction)

In using Manpower as a tool for project
control, PM encounters human emotions
(anger, fear, frustration, etc.)
Part 3
Elements
of
Project Control
Elements of Project Control
Resources-related
Project-related
3. Elements of Project Control
3A. Resource-related
Re-allocate resources

Manpower-related control

Machinery-related control

Money-related control

Material-related control
Elements of Project Control
3A. Resource-related
Re-allocate resources

Manpower
Also referred to as ”Human Resource Control”
- Lay-off/fire any under-performing staff
Machinery
- Hire staff with needed skills
- Assign staff with specific skills to specific
activities
Money
Issues:
Materials
-PM may be seen as a “stern disciplinarian”
- PM must avoid heavy handed actions,
- Fix problems without blaming people
Elements of Project Control
3A. Resource-related
Re-allocate resources

Manpower
Also referred to as ”Physical Asset Control”
Machinery
- Re-assign specific equipment to specific activities
Money
Materials
- Decommission any under-performing equipment
- Bring in equipment with appropriate capabilities
Elements of Project Control
3A. Resource-related
Re-allocate resources

Manpower
Also referred to as ”Physical Asset Control”
Machinery
- Re-assign specific equipment to specific activities
Money
Materials
- Decommission any under-performing equipment
- Bring in equipment with appropriate capabilities
Issues:
- Equipment decisions may involve some economic
analysis
- Equipment-based control easier than manpowerbased control
- Some trade-off may exist between manpower and
equipment utilization.
Elements of Project Control
3A. Resource-related
Re-allocate resources
Manpower
Machinery

Money
Also referred to as ”Financial Resource Control”
- How much money should be spent?
- How should it be spent?
- PM assisted by:
Materials
- Project accountant
- Project Finance Manager
Elements of Project Control
3A. Resource-related
Re-allocate resources
Manpower
Machinery
Money

Materials
- Discontinue use of sub-standard material
- Seek new sources of superior material
Elements of Project Control
3B. Project-related

Options:
- Reduce project size?
- Reduce project scope?
- Terminate project?
Part 4
Mechanisms
of
Project Control
Mechanisms of Project Control
Types of Mechanisms:
- Cybernetic
- Go/No-go
- Post-control
Types of Control Mechanisms
Cybernetic
- “Cyber” means “Steer” or helmsman
(Greek language)
- May be First-, Second-, or Third-order
Cybernetic control mechanisms
Monitoring mechanism (e.g. sensor)
Inputs
Process
Effector
and
Decisionmaker
Comparator
Standards
Outputs
Mechanism:
- System output monitored by
sensor
- Sensor measurements
transmitted to Comparator
- Measurements compared
with predetermined standards
-- Deviation from standard
sent to decision-maker
-If deviation from standard is
too large, signal sent to
Effector
Cybernetic control mechanisms
Monitoring mechanism (e.g. sensor)
Inputs
Process
Effector
and
Decisionmaker
Outputs
Comparator
Standards
This is a First-order cybernetic control
system. (Standards are fixed)
Example: Thermostat that keeps room
temperature to 70F all year round.
Mechanism:
- System output monitored by
sensor
- Sensor measurements
transmitted to Comparator
- Measurements compared
with predetermined standards
-- Deviation from standard
sent to decision-maker
-If deviation from standard is
too large, signal sent to
Effector
Cybernetic control mechanisms
Monitoring mechanism (e.g. sensor)
Inputs
Process
Effector
and
Decisionmaker
Outputs
Comparator
Standards
Mechanism:
- Same as described for Firstorder Cybernetic systems, but:
- Standards are not fixed, but
the manner they change is
fixed.
Memory Pre-programmed Responses
This is a Second-order cybernetic control system (standards vary according to a fixed set of rules)
Examples: Thermostat that keeps room temperature to 70F in winter and 65F in summer,
Robot installations, Automated inventory systems, Automated record keeping systems
Cybernetic control mechanisms
Monitoring mechanism (e.g. sensor)
Inputs
Process
Effector
and
Decisionmaker
Outputs
Comparator
Standards
Mechanism:
- Same as described for Firstorder Cybernetic systems, but:
- Standards are not fixed but
are variable. Also, the manner
they change is variable because
there is a consciousness
(human element) involved.
Consciousness Memory, Selection
This is a Third-order cybernetic control system (standards vary according to a variable set of
rules)
Examples: Most Project management systems.
Cybernetic control in Project Management
1.
PM must clearly define “outputs” in terms of relevant
project characteristics
2.
PM must establish standards for each characteristic
3.
Monitoring mechanisms (sensors) must be established to
measure the characteristics at regular intervals
4.
For each characteristic, the trigger point or maximum
deviation (difference between “attained level” and
“standard level”) should be established.
5.
If triggered, appropriate action should be taken to
minimize the deviation between Attained Level and
Standard Level of performance.
“Go/No-go” Mechanisms of Project Control

Testing to see if some specific precondition has been
achieved

Yes/No (discrete)

Control in most PM fall into this category (Cooper,
1994; Meredith and Mantel, 2006)

Example: Was Activity X completed within 6 months?

