Ihab Saad – Project acceleration Time compression
AI: Summary ©
The speakers discuss the importance of accelerating a project to improve productivity and avoid overtime. They stress the need to manage and retain labor in a shorter period to avoid overtime and create a cost curve. The speakers provide guidance on converting a project duration to a cost slope and identifying critical and non-critical activities to reduce project duration. They also discuss the benefits of working in a longer shift and updating project timeline through multiple conditions and identifying the best methods to compress each activity.
AI: Summary ©
Accelerate the project. Finishing the project early means contractor
can move to other jobs again. If there are other opportunities that
the contractor needs to use these resources for, then we're going to
try to shorten the duration of this project in order to benefit
from that new opportunity. It may be more profitable to do so that's
for the contractor if, for example, we anticipate some
material or equipment price increase in the future, and we
want to finish early so that to avoid this price increase, that
would be another venue the owner has directed the contractor to
accelerate the project. In this case, is going to be considered an
owner initiated acceleration, and usually the contractor would get
some reimbursement for any extra costs that might incur due to that
owner initiated acceleration.
How to accelerate the project? There are different ways, the
first of which is to revisit or study the schedule thoroughly to
find any errors or unnecessary logics or constraints. So for
example, if we have some activities that are done on a
finish to start basis, what if we can do them on a start to start
basis, or with lag or finish to start basic with overlap, so that
we would shorten the duration of completion,
fast track the project by breaking it down into smaller packages and
starting the construction of earlier packages while the latter
ones are still in design or bidding. This is what we call fast
tracking of the project. Conduct value, engineering, productivity,
improvement and constructability studies. Are we making the best
use of our resources? Can we increase the productivity of that
team of labor, or of that piece of equipment, or the coordination
among these different resources, change the method of construction
or its sequence, doing things in parallel rather than doing them in
series, one after the other, might result in time shortening,
ultimately improve the production rate or P in the duration
calculation equation Q over P, if I increase p, that means that,
while keeping the quantity the same, that means that the duration
is going to drop
other options, which is, unfortunately, what comes first to
some people's mind, work over time, Over time might not always
be the solution, or offer incentives to workers or crews for
improving productivity within the same time. If you can finish more
work, you're gonna get a bonus or acquire more workers and equipment
again to work within the same time so that you don't have to work
overtime.
Because over time, by the way, you know that you're gonna pay a
premium for the overtime maybe one and a half times the average rate,
while you're not getting the same productivity. Because imagine if
some worker have worked for eight hours, and you're asking them to
work three more hours in overtime, you do not expect that their
productivity is going to be the same as during the normal work
hours, so you're paying more and getting less
work a second or possibly a third shift. So you're going to have
different shifts of labor, each one working only for eight hours.
And in this case, you're going to get fresh labor to work on the new
shift acquire special materials and equipment that can help speed
up the work process. For example, in concrete, we can have
accelerators that are going to accelerate the setting up of the
concrete so that we can remove the form works faster. Therefore we
can proceed to the next floor faster. Improve project
management, or supervision, again, project management and
encouragement and so on, proper supervision can provide better
productivity rates, improve communications among parties,
particularly during the submittal process, to make sure that we get
our submittals on time. We get our approvals on time, and we are not
delayed by such paperwork.
In order to accelerate the schedule, the contractor will most
likely need additional resources or better utilize existing ones.
As a project manager, you should know how and when to accelerate
the schedule and understand the trade off between time and cost,
because usually, as we agreed before, time is a resource. You
pay money to acquire time. So what we're trying to do here is buying
time by doing more in a shorter period of time, and that's going
to cost us, most likely, some additional resources
for the time. And cost trade off. We're going to deal with some new
terms, and basically we're going to deal with primarily five, four
or five different new terms. Let's learn about them here right now,
the original duration for each activity, which is also called the
normal duration under under normal conditions. How much would it take
to finish that activity?
And that's referred to as nd, or normal duration,
the cost associated with completing the activity within its
normal duration is.
Have a higher cost per unit, and at the end, we have a lower cost
per unit. This is what we call the economy of scale, or buying in
bulk. The more you buy, the more discount you're gonna get on the
price. So the larger the amount that you order, the lower the unit
price that you're gonna get. And that's why the unit price might
not be
linear.
