By Dr. Awad Hanna Ross Umentum Project Tracking to Improve Labor Productivity – An Earned Value Approach University of Wisconsin – Madison By Dr. Awad Hanna Ross Umentum Dr. Awad Hanna and Ross Umentum Copyright

Dr. Awad Hanna and Ross Umentum Goals Accurately measure project percent complete Measure project performance every reporting period. “Performance Factor”. Predict project outcomes as early as 25% complete Improve estimating practices by measuring activity performance © Dr. Awad Hanna and Ross Umentum Copyright

Dr. Awad Hanna and Ross Umentum Goals (Continued) Identify problem areas Track change orders and measure impact of change orders Track project schedule Determine accurate Earned Value method Analysis of Trends Determine optimal project ratios © Dr. Awad Hanna and Ross Umentum Copyright

Productivity Analysis Selected Activity In Progress Work hours Quantities Productivity Calculations Performance Evaluation Workhour Forecast Analysis of Trends Dr. Awad Hanna and Ross Umentum Copyright

Dr. Awad Hanna and Ross Umentum Measuring Output Subjective Evaluation Quantity Installed as Measured Binary Approach Partial Complete Method Dr. Awad Hanna and Ross Umentum Copyright

1. Subjective Evaluation Subjective evaluation of work completed is conducted by the project foreman and/or supervisor. Subjective evaluation Dr. Awad Hanna and Ross Umentum Copyright

1. Subjective Evaluation Guidelines The work breakdown structure should be established to lend itself to subjective evaluation. The project must be divided into at least twenty activities or the activities must represent no more than 5% of the manhours. Do not use accounting or budget report values to persuade the subjective values. These values need to be subjectively determined based on the assigned person’s visual inspection and experience. Subjective evaluations should be conducted by two or more individuals. Dr. Awad Hanna and Ross Umentum Copyright

2. Quantity Installed as Measured Measurement from Drawings/ Invoices Methods: Physical Measurement Reporting: Actual Manhours Earned Manhours Dr. Awad Hanna and Ross Umentum Copyright

2. Quantity Installed as Measured Best used for easily measured work when installed or work which is repetitive in nature. Examples where this technique is applicable Pipe: Lengths of different sizes are easily measured in field or via invoices and paper records Fixtures: Installed count is easily maintained Dr. Awad Hanna and Ross Umentum Copyright

Comparison of Earned Manhours to Actual Manhours Earned Hours = Qty(Installed)x(Estimated Production Rate) Earned Hours=Qty(Installed)/Qty(Estimated)xBase Hours(Estimated) Or Earned Hours=Base Hours(Estimated) x Percent Complete Dr. Awad Hanna and Ross Umentum Copyright

Dr. Awad Hanna and Ross Umentum 3. Binary Approach Rules Assign 0% complete to tasks which have not started Assign 50% complete to tasks when they start Assign 100% complete only after the task is completed Guidelines Suitable for tasks that lack readily definable intermediate milestones (Millwright work, Equipment alignment) Or for projects with extensive breakdowns that each have short durations Dr. Awad Hanna and Ross Umentum Copyright

4. Partial Complete Method (Incremental Milestone Method) Guidelines Useful for sequence work, When a task is to be completed in a certain fashion every time, Or, when the task duration is longer than one reporting period. Divide 100% of the value into subdivisions or milestones as determined by the contractor form experience. Requires extensive upfront effort Takes subjectivity out of equation Dr. Awad Hanna and Ross Umentum Copyright

Simple System for Tracking Project Performance Divide the job into tasks No task should be more than 5% of your base hours Enter base hours from your estimate Ask the foreman to provide you with Subjective Evaluation of % Completion per task Calculate Earned Hours and enter actual hours Dr. Awad Hanna and Ross Umentum Copyright

Dr. Awad Hanna and Ross Umentum Code Description Base Hr % Complete Earned Actual Total Estimated Hours Dr. Awad Hanna and Ross Umentum Copyright

Dr. Awad Hanna and Ross Umentum Project Code Description Base Hrs. % Complete Earned Hours Actual Hours Prod. E/A 100 Pipe 1”, FLA 1000 50% 500 800 0.625 200 Pipe 2”, FLA 1800 60% 1080 900 1.2 300 Pipe 1’, FLB 30% 240 0.8 400 Pipe 2”, FLB 1200 10% 120 4800 1940 2100 © Dr. Awad Hanna and Ross Umentum Copyright

Dr. Awad Hanna and Ross Umentum Project (Continued) Job % Complete = Σ Earned = 1940 = 0.404 Σ Base 4800 Performance Factor = Σ Earned = 1940 = 0.92 Σ Actual 2100 Predicted Hrs at Comp. = Hrs-to-date = 2100 = 5198 Job % Comp. 0.404 5198 > 4800, therefore cost overrun to date. © Dr. Awad Hanna and Ross Umentum Copyright

Typical Performance Factor Curve 1.0 25% 50% 75% 100% % Complete Dr. Awad Hanna and Ross Umentum Copyright