Did Activity Y cost exceed its budget of $1.5 million?

Some engineering judgment is necessary in exercising
these types of controls.
Post-Control Types of Project Control


Also called: Post-performance control, Post-performance
review
Is done after the activity or project is over

Like a post-mortem or report card

Is it “Locking the barn door after the horse has
escaped”?

Or is it “We need to learn from the past to avoid future
mistakes”?

Generates lessons from current projects so that future
projects can be controlled better.
Desired characteristics of a project control mechanism

Flexible – PC should be able to react to changes in system
performance

Cost-effective – Value of PC should exceed cost of PC

Useful – Must really satisfy the needs of project, not the
whims of the PM

Timely – Be able to react quickly before the problem
overwhelms the project

Simple –Easy to understand and operate

Adjustable – Capable of being adjusted to reflect changing
priorities

Documented – so that training is possible
Some Interesting Issues in Project Control





Flexibility
Trade-offs
Some things to watch out for
Impediments to Project acceleration
Cost-only and time-only actions to control
projects
Some Interesting Issues in Project Control
Value of Flexibility in Project Planning

Flexibility is primary defense against risk

Planning too tightly may highly complicate control

Flexibility in construction is key during control

Want adequate float and contingency to change plans if
needed
Be careful on value engineering that limits flexibility!

Some Interesting Issues in Project Control
Trade-offs between Performance Measures
during Project Control

Can sometimes only correct for one
performance measure at a time
– Time
– Cost
– Quality

Need to understand tradeoffs and triage
– Pick where to make tradeoffs (e.g. non-critical
activities)
Some Interesting Issues in Project Control
Tradeoffs
Acceleration  $
Need for rework imposes
(Overtime, shift work,
high expenses
Rework, higher-end
High quality needs can lead
equipment, better crews etc.)
to costly miscalculations
Slow progress  $
on labor time
Delayed occupation,
Higher interest on
Less $  Low progress
Trying to save $
const. loan
Resource reduction
Can lead to substitution,
Loss of tenants
Selection of poor quality workers
lower quality
Opportunity cost
Default of contractor/subs
workmanship
$
Time
Quality level impacts speed of work,
Level of rework
Quality problems result from
overtime, shift work, new hires
Quality
Some Interesting Issues in Project Control
Trade-offs: The Time-Quality-Money Triage

In many cases, the best we can do is to pick
the areas where tradeoffs do the least harm
e.g.
– Move resources from non-critical activities
– Accelerate only critical activities
– Sacrifice quality on non-critical items that can
be remedied after substantial completion
Some Interesting Issues in Project Control
Some things to watch out for:
Overreacting/Improvisation, etc.)


When trying to correct, often bump up against other limiting
factors
– Space constraints/Hiring time/Morale/Coordination
difficulties
Improvisation dangerous (working w/o planning)
– Often can lead to “Snowballing” (increased problems at a
rapidly accelerating rate)
– Confusion, discoordination, cascading unanticipated
effects, suboptimal work efficiency, lack of morale
– Breaking “Job rhythm” and learning curves can really
inhibit productivity!
Some Interesting Issues in Project Control
Controlling the Time Schedule – Project Crashing
– Adding new project resources
– Changing the “production function” (Change the
technology)
– Change operation conditions by altering the
precedence, sequence, or timing of work



Fast-track, activity overlapping
Overtime
Shift work
– Changes in the tools, methods, operating conditions
– Work in more sheltered location
Some Interesting Issues in Project Control
Impediments to Project Acceleration

Human resources
– Multiple-shift work
Environmental/safety issues, High cost, Neighborhood objections
– Overtime/extended workdays
Fatigue, Lower morale, Rework
– Increasing # of workers
Training (takes time of most experienced!), Space constraints, Hiring time

Technology
– Using more, larger or more efficient equipment
Training/learning curve, Procurement time, Space constraints
– Using faster-installing materials
Procurement, Submittals for owner approval
– Alternate construction methods
Skill set, Learning curve, Unknown side-effects
Some Interesting Issues in Project Control
Impediments to Project Acceleration

Human resources
– Multiple-shift work
Environmental/safety issues, High cost, Neighborhood objections
– Overtime/extended workdays
Fatigue, Lower morale, Rework
– Increasing # of workers
Training (takes time of most experienced!), Space constraints, Hiring time

Technology
– Using more, larger or more efficient equipment
Training/learning curve, Procurement time, Space constraints
– Using faster-installing materials
Procurement, Submittals for owner approval
– Alternate construction methods
Skill set, Learning curve, Unknown side-effects