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Pinnell Busch is the Pacific Northwest industry leader in construction and design consulting.

Trained Employees are the Solution to a Company’s Future Perfomance

Daily Journal of Commerce
Design & Construction – June 11, 2001
By Steven Pinnell and Toni Severe

Lifesavers are a great necessity and in most adverse conditions they can keep you afloat.In the construction industry the best lifesaver and view to the future is available through the collective eyes of your colleagues. We found this in the 2001 annual survey by the Construction Financial Managers Association.The CFMA survey indicates how different contractors nationwide are performing, what they pay their personnel, and provides other data that are true lifesavers. One of the most fascinating results of the survey was what they felt were the most important challenges to their profitability.The survey found that a shortage of trained personnel was their first and second concerns with 90% listing a shortage of trained field personnel and 63% listing a shortage of trained project managers. The clear solution is training.Training was the second most stated strategy, after “doing what we do better,” and certainly essential to doing better. The CFMA survey also showed 60% of the companies felt that training should be a vital part of their strategies to improve future profitability.

In addition, contractors interested in construction manager/general contractor proposals should be aware of a recent survey by the Society of Marketing Professional Services, which found that clients look for strong technical competencies, professional and managerial capabilities, and good “chemistry” with their staff and other members of the team. Many of those surveyed feel that “chemistry” is most important tor negotiated work.

How do you achieve these results? Training, hiring and retaining the right people is both the answer and the challenge. This requires investing in your people, which is an essential element of Pinnell Busch’s Bottom Line Management SM recommendations to ensure a successful future for your company.

To make sure you get the most out of your training dollars, start by identifying your training needs and obtain experienced trainers. We at Pinnell Busch believe that trainers should conduct a needs assessment and use the following crucial factors to successful training:

  • They should begin by setting achievable objectives, first measuring progress and then attaining them, afterwards customizing the training to fit your needs.
  • Trainers should apply state-of-the-art techniques to accomplish practical solutions. They should use a combination of training, with the accomplishment of actual work, and use hands on experience from current projects during instruction.
  • Finally the trainers should do follow-up to make sure participants are utilizing training instruction effectively.

In the future what will keep your company afloat is your people. They are without a doubt your lifesavers and, like the kind in boats, they can ensure your survival.

By |January 21st, 2015|Steve Pinnell|

More Education is Needed

American Society of Civil Engineers
Civil Engineering Magazine, June 1999
By Steven Pinnell, P.E.

A review of the construction industry suggests that an industry wide educational program on how to manage and resolve disputes in a fair, timely, and economical manner is needed. The most effective approach would be a three-tier educational program that would start at the university level, continue with association-sponsored seminars, and end with in-house workshops at individual organizations.

At the university level, engineering students labor under a full curriculum. A four-year program covering all the basics is a heavy load, but students must find time to study project management. This subject should be required at the undergraduate level for all engineers because once they begin their careers, they will be involved in projects as team members and will eventually become team leaders or project managers. Knowing how to improve project management will help avoid the problems that lead to disputes and claims.

In addition to a course in project management, students should take a course in dispute resolution. This would include: an overview of contracts and would demonstrate how to maintain records and give notice of a change, document extra work or delays, prepare a change order request or claim, and negotiate an equitable adjustment. Students also need to understand conflict – to learn why and how disputes occur and how to prevent them from leading to claims and litigation. This requires people skills, which are as important to long-term success as technical skills.

Once students graduate and become practitioners they must continue the educational process. They need to learn more about how to avoid and resolve disputes. Industry wide seminars can address such concepts, educating these professionals about how to develop and implement a dispute management program (OMP), and the techniques for preparing or analyzing change order requests and claims. Such seminars must be based on a partnering approach, not the adversarial approach that has been used in the past.

The next step would be to teach the methodology and how to implement a DMP for an organization. If adequate handout material and technical support by consultants are available, this can be accomplished in a one-day session. There are also in-depth seminars organized by various associations for this purpose. In-house workshops are another good way to teach managers and field supervisors how to conduct an effective DMP. It’s Important to have all levels of management involved, but the key group is top management, which must buy into the program, determine its focus, lead its development, and ensure its implementation and continued use.

