Project highlights

TeesRep: Teesside University's Research Repository http://tees.openrepository.com/tees/
This full text version, available on TeesRep, is the final version of this PhD Thesis:
Mackenzie, D. I. (2010) A review of project controls in the UK and methodologies to
improve the processes. Unpublished DProf Thesis. Teesside University.
This document was downloaded from http://tees.openrepository.com/tees/handle/10149/112675
All items in TeesRep are protected by copyright, with all rights reserved, unless otherwise indicated.

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A REVIEW OF PROJECT CONTROLS IN THE UK
&
METHODOLOGIES TO IMPROVE THE PROCESSES
IAN MACKENZIE
A thesis submitted in partial fulfilment of the
Requirements of the University of Teesside
For the degree of Doctor in Professional Studies
November 2009

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DECLARATION
I declare that this thesis represents my own work, except where due acknowledgement is
made, and that it has not previously been included in a thesis, dissertation or report
submitted to this University or any other institution for a degree, diploma or any other
qualifications.
Signed ------------------------------
David Ian Mackenzie

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ACKNOWLEDGEMENTS
I would like to express appreciation to Prof. Nash Dawood who supervised the research
and development of the thesis, Nash,s guidance and support has been of great value in
this period of study.

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Abstract
The construction industry represents a significant part of the Gross Domestic
Product, (GDP) in the UK. It employs around 1.4 million people and has averaged
around 7.5% of GDP over recent years. Although the industry is of major
importance to the UK economy, it still under achieves. Many projects run over
budget and are completed late to schedule and a lot of resource is invested in
making good defects, repair and replacement and in litigation (Latham 1994).
These shortfalls in the construction industry were investigated by EGAN 1998 in
his report, Rethinking Construction. EGAN proposed five key drivers for change,
these consisted of committed leadership, focus on the customer, integrating the
processes and teams, a quality driven agenda and commitment to people.
Targets were set to gauge the improvements to the UK, these include 10%
reduction in capital cost and construction time, 20% reduction in defects and
accident, 20% increase in productivity and profitability and 10% increase in
predictability of project performance.
This thesis reviews one of the most important drivers, which is the improvement to
integrate construction processes through improved project controls. The aim of the
Thesis was to investigate by a literature review, a questionnaire and survey and
three audits of client‟s processes and work practices how Project Controls was
currently operating to deliver Projects on time and within budget. It was then
necessary to review (how based on best practice) current Project Control
processes and systems could be improved. The improvements are portrayed by
the development a series of “road maps” and “tool kits” demonstrating how
processes and systems could be improved.
This research thesis investigates the status of Project Controls in the UK and
develops methodologies to improve controls.
The investigation of Project Controls is based on five pieces of work, namely;
i) A literature review of current practices;
ii) The development of a questionnaire and survey results;
iii) Three client reports of work carried out by the author.
The five pieces of work were then contextualised to form a commentary of findings
and recommendations for improvement.

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The recommendations were then linked to a methodology for improvements to the
key elements of Project Controls. The aims of the thesis were achieved in that
many issues of weakness were identified in current Project Control systems and
processes and “road maps” were developed identifying in detail how best practice
should be adopted.
The thesis identifies major weaknesses in control of major projects with examples
such a Pharmaceuticals, Building construction and Road construction industries
demonstrating minimal understanding of the concepts and benefits of effective
control. It could be described as disappointing series of examples of why some of
our Industries fail to deliver to cost and schedule. However, the thesis does layout
via “road maps” how improvements could be made, this knowledge has in part
been shared with some clients in the Pharmaceutical and Road construction. The
thesis therefore does demonstrate a contribution to knowledge and some of its
recommendations are being implemented in practice.
The primary conclusions of the Thesis indicates that with the exception of Oil &
Gas companies there are major gaps between what is accepted as best practice
and what is happening in Industry with regards to Project Controls.
There is a lack of understanding at Project Control engineer and Project Manager
Level. There is a need for additional training in particular for Project Managers as
their understanding and ability to see the benefits is paramount to driving forward
effective planning and control for projects.
Also it is necessary that robust Project Control procedures are established in all
industries to integrate the cost and planning disciplines to ensure a common
approach to best practice is adopted.

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Title Page i
Declaration ii
Acknowledgements iii
Abstract iv
Table of Contents vi
List of Figures ix
1 Literature Review
1.1 Introduction 1
1.2 Project Management Bodies of Knowledge (BOK) 2
1.3 The Nature of Project Control 3
1.4 Importance of Project Control 4
1.5 Existing Project Control Processes 6
1.6 Multi-dimensional Project Control System Approaches 7
1.7 4D / 5D CAD Visualisation Technology 8
2 Cultural Aspects of Project Control 10
2.1 How Company Culture Affects the Project Controls Approach 10
2.2 Cultures and Observations in Other Industries 11
3 Results from Project Control Survey 14
3.1 Research Strategy and Design 14
3.2 Protocol and Data Collection 14
3.3 Introduction to Survey Cases 15
3.4 Analysis of Survey Findings 16
4 Transfer of the Oil & Gas Industry Tried and Tested Project Control 30
Methodologies to Other Industries
4.1 Company A Report 31
4.2 Company B Report 50
4.3 Company C Report 67
5 Commentary and Contextualisation of the Survey Paper 92
5.1 Overview 92
5.2 Planning and Schedule Control 92
5.2.1 Schedule Control – How it could be improved 93
5.2.2 Co-ordination and Critical Path Planning 93
5.2.3 Forecasting Completion Dates 93
5.3 Key Observations from the Questionnaire 94
5.3.1 Cost Estimating 96
5.3.2 Cost Control 97

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5.3.3 Change Control 97
5.3.4 Reporting of Progress at Project Level 98
6 Summary of Findings and Recommendations 99
6.1 Planning and Schedule Control 99
6.2 Cost Control and Estimating 102
6.3 Change Control 102
6.4 Reporting and Progress Measurement 103
7 Road Maps to Initiate Influences to Project Controls 104
7.1 Road Maps / Toolkits 104
7.2 Integration of Cost and Planning 105
7.2.1 Cost and Planning Integration 105
7.2.2 Cost and Planning Integration – The Benefits 105
7.2.3 Project Control to Meet Cost and Time Objectives 105
7.2.4 Project Control Standard Coding System 105
7.2.5 Project Control Estimate and Schedule Verification 106
7.2.6 Project Control Change Control 106
7.2.7 Project Control Trend and Variance Identification 106
7.3 Road Maps 107
7.4 Schedule Development 117
7.4.1 Schedule Selection – Where do we start? 117
7.4.2 Schedule Selection – Project Requirements 117
7.4.3 Schedule Techniques 117
7.4.4 Schedule the Hierarchy 119
7.4.5 Key Points to Note 122
7.4.6 Activity Coding 124
7.4.7 Work Breakdown Structure (WBS) 124
7.4.8 Activity Coding – Our Approach 124
7.4.9 Activity Coding Structure – Example 125
7.4.10 Activity Coding Definition – Level 4 127
7.4.11 Schedule Techniques – Overview 129
7.4.12 Project Responsibility, Duration and Update Cycle 130
7.4.13 Schedule Types 132
7.4.14 Critical Path Logic Diagram 134
7.4.15 Classic Schedule Bar Chart 136
7.4.16 Resource Forecasting 138
7.4.17 Project Forecast „S‟ Curves 140
7.4.18 Procurement Schedule 142
7.4.19 Time Chainage Diagram 144
7.4.20 Visual 4D Planner 146

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7.4.21 Software Tools 148
7.5 Estimate Development 151
7.5.1 Basis of Estimating 151
7.5.2 Estimate Information – Status Definition 151
7.5.3 Estimate Development 153
7.5.4 Estimating Techniques 153
7.5.5 Estimate Accuracy 159
7.5.6 Project on Cost 161
7.5.7 Value Management and Value Engineering 164
7.5.8 Estimate Allowances – Escalation 166
7.5.9 Estimate Allowances – Contingency 171
7.5.10 Risk Management – The Process 174
7.5.11 Estimate Format – By Activity 176
7.5.12 Estimate Format – By Procurement Strategy 179
7.5.13 Estimate Development – Project Budget Responsibility 179
7.5.14 Cash Flow Forecasting – Graphical 181
7.5.15 Cash Flow Forecasting Activity Based 184
7.5.16 Foreign Orders and Currency 186
7.5.17 Estimate and Schedule Verification 189
7.6 Cost Management Process 192
7.6.1 Cost Management – Monitoring Actual Cost 195
7.6.2 Risk Register and Progress 202
7.6.3 Foreign Orders and Currency 204
7.6.4 Clients Cost Ledger Reconciliation 207
7.6.5 Accruals Calculation 210
7.6.6 Cash Flow Forecast – Tracking Cost 213
7.6.7 Tracking Costs – Contingency 216
7.7 Change Control Process 219
7.7.1 Change Control Organisation 222
7.7.2 Change Order – Process Flow Sheet 224
7.7.3 Change Order – Form 227
7.7.4 Change Order Register 230
7.8 Progress Measurement 232
7.8.1 Progress Measurement Technique – Incremental Milestone 233
7.8.2 Progress Measurement Technique – Weighted or Equivalent 237
7.8.3 Progress Measurement – Requirements 241
7.8.4 Progress Record – Milestone Schedule 244
7.8.5 Progress Record – Classic Schedule Bar Chart 246
7.8.6 Progress Record – Period „Look Ahead‟ Chart 248

