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CIOB Malaysia 2013
 

CIOB Malaysia 2013

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    CIOB Malaysia 2013 CIOB Malaysia 2013 Presentation Transcript

    • Dr. Tahir HanifPhD MSc MCIOB FAPM FACostE MIC CMC FRICSM A L AY S I AInternational Construction ConferenceSunway Putra HotelKuala LumpurMalaysia5th – 6th June 20131Dr. Tahir Hanif, CIOB Malaysia 2013
    • Presentation Outline2Dr. Tahir Hanif, CIOB Malaysia 2013 (Part 1) Earned Value Management (Part 2) The ‘Earned Schedule’ Concept (Part 3) The Challenges With Implementing Earned Value (Part 4) Introducing ‘Imperium’ (Part 5) Worked Example To Demonstrate How Imperium Works (Part 6) Conclusion Questions & Answers
    • A Few Words Of Caution! Management methods are NOT EXACT science! All methods are appropriate & suitable It all depends on what needs to achieved Project size, complexity and necessity The aim is to detect ‘deviations’ so that action can be takenDr. Tahir Hanif, CIOB Malaysia 2013 3
    • EARNED VALUE MANAGEMENTPart 1Dr. Tahir Hanif, CIOB Malaysia 2013 4
    • The Earned Value Concept Developed by the US defence industry (1967) Originally called “Cost and Schedule Control System Criteria (C/SCSC)” Integrates cost and time to determine productivity Used on large scale projects (heavy engineering and Oil & Gas)5Dr. Tahir Hanif, CIOB Malaysia 2013
    • Resource ProfileEarned Value „Rich Picture‟Dr. Tahir Hanif, CIOB Malaysia 2013 6WBSOBS CBSXxxxResponsibilityMatrixStatementOf WorkProject PhasesTimelineSource : graphic developed from BS 6079Cost Profile
    • CostVarianceScheduleVarianceEACThe Mechanics Of Earned Value7Dr. Tahir Hanif, CIOB Malaysia 2013$tBCWS = Budgeted Cost of Work ScheduledBCWP = Budgeted Cost of Work PerformedACWP = Actual Cost of Work PerformedTerminologyBCWSACWPBCWPBAC = Budget At CompletionBACScheduleOverrunETC = Estimate To CompleteETCEAC = Estimate At CompletionCostOverrunManagement ReserveVACVAC = Variance At Completion
    • Earned Value MetricsDr. Tahir Hanif, CIOB Malaysia 2013 8CostPerformanceIndex(CPI)Schedule Performance Index (SPI)UNDERBudgetOVERBudgetBEHIND Schedule AHEAD of ScheduleUnderBudget /BehindScheduleUnderBudget /Ahead ofScheduleOver Budget/ BehindScheduleOver Budget/ Ahead ofSchedule1
    • Measuring Progress On SiteDr. Tahir Hanif, CIOB Malaysia 2013 91) Units of work(m2, Nr, m3, lm, etc)2) Quantity of work(e.g 24m2)3) % complete = Work completed X 100Work AssignedProjectPhaseElementActivity Activity ActivityElementPhaseElement
    • THE ‘EARNED SCHEDULE’CONCEPTPart 2Dr. Tahir Hanif, CIOB Malaysia 2013 10
    • The Emergence Of Earned Schedule SPI (Schedule Performance Index) accurate for 2/3 of the project but notreliable for the last 1/3 SV (Schedule Variance) equates ‘Time’ in terms of monetary valueDr. Tahir Hanif, CIOB Malaysia 2013 11ScheduleVariance(EV)$tBCWSBCWPEarnedScheduleActual Time (AT)(ES)Schedule Variance(SVt)Remaining TimeProject DurationSchedule Variance (t): SV(t) = ES – ATSchedule Performance Index: SPI (t) = ES /ATEstimate At Completion: EAC(t) = PD / SPI(t)
    • Earned Schedule ExplainedDr. Tahir Hanif, CIOB Malaysia 2013 12$t1002003004005006007001 2 3 4 5Earned Schedule (ES)Earned ValueSPI = BCWP / BCWS= 120 / 175= 0.68Actual Time(AT)Earned ValueCalculationEarned ScheduleSPI (t) = ES / AT= 1 / 2= 0.50BCWSBCWP