In-house training should be customized for the organization, preferably after modifying existing procedures to improve their effectiveness. The steps are as follows:
1) Perform a needs assessment.
2) Make a management decision on how to proceed, how to change existing procedures, and, perhaps, how to improve the organizational structure, roles, and responsibilities.
3) Modify existing procedures and develop the training curriculum.
4) Conduct the training, which should alternate between instruction and practical application of the materials learned.
5) Follow up and continue to seek improvements.

In-house workshop curricula should be modular, so that courses can be delivered in segments of half a day or less. Some sessions can be designed for all staff levels; others would focus on just one.

By |January 21st, 2015|Steve Pinnell|

It Was the Best of Times; It Was the Worst of Times

Daily Journal of Commerce
Design & Construction – November 26, 2001
By Steven Pinnell and Toni Severe

You must invest in your company to ensure continued success, and training your people is the best form of investment. Successful companies continually invest in their people, especially during unstable or weak economic times. In an attempt to survive, some companies conserve by cutting all possible overhead costs, including employees and investments. To stay healthy, the more successful companies make selective investments that will see them through tough times, and position themselves for a better future. They invest in their employees’ skills, making them more effective and gaining a competitive advantage. As Charles Darwin said many years ago, “It is not the strongest of the species that survives, nor the most intelligent, but the one more responsive to change.”To illustrate our point and in preparation for this article, we conducted interviews with some our most successful clients to get their insights and viewpoints on the benefits of continued training – in the worst of times.Bob Schommer of A.C Schommer & Sons stated, “One of the reasons our business has survived for over 60 years is that we have maintained our commitment to invest in our people. We keep our project management staff educated and our field staff trained – so they are prepared to work on the most challenging projects in the industry.”

Companies will see instant results in the people that receive training. For instance, these people project an attitude of readiness and confidence, and they are more productive. In addition, they will use their increased knowledge to keep their company or organization financially strong.

When asked about some of the benefits of a recent three-day training series on scheduling and claims management, Hank Payne of the U.S. Army Corps of Engineers, reported: “One Corps of Engineers’ employee recently used the schedule analysis techniques presented to reduce the proposed settlement on a $700k impact and delay claim from $300k to $140k.”

Training can be acquired from in-house experts, consultants such as us, or, through professional associations (they are strong supports of training). For example, Linda K Lindsten, executive director for Oregon Plumbing Heating and Cooling Contractors, said, “For their financial success and to improve and maintain customer satisfaction, productivity and efficiency, it is imperative that businesses, even in an economic downturn, continue training their employees.”

The road to success is paved in many ways. The choices are yours. Will it be a prudent investment and long-term profitability or “off with their heads”?

By |January 21st, 2015|Steve Pinnell|

How’s Your Schedule? Manager’s Involvement in Establishing Project Plan a Must for Success

We have all heard the success stories, as well as the horror stories, about what a schedule can do, or could have done, or didn’t do, or would have if!

In addition, the majority of contractors are well aware of the network diagram potential. Yet when job site pressures mount, progress starts slipping and changes are occurring daily, the schedule is more often than not set aside until the job is seemingly back under control.

In today’s marketplace, projects are sometimes too few and far between to make up for lost profits or excessive cost overruns. The demands and pressures on job site management are intense and often unforgiving. The risks are high and projects must be managed with adequate tools and a confident staff. This includes a project plan that has been carefully thought out and analyzed and then placed into a form that can communicate its message – the project schedule. Job site team members each must have a comfortable and confident level of schedule understanding, including the variety of its formats and the ability to maintain it, manage with it and defend it.