The question now is, if we want to calculate the total cost of the
project, which is direct plus indirect, in this case, it's going
to be the once only plus the time related, plus which are indirect,
plus the quantity proportional which is direct. The dilemma that
we have here is, how are we going to add these three costs together?
The time related and the ones only can can be added together because
they have the same units time on the horizontal axis and costs on
the vertical axis. So we can add these two graphs together, but we
cannot add this third one because it has a different element on the
horizontal axis, which is quantity. We cannot add apples and
oranges, in this case, time and quantity. Therefore we have to
think about a way of converting this quantity cost curve into a
time cost curve, and we can add it to the other two. Therefore we can
get the total cost of the project graphically as well.
So here we're going to start learning about something called
the cost slope of activities. Now we're talking about direct costs
only, cost of labor, material, equipment, subcontractors, etc.
If you have this time, which is a normal duration to finish the
activity, it's going to cost you that much, which is a normal cost.
We agree that if you try to shorten the time, you're going to
need to use more resources. Therefore, if we want to do it at
the crash duration, which is shorter than the normal duration,
we're going to need to have a crash cost which is higher than
the normal cost. So basically what we have on the horizontal axis
here the difference between the normal duration and the crash
duration is going to be called delta t, or difference in time.
That's the difference between normal duration and crash
duration, which can also be referred to as the compressibility
of the activity. This is the amount of time by which the
activity can be compressed.
And on the vertical axis, the difference between the crash costs
and the normal cost is going to be the delta c, or difference in
cost. So of course, crash cost is going to be higher than normal
cost. The slope connecting these two dots, the CC, CD, with the nd
and C,
we're going to get what's called activity cost slope. Activity cost
slope represents the average increase in costs by shortening
the activity by one day. So delta c over delta t. How much is it
going to cost, on average, for short shortening the activity by
one day, the units of the activity cost slope are going to be dollars
per day or dollars per hour, depending on the units of that
time on the horizontal axis.
So talking about the activity utility curve, it's essential data
required for the application of network compression are the direct
costs and time curves for the activity and that's called the
activity utility curves.
So basically here what we said normal time and normal costs are
going to give us a point. Crash time and crash costs are going to
give us another point. This is going to be the relationship
between the two. But for simplicity, we're going to assume
that it is a straight line connecting these two dots, as we
have seen on the previous slide,
direct cost for each method of accomplishing accomplishing an
activities plotted against the duration required to do it in that
way. In practice, there are normally only a limited number of
ways investigated, and thus only a finite number of points are
defined. It's not an infinite number of methods, but it's a very
discrete number of points. Basically, if I can finish it in
five days, it's going to cost that much. If I finish it in four days,
it's going to cost that much. If I finish it in three days, it's
going to cost that much.
So that's basically what we're talking about here.
It's straight lines, short segments of straight lines. And
we're going to approximate that by connecting these two points at the
end to get the cost slope that we just talked about.
That's pretty much the same thing.
So this is the cost loop s2 is the cost slope.
Per hour, plus the 32 to $32 per hour, all of this is going to be
the direct cost for the project. Now, if we want to shorten that
duration from 100 hours to shorter than that, then we're going to use
overheads. The more overhead hours, the shorter the duration of
the project, but the higher cost by adding these overtime wages and
benefits,
and then you can, you can calculate the the net, because
each day that you shorten assuming that we're working eight hours a
day, so 12 and a half days, each day that you shorten, you're gonna
save on the indirect costs, $100 per day. So you're gonna pay more
in the direct costs, but you're going to pay less in the indirect
costs, and that's going to be the balance that we're going to be
looking for.
The objective is to shorten the total project duration by
compressing the duration of activities on the critical path.
Only critical activities will be considered for compression.
Remember now that we're going to have four conditions. So you have
to remember these four conditions before you can start compressing,
before even considering an activity for compression, these
four conditions are, first of all, the activity has to be critical.
If it is not critical, do not consider it for compression.
Number two, it has to be compressible. If its delta t is
equal to zero, which means its normal duration is the same as the
crash duration, then this activity cannot be compressed. So do not
waste your time or money.
