Ihab Saad – Resource Management

Welcome to another scheduling class, and today we're going to

talk about an introduction to resource management, how to manage

resources in a project. First of all, what's the definition of a

resource, and then how are we going to manage these resources

successfully?

So the contents are going to be introduction to what resources

are. And then how are we going to allocate these resources to

different project activities? Then how are we going to graphically

represent these resources and resource distribution through

what's called a resource use or resource loading histogram, and

then the cumulative curve, which is a compilation of that

histogram. And finally, how are we going to level these resources, in

case the use of these resources, or the need for the resources

exceed that resource availability?

So first of all, the definition of what a resource is. For something

to qualify as a resource for a construction project, it needs to

meet three criteria. The first one, it has to be needed for the

project. So if it's not needed, it's not a resource. Second, it

can be managed. So if you cannot manage it, it is not a resource.

Sunshine, for example, we cannot manage that so it would not be

considered as a resource. And the third one is it has to cost money

to acquire to be considered a resource. Again, air that we

breathe, we need definitely to live, rather than to work. But

since it's free, it cannot be considered a resource. On the

other hand, compressed air which is going to be manufactured,

compressed through a compressor. In this case, it can be managed,

and we pay money to acquire it through the cost of the

compressor. In this case, it's going to be considered a resource.

Examples of construction resources include the four M's. That's an

easy way to remember them, manpower, which is labor,

machinery, which is equipment, materials. And finally, the most

universal

resource, which is money, since it can be translated in any of the

other three resources, hiring labor is going to cost money,

purchasing or renting or leasing machinery or equipment is going to

cost money. And buying the materials, it's gonna cost money

as well. So the first three types of resources can be translated

into a monetary quantity, a part of financial resources.

Resources also can be classified under one of two different

classifications, either stackable or non stackable. Resources

stackable, also known as stockable, which are resources

that can be acquired in bulk and stored or stacked for a later time

to be used whenever needed. Examples include some materials

like wood, for example, pipes, electrical supplies, things like

like that. Own capital, if you have your own capital, your own

money that you're going to be working with, it can be stocked or

stored in a bank, owned equipment, which can be stored in a

warehouse, and some other types of some types of information, like

records, for example, if you have something on record, In this case,

it's considered as a stackable or stockable resource.

The other type, which is the non stackable, or non stackable, are

resources that have to be used as soon as they are available.

Otherwise they cannot be used later, which is basically use it

or lose it. Examples include labor productivity, if you have a crew

of labor today, and you don't use the productivity of this crew of

labor, then that day is lost, borrowed money. Again, if the

money is borrowed and you do not utilize it, then it doesn't have

any value.

Rented or leased equipment, if you rent the equipment or lease it and

you do not utilize it while you're renting it, then again, its

production date is lost. Some materials like ready mixed

concrete. Ready mixed concrete cannot be in its final shape,

cannot be stored or stacked for a while, except for maybe 45 minutes

to an hour or so, but no longer than that. So whenever it's

available, you have to use it immediately. And some types of

information that has volatility or it has to be acted upon

immediately so that it will be useful or valuable, like stock

market for example, stock market information this is this varies by

the minute, so if you act late, that's that's going to cause a

problem.

The third thing that we need to know also about resources is their

availability limit. In how many units is that resource going to be

available and for how long? So under the availability.

Limits. We have two different types. We have something called a

normal limit, which is under normal conditions and without

reaching extreme measures, this amount of units of the resources

are going to be available for immediate use. So it's available

at any time without having any problems.

The other type, the second level, or limit of availability is going

to be called the maximum limit, which is under extreme measures,

if push comes to shop, if I have to do it right now, this is the

maximum amount of resources that have that can be made available.

It's usually greater than or equal to the normal limit.

Peaks are going to be any amount

any demand of that resource exceeding the maximum availability

limit. So if I need, for example, three bulldozers today, and I only

need two, then I have a peak of one extra bulldozer. It results in

the project being delayed if on a critical activity, because again,

the only way to do a job that requires three bulldozers with

only two is to extend the duration of the activity. If it's a

critical activity, then the whole duration of the project has been

extended.

This is a graphical representation of what we're talking about here,

so we can see, for example, this is this green line represents the

normal limit, and this red line represents the maximum limit. This

is the aggregation of resources. So today I'm going to need three

units of that resource, if this is three, for example.

And here we're going to need four. Here we're going to need five.

Here. We're gonna need if the maximum level is seven, for

example, here we're gonna need eight. Here we're gonna need four.