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7.8.7 Progress Record – Schedule Activity Table 250
7.8.8 Progress Record – Resource Histogram 252
7.8.9 Progress Record – Procurement Schedule 254
7.9 Reporting Process 256
7.9.1 Reporting – Team Effort 258
7.9.2 Report Types 260
7.9.3 Report Regularity 262
7.9.4 Project Report – Executive Summary 264
7.9.5 Project Report – Key Items 266
7.9.6 Project Report – Milestone Schedule 269
7.9.7 Project Report – Schedule 271
7.9.8 Project Report – Cost 273
7.9.9 Project Report – Change 276
7.9.10 Project Report – Risk 278
7.9.11 Project Report – Risk Update 279
8 Conclusion 280
8.1 Project Control Survey Questionnaire 281
8.2 Company A Report 282
8.3 Company B Report 282
8.4 Company C Report 283
8.5 Commentary and Contextualisation 284
8.6 Cultural Aspects 285
8.7 The Oil Industry Model 285
8.8 Training/ Future areas of research 286
9 References 288
10 Appendices 291
Figures
Fig 3.1 Chart – Section A: Q1-Q23
Fig 3.2 Chart – Section B: Schedule Control: Q25-Q42
Fig 3.4 Chart – Section D: Reporting: Q48-Q54
Fig 4.1 Process Flow Chart
Fig 5.1 Contextualisation Chart
Fig 7.1 Overview of Project Controls / IDEFO Chart A0
Fig 7.2 Planning / IDEFO Chart A1
Fig 7.3 Estimating / IDEFO Chart A2
Fig 7.4 Cost Management / IDEFO Chart A3
Fig 7.5 Change Control / IDEFO Chart A4
Fig 7.6 Progress Measurement & Reporting / IDEFO Chart A5
Fig 7.7 Schedule Selection – Flow Sheet

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Fig 7.8 Schedule – The Hierarchy Pyramid
Fig 7.9 Schedule Development Flow Sheet
Fig 7.10 Project Activity Coding Structure
Fig 7.11 Activity Definition Form
Fig 7.12 Scheduling Techniques Summary
Fig 7.13 Milestone Schedule
Fig 7.14 Critical Path Logic Diagram – (PERT Chart)
Fig 7.15 Classic Schedule Bar Chart – (GANTT Chart)
Fig 7.16 Resource Histogram
Fig 7.17 Project Forecast „S‟ Curves
Fig 7.18 Procurement Schedule Example
Fig 7.19 Time Chainage Diagram
Fig 7.20 Visual 4D Planner
Fig 7.21 Checklist – Expectation of Information Availability
Fig 7.22 Estimating Development Flow Sheet
Fig 7.23 Estimating Techniques Summary
Fig 7.24 Estimate Accuracy Checklist
Fig 7.25 Project On Cost Checklist
Fig 7.26 Project Life Cycle – Impact of Change
Fig 7.27 Escalation – Indices for Uplifting Historical Data
Fig 7.28 Escalation – Indices for Future
Fig 7.29 Estimate Allowance – Contingency Checklist
Fig 7.30 Risk Management Flow Sheet
Fig 7.31 Estimate Format – Summary by Activity
Fig 7.32 Estimate Format – Summary by Procurement Strategy
Fig 7.33 Cash Flow Forecasting – Typical Graph
Fig 7.34 Cash Flow Forecasting – Activity Based Summary
Fig 7.35 Foreign Orders and Currency – Estimate Summary
Fig 7.36 Estimate and Schedule Verification Report
Fig 7.37 Cost Management Flow Sheet
Fig 7.38 Projects External Orders – Progress
Fig 7.39 Monitoring Actual Cost – Internal Costs Progress
Fig 7.40 Scoring Matrix
Fig 7.41 Risk Register Excerpt
Fig 7.42 Foreign Orders and Currency Progress
Fig 7.43 Clients Cost Ledger - Reconciliation Report
Fig 7.44 Accruals Calculation – Report
Fig 7.45 Cash Flow Forecasting – Tracking Movements
Fig 7.46 Tracking Costs – Contingency Movement

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Fig 7.47 Change Control Flow Sheet
Fig 7.48 Change Control Organogram
Fig 7.49 Change Order – Process Flow Sheet
Fig 7.50 Change Order – Form (Template)
Fig 7.51 Change Orders – Register Progress
Fig 7.52 Progress Measurement – Incremental Milestone
Fig 7.53 Progress Measurement – Weighted or Equivalent
Fig 7.54 Progress Measurement – Project Forecast „S‟ Curves
Fig 7.55 Progress Measurement – Flow Sheet
Fig 7.56 Milestone Schedule – Progress
Fig 7.57 Classic Schedule Bar Chart – Progress
Fig 7.58 Period „Look Ahead Chart‟ – Progress
Fig 7.59 Schedule Activity Table – Progress
Fig 7.60 Resource Histogram – Progress
Fig 7.61 Procurement Schedule – Progress
Fig 7.62 Reporting Flow Sheet
Fig 7.63 Reporting – Team Effort Model
Fig 7.64 Report Types – Schedule
Fig 7.65 Report Issue Dates
Fig 7.66 Project Report – Executive Summary Update
Fig 7.67 Project Report – Key Items Update
Fig 7.68 Project Report – Milestone Achievement Update
Fig 7.69 Project Report – Schedule Update
Fig 7.70 Project Report – Cost Update
Fig 7.71 Project Report – Change Order Update
Fig 7.72 Project Report – Risk Update

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1 Literature Review
1.1 Introduction
The aim of the thesis is to review how Project Controls in the UK and Europe is
working in the delivery of projects. To establish what works and what does not and
to indicate how the research could help improve Project Controls by developing
processes and systems that supported the delivery of successful projects.
The objectives were to determine from experience, tacit knowledge, a
questionnaire survey, audits of construction businesses and a literature review
how projects were controlled. This data could then be contextualised to determine
areas of strengths and weaknesses in current processes and systems that
controlled projects. The ultimate output/objective from the research was improved
processes, systems and procedures with which to control projects.
The methodology of the research was to initially carryout a major literature review
of relevant documentation such as project management body of knowledge
(PMBOK). Also included in this review were various project management
documents and publications. The underlying aspect of the review concentrates on
what, is working in Project Controls and what is not, and also to consider
innovation, best practice and future methodologies for controlling projects.
Following the literature review it was decided to carryout a Project Controls survey
of a cross section of businesses who were involved in Oil and Gas, Petrochemical,
Building construction, Pharmaceutical, Nuclear and road construction. The survey
was carried out using a series of specifically designed questions to establish how
these industries approached Project Controls and what is working for them as well
a how project delivery was impacted by poor controls.
The next phase was to use Project Control survey reports from three audits carried
out by the author during his employment as a Project Controls Consultant. The
audit reports recorded use of Project Controls in the Nuclear, Road construction
and Pharmaceutical industries.
It was then necessary to contextualise the literature review, the survey and the
three audit reports. This contextualisation indeed demonstrated many common
threads of strengths and weaknesses in the use of Project Controls. From this

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review we could determine how we could develop road maps to illustrate how
Project Controls could be improved.
Road maps were subsequently developed along with detailed procedures
indicating how improved processes and systems could improve Project Controls.
The road maps have been implemented during the course of this research and
several companies are now showing improvements to their control and delivery of
projects.
A comprehensive ongoing review of Project Controls has taken place during the
course of the D Prof. Research programme.
The literature review has concentrated on “what works and what does not.” it also
looks at innovation, best practice and future methodologies for controlling projects.
A project is defined A Guide to the Project Management Body of Knowledge
(PMBOK Guide) (PMI 2004) as “a temporary endeavour undertaken, to create a
unique product or service.” The term temporary, is defined as every project has a
beginning and an end. Unique is defined as the product or service, is different in
some distinguishing way from similar products or services.
There is a considerable amount of literature on Project Control and it is not the
intention to cover all existing publications.
This review, therefore, looks at discrete areas of Project Control as shown below:
i) Project management bodies of knowledge;
ii) The scope and nature of Project Control;
iii) The relevance and importance of Project Control;
iv) Project Control systems – existing;
v) Future requirements of Project Control.
1.2 Project Management Bodies of Knowledge (BOK)
The two main areas of BOK have been developed by two professional
associations: the Association of Project Management (APM) and the Project
Management Institute (PMI).

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The main area of discussion around BOK, is that a single methodology does not fit
all kinds of projects, (Shenhar 2001). Shenhar classified a number of projects he
surveyed into four categories. In order to be managed successfully, projects in
each category are handled slightly differently. (Evaristo and Von Fenema P.C)
also took a similar view with regard to the classification of project types based on a
number of projects and sites involved in their study.
The examples of how the single methodology does not fit all kinds of projects are
as follows:-
a) Managing a construction project requires a different approach to that of an
IT related project;
b) Complex projects require a different approach to that of less complex
projects;
c) Different industries will have approaches which reflect their own
approaches, i.e. Pharmaceutical, Oil & Gas, Nuclear and Building
Construction all differ in their approaches.
Other researchers, however, support the BOK assumption of project similarity
(Tatikonda & Rosenthal 2000). They reviewed project management methods used
during the execution phase of new product development projects and found that
companies do indeed balance firmness and flexibility in product development
projects.
It is doubtful, however, that this piece of work by Tatikonda & Rosenthal was a real
test of comparing approaches across other types of projects or industries.
The PMBOK guide does not refer to Project Control as a knowledge area.
According to the guide, projects include segments within the other knowledge
areas, such as Cost Control within the project cost management knowledge area
and Schedule Control, within project time management knowledge area.
The APM BOK section on control which covers many of the recognised tools
associated with Project Control during the project life cycle. This is an important
difference between APM BOK and the PMBOK guide, according to (Rozenes S,
Vikner G and Spraggett S. 2006).
1.3 The Nature of Project Control

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The traditional view of Project Controls as defined by PMBOK has been cost &
schedule during the project execution phase. Although this view is persuasive in
industry, a more effective Project Controls process can influence and benefit the
whole project life cycle including the following:
 Project strategy;
 Project organisation;
 Project objectives;
 Project control systems;
 Scope management;
 Work breakdown / cost breakdown structures;
 Schedule management;
 Cost management;
 Engineering deliverables;
 Procurement and material control;
 Construction management;
 Control administration;
 Change order control;
 Estimating;
 Risk management;
 Progress measurement / reporting;
 Cost control;
 Earned value reporting;
 Productivity;
 Trend Analysis;
 Cost forecasting;
 Schedule forecasting;
 Corrective action.
Project Controls systems and processes indicate the direction of change from the
baseline costs and schedule, to the actual performance.
1.4 Importance of Project Control
The successful performance of a project depends on appropriate planning. The
PMBOK Guide defines the use of 21 processes that relate to planning out of the
39 processes for project management, (Globerson & Zwikeal 2002).

