CE 366 PROJECT MANAGEMENT AND ECONOMICS Robert G. Batson, Ph.D., P.E. Professor of Construction Engineering The University of Alabama Rbatson@eng.ua.edu

Chapter 7: Project Time Acceleration

Sources of Need For Project Time Reduction Overall Project Planned schedule will not meet contracted completion date Owner requests quotation to finish work early Contractor has reasons to finish early Work underway, delays have occurred, need to recover lost time Milestone Event Computed timing of event is later than desired Network interface requirement Need to recover lost time by the milestone Removing “Project Contingency” is not the way to accelerate the project

Project Time Reduction (Acceleration) Also known as Least-cost expediting Project compression Activity time-cost trade-off or “crashing” Does not require expediting all project activities (shotgun approach) To reduce the project completion time, the project critical path must be shortened To reduce the time to achieve a milestone or interface event, the event critical path must be shortened As critical activities are accelerated to shorten critical path(s) The floats along all paths to the accelerated activity change The critical path eventually changes (hence activities may change from non-critical to critical, or vice versa) Second critical path may emerge, or disappear

Shortening the Longest Time Path Two ways to accomplish shortening Modify the job logic, such that the longest path is reduced Rearrange order of activities Split activities into two Revise lag time logic Reduce the time duration (crash) one or more critical path activities Increased manpower or overtime work Additional equipment Computerized time-cost trade-off analysis will actually find the most efficient sequence of such activity time reductions, with input such as Figure 7.1 Remember, after each logic or activity duration adjustment, the critical path and float times must be recomputed.

Handling Direct Cost Increases in Project Acceleration Study Direct cost of an activity is made up of the expense of labor, equipment, materials and subcontracting Each activity is assumed planned at its “normal cost” and “normal duration” Any variation in an activity time from that estimated, either more or less, will result in a commensurate increase in its direct cost An activity that is feasible to accelerate (crash) will have a “crash cost” and “crash time” as in Figure 7.1 The least total direct cost for the project is the cost associated with the normal project duration (as estimated by CPM) If the project duration is to be reduced, the direct costs of the activities actually shortened will usually be increased; therefore the total direct cost will increase as well.

Estimating Indirect Cost Decreases in Project Acceleration Study If a specific activity is shortened, its direct expense increases, but if it leads to a corresponding decrease in overall project duration, the indirect cost is reduced There are two types of project indirect costs Time-constant overhead expense Time-variable overhead expense For the highway bridge, each day reduction from the normal schedule (70 days) is worth $43,690/70 = $624 reduction in overhead

Shortening the Critical Path at No Extra Direct Cost Restudy of Critical Activity Duration Error could be discovered Original time estimates based on invalid assumptions Restudy of Project Plan Rework project logic Modify the design (in design-build) Critical Activities in Parallel, not Series Subdivision of Critical Activities, with new logic Subcontracting, if it substitutes workers/equipment at same direct cost yet enables activities to overlap Items B, C, D require scheduler to use personal technical knowledge or obtain inputs from experts, individually or in team meetings

Shortening the Critical Path by Expediting Expediting actions, such as those in Figure 7.4, involve additional direct cost some involve adding an activity, that changes the network logic in a favorable way, such as Action A which saves 6 days others involve accelerating a particular activity by expending direct activities Figure 7.5 organizes the actions from smallest to largest increment in direct cost, and show cumulative direct costs (also see Figure 7.6) Figure 7.7 shows overhead cost reduction, project direct cost increase, and project direct cost + overhead, as a function of time

Significance of Project Time-Cost Trade-Off Curve What durations yields minimum cost to the contractor? If normal plan dictates a late completion, and daily penalties are known, how much expedited cost is justified; that is, what duration best balances costs with penalty avoidance? Owner may ask for a range of price quotes, one for each completion time What are the limits that may be achieved by expediting? Some of the most useful CPM-based information the scheduler/estimator can provide to the project manager

Project Extension Projects, of course, experience “slippage” in milestone or completion dates, if the project actualization does not match the plan The usual rule is that projects whose end dates slip will cost more, in direct cost of those activities that took longer than planned, and in overhead costs Sometimes projects are estimated using some or all activities at their expedited (crash time) limits, and this anticipated action proves unnecessary once the CPM schedule is developed and evaluated Some of these activities can be relaxed to their normal time and cost Critical path activities if project duration can be extended Non-critical path activities if project duration is held