Again, here we're gonna need nine. So that resource demand varies

depending on the activity being done on that particular day. So on

the horizontal axis, we have the time. On the vertical axis we have

the resource units, or their translation into the universal

resource, which is money or cost. So obviously, here we have a

problem with these two peaks

the project as such, if these two peaks occur on critical

activities, this is infeasible. Even if it's on non critical

activities, it's still in infeasible or non feasible, unless

and until we get rid of these peaks, we notice also that we have

troughs,

which is areas where

I can afford having this resource but I don't need it. So if you

have played Tetris before, for example, you know that the secrets

to the secret to lasting in Tetris is to manage the shapes and try to

fill the troughs with the peaks. And this is exactly what we're

gonna try to do. We're gonna try to see if we can take that peak

and fill in that gap or that trough. So by redistributing the

resources, this is what we're gonna call later, resource

leveling.

Some examples of resources include salaried labor, like the project

manager, Superintendent, Project Engineer, Secretary, lab

technician, security guard and others. If you notice, all of

these do not perform any physical work on the project. Their job is

primarily supervisory or administrative, but they do not do

any physical work like they do not lay concrete, for example, or

install tiles or vinyl or carpet or paint walls. They do not do

that. They are tied to a project, but not tied to one particular

activity or work package, and they get paid a fixed salary, therefore

mostly indirect costs. The salary of the project manager is

independent of how many cubic yards of concrete have we placed

today.

On the other hand, we have the hourly workers or the daily

workers, or the

the workers were, whose payment depends on their performance or

the amount of work that they have done. So they are hired to perform

a specific task or activity, like carpenters, masons, iron workers,

electricians, for men, etc. And they are pet for actual hours

work. Therefore it's mostly direct cost, as later we're going to talk

about direct and indirect costs in another lecture. Their production

rate is a conversion factor between achieved quantity and the

number of hours worked. So the production rate is the quotient of

amount of work divided by number of hours worked. If you notice

that

p is equal to q over T, remember the equation that we used to you

before T or duration or time is equal to q over P, quantity

divided by production rate.

And here, if I want to know the production rate, I can divide the

quantity by the number of hours worked, and that would give us

units per unit of time, like cubic yards per hour or tons per day and

things like that.

For the equipment, equipment that assists. We have different types

of equipment as well, equipment that assists in the construction

process, not permanently installed in the project. It's just used to

achieve work activities, like a tower crane, like a loader, like

an excavator,

power generator, forklift, temporary power generator, just

for construction. It's similar to direct labor. Its cost is derived

from the completed quantity of work, related to the number of

hours that it has worked and the hourly rate. Inexpensive personal

tools are usually treated differently, either as a lump sum

for all tools, or as the laborers personal property. So it's going

to be part of the labor cost, trowels, for example, or

10 tools that are going to be used by labor. Hammers.

On the other hand, we have the installed equipment which stays

permanently in the project after completion, thus becoming part of

the direct cost priced in the bid. Examples include heat pumps,

generators that are going to be permanent in the project, for

power generation on the project, while it's operating air

conditioning units and so on and so forth.

Elevators,

materials, construction materials for use, for construction, but not

being part of the final project deliverable still treated as the

red cost and part of the pricing of the relevant bid items.

Examples include formwork, scaffolding, shoring, etc, is not

going to be part of the permanent work, but it's needed to achieve

that permit work the other on the other hand, we also have the

installed material which is part of the final deliverable, and

therefore the direct cost. Examples include concrete, rebar,

concrete masonry units, bricks, blocks, insulation, tiles, paint,

etc. All of these are materials that are going to be part of the

final completion of the project.

So money is the financial resource used in construction, and there

are two methods are available for assigning budgets to activities,

either assigning a lump sum amount for each activity, without

specifying how the number is sliced or which resources are

used. So for example, we say this activity is going to cost 5000

pounds, $5,000

these $5,000

can be the cost of the material, how many cubic yards of concrete

the cur, the cost of the crew of labor that work to place this

concrete, the cost of the equipment that was used. So I

converted all of these different units into money, and I added it

up, and that was the cost of the activity, or assigning a number of

units of certain resources to each activity, together with the unit

price for each of these resources. So I can say this activity is

going to require one bulldozer, one foreman, one equipment

operator, two laborers, etc, and then knowing what is the hourly

rate? And for how long am I going to need these resources? I can

translate that into money.