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The execution of a project based on a robust project plan can be achieved through
an effective schedule control methodology.
The development of a suitable Project Control system is an important part of the
project management effort (Shtub, Bard & Globerson 2005). Furthermore, it is
widely recognised that planning and monitoring plays a major role as the cause of
project failures. Despite the continuous evolution in the project management field,
it appears evident that the traditional approach still shows a lack of appropriate
methodologies for Project Control. (De Falco & Macchiaro 1998). There have
been a number of articles published to support the importance of control in the
achievement of project objectives, Project performance can be improved if more
attention is given to the issue of control. (Avison, Baskerville & Myers 2001).
There has been a significant amount of research conducted to examine project
success factors. One such piece of research was carried out by (White & Fortune
2002) who sent out a questionnaire to almost 2,000 project managers. Another
survey covered 200 defence projects conducted by (Sadeh, Duir & Shentar 2000).
A survey was also carried out by (Frick & Shentar 2000), it was related to
organisations with inter / intertrade departmental projects.
The common thread from the surveys was a common checklist
representing project success factors. This list included clear goals,
management support, ownership, a control mechanism and
communicating. (Rozenes, S., Spraggett, S., Vitner, G 2006).
An IBC 2000 Project Control Best Practice Study carried out by IPA indentified that
good Project Control practices reduce execution schedule slip by 15%.
Project Controls cost range from 0.5% to 3% of total project, (including cost
accounting), therefore, to break even, Project Control needs to improve cost
effectiveness by around 2%.
A sample study carried out by the IBC Cost Engineering Committee (CEC) in
1999, showed cost improvements for the projects in the study, was more than
10%. It is noted also that NPV also benefits from schedule improvements.
Success factors are based on good Project Control practices, which result in good
cost and schedule outcomes.
Best practices include: (according to IBC 2000 Project Control Best Practice Study
IBC 2000)

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 Performance estimates with a breakdown suitable for physical progress
measurement;
 Owner quantitatively validates detail cost estimates;
 Owner cost and Project Controls specialists are on project teams;
 Capture actual results for future planning;
 Outcomes improve with level of details of estimating, validation, control and
historical data collection;
 Strong Project Control practices reduce the effect of project manager
turnover;
 Good Project Control practices are a must for reimbursable execution
contract strategies;
 Results are strongest for small projects.
1.5 Existing Project Controls Processes
The core of current Project Control process is the Work Breakdown Structure
(WBS). The PMBOK Guide defines a WBS as a deliverable, orientated grouping
of project elements, that organises and defines the total scope of the project. By
using a WBS, it allows the project team to plan a project by means of a
hierarchical structure, by identifying the elements and sub elements. A work
package, usually at the lowest level of a WBS, includes a series of tasks to be
carried out as part of an element of work. The WBS is interfaced with the project
plan and the coding structure within the WBS, allow reporting of cost and schedule
forecasts to deliver the schedule and cost reports. Recent developments have
initiated a Cost Breakdown Structure (CBS), which links to the WBS, but allows
increased details of monitoring and cost control to take place.
The Earned Value (EV) principal, that examines work performed cost versus
budgeted cost, is described in many, many papers and textbooks, e.g. (Sipfer &
Bufin 1997), ( Ruby 2000), (Fleming & Koppelman 1999 & 2000).
Current Project Control systems employ the earned value principles. A 1998
survey carried out by (Deng & Hung) suggested that only a small percentage of
construction projects implemented Earned Value technique. My survey of 24
planning engineers, (which was carried out in number of different industries
indicated that over 70% of companies were using Earned Value techniques.
Risk monitoring and control is a further process which keeps track of identified
risks and indentifies new risks.

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(Elkington & Smallman 2002) carried out a survey to examine project management
risk practice, in the British utility sector. Findings showed that there was a strong
link between the use of risk management in projects and the level of their success.
A further study by (Miller & Lessard 2001), proposed that managing and controlling
risks reduces the probability of project failure.
In conclusion, the use of risk management enhances the project delivery and
reduce uncertainty in terms of time and budget.
1.6 Multi-dimensional Project Control System Approaches
Previous studies (Regina Gyampoh- Vidogah, Robert Moreton, David Proverb -
2003) suggest that the current control processes and systems are insufficient for
major projects and that a multi-dimensional Project Control system is needed, that
can monitor, measure and control the projects objectives. Also an integrated
system is required, that can measure the projects status during the life cycle of the
work.
A new Project Control methodology was developed by (Rosenes, Vitner &
Spraggett) in 2004. The new methodology was named the Multi-dimensional
Project Control system, (MPCS). The MPCS is an approach whereby deviations
between the planning phase and the execution phase are quantified, with respect
to the Global Project Control Specification, (GPCS). The projects current state is
translated into yield terms, which can be expressed as a gap vector representing
the multi-dimensional deviation from the GPCS. The MPCS allows the project
manager to determine the project status, where problems exist in the project,
where and when to take corrective action and how to measure improvement.
Implementing MPCS methodology does not require extra data collection.
Further work has also been carried out by (Songer A. D, Hays, B and North, C) in
2004 with regards to multi-dimensional visualisation of Project Control data Where
they advise „The construction industry produces voluminous quantitative data.
Much of this data is created during the controls phase of projects and relates to
cost, schedule and administrative information. Recent storage and processing
advances in computers, as well as display capabilities afforded by computer
graphics, increase the opportunity to monitor projects fundamentally different from
existing Project Control systems‟.

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Visualisation technologies are also playing a part with innovative tools to integrate
digital 3 models, with time and cost information. Thus allowing a virtual reality
project control system, which can efficiently and visually manage the project
implementation process.
The Gantt chart is the commonly used planning tool on projects. The main issues
and problems according to (Dawood N & Mallasi Z 2006) is that the Gantt chart
has not changed for the last 40 years and planners do not use it to usually
communicate the executive strategy of the project.
(Mawdesley et al 1997), states that the Gantt chart technique does not furnish a
communication medium on how the project activities on the construction site are to
be executed. During the construction phase, the format of a Gantt chart does not
capture the visual interaction between the construction activities. As a result, the
Gantt charge is not adequate for rehearsing construction activities.
1.7 4D / 5D – CAD Visualisation Technology
4D construction visualisation has been apparent for some 15 to 20 years. More
recently, however, developments are underway to have 3D CAD linked with
planning software (Time) and the 5th dimension cost, thus giving rise to what is
known as 5D Project Controls. This research and development is being
spearheaded by Company X UK and the research team at Teesside Universities
Centre for Construction & Research department. The objectives of the 5D system
is to allow feasibility studies and impact analysis of technical and logistical
programmes by means of rehearsing the planned construction operations in the
virtual environment. Using these methods, an improved fine-tuning of the
schedule can be achieved, avoiding soft clashes in space management before
they affect project performance. Also by exploiting high quality visualisation
techniques, it is possible to enhance significantly the quality of interaction among
involved stakeholders reducing the intrinsic ambiguity and complexity of Gantt
charts and textual descriptions and time-based 3D views of the plant. Project
delivery can be improved through better understanding of site conditions and
implications of scheduling plans.
The cost and progress control tools and methods included in the development,
guarantees an increased ability to assess the project development status. The
integrated analysis features allow intuitive visual inspection of early warnings to

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assess the causes of cost or time execution problems and identify and implement
correction actions.
The ability to rehearse and test several alternative scenarios in an information rich,
visual and interactive environment, will allow an improved risk analysis capability
and the choice of the most effective mitigation strategies both at design time and in
response to unexpected events during the construction phase.
The benefits of the 5D system are increased perception and confidence in the
project quality, in its control capabilities and in the communication across the
involved stakeholders, ultimately allowing the development of high quality
collaborative projects and integrated, effective and reliable risk management
strategies.

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2 Culture Aspects of Project Controls
2.1 How Company culture affects the Project Controls Approach
North Sea Oil project controls are generally seen as the best practice approach,
this is in part due to the culture within the industry. This view was referred to by
HM UK Government in a white paper published in 2003. The white paper was
addressed to the UK Nuclear Industry.
This culture is driven by several factors, for example most projects were in the
£1 billion range and driver by the rate of return on the investment. The return on
the investment is determined by being ready to sell gas / oil to the market on a
specific date. Gas and oil sales are based on gas / oil sale agreements, which
work on a delivery or pay penalty basis. Also, within the construction and
installation phases oil companies need to book in advance heavy lift barges and
install the Jacket and Topsides in the field. Due to the demand on the heavy lift
barges, they must be booked two years in advance, at a cost of around $500,000
per day for periods up to 7 to 10 days. Oil companies cannot miss the pre-booked
dates, therefore schedule and cost control is paramount in the design,
procurement and construction phases. Finally, the projects are supported by
partner oil companies who own percentages of the field development and also the
banks who lend the finance to develop the field.
All of the above factors result in the demand from partners and bankers coupled
with penalties for missing deadlines, which results in a need to have good project
control systems and procedures to help manage the project. The outcome is a
culture within the project team that assures that the development is driven from the
top of the organisation to the bottom with all involved organised to control the cost
and schedule. This culture has been seen in many oil companies, throughout the
1980‟s and 1990‟s during major offshore oil field developments.
The culture ( Marathon Oil UK 1984 Brae Field Developments) resulted in the
development of many systems, procedures and processes being developed to
enhance the control of cost and planning techniques, which have since spread into
construction companies and other industries. The systems include:
a) Planning cost management and estimating procedures;
b) Effective schedule development;
c) Procurement schedules