Third, it has to be an effective activity. And this is the very
interesting part here. If you have two critical activities that are
connected by a start to start relationship.
If you compress the duration of the first one, is that going to
affect the completion date for the second one? The answer is no,
because they are linked by start to start so the completion of the
first one does not affect the shortening the duration of the
project. Same thing. If you have two critical activities connected
by a finish to finish relationship, what's driving the
completion date for the first for the second one is the relationship
with the previous predecessor. So if you shorten the duration of
that last activity by itself, it's not going to achieve anything,
because it has to wait for that number coming from its predecessor
anyway. Therefore, if you have a start to start relationship on two
critical activities, the first one would be considered ineffective.
If you have a finish to finish relationship on two critical
activities, the second one or the successor, would be considered
ineffective
once an activity satisfies all of these three conditions, it's
critical, it's compressible and it's effective. We have multiple
activities satisfying all of these three conditions. Then which one
to start with? The cheapest one to compress? Which means the one that
has lowest cost slope. So among the critical, compressible and
effective activities, we will start with the activity, or
activities with the lowest cost slope, then move to other
activities in an ascending order of their cost slope. So I'm going
to keep the most expensive activity until the end.
So the basic procedure is start with the critical activity having
the flattest or the lowest cost slope, and then considering
successively those having steeper or higher cost slopes, if non
critical activities. Now, while we are compressing, we're going to
keep an eye on the non critical activities. The non critical
activities are recognized by having total float, but each time
we are compressing the duration of the project, that total float
decreases until a certain point in time where the activity might lose
all of its total float, the non critical activity might lose all
of its total float, becoming activity, then it becomes a new
candidate for compression
if non critical activities lose their flow time and become
critical duration, the compression of the original critical
activities, then these new critical activities must also be
considered when selecting activities to compress to further
reduce the total project duration. Question Now here is I started
with one critical path and several other non critical paths. While
doing my compression, one of the non critical paths became
critical. So now I have two critical paths. Which one should I
compress to reduce the total duration of the project? The
answer is both, because if you compress one and leave the other,
if you remember the definition of the critical path, it was the
longest path in the network. So if you compress one of them and leave
the other one, then that one that was left without compression is
still going to be the longest path, or the critical path, and we
have not achieved anything. So if you're going to compress two
paths, you have to compress both by the same amount.
At the same time.
So the safest method is going to be compressed the network one day
at a time, unless the minimum total float on the non critical
activities is greater than one day. So let's say the minimum
total float on the non critical activities is 12 days. It means
that I can compress the network the original critical path by up
to 12 days before creating a new critical path.
Once I recognize this fact, I can compress more than one activity by
more than one day in one single step to simplify my calculations
at each stage of the network compression calculations, we're
going to follow these steps. First of all, identify the critical
activities. Second, delete from considerations those with zero
potential for compression. If they have delta t equal to zero or they
are incompressible, then we're not going to look at them among the
critical activities, exclude the non effective ones, as we said,
the predecessors in start to start relationship and the successors in
a finish to finish relationship.
Number four, select that activity or group of activities, if
parallel critical paths exist with the lowest combined cost. Look if
you're trying to compress more than one path at the same time,
and always watch for the creation of new critical paths. So keep an
eye on the total float of the non critical activities, and watch if
it's dropping and these activities are becoming critical
at each stage of the network compression, we're also going to
notice, compress the activity, or activities as identified in step
three, update the network time calculations and the corresponding
Project Direct Cost. Repeat these steps until
further. Direct reduction in the project duration is not possible,
or until the desired project duration is reached. So for
example, we may say, I do not want to compress the network to the
maximum. I just need to save three days. So I'm going to compress it
only by three days and then stop the project is late by three days.
I don't want to shorten it beyond that, so only three days of
compression are going to be needed, or until the cost of
compression is no longer economically feasible or
meaningful. So if the question is, compress the project duration
until I reach that lowest point on the total cost curve. Beyond that,
compressing the duration is going to result in another increase in
cost, I don't want that. So I just want to reach the lowest cost
point, which is going to be called My optimum duration.
So we're going to stop here for this time, and then in our next
lecture, we're going to look at an example, and we're going to solve
that example in systematic steps. I'll see you in a short while,
while working on that example.