Do You Trust Your Schedule

When confronted, few job site managers would ever admit that they don’t know how to use a schedule. However, if asked if they believe in it – I mean truly believe in the message it displays, to rely on it and trust it when work is seemingly out of control – your answers may vary widely. Only a small number of individuals may actually believe in the message unless they played a major role in its development. Whether the schedule is fully computerized or hand drawn, whoever is expected to manage the job site and coordinate specialty contractors and materials must provide hands-on input into its planning. Without this level of participation, the individual may never believe in it. This is not to say that the individuals must computerize it themselves. However, they must be allowed to provide their thoughts, ideas, experiences and supervision “know-how” to secure ownership and commitment to the finished product. When a schedule is developed for the job site manager or when managers are given little time to prepare one, it stands only a slim chance of being utilized. One must spend time planning the project. Trust in the information presented only is evident when the manager can place reliability on the schedule content. This goal must be achieved to truly get the return-on-investment from the time and cost to develop it in the first place.

Where is Your Schedule

Because the typical schedule for an average size project is often developed in a half day or less – yet is expected to function for the full duration of the project – it is no wonder it is disregarded as inaccurate and is not visible at the job site. Concerns that a contractor should have are the failure to use the schedule as it was intended and the failure to implement it effectively. Both failures stem from the contractor’s belief and commitment to the schedule itself. For a schedule to receive the respect it requires it must have commitment. For a schedule to be enforced and utilized, it must have the support and belief from the individual and the organization. Having a fancy computer scheduling system doesn’t generate miracles for the job site manager. The success of the project schedule relies on the manager’s ability to manage with it.

Schedules are Different for Different Purposes

The management of any project has variables that must be considered when developing schedules. Form, format and content are often varied to better convey the message intended. Perception is equally as important as facts. Consider these points to help build an effective schedule:
Purpose – Make it clear at the start what the schedule is intended to accomplish.
Audience – Identify who the audience is and their experience in schedule usage.
Maturity – Develop the schedule as soon as possible and remain current with periodic updates and necessary revisions.
For the Record – Keep in mind that all schedules may be reviewed at a later time and will become part of the project records.
Scheduler’s Point of View – Consider the point of view used to develop the schedule, such as level of schedule knowledge, scope of schedule responsibilities, primary sources of input, quality of feedback and organizational loyalties. The schedule itself should be a key topic at the pre-job planning meetings and the above items need to be addressed by top management to maintain the importance of a quality-oriented schedule.

Is Your Organization Respected?

The Project Management Institute defines the title of project manager as “a manager of change.” This is not to say that you start out building a highway or a school and end up with a boat harbor or a McDonalds. With regard to construction, it does say that the methods, materials, sequences and resources will change and these changes must be managed – quite often by the job site manager or superintendent.

The schedule is the performance yardstick for the job site managers to identify the scope of the work, to plan both on-site and off-site activities, measure progress, to manage changes, to correct deviations and to be proactive in its use and the management decisions to follow. Belief and respect for the schedule does promote belief and respect for the project leadership.

Finally, a schedule is affected by its origin. How well it is implemented is and always will be a direct reflection on the organization attempting to use it.

By |January 21st, 2015|Steve Pinnell|

Critical Path Scheduling: An Overview and a Practical Alternative

American Society of Civil Engineers
Civil Engineering Magazine, July 1980
By Steven Pinnell

Although critical path scheduling (CPM/PERT) was developed in the late 1950s and has been taught in seminars and university courses since then, it is used by few and understood by even fewer. Yet it is an extremely powerful and adaptable — but simple — tool.

The reasons for CPM/PERT’s limited use seem to be a failure to appreciate its simplicity and a misconception that computers and scheduling specialists are necessary for its use. Project managers have either attempted to plan and control their jobs with bar charts or have surrendered their basic role of planning, scheduling and controlling progress to a machine and a technician. Subsequent failure of computerized schedules to reflect the thinking of those doing the work often results in schedules that are not or cannot be followed. In addition, many managers are unable to cope with the reams of data that the computer spews forth. The end result is that most projects are still being planned with bar charts — if at all.