11
d) Design interface schedules;
e) Four to six weeks look ahead schedules;
f) Progress measurement innovation;
g) Productivity calculations;
h) Reporting techniques developed;
i) Change control procedures developed to include impact statement
on cost and schedule;
j) Improved cost management processes;
k) Estimating techniques integrated with scope definition and cost control;
l) Integration of the contractors‟ procedures and processes.
2.2 Cultures and Observations in other Industries
From personal involvement in several Pharmaceutical companies it was observed
that the culture in the pharmaceutical industry projects division, proved to be totally
different to the oil and gas industry. The reasons for this appear to be based
around a number of factors; firstly the core business of pharmaceutical businesses
is to produce products to sell to markets. The management of projects, although
important to the industry, did not have the focus seen in the oil industry. This lack
of focus was coupled with a lack of understanding of many of the basic
requirements of project management and planning techniques.
It would seem that the pharmaceutical companies we discussed issues with,
regarding project management and planning, saw inefficiencies in their systems
and processes. They seem, however, due to the culture within the project groups,
unable to improve the processes. This in part, could be as a result of the
companies working in the industry being fairly insular and many members of the
project teams having worked in the industry for many years. This resulted in the
lack of best practice, modern methods and systems being introduced into the
business.
Cultures, however, can be changed, although it can be a long process to modify
the culture and improve controls and project delivery. However as a result of
implementing the following approach the culture of the companies did move
towards better control of projects:
a) Carry out a survey of current processes and systems;
b) Compare current processes against best practice;

12
c) Present results, observations and recommendations to
management;
d) Have the client appoint a sponsor to help initiate and introduce
recommendations;
e) Present outline of observations and recommendations to staff in
project team. Make the team aware of what needs to change and get
their involvement
f) Develop a plan to implement change;
g) Review all project plans with project team, develop achievable
plans that are robust and resourced with manpower;
h) Baseline the portfolio of plans;
i) Develop and carry out a progress measurement system;
j) Develop a project reporting system;
k) Set up a weekly progress review meeting and review projects by
exception, i.e. those that are not achieving the planned progress,
plot trends;
l) Record actions from the weekly progress meeting. This meeting
will identify problems or issues that need resolving in order to
improve progress and recover slippage;
m) Develop a change control system that captures changes to projects
and ensures the impact of changes are reflected in the cost and
schedule documentation.
A further example of cultural differences was found in the nuclear industry at a
remote site in the UK.
The site had until fairly recently been a provider of electricity, but was now in a
decommissioning phase. This phase, however, resulted in a portfolio of projects
required to decommission the site.
The site had a legacy of producing electricity; its management was a production
orientated team with relatively low experience of controlling projects.
The result of the lack of expertise in managing and controlling projects resulted in
poor control of projects.

13
The culture of the site resulted in site management not being aware what best
practice for project controls was and not understanding the need for effective
controls.
Examples of this were the lack of a common WBS or coding structure, cost
planning and estimating skills not integrated, portfolio / programme management
not being utilised.
The lack of basic understanding of Project Controls was a direct result of the
culture of the organisation that was not aware of how they should manage the
project.
The management team who generally operated as an operational unit and had not
moved its cultural view to being a project orientated management.

14
3 Results from Project Control Survey
3.1 Research Strategy and Design
The literature review of current practice in project planning and control as
described in Section 2, determines how the theory of the processes are generally
performed. The knowledge gained from the review, however, has to be tempered
with real life and a qualititive survey questionnaire study was chosen as the key
methodology to confirm and gain understanding of current practices.
3.2 Protocol of Data Collection
The first step was to develop a questionnaire to help understand how project
controls is operated in various industries, (see Appendix 1).
The questionnaire was developed from the authors experience in project controls
over a 30 year period. However, it also drew on literature from the PMBOK 2004
Guide, APM and The University of Leeds Guide to Design of Questionnaires
(2006). The questions were reviewed by a peer group of professional cost,
planning and estimating managers, some modifications and enhancements were
made to the questionnaire at this review stage.
A pilot study of the final questionnaire was then carried out on a small target group
of colleagues and this proved that there was a meaningful document in place to
move forward with the research.
The questionnaire in this research used both open and closed question formats to
collect the information from the research participants.
The next task was to carryout interviews with the participants. The interviews were
generally face to face; however, in the case of some European based projects
telephone interviews took place. Face to face interviews were the preferred
method as this method achieves the best return from participants, ( Czaja and
Blair, 2005)
The questionnaire was used to carry out interviews with project planners, project
control engineers and planning engineers.
The industries where the surveys were carried out included:

15
i) Oil & gas;
ii) Pharmaceutical;
iii) Nuclear;
iv) Building & construction;
v) Transport & utilities;
vi) Chemical / petrochemicals.
A total of 21 interviews were carried out, split across the various industries as
shown below;
i) Oil & gas 4 responses;
ii) Pharmaceutical 3 responses;
iii) Nuclear 4 responses;
iv) Buildings & construction 4 responses;
v) Transport & utilities 3 responses;
vi) Chemical / petrochemicals 3 responses.
The value of the projects being managed was over £4 billion.
3.3 Introduction to Survey Cases
Oil & Gas
The total value of the projects was £855 million and included:
a) Norwegian sector Brownfield offshore development;
b) UK North Sea offshore upgrade of facilities;
c) A major LNG development based in Spain;
d) A UK Oil Platform upgrade
Pharmaceutical
The total value of the projects was £55 million. The three companies were all UK
based and each managed a series of project value between £10m and £25m. The
projects were individually valued at between £50,000 and £3 million, each
company had a portfolio of projects in the range of 50 to 80 projects per company.
Nuclear

16
The total value of the projects was £180 million, the projects were new builds,
refurbishments and shutdown related work.
Building and Construction
The total value of the projects was £160 million with University buildings, new
office blocks and property developments amongst the projects being constructed.
Transport and Utilities
The value of the work was over £1 billion, the projects covered road building, rail
and water projects.
Chemical and Petrochemical Projects
The value of the projects was in the order of £800 million and was based on
projects based in Germany and the UK.
3.4 Analysis of Survey Findings
The questionnaire and survey questions were arranged in sections A to D.
Section A - covered issues such as cost control and estimating.
Section B - covered issues such as schedule development and control, critical
paths, forecasting completion dates.
Section C - covered issues around change control.
Section D – covered the reporting system and processes.
Structure of Questions
Interviews took place on the specific questions and answers were recorded using
the following conventions for example:
Q) Are work breakdown structures A B C D NE

17
established and all budget
costs coded?

Legend
A) Always;
B) Sometimes;
C) As and when necessary;
D) Control impaired as a result;
NE) No experience.
What we learnt from the results by section is as follows:
Section A – Cost control and estimating (which covered questions 1 to 23 on the
questionnaire)
.
The chart below indicates the responses:
Fig 3.1
Section A: Q1 - Q23
46%
16%
21%
9%
8%
Alw ays
Sometimes
As and w hen Necessary
Control Impaired as a
Result
No Experience

18
If we consider that the topics / issues in the questionnaire represent best practice,
then only 46% of the sample always follows best practice. Analysis also indicates
that 16% of the sample sometimes adopted best practice with 21% using best
practice when they felt it necessary, with 9% of the sample having a view that
control was impaired as a result of not adopting best practice issues.
Feedback from the sample on how processes could be improved to help controls
is shown below:
Estimating
 “Could refine the processes to correct best practice.”
 “Consistently apply best practice.”
 “Could be logic links between accounts and construction.”
 “By portfolio availability, (procedures not integrated with cost / planning).”
 “Require higher level of detail.”
 “By benchmarking previous projects and establishing norms and preparing the
estimate at the lowest level and rolling up the values rather than a high level
guesstimate.”
 “Central estimating with real benchmarking. Budgets are often met, but only
because costs are booked elsewhere. Estimating is often bespoke or carried
out by EPC, PMs or specialise departments. A new standardised WBS is to be
introduced.”
 “By utilising project schedule to show where possible over spending may occur
during the project life cycle. All project estimates only change when a project
manager has ran out of money, therefore poor cost forecasting by the PM.”
 “Could be improved, analysis actuals to improve future project estimates, no
formal estimating done.”
 “A more integrated tender and approval process. Currently no formal
programme challenges, the review of estimates are financial and take no
cognisance of value, thus performance has been impaired. A team is being
formed to tackle estimates challenge. Current system is fair and transparent.”
 “Elements of estimate used weight rather than contractor submitted values.”
Costs
Control of Reimbursable Resource
The following comments indicate how some companies‟ staff would like to improve
the process:

19
 “Yes it works. Level of sign off could be improved.”
 “Works fine. Client cost engineers control this work.”
 “System works.”
 “Doesn‟t work because of the fear factor, i.e. don‟t want to be blowing the
budget.”
 “Yes the system works, but could be improved by any changes being reviewed
by project controls dept prior to implementation (i.e. prior warning and not just
sprung on project controls dept).”
 “Increased frequency of updating for better control.”
 “No cost controls in place. Could be improved by having the project controls
manager responsible for the forecast costs, rather than a corporate cost
engineer.”
 “Scope changes poorly documented, therefore some cost surprises.”
 “The current system works due to the functionality of SAP.”
 “No room for improvement, good clear control system in place. Planners and
cost personnel to work more closely.”
 “Yes.”
 “The system is inefficient. Cost handling and reporting is by the finance dept
and is not managed by the PMs (not that any PMs are employed).
 “System is robust and works well in practice.
 “Yes it could.”
 “It needs to improve.”
Section B
This section covers schedule control and schedule development, critical path
planning and forecasting completion dates.
The chart below indicates the responses:
Fig 3.2

20
Section B - Schedule Control: Q25 - Q42
51%
19%
14%
14%
2%
Alw ays
Sometimes
Result
No Experience
It is interesting to note that 14% of the sample advised that project control was
impaired as a result of inadequate schedule control.
The following comments were gleaned from clients as how improvements to major
aspects of schedule control could be achieved:
Schedule Control – How we could improve the current model
 “Only high level programme from the contractor.”
 “Require client buy-in.”
 “4D planning. Filters to advise who does work via foreman / supervisors.”
 “Honest appraisals / estimates / accuracy.”
 “Lump sum therefore client has an overview and the risk is with the contractor.”
 “Various departments throughout the UK need to buy into the programme.”
 “Earlier release of engineering data to define scope.”
 “By detailed integration with the design and procurement deliverables, and
alignment with the availability of key resources, plant and equipment.”
 “At our company simple changes such as creating and monitoring against a
baseline would help improve performance. At our company no baselines are
set and therefore they are always on plan!!! This is not the way to manage
projects in my opinion.”
 “Plans not usually used to drive work, culture not right for the plans to be driven
the way they should be.”
 “N/A.”