    • Earned Schedule Explained (Cont‟d)Dr. Tahir Hanif, CIOB Malaysia 2013 13$t1002003004005006007001 2 3 4 5Earned Schedule (ES)Earned ValueSPI = BCWP / BCWS= 170 / 225= 0.75Actual Time(AT)Earned ValueCalculationEarned ScheduleSPI (t) = ES / AT= 2 / 3= 0.67BCWSBCWP
    • Earned Schedule Explained (Cont‟d)Dr. Tahir Hanif, CIOB Malaysia 2013 14$t1002003004005006007001 2 3 4 5Earned Schedule (ES)Earned ValueSPI = BCWP / BCWS= 620 / 575= 1.07Actual Time(AT)Earned ValueCalculationEarned ScheduleSPI (t) = ES / AT= 4.4 / 4= 1.10BCWSBCWP
    • THE CHALLENGES WITHIMPLEMENTING EARNED VALUEPart 3Dr. Tahir Hanif, CIOB Malaysia 2013 15
    • Assessing The Suitability Of Methods16Dr. Tahir Hanif, CIOB Malaysia 2013
    • Anatomy Of A Typical Mega ProjectDr. Tahir Hanif, CIOB Malaysia 2013 17Mega ProjectDesignConsultantDesignStaffConsultantDesignStaffConsultantDesignStaffConstructionConsultant ContractorSubContractorSiteOperativesSubContractorSiteOperativesConsultant
    • Reporting Time LagDr. Tahir Hanif, CIOB Malaysia 2013 18Contractor ConsultantProjectManagerClient
    • Keeping Up With „Changes‟ !19OtherRequestRequestsforChangeReview /ApproveChangeAddChangesto ScopeScopeMeasureProgress“Issue”Occurs“Risk”OccursInstructChangeWorksExecutedDr. Tahir Hanif, CIOB Malaysia 2013
    • Challenge With System ImplementationsDr. Tahir Hanif, CIOB Malaysia 2013 20Structure Participation
    • Earned Value Awareness Not everyone understands what it means !Dr. Tahir Hanif, CIOB Malaysia 2013 21Operative Contractor ProjectManagerConsultant ClientProject ControlsManager
    • Why Are We ...? Using earned value for dynamic environments Relying on others to provide the information Creating elaborate Work Breakdown Structures Using a method that is difficult to implement Spending wasted effort to pursue reporting Waiting for information!22Dr. Tahir Hanif, CIOB Malaysia 2013
    • INTRODUCING ‘IMPERIUM’Part 4Dr. Tahir Hanif, CIOB Malaysia 2013 23
    •  Aimed at client reporting Based on Earned Value thinking Focused on TIME and BUDGET expenditure Uses modified terminology No need for elaborate WBS structures Focused on project delivery Reports produced quickly Client makes the assessment24Dr. Tahir Hanif, CIOB Malaysia 2013* Latin:Having power over others
    • Two Dimensions To DeliveryDr. Tahir Hanif, CIOB Malaysia 2013 25Time BudgetDeliverable(s)
    • Top Down Approach Of Management26 Clients assess supply chain performance Are budgets being spent?Dr. Tahir Hanif, CIOB Malaysia 2013ClientProjectManagerConsultant DesignerContractorSubContractorSubContractorSubContractor
    • Robust Pre-Selection Framework27Agree theSCOPE ofwork1QUANTIFYwhat needs tobe delivered2SELECT thefirm to deliverthe finalproduct 3DELIVER theproduct4Dr. Tahir Hanif, CIOB Malaysia 2013
    • Simple Work Breakdown StructuresDr. Tahir Hanif, CIOB Malaysia 2013 28Traditional Earned Value
    • Measuring Progress Using ImperiumDr. Tahir Hanif, CIOB Malaysia 2013 291) Units of work(m2, Nr, m3, lm, etc)2) Quantity of work(e.g 24m2)3) % complete = Work completed X 100Work AssignedProjectPhaseElementActivity Activity ActivityElementPhaseElementClient FocusContractor Focus
    • Looking At The Detail!Dr. Tahir Hanif, CIOB Malaysia 2013 30WorkExecutedWorkAssessedGrossValuationAmendedValueCertifiedValue% WorkCompleteBudgetIndex (BI)TimeIndex (TI)AdjustScopeInstructextraworksApproveChangeReviewChangeRequestForChangeRiskOccursIssuesbecomerisksOtherRequest