Alternative

There is a method of CMP/PERT scheduling that is simpler, easier and just as powerful as computerization. It is the time-scale arrow diagram — a method used successfully by this firm for years on all types of projects. It’s been taught to hundreds of people who have found it vastly superior to computer printout on most jobs. The following discussion presents a brief overview of CPM/PERT, then explains how and when to use the time-scale arrow diagram method of CPM scheduling.

CPM/PERT

CPM (Critical Path Method) and PERT (Program Evaluation and Review Technique) were both developed in the late 1950s on very large computers for massive projects. PERT, developed for research and development projects, focused on major events (called milestones) and used probabilities to calculate the most likely time between milestones. CPM, oriented toward construction, focused on those activities required to accomplish a project by using one estimate of activity duration instead of the three used in PERT.

Although there has been a mind-boggling proliferation of CPM and PERT variations, the two techniques have become quite similar. CPM users have adapted the use of the milestone to highlight the beginning or end of a major phase of work. And now PERT users seldom use three estimates of activity duration because one is plenty of work and not many have the time or patience to estimate two more durations when the results are scarcely better.

Today, few civil engineers or contractors use PERT, and those who do should recognize that the techniques are essentially the same. Therefore, the following discussion focuses on CPM.

Basic steps

There are three basic steps in preparing a CPM schedule: 1) planning (or diagramming), 2) estimating of activity durations, and 3) scheduling (or computing).

First, one must plan the job, usually by laying out the activities in sequence on a piece of paper. This is the network diagram; it defines the activities and their relationship. The two types of network diagrams are the arrow diagram and the precedence diagram. Either of these, or some variation, must be prepared even if the schedule is eventually computerized.

Second, one must assign time durations to each activity. This step is almost as difficult as the first step and also must be done manually.

Third, only when the diagram is prepared and durations assigned, can one compute the critical path, early start (ES), late start (LS), early finish (EF), late finish (LF), float, and total project duration. This is the easiest step as it requires only simple mathematics — addition and subtraction. It can be done by computer.

There are four methods of computing the critical path. Two are computerized (i-j node and precedence) and two are non-computerized (manual computation directly on the network and time-scale computation with the network diagram).

i-j Node Computing

CPM was originally developed using the i-j node method. In this method, each activity is identified to the computer by its beginning (i) node number and its ending (j) node number. These two numbers (i-j) uniquely define each activity and the relationship between them. For example, if activity B follows activity A(as in Fig. 2) then the j (ending) node number of activity A is the i (beginning) node number of activity B (as in Fig. 1).

lt is nearly impossible to determine accurately the complex relationships between activities of a major project from just a table of activity descriptions and their i-j nodes (such as Fig. 1). Consequently, activities first are laid out on a network diagram that graphically shows the relationship between them. This is called arrow diagramming, as an arrow represents the activity (with no time-scale) and a circle (or node) at each end contains the i-node number and j-node number. A relationship between two activities that cannot be shown by directly connecting the arrows is indicated by a dotted-line arrow, called a dummy arrow (Fig. 2).

Precedence Computing

The precedence method is a new approach to CPM scheduling; it assigns one number to the activity itself and simply lists all preceding activities, making it much easier to update and revise than the i-j node method (see Figs. 3 and 4).

Precedence diagramming uses a box instead of an arrow to represent an activity. A solid line goes from the back of the preceding activity to the front of the following one to show relationships, making the precedence diagram much easier to draw and revise than the arrow diagram (see Fig. 4).

Although the precedence diagram appears to be quite different than the arrow diagram, they are really quite similar (as shown in Figs. 5-8).

Manual Computation

One of the first non-computer scheduling methods was developed by Prof. John Fondahl of Stanford University in 1963.Non-computer methods are easy to use, requiring only a network diagram and basic skills in addition and subtraction to compute the ES, LS, EF, LF, float, and total project duration.

It has been found to often be cheaper and faster to manually calculate the critical path than to input data into a computer, make the run, debug it, and rerun. Incidentally, if one doesn’t computerize, there is no need for the nodes (circles) and i-j numbers except to highlight a milestone. This will significantly speed drafting (the typical activity arrow and notation is shown in Fig. 9).