21
 “Create work schedules for all projects.”
 “Greater and more accurate detail of tasks is required. Scope is developed but
is unstable without management support to control it. Lack of PM means the
validity of the scope is questionable. Logic with P3e with greater cross links
will be utilised.”
 “Continuous review of programme with client and contractors.”
 “Contractors use a standard scheduling tool. Level 1 & 2 schedules used to
control with project, with contractors using level 3, 4 and / or 5.”
 “There were large gaps. Some inexperienced people were developing the
plans.”
 “Professional planning support required. Planning usually left to contractors no
checks by client.”
 “Good schedule.”
 “Establish items 26, 27 & 28.”
 “Implement all on programme.”
Co-ordination and Critical Path Planning
 “Need to baseline / CP shown on schedule.”
 “The CMS is broken down into detail.”
 “Yes, more detailed assessment of the subcontractors schedules. Is not
happening because PM doesn‟t see financial control more important than its
physical worth.”
 “No.”
 “Recognition by project management that they are the owners of the plant.”
 “By educating the end users of the benefits of planning ahead rather than
planning by default. P3 is in house, but sub-contractor not co-ordinated, using
different systems.”
 “Using a standard software which can be used by all.”
 “Our company should look at all projects the same way using the same
methods all of the time. Our company should have a standard reporting and
monitoring system so all projects are analysed the same way. Additional
training for PMs as only 10% understands critical path, etc.”
 Could have more detail in the review.”
 “Currently it is good.”
 “Create planning awareness for scheduling, etc.”

22
 “The use of PMs. Al sub-projects have a critical path; the overall path is also
identified. Bulk work is tightly controlled. For next execution more thorough L2
plans are being created to drive the project. Use of PMs would improve quality
of info.”
 “Some contractors should actually use the software to schedule the plan rather
than making a nice picture.”
 “MSP being used whilst P3 should be.”
 “Inexperienced planners. PM not reviewing or involved, SAFRAN software v3
inappropriate for the project.”
 “Professional planning control procedures. MBP software not up to the job.”
 “Good.”
 “Programme control management introduce planning experience to project
team.”
Forecasting Completion Dates
 “Need a baseline / CP shown on schedule.”
 “Always room to improve.”
 “Better site record of changes and progress based on physical progress, could
be better but resources are an issue.”
 “Yes – management of sub-contractors can be improved not all contractors
have planners all done in MSP by sub-contractors, therefore need to convert.
Weekly reporting focuses more on the site works.”
 “Process established and agreed additional planning resources would improve
development time.”
 “Improvements here are part of a gradual process of „teaching dogs new
tricks.‟ i.e. when a company emerges from a small design environment to a
project team environment, the change process can be frustratingly slow.”
 “Introduction of Primavera.”
 “Going back to basics, i.e. basic project management training for all project
managers so they can learn what to look for and understand the project
programme and how important it is to create a monitoring plan, and progress /
performance and resources.”
 “39 is weak in some cases.”
 “Currently good.”
 “As above „planning‟.”
 “Reports are daily. Resource levelling takes place prior to baselining; the
changes to resource are handled individually.”

23
 “No system works well.”
 “No major buy-in from senior managers who do not see the advantage of
project control.”
 “Yes.”
 “As above, „planning‟.”
 “Lacking in site liaison.”
 “Yes, items 38, 40 & 42 required to be improved upon.”
 “Yes, create resource loaded programmes.”
Section C – Change Control
This section covers whether there is a change order system in place and whether
the impact of changes are reflected in the costs and schedule.
Fig 3.3
Section B - Schedule Control: Q25 - Q42
51%
19%
14%
14%
2%
Alw ays
Sometimes
Result
No Experience
It is interesting to note that most clients, (51%), used a change control system in
some form.
We asked the clients to advise how the change order system could be improved,
the following comments were received:
Change Order System – Does it work? Could it be improved?
 “Standard system works.”
 “It works. Essentially follow clients‟ procedural requirements.”
 “Works. Forecast cost could be given IT use.”
 “Honest appraisal / estimates / accuracy.”
 “Only when applied correctly, particularly financial changes.”

24
 “Change control with an appropriate tracking register, controlled by project
controls manager would be an improvement.”
 “New scope change or CO system to be introduced. The design (EPC)
contractors have good change order systems, however, the contractor
systems are not integrated into our systems and the CO system has not yet
been fully implemented.”
 “Yes. The change order process is primarily utilised for costs and it is up to
the skill of the planning engineer to find out what the change is and how it
affects the project as the PMs are only concerned with cost!!!”
 “Good GSK system.”
 “Not involved.”
 “A more thorough system is being developed. COs are not diligently
controlled historically and unnecessary work is admitted.”
 “Recording of change could be improved.”
 “CO system not fully implemented.”
 “Partially.”
Section D – Reporting of the Project / Projects
This section covers issues such as, “is there a reporting system in place?”, “is
performance measured and reported?”, “are risks identified, are trends identified
and are corrective actions being undertaken?”
The following chart indicates the results:
Fig 3.4

25
Section D - Reporting: Q48 - Q54
49%
19%
21%
8%
3%
Alw ays
sometimes
As and When Necessary
Control Imparied as a
Result
No Experience
It is interesting to note that only 49% of those questioned had a regular reporting
process and that 8% of respondents indicated that control was impaired as a result
of inadequate reporting.
Clients were asked to advise if the reporting process could be improved, the
following comments were received:
 “Not a bad report, but no baseline.”
 “Always room to improve.”
 “Benefits identified. Could be improved with additional resources.”
 “Yes.”
 “By lots of duplication in current reports. Cost reports, time reporting and
planning progress all using different cut-off dates.”
 “Yes.”
 “As the project has evolved, report volume has increased. Could be
streamlined to be more effective.”
 “The reporting process could be improved by a precise edition issued to the
project team and a detailed version maintained for the inevitable claim at the
end of the project.”
 “Yes. Cost / performance reports only carried out by 30-40% of projects,
therefore data is useless. Cash flow is reported to accounts separately for all
projects. EPC contractor reports not linked to BP systems. Reporting should
be linked to controlling system.”

26
 “I believe that by standardising the current reporting procedure GSK would
benefit as at the moment they change their reports more or less each month.”
 “51 is only milestones % completed or achieved man hours are not used.”
 “Yes. Not enough time allocated to interrogate programme progress reports.”
 “More automation and more integration would improve. Reporting will change
with P3e.”
 “Standard reports needed for all contractors. New reporting system currently
being implemented.”
Clients were also asked if key performance indicators and gained value analysis
were important benefits to project controls.
The following comments were received:
 “KPIs yes. EVA benefits to control.”
 “Yes. Client cost engineers control this work.”
 “Only way to control.”
 “Yes.”
 “Yes.”
 “Yes. EVA and KPIs give a standardised method of measuring the project
progress.”
 “Yes.”
 “EVA cost values should never be confused with progress % complete. KPIs
are beneficial as a yardstick measure.”
 “Only when well defined and understood.”
 “I believe EVA and KPIs are an absolute must in all aspects of project
management, as they enable the project team to understand what the
consequence of poor performance and control will have on the project budget
and timescale.”
 “KPIs not driver and actioned. Top 20 projects are concentrated on and those
need to happen.”
 “Yes.”
 “Yes.”
 “No. The KPIs are not relevant.”
 “Yes.”
 “EVA should be used and contracts incentivised.”
 “Yes.”
 “Yes. Client improving cost management.”

27
The questionnaire was discussed with some 24 different companies and the
statistical analysis derived from the results gives a general view from the sample
taken, However, there could be an element of bias in the results from the sample
taken. The 24 companies could be described as a low figure on which to base
discrete results; therefore we need to treat the statistical analysis results with a
level of caution when considering the sample size.
The questionnaire was also used to gain tacit knowledge from the project control
personnel interviewed and this feedback provides comments regarding the
effectiveness or otherwise of the project control processes being surveyed
Oil Industry Best Practice
Comparison of Results between Different Industries
The oil and gas industry was proven to be the most advanced industry in terms of
utilising best practice systems and processes with regards to project controls. The
systems and processes were developed during the late 1970s and 1980s during
the major investments to extract oil from the North Sea. With major investment to
design, construct, install and commission the oil and gas installations, which cost
in the region of £1 billion, it is necessary to have robust project control systems in
place. The major investments coupled with gas and oil sales agreements, which
meant delivering oil and gas products to a predetermined date focused
management to deliver on time and within budget. The major operations in the
North Sea, such as Exxon, Shell, BP, Marathon and many of the major contractors
such as Bechtel, Fluor and Amec were also responsible in driving best practice
project controls processes.
In essence the model for major projects in the North Sea was based around
certain key criteria.
a) Suitably resourced planning engineers who were experienced in oil and
gas, with engineering qualifications;
b) Suitable planning software to develop plans and reporting procedures;
c) Procedures for planning, progress measurement and reporting developed
and in place;
d) Planning, progress measurement reporting requirements specified in the
ITT to contractors;

28
e) Prior to the bid being assessed for constructability, durations, logic and
resource levels. Develop in-house schedule for comparison with
contractor‟s bids;
f) After award, ensure the contract master schedule is submitted by the
contractor six weeks after award date, tie in a financial reward or penalty to
that submission. The client‟s works with the contractor to develop /
approve the schedule;
g) Following agreement of the contract master schedule and its baselining, a
weekly progress measurement and reporting process was put into place;
h) The contract master schedule, (CMS), is developed from around a 400
activity network (level 2 / 3); this includes a level 2 summary schedule and
a level 1 executive summary. Also included, is a resource histogram and
„S‟ curve by overall and by area and discipline;
i) man-hour estimating based on an agreed set of norm values. Estimates
and scope of work were agreed between client and contractor;
j) A robust change control system in place, that addressed the impact of
changes against the schedule impacts agreed between client and
contractor;
k) Following the weekly progress measurement exercise, the achieved
manhours and percentage progress calculations at discipline level was
calculated. Disciplines included:
 Structural fabrication / erection
 Piping fabrication / erection / testing;
 Electrical;
 Instrumentation;
 Fire proofing
 Insulation;
 Architectural;
 Equipment.
Each disciplines expended hours were captured used and productivity
calculations determined. Productivity is based on the ratio of output/ input /
input..
k) Following the weekly progress measure, a weekly progress meeting would
review progress data. The progress by disciplines would be reviewed and
variances in planned versus actual progress and productivity would be

29
discussed and where necessary, recovery plans developed to improve
progress and productivity. Lack of progress and productivity could be due
to several factors:
 Insufficient supervision;
 Material shortages and delays;
 Wrong trade mix;
 Incorrect sequencing of work;
 Incorrect estimates of work scope;
 Client changes;
 Physical changes;
 Physical clashes;
 Weather.
It was, therefore, necessary to determine reasons for progress slippage,
once this had been established it was then possible to put into place
corrective actions to improve progress and productivity.