So resource allocation is basically assigning different

resources to different activities and assigning their costs to that

activity as well. So the construction planning process

includes the assignment of different resources to activities,

also known as this process called resource allocation in the

project, monitoring and controlling process the

consumption of resources should be tracked and compared to the plan,

I have estimated that this activity is going to need 200

cubic yards of concrete. While placing the concrete, I have

ordered the concrete from ready mix supplier. I've been tracking

the shipments arriving on site, and I've been tracking the

placement of the concrete, and I found that there at the end that I

needed 210 cubic yards. So maybe there was a loss or waste of 10

cubic yards, or maybe the original quality that was estimated was

less than what I'm going to need for the project

resource planning, monitoring and controlling can help project

managers understand resource demand versus resource supply for

major pieces of equipment, trained workers, and so on and so forth.

So for example, we may say today, I'm gonna need 500 man hours of

carpenters.

So this 500 man hours can be achieved by 500 carpenters, each

one working for one hour, or 50 carpenters, each one working for

10 hours, or any.

Combination there in between.

So we have to understand the project status and the cost, to

control the project cost and schedule that's going to result to

be the result of using these resources.

So the process for resource allocation, we have to identify

all the resources that need to be assigned and tracked for the

project. Identify the quantities of these resources and their

production rates and unit prices.

Assign critical resources to each applicable activity. So we're

going to start with the critical activities, because they are more

critical, therefore they need to be supplied and satisfied with the

resource supply before any other activity, develop a histogram or

table of resource consumption over time, monitor the availability

limits to ensure not exceeding the maximum available limit. So I'm

going to draw horizontally the normal limit and the maximum limit

to make sure that I do not exceed the maximum limit, and develop a

contingency plan in case of exceeding the availability limits.

In case I have a few peaks, what am I going to do with these peaks?

How can I reassign them to other areas where I have resource demand

less than the resource availability therefore I can

flatten that peak, and have a smooth resource distributor.

Looking at an example. Here we have a few activities. So on this

side, we have the activities, and then we have their predecessors,

the crew, size,

labor. How many labor am I going to need the daily output of that

crew? And then the planned quantity that has been measured

from the drawings and the specs, and then the next step would be to

assign how many days for how long am I going to need these

resources? Again, remember q over p, so this is q and this is the

production rate, or output p. So by dividing Q over P, I'm gonna

get number of days. And here, in this case, if we deal with full

days, not increments of days, I'll have to round up. So for example,

here we have 280 linear feet, and I can produce 100 linear feet per

day. So 280 divided by 100 gives 2.8 which is going to be rounded

to three. Therefore it becomes, here I'm going to need three days,

323124,

etc. That's based on the resource availability, based on the

resource the resource production rate, and based on the total

quantity for that activity.

So the next step is going to draw a timeline, a draw a histogram. On

the horizontal line, I have time. On the vertical line, I have the

resources. And then I'm going to plot these resources. How many

units am I going to need per day and so on based on these crew

sizes. In this case, labor is the resource to be planned for.

Now, when we are allocating these resources, the old school said, Do

not be constrained by the resource availability. Assume an unlimited

resource availability and build your schedule accordingly, and

then look at the resource availability and adjust it

accordingly. And then later on, it was found that this is a very

futile process, because we'll have to do everything twice. I made an

assumption, and this assumption is not correct in the first place,

because I was assuming unlimited resources, there's always going to

be a limit on some of the resources. Very rarely is there

going to be an unlimited supply of resources. So according to that

first assumption, you assume that sufficient resources are available

to carry out the project, which must be completed by specified due

dates. So the only constraint is on the completion of the project.

And then the second iteration in that process was we said we're

going to combine these two steps, assuming unlimited resources, and

then adjusting later on into one step. So we're going to start with

the assumption that we have. We recognize that we have a limited

resource availability, and we're going to play a plan accordingly,

by, again, including these two horizontal lines, the normal limit

and the maximum limit, and taking that into consideration while we

are developing our resource loading histogram. So there are

definite limitations on the resources available to carry out

the project. And the objective is to meet the project due dates in

so far as possible, which is minimizing the duration of the

project being scheduled subject to stated constraints on available

resources, which means I'm going to try to finish the project in

the least possible time.