    • New TerminologyDr. Tahir Hanif, CIOB Malaysia 2013 31Abbreviation Description CalculationATE Actual Time ExpenditureABE Actual Budget ExpenditureBR Burn Rate (Forecast / Actual) x 100%TI Time Index ForecastTime / ActualTimeBI Budget Index ForecastBudget / ActualBudgetDI Deliverable Index ForecastDeliverable(s) / ActualDeliverable(s)
    • WORKED EXAMPLE TODEMONSTRATE HOW IMPERIUMWORKSPart 5Dr. Tahir Hanif, CIOB Malaysia 2013 32
    • Basis Of Thinking1. Understand Scope2. Assess Time3. Assess Budget4. Understand Performance5. Taking remedial action(s)6. Start at Step 4, until scope is deliveredDr. Tahir Hanif, CIOB Malaysia 2013 33AssessTimeUnderstandScopeTakeRemedialActionUnderstandperformanceAssessBudgetMissionProject Team
    • Understand the ScopeDr. Tahir Hanif, CIOB Malaysia 2013 34KeyDeliverablesStage 1 Stage 2 Stage 3 Stage 4 Stage 51 1 1 1 1Totals [1] [1] [1] [1] [1]cumulative [1] [2] [3] [4] [5]
    • Assessing „Time‟ & „Budget‟35Dr. Tahir Hanif, CIOB Malaysia 2013Time(Days)Stage 1 Stage 2 Stage 3 Stage 4 Stage 5TASK 1.1 [1] TASK 2.1 [2] TASK 3.1 [5] TASK 4.1 [7] TASK 5.1 [7]TASK 1.2 [2] TASK 2.2 [3] TASK 3.2 [6] TASK 4.2 [6] TASK 5.2 [6]TASK 1.3 [3] TASK 2.3 [4] TASK 3.3 [4] TASK 4.3 [5] TASK 5.3 [6]TASK 1.4 [2] TASK 3.4 [3]Totals [8] [9] [18] [18] [19]cumulative [8] [17] [35] [53] [72]Budget($)Stage 1 Stage 2 Stage 3 Stage 4 Stage 5TASK 1.1 [100] TASK 2.1 [100] TASK 3.1 [500] TASK 4.1 [200] TASK 5.1 [100]TASK 1.2 [50] TASK 2.2 [150] TASK 3.2 [400] TASK 4.2 [100] TASK 5.2 [100]TASK 1.3 [70] TASK 2.3 [100] TASK 3.3 [300] TASK 4.3 [500] TASK 5.3 [200]TASK 1.4 [60] TASK 3.4 [400]Totals [280] [350] [1,600] [800] [400]cumulative [280] [630] [2,230] [3,030] [3,430]
    • Stage 1Dr. Tahir Hanif, CIOB Malaysia 2013 36TimeStage102030405060701 2 3 4 580BudgetStage5001000150020002500300035001 2 3 4 54000ProjectStageActualTime(ATE)ATEcumBurnRate (T)Stage 1 8 8 100% lProjectStageActualBudget(ABE)ABEcumBurnRate (B)Stage 1 280 280 100% l8173553722806302230303034300 < 50%50 < 80%80 < 100%
    • Dr. Tahir Hanif, CIOB Malaysia 2013 37
    • Stage 2Dr. Tahir Hanif, CIOB Malaysia 2013 38Stage102030405060701 2 3 4 580Stage5001000150020002500300035001 2 3 4 54000ProjectStageActualTime(ATE)ATEcumBurnRate (T)Stage 2 5 13 56% lProjectStageActualBudget(ABE)ABEcumBurnRate (B)Stage 2 250 530 71% l280630223030303430817355372Time Budget0 < 50%50 < 80%80 < 100%
    • Dr. Tahir Hanif, CIOB Malaysia 2013 39
    • Stage 3Dr. Tahir Hanif, CIOB Malaysia 2013 40Stage102030405060701 2 3 4 580Stage5001000150020002500300035001 2 3 4 54000ProjectStageActualTime(ATE)ATEcumBurnRate (T)Stage 3 15 28 83% lProjectStageActualBudget(ABE)ABEcumBurnRate (B)Stage 3 1200 1730 75% l280630223030303430817355372Time Budget0 < 50%50 < 80%80 < 100%
    • Dr. Tahir Hanif, CIOB Malaysia 2013 41
    • P6 VersionDr. Tahir Hanif, CIOB Malaysia 2013 42
    • CONCLUSIONPart 6Dr. Tahir Hanif, CIOB Malaysia 2013 43
    • In Summary ... Focused on expenditure of budgets & time Uses basic measures Better reporting for Clients Less administration Easy to implement & use Constant focus on DELIVERY!44Dr. Tahir Hanif, CIOB Malaysia 2013
    • QUESTIONS & ANSWERSThank you for listening!“Terima Kasih kerana sudi mendengarpembentangan kertas kerja saya.”45Dr. Tahir Hanif, CIOB Malaysia 2013