30
4 Transfer of the Oil and Gas Industry Tried and Tested Project Control
Methodologies to Other Industries
During more than 20 years in project controls, the author has been able to offer
advice to clients in other industries and the chance to introduce the oil and gas
methodology into other sections of industry.
It is notable to point out, that the North Sea oil and gas methodology was referred
to by the Government in the scope of a white paper addressed to the nuclear
industry. The white paper advised the nuclear industry that they needed to follow
the project controls, (estimating, cost management and planning) methodology as
used by North Sea oil and gas companies in the 80s. The nuclear industry in the
early 2000‟s did improve their systems and processes to introduce better controls.
The author was invited by a major nuclear industry to review how cost planning
and estimating processes were integrated on a portfolio of projects valued at over
£1 billion.

31
4.1 Company A Report
Comments on the attached report.
Company A invited the author to review their planning, cost management and
estimating processes and how they interfaced as groups within the Dounreay site.
This audit was carried out in March 2003.
The reason why Company A wanted this audit carrying out, was that the NDA
(Nuclear Decommissioning Authority) were to come to site in the following months
and Company A wanted to establish where they stood in relation to best practice
and project control standards.
My company, (Company X), were at that time managing the planning engineering
functions and also some of the cost and estimating roles.
It is interesting to note that in 2002, Company A had been advised by the author
that the planning system adopted by Company A was flawed and that a
hierarchical system of „rolling‟ of project plans to the Dounreay restoration plan,
should be adopted. This advice was ignored at that time, but was implemented
following the NDA visit later that year.
Another key observation from this audit was the inconsistent approach to planning,
estimating and cost control, with different WBS being used in some areas. It
appeared that Company A placed personnel into the different areas of the plant
without any agreed procedures at the different specialist level and also with no
guidance of how the specialist in cost, planning and estimating should interface
with each other.
A further observation was that the culture of the Company A site was such that
there was little understanding of the project controls processes. This in part was
due to the fact that the site was, until fairly recently, a nuclear producer of energy
and many of the decommissioning managers had worked as operation managers
and were now responsible for managing projects. The project management role is
far different from that of operations manager and different skills, such as cost
management, planning and estimating skills / knowledge are needed to manage
projects. This lack of understanding was a major factor in why the project control
disciplines were not operating effectively.

32
Finally, it is worth pointing out that the recommendations in the report were largely
implemented by Company A and a much improved project controls system was
introduced, to help manage the £4 billion decommissioning of the Dounreay site.

33
4.1 Company A
Dounreay Project Controls Review
April 2003

34
1.0 INTRODUCTION
1.1 Company A have requested that Company X carry out a survey of their
planning and cost engineering services, to ensure compliance with existing
standards and practices and to identify areas of improvement.
1.2 There was also a requirement to review the integration of planning and cost
engineering.
1.3 The survey was carried out between 24 – 27 March 2003.
1.4 The report will cover the following aspects of the audit:
1.4.1 Review the planning systems, guidelines and processes across the
site;
1.4.2 Review the cost control systems, guidelines and processes across the
site;
1.4.3 Review the integration of planning and cost control site-wide.
1.5 Discussions were held with eight planning engineers, six cost engineers and
10 project managers / senior project managers. The planning engineers were
an amalgam of Company A and Company X staff. The cost engineers were a
mix of Company A and various other companies.
2.0 METHODOLOGY OF AUDIT
2.1 Prior to the audit, Company X had developed a 100 point check list, which was
used as a guide to audit the planning and cost teams against current best
practice.
2.2 The Dounreay planning guide, (developed by Company A), was also used as a
method of assessing if a common approach was being utilised across the site.
Company X‟s planning toolkit also supports the Dounreay planning guide and
this was also referenced during the audit.

35
2.3 The PRICE system procedure, project sanctioning procedure (DP/PJM/003),
Dounreay Project Management Manual Issue 3 and the EARNED Value
Analysis and Reporting guideline company (A/GN/A45) were used as
reference points to conduct the cost control audit. The 100 point check list was
also used to assess a common best practice approach.
2.4 Discussions took place with planning engineers, cost engineers and project
managers. The planning engineers and cost engineers where interviewed
regarding how they operated against the available Dounreay procedures /
guidelines and the Company X 100 point check list. The project managers
were asked for their views of how planning and cost engineering worked in
practice and was there room for improvement.
3.0 AUDIT FINDINGS PLANNING
3.1 Schedule Development:
3.1.1 All planning groups interviewed develop levels 1 to 3/4 planning
documentation. They also develop look-ahead schedules to drive the
work through the supervisors / project engineers. There is some
evidence, however, of inconsistencies in the layout of the schedules,
i.e. different colours used in presentation, logos not applied, revision
boxes not shown, etc. From discussions, none of the planning groups
have resources shown on the look-ahead schedules; this is a
requirement on the planning guidelines.
3.2 Applying resources to schedules / resource coding:
3.2.1 Standard Resource Codings
There has been a standard resource code determined which should be
used site-wide. Very few planners, however, are using it; most are
using their own resource codes.
3.2.2 Applying Resources to Schedules
Resourcing is done by approximately 50% of the planners. Some
areas partly use resourcing and three areas do not apply resources at
all.

36
3.3 Resource Levelling
Only two areas have applied resource levelling to schedules. Six areas do not
apply levelling techniques.
3.4 Planning Involvement with Invitation to Tender Process
Approximately 50% of the planners are totally involved in developing
milestones, setting standard planning requirements and guidance on the
software required by contractors in the ITT. All planners are involved in
reviewing the schedules submitted by contractors. Part of the reason why only
50% are involved in the ITT process is that some areas do not have a
requirement to issue tenders.
3.5 Progress Measurement Techniques, „S‟ Curves / Earned Value
All planning engineers have a form of progress measurement which is
acceptable, i.e. direct measurement, information from project engineers,
measures by contractors and spot checks. Just over 50%, however, use „S‟
curves to compare planned versus actual progress. Only two areas use the
Earned Value method of measurement. Progress measurement is carried out
on a monthly basis in all areas and progress data is used to develop monthly
reports for the project managers.
3.6 Standard Activity Codings and WBS
There are no standard activity or resource codings used across the site. A
WBS is being used in 50% of the areas visited.
3.7 Baseline Planning
Approximately 50% of the planning engineers baseline the plans. Less than
50% keep a log of how and why the schedule has slipped over time.
3.8 Change Control
Over 50% of the planners are aware and use a change control system, which
provides a mechanism for approving major changes and milestone movement.

37
There is no evidence of change control at a lower level which would allow
changes of scope to be monitored and tracked.
3.9 Planning and Cost Interface
The range of interface between the two groups varies between cost and
planning going their separate ways to 100% integration. In most areas,
however, there is some form of integration which is through a WBS / CBS
structure.
3.10 Schedule Risk Analysis
This is carried out in-house or by consultants in many areas, but is not 100%
across the site. There is also evidence of regular updates carried out in some
areas.
3.11 Project Manager‟s View of Planning
The general view was that the planning engineers did a good job. There were,
however, two observations made in one area, which suggested there was
room for improvement in that area. This has been discussed with the BSG
planning manager.
There were also some concerns regarding how data was transferred from
projects to update the DSRP schedule and the accuracy of some of the DSRP
scheduled dates.
3.12 General Observation by Auditor
The general perception is that the planning teams are a conscientious group
who are trying to provide a good service to their project teams. Their efforts,
however, are not being applied in a consistent manner. If Company A are to
develop an integrated site plan which captures all projects and site resource
requirements then common activity and resource codings and commonality of
approach are mandatory.
Several times through the audit, planners advised that some project managers
were only looking for “simple bar charts” and that planning was only paid a “lip
service” in some areas. This was perceived as an issue that should be

38
resolved, but it is in isolated areas. There were also issues regarding project
managers not fully understanding the requirements of planning and control
systems and this is an area where improvements could be made.
4.0 AUDIT FINDINGS COST CONTROL
4.1 Cost Engineering Procedures.
Whereas Company A have developed the Dounreay Planning Guide as a basis
for implementation of the planning process throughout the site, to date it
appears that no similar guidelines exist for the cost engineering discipline. The
following reference documents were however tabled.
 Parametric cost estimating system (PRICE) to provide guidance with
regard to preparing estimates for decommissioning works;
 Dounreay Procedure (DP/PJM/003) Project Sanctions;
 Guidance note for Earned Value Analysis and Reporting;
 Dounreay Project Management Manual.
4.2 Cost Engineering Findings
Estimating Process and Application
Main indications were that initial estimate preparation is undertaken by „stand
alone‟ estimators in conjunction with project managers, with cost engineer‟s
involvement essentially being „post sanction‟ although individual managers did
utilise the cost engineer to validate / sanity check the estimates as they felt
necessary.
Individual cost engineers did get involved with preparation of „one-off
„estimates, but there did not appear to be a strict regime with regard to the
basis of the estimate, labour-norms / historical data / on-costs etc.
The estimates as produced, essentially reflected the categories within the
Work Breakdown Structure and cost engineers recognised the requirement to
align the actual WBS with a suitable cost breakdown structure and current