Within the available limitations on my resources,

long range resource planning. Management seeks to determine the

combination of resource levels and project due dates that will

minimize resource costs, overhead costs and losses, which result

when project due dates are not met. So now we are going through

an optimization problem, not only meeting the deadline within the

number of resources available, but what would be the best possible

use of these resources so that I can minimize the total cost of the

project and finish it still within the available time. You

so in resource allocation problems, the basic approach to be

followed in solving each of these problems is to first order the

activities according to some criterion, and then to schedule

the activities in order listed as soon as the predecessors are

completed and adequate resources are available. Basically what

we're talking about here the criterion, the main criterion to

resort the activities is going to be their criticality, whether the

activity is critical or not. So we're going to solve the network,

draw a bar chart or solve the network, and identify which

activities are critical, which activities are non critical, and

pay our first attention to the critical activities. So they're

going to be our first recipients of the resources.

Here, for example, we have limited resource availability, and we need

to allocate these to the this project. So here we have two

activities starting the project. This is the project start, two

activities starting the project. And then we can, basically, based

on this table here, we drew the network. We can then solve the

network to get the different dates, early start, early finish,

late start, late finish, and so on and so forth. Determine which

activities are critical, which activities are non critical, and

then start allocating the labor or the resource demands for these

different activities and drawing our resource loading histogram and

seeing whether we're going to be able to meet that maximum limit,

to be below that maximum limit of six labors or not. First of all,

we can notice here that activities A and B, since they occur at the

same time,

activity A requires two labors. Activity b4 labors. So basically,

we're gonna need six labors for at least the first

four for at least

the first five days of the project. And then once activity is

complete, there's going to be a need for two more for activity B.

But once activity is complete, activity c is going to step in.

And so is activity D is going to wait until B is complete. So

again, we can draw the Gantt chart and assign resources according

we're going to see an example of that.

So here's the network. We have solved it, and then we are going

to schedule the resources by the early start. First of all, we have

to satisfy the critical activities. And that activity A,

we're going to notice that it has two days of float. Activity C has

four days of float so we can maneuver with these activities in

order to try to avoid that peak as much as possible.

Based on this resource distribution, on the first day,

I'm going to need 66666777,

and so on. You can see the resource demand now this seven

here resulted from

resulted from four on B and three on c4,

on B and three on C. What if I moved activity C along its total

float to avoid that excess moved it by two days so I delayed it by

two days of its total float. So instead of starting on day six,

we're going to start it on day

let's say nine, or day even day eight. If I start on day eight,

that's going to be okay. So in this case, the demand for days six

and seven is going to be only five, which are from activity B.

And then here we're going to have three from activity D and the two

from activity

c, or whatever it was for activity c3, from activity c, so three from

D and three from C, therefore it's still gonna be within my maximum

limit. So I now have solved that peak that is.

Started from B and C being at the same time.

So here, when I moved activity c little bit. Now I still have float

on activity c. And now, as you can see, the resource peaks have

disappeared, and my resource utilization is within the maximum

limit, which is six. And the project duration did not change.

Here it was 14, and here it was 14. So I finished the project on

time. I have satisfied the different objectives that I had.

Now, if I want to do that for multiple resources, here I assumed

only one resource, which is the labor, but if I have multiple

resources to be done, labor, equipment, materials,

subcontractors, etc, it's

not going to be that easy. It's going to be a little bit more

complicated. So we'll have to start now thinking about different

strategies to reducing these peaks.

First of all, can the activity be delayed beyond this early start

without delaying the whole project, as we did with activity

c, we moved it along a sort of float. If we can do that and that

solves the problem, great. If not. Can this activity be split into

smaller chunks. So I can split it into two parts. Start, one little

bit earlier. Start, one little bit later. If I can do that to avoid

the peak, then again, that would be great. Can the activity be

started and then paused for a while to avoid the peak and then

resumed later on again? If I can do that, that would be great. If

none of the above solutions work for the non critical activities,

then going to start thinking about the same solutions for the

critical activities, knowing in advance that this is going to

delay the project or increase the duration of the project.

Here is a flow chart that shows basically what talking about here.

So calculate initial early start and they start for each activity,

determine the initial eligible activity, set those activities

with all predecessor activities scheduled, and so on. You can read

basically on that that's just a an algorithm to show you how to solve

the resource allocation problem. And as I said, if you have two or

more resources to be allocated and leveled or planned for and smooth

at the same time, most likely the software is going to do that for

you, because it's going to involve so many different permutations, so

many different probabilities. So the easiest way to do that is

through the software, following that algorithm that we're looking

at.

So basically, this is a brief introduction about resource

allocation. We are going to solve a numerical example. I'm going to

post that on Blackboard so we can see how to address this problem

and how to solve for different probabilities. I'll see you in

another class. You.