39
Company A account codes, although opinions were expressed that the site
does not currently have a fully integrated system.
There was also a difference of opinion as to whether the cost breakdown
structure whilst aligning with the WBS, correlated directly with activities within
the project programme, a fundamental requirement if these two disciplines are
to be used as an effective control process.
It was not possible to interview estimators or interrogate any estimates, or
ascertain the basis of local inflation factors / cost data information.
Concerns were expressed with regard to inclusion within the estimates for
operational costs of maintaining redundant building fabrics. Indications were
that estimates essentially make provision for routine inspections etc, but do not
allow for the actual cost of the structure, whereas these costs are ultimately
charges against the sanction sums.
Fundamental to the development of the original sanction is the establishment
of „risk provision‟ and the regular monitoring of the same. This is considered
separately within this report, albeit that the personnel interviewed were aware
that the risk process was implemented, but were not fully conversant with the
actual methodology used or the interpretation of the data produced.
Concerns were expressed with regard the periodic review of estimates to
reflect either general development / changes in circumstance / risk
management.
4.3 Contract / Project Strategy / ITT Documentation
The Dounreay project management manual identifies within the project
planning and initiation phase, the requirement to develop a structured project
and contract strategy, to ascertain the most beneficial route. The PMM states
that the contract strategy meeting may be held at a joint project strategy
meeting.
From the personnel interviewed, it appears that the cost engineer / planning
engineers do not get involved in the contract strategy workshops. We consider
that it would be prudent to involve such personnel, particularly at the contract
strategy meetings, given that the planning engineer will have an active role in

40
ascertaining key deliverables and the cost engineer should be aware which
format of contract implementation will best deliver the works with the balanced
ownership of risk / liability.
The PMM identifies the requirement for a structured tender assessment
methodology prior to tenders being evaluated. What the PMM does not
identify is whether actual scoring criteria / matrices are agreed and lodged with
the contracts department prior to the date for return of tenders, together with a
pre-determined „model‟ for the assessment of „Compensation Events‟
(variations), which may influence the overall commercial standing of the
submitted tender.
The cost engineers interviewed did not get involved with any „pre-tender return‟
pro-formas, the actual evaluation / modelling being done as part of the overall
process. Technical and commercial issues are addressed separately and
drawn together into an overall assessment, although we were unable to
examine a standard „tender report‟.
The PMM makes no reference as to whether cost risk analysis is undertaken
as part of the tender appraisal, although it is acknowledged that any such
exercise should be rigidly administered against all tenders and not used as a
method of „skewing‟ financial outputs, (specific queries should be resolved with
individual tenderers as part of the tender review process and not addressed
subjectively by the reviewing authority), to ensure transparency of the process.
4.4 Value Management
The nature of the bulk of the works currently being undertaken relates primarily
to front end engineering / scope of requirements development and as such,
traditional value management techniques have not been adopted.
4.5 Cash Flow Planning
Sanction values are essentially split into annual budget forecasts and costs are
monitored against these individual sums. Indications were that these budgets /
spend profiles are generally developed from the activity schedules within the
individual project programme.

41
We understand that any under-spend within a particular annual budget is not
generally made available for transfer within subsequent years, albeit that the
actual sanction value still retains these sums.
4.6 Cost Monitoring / Control of Resources
Actual cost reports were essentially prepared on a regular basis (determined
by the project manager) but there does not appear to be a standard pro-forma
or layout for the basis of the report. Whilst the individuals essentially
recognised the requirement to align the report with the WBS and the
accounting process, the actual required out-puts from the report appeared to
be with different cost engineering / project manager teams.
General indications were that major changes in out-turn cost / revised spend
profiles are detailed within the narrative of the report.
The current format of data collection retrieval is via hard copy and manual input
into „Excel‟ spreadsheet, although a system has been developed for the
administration of the overall „Alliance‟ contracts whereby the individual alliance
contractors input data direct into protected fields within a fully integrated cost
system, generating value of work done / linked to accounts and planning data,
whereby cost reports / earned value can be developed with the minimum
number of manual transfer / potential errors.
Sanction values detailed within the reports are determined from:
 Base estimate for main works / contractor / agency resource;
 Internal charges (personnel) established using standard charge out day
rates and estimated resource requirements.
Indications from the cost engineers were that whist such internal charges are
detailed within the original sanction sum; these costs are not actually charged
to the project, (as a central overhead) and hence cannot be monitored against
the sanction sum. We were informed that with effect from 1 April 2003, internal
charges will be identified and the cost engineer will have the facility to query
levels / costs allocated against individual projects / budgets.

42
Such revision to the cost procedure will enable closer monitoring of the overall
sanction amount from ‟time-now‟ but will not address any apparent over / under
spend up to this point.
Company A guidance note (GN/A/45) Earned Value Analysis and Reporting,
identifies the procedures to be adopted in preparing Earned Value reports,
although the note in its introduction recognises that such reporting is not
mandatory within the organisation.
The cost engineers interviewed incorporated Earned Value reports within the
monthly reports and these primarily reflected the main activities within the
programme.
There did, however, appear to be differing opinions as to whether Earned
Value should monitor against invoiced amounts or actual committed value.
In all but one instance, no cost engineering resource applied KPI techniques to
monitor project performance, the exception recognising the benefit in aligning
overall performance / release of target sums with contract milestones.
4.7 Risk Management Process
Risk analysis techniques are applied at „approval estimate‟ stage, as part of the
project sanction process. This essentially identifies the P10, P50 and P90
percentiles, the latter being incorporated within the sanction paper.
The risk process is a dynamic process, which if to be used as an effective
management tool, should be reviewed on a regular basis, as not only a cost
and programme aid, but as a general vehicle for communication / delegation of
roles and responsibilities.
All parties recognised the need for ongoing / regular reviews, but the actual
practice differed greatly from the theory. Responses ranged from the
consensus that once the sanction had been set, there was no need to revisit
and re-run the model, to the recognition of the need to actively drive / manage
risks out of the process, including where risks had passed, re-running the
model to identify possible release of funds for other works within the sanction
amount (contingency draw down) or, conversely identifying new risks /
changes in impact with a potential cost over-run.

43
The general consensus was that regular reviews should be done, but there did
not appear to be any structured approach.
Given that the individual projects all feed from „the bottom-up‟ into the overall
de-commissioning programme, there appeared to be no lateral relationship
between individual projects, in so far as the impact of particular events on one
project may feed into critical areas of another. This issue was also noted with
particular regard to planning interface of separate projects, (see planning).
We were unable to ascertain the level of detail incorporated within the risk
process, whether correlation was considered or criticality / sensitivity analysis
was undertaken.
4.8 Interface between Cost and Planning Engineers
All interviewees recognised the importance in developing a close working
relationship between both disciplines and there are individual projects where
these act as part of an integrated team sharing office facilities. This is
paramount if close dialogue and hence, regular dissemination of information
maintained.
There are, however, still areas where the two disciplines work remotely and
this ultimately leads to breakdown in information exchange / different
interpretation / reporting structures.
4.9 Change Control
Fundamental to effective project control, is an effective change control
procedure. Company A are currently developing a suit of procedures
covering:
 Project change control-sanction impact;
 Milestone change control;
 Budget change control.
Procedure 105-project change control has already been rolled out and is
operational. Indications are, however, that whilst individuals are aware that the
procedures exist, their implementation is piecemeal, with individual personnel
having only a high level awareness of their existence, but not implementation.

44
There does not appear to be a standard procedure for „project‟ change control
at actual „workface level‟, to address constructional change, which in isolation,
may not appear to impact upon the overall sanction, but which could
cumulatively have such an impact or impact on phasing budgets.
5.0 RECOMMENDATIONS
5.1 Planning
5.1.1 It is essential that an integrated Dounreay site plan (IDSP) is
developed. This will incorporate operations, decommissioning, projects
and site services. Near term work plans (2-3 years) will be developed
for all sections. These near term work plans would then automatically
roll up in Primavera P3 to form an IDSP. This would take the form of a
fully interfaced, resourced plan showing detailed work schedules over
the next 2-3 years. Outputs from the plan would be resource
requirements to support the plan, integrated schedules, „S curves and
Earned Value reporting.
5.1.2 In order that an IDSP is possible, however, it is necessary to develop a
site-wide activity and resource coding system. This is mandatory to
ensure an IDSP can be developed. Historically, this can cause a lot of
effort / discussion, but it is necessary if an integrated plan is to be
developed.
5.1.3 All near term work plans to be fully resourced by site planners.
5.1.4 Resource levelling techniques to be applied to near term work plans.
5.1.5 In order that the IDSP can be managed it will be necessary to have a
programme manager with a staff of 2-3 planners. They will receive the
individual plans from the individual site planners and integrate the
schedules, develop outputs, manage the monthly progress reports from
the site planners, review overall site resources and determine priorities.
5.1.6 Planning engineers need to be additionally involved in the ITT
documentation and review of tender schedules.

45
5.1.7 The use of „S‟ curves and Earned Value reporting needs to be
encouraged.
5.1.8 Baseline planning techniques need to be encouraged at site planning
level.
5.1.9 Change control methodologies need to be incorporated on a site-wide
basis. There are currently two change control procedures in use by
Company A. The planning and cost teams need to be aware of the
systems.
We would also advise that a change control procedure is developed to
capture scope changes, e.g. revised drawings, site clashes, revised
methods, etc. Although these changes can be small they can be
significant when reviewed cumulatively. The capture of these changes
ensures the plan is dynamic and the correct level of resources is
applied to the works. We would recommend that change control
workshops are initiated for planners to get the message across
regarding the importance of Company A‟s procedures.
5.2 The interfaces between cost and planning are not consistent across the site.
In some areas it works very well, in others there is a divergence. In those
areas where there are problems we need to carry out some training /
integration processes in order that we quickly resolve the problem areas.
5.2.1 There is a misunderstanding of the planning process by some project
engineers and project managers. We would recommend training in
those areas of the capability of P3 and the planning process. Company
X could carry out such training if required. This training could also be of
use to the cost engineers and give them an appreciation of the P3
planning system. We have applied this 2-3 hour course in other
nuclear facilities with good effect.
5.2.2 The planning guidelines developed in 2002 need revising to reflect the
LMU requirements, WBS, an IDSP approach, common coding
structures, cost integration and change control.
5.2.3 We would recommend also that to aid the drive to reinforcing a
common approach, a Company A planning processes folder is

46
developed. This would take a similar form as the Company X‟s
planning toolkit, but would concentrate on the following:-
(a) P3 standard presentation charts, colours, logos, revision box. This
will allow one common output, and if the planners are transferred
from one group they will pick up a standard approach across the
site;
(b) The Company A standard activity codes;
(c) The Company A standard resource codes;
(d) The basis of the change control procedure including site changes;
(e) Earned Value Analysis Company A standard approach;
(f) Progress Measurement, Reporting Company A standard
Reporting / weightings;
(g) Risk analysis guidelines;
(h) Milestone scheduling;
(i) Estimating data – data availability;
(j) ITT requirements;
(k) LMU approaches / guidelines;
(l) Close out data.
5.2.4 In order that the revised guidelines and the planning process
documentation are being applied in a consistent manner, we would
recommend that an internal or external audit system is introduced. This
would lead to planners being audited against the procedure and
process and non-conformance notes issued where appropriate. This
policing of the systems would lead to conformity across the site.
5.3 Cost Engineering

47
Conclusion and Recommendations.
From the discussions held between individual cost engineers and project
managers, there would appear to be marked differences with regard to what
individuals require / expect from the project team. There does not appear to be
any level of consistency of approach with regard to the day to day contract
administration of individual projects / the decommissioning project overall with
regard to:
 Cost reporting-frequency / cut off dates / reporting format / presentation;
 Involvement with regard to development of / or validation of estimates;
 Tender appraisal-cost engineer / planning engineer involvement;
 Risk analysis namely: periodic review, probabilistic modelling, proactive
management of risk, identification of new issues;
 Integration of cost and schedule analysis.
Initial examination suggests that the following need to be implemented as a
matter of urgency.
Development of a „generic „cost engineering procedure addressing:
a) Cost reporting format / layout / timetable - the intention should be that
individual cost engineering / planning personnel should be able to migrate
from one project onto another and following a brief introduction into the
status of the project, pick up and run with the process with the minimum of
disruption, following a common format and within a rigid timeframe to meet
the overall „decommissioning plan‟.
b) Sanction / budget base-line and re-phasing- procedures should identify if
and when current / forecast expenditure profiles are underachieved or
exceeded with revised spend profiles against the individual budget /
sanction amounts. Reports should detail variance in month over forecast
spend / effect on overall forecast, with reasons for major changes in the
period.
a) Change control - it is acknowledged that change control procedures are
currently in development and it is essential that these are rolled out and
implemented to ensure full traceablity throughout the project process not
only identifying main reasons for changes to project budget / sanction

48
values, but also identifying cumulative impacts of change on not simply
levelling reasons for revised forecast / sanction values at the „last event in
the line‟.
Risk management process - there needs to be a structured approach to
effectively identifying and managing risk including details of:
Stages of workshops / reviews-including:
 Design development;
 Sanction;
 Pre-contract;
 Construction-periodic or at major changes;
 Preparation for workshop-develop pre-workshop handbook outlining aims
and objectives, on the day / post event / input required on the day /
attendees required;
 Frequency of qualitative / quantitative reviews;
 Management action plans and implementation;
 Probabilistic modelling to be undertaken, data output required / sensitivity
analysis-identification of key issues.
Interface between cost and planning engineer - both disciplines to form part of
an integrated team to ensure dissemination of information and a common
reporting process. Consideration should also be given to combining roles
within a cost and planning remit.
Possible development of a cost engineering „tool-box‟ - the generic process
detailed above should identify the procedures and timetables to be adhered to
such that as stated any cost engineer should be able to identify with any
project with the minimum of handover. It is however, acknowledged that actual
accounts procedures / output requirements within the Dounreay
decommissioning project may not necessarily reflect those issues identified
within the traditional construction industry. Consideration should, therefore, be
given to developing a separate „tool-box‟ identifying those methodologies
adopted, to ensure compliance with the generic procedures.
Periodic audit – It should be acknowledged that whilst specific procedures /
processes may be introduced, these are only effective if strictly adhered to.
We would therefore, suggest that spot audits of individual projects from

49
feasibility to implementation stage, to address implementation of generic
procedures „in the field‟.
6.0 ESTIMATING
6.1 We are mindful that in order to populate the new term work plans and the long
range plans with manhours and cost estimating data, (as required by the LMU),
an estimating system will have to be in place.
6.2 Whilst recognising you have estimating staff and without wanting to appear that
we are selling our skills, we do have 20 years experience developing estimates
for other companies. Also we have many different forms of estimating tools
including a suite of manhour norms for piping, electrical, mechanical, structural,
etc., many of which have been shared with our / your planning staff at
Dounreay.
6.3 Estimating is an area, therefore, where we could provide some assistance if
required.

50
4.2 Company B Report
The author was also invited to review how project planning was operating in two
major pharmaceutical companies. Both companies managed a portfolio of
projects valued at around £15 – £20 million per annum.
Notes of Experiences / Tacit Knowledge
Company B requested we review how they carried out project planning, as they
were uncomfortable with current processes and planning engineering. The client
wished to improve the present processes, but was unsure how to carry this out
and effect change and improvements.
Observations
The client was managing approximately 60 projects with an annual budget of
around £15 million. The work was managed by around 20 engineers and
managers, the projects were major improvements to a pharmaceutical plant
involving civil, construction, mechanical and electrical works. Project plans were
being developed in Primavera P3, however little care was being taken to phase the
projects, with the result that many projects were commencing on the same day
and resource levels were insufficient to execute the work. Progress measurement
was not carried out in a formal manner and the management team had no real
idea if a project was on schedule or late. Finally, apart from the senior managers,
it appeared that most people were not interested in the project status.
Actions
A meaningful schedule was developed, agreed with the staff and baselined. This
became the control schedule and as new projects were added they became part of
the revised schedule. Resources were added to the schedule and resource
levelling took place to determine if sufficient staff was available to complete the
work as planned.
Progress measurement procedures were developed and agreed, this resulted in a
monthly measure with progress reports issued, indicating actual versus planned
achievements at project and overall levels. The results of the progress measure
were reviewed at a monthly progress meeting. This meeting then allowed the
engineers and managers to explain why the slippage to their projects had

51
occurred. Although the engineers and managers were not used to explaining why
the schedule had slipped, most did after some time understand that it was
necessary to understand why. The analysis of achievement indicated that only
around 25% of milestones were being achieved prior to implementation of a
revised planning and progress system. During the implementation, analysis of the
progress measurement indicated that milestone achievements were generally not
achieved, as a result of 6-7 repeated major factors, i.e:
 Lack of QA resource;
 Material shortages;
 Owners failing to sign off project closure;
 Facility not available to carry out tasks;
 Lack of facility resource to support project teams.
Having, therefore, identified the problems that repeatedly prevented milestones
and programme delivery being effective. A series of improvements were put into
place to solve the problems. Among these were:
 Additional QA resources;
 Improved material delivery;
 Agreements from owners to sign off project closure reports;
 Improved interfaces with facilities to gain access and support.
Going forward, the monthly progress review meeting continued to identify other
problem areas and an action plan developed to solve the problems as they were
identified. The outcome of installing improved schedule, carrying out a progress
measurement process / reporting, identifying issues that impacted the plan,
resolving those issues resulted in achieving 85% of the milestones, as opposed to
25% achievement.

52
The process is shown below:
Fig 4.1 Process Flow Chart
Progress
measurement
Improved performance
Report
Progress meeting
Issues resolved
Feedback loops
Feedback loops
Scope of
work / project
Plan developed
cost / resources
Baseline plan
Progress
measurement
Improved performance
Report
Progress meeting
Issues resolved
Feedback loops
Feedback loops
Scope of
work / project
Plan developed
cost / resources
Baseline plan

53
4.2 Company B
Change Projects Planning Review
February 2003

54
Contents
1 Introduction
2 Report Approach
3 Management Overview
4 Present Status
5 The Way Forward
6 Software Recommendation
7 Outsourcing Strategy Discussion
8 Training
9 Proposal to Provide Planning and Cost Services
10 Report Conclusions
11 Proposed Implementation Strategy

55
1 Introduction
Pharmaceutical products have been produced at the Avlon Works for a number of
years, under a series of guises, but more recently into the present production
company, Company B. As part of their continuing philosophy towards customer
satisfaction, high management levels now wish to raise the level of expectancy
with respect to project planning and reporting.
A presentation to the capital projects department (Change Projects) in January
2003 by Company X, put forward the suggestion of a review of the in-house
planning procedures. This review, over a two week period would look at how the
current set-up is working, highlight problem areas and put forward viable solutions
to improve and raise the profile of the planning function. Key areas to review are
as follows: -
 Review the planning process within the department;
 Develop an impression of how the planning group is performing from other
parties within the capital projects department;
 Propose where improvements could be made in terms of efficiency,
effectiveness and content of developing programmes;
 Recommend a planning software package that will enhance the
department and bring it up to speed with current practices.
As a follow-up, the findings of this report can be presented at Company B‟s Avlon
Works offices. It is also hoped to take advantage of this opportunity to offer advice
on how Company X can assist with Company B‟s target of upgrading their
planning capabilities.
This report is intended for Company B‟s senior management, however, there is no
reason why it should not be shared with all levels, as it is the same people who
have contributed and assisted in its preparation.
2 Report Approach
This report has been developed with assistance across the full spectrum of
professionals, within the change projects organisation. All levels of managers,
engineers, designers and co-ordinators have been included to broaden the debate
as to the way forward.

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