The ease of manual CPM schedule computation can be illustrated with the example network (seen in Fig. 10).

Forward Pass

The first step is to start activity A at the beginning of work day 1 (Fig. 11), which is the ES for activity A. If activity A starts the beginning of work day 1 and takes 5 working days, its EF will be 1 + 5 = 6 (the beginning of work day 6, which is the same as the end of work day 5; see Fig. 12). If the earliest that activity A can finish is (the beginning of) work day 6, then the earliest that activities B and D can start is (the beginning of) day 6 (ESB = ESD = EFA = 6); see Fig. 13.

Since activity B can start the 6th day and takes 6 days, the earliest it can finish is the 12th day (EFB = ESB + duration = 6 + 6 = 12). Also, activity D can start the 6th day and takes 8 days so it can’t finish before the 14th day (EFD = ESD + duration = 6 + 8 = 14); see Fig. 14.

To compute the Early Start for activity C, one must consider what activities have to finish before C can begin and what is the earliest that they will finish. From Fig. 15, it is apparent that activities B and D both must be finished before C can start — and that the earliest that they will be finished is day 14 (ESC = latest EF of B or D = 14). Therefore the ES for C (and also E) is 14.

The computations continue:
1) EFC = ESC + duration = 14 + 5 = 19
2) EFE = ESE + duration = 14 + 2 = 16
3) ESF = latest of EFC or EFE = 19
4) EPF = ESF + duration = 19 + 4 = 23 (see Fig. 16).

Backward Pass

This completes the “forward pass,” which gives the early start, early finish, and total project duration. The next step is the “backward pass,” which gives the late start, late finish and float. To begin the backward pass, set the late finish of the last activity equal to the early finish (LFF = EFF = 23). The earliest the project can finish is (the beginning of) the 23rd day. The latest the project can end is also (the beginning of) the 23rd day. If activity F takes 4 days, then the latest it can start and not delay the project is the 19th day (LSF = LFF – duration = 23 – 4 = 19) (see Fig. 17).

If day 19 is the latest activity F can start and not delay the project, then day 19 is also the latest that activities C and E can finish and not delay activity F (and thus the project). Therefore, the late finish of both activities C and E is day 19 (see Fig. 18).

From here, it is simple subtraction to determine that:
1) LSC = LFC – duration = 19 – 5 = 14
2) LSE = LFE – duration = 19 – 2 = 17
3) LFB = LSC = 14
4) LSB = LFB – duration = 14 – 6 = 8
5) LFD = earliest of LSC & LS = LSE = 14
6) LSD = LFD – duration = 14 – 8 = 6
7) LFA = earliest of LSB & LSD = LSD + 6
8) LSA = LFA – duration = 6 – 5 = 1

This completes the “backward pass” and gives the late finish and late start of each activity (see Fig. 19).

Computation of Float

Float is the number of days between either the early start and late start or the early finish and late finish (float = LS – ES = LF – EF). Activities with an early start equal to the late start have zero float and are therefore critical. Note that activity A is critical (LSA – ESA = 1 – 1 = 0 = LFA – EFA) as is activity D (LSD ESD = 6 – 6 = 0), activity C (LSC – ESC = 14 – 14 = 0), and activity F (LFE – EFE = 23 – 23 = 0). However, activity B has 2 days float (LSB – ESB = 8 – 6 = 2 = LFB – EFB = 14 – 12 = 2), and activity E has 3 days float (LSE – ESE = 17 – 14 = 3).

Conversion to Calendar Date

The final step is to convert the computed work days for ES, LS, EF, & LF to calendar dates. This can be accomplished by providing a simple conversion table on the network diagram or even developing a table with the calendar dates. Conversion to calendar date is tedious, but for only one project it is probably cheaper and faster than to: 1) learn how to use a particular computer program, 2) key punch the date, 3) make the computer run, and 4) debug the data so that it runs correctly.

Time-scale Arrow Diagrams

Fortunately, there is another non-computer alternative to the time-scale arrow diagram. The initial step is to draw the first activity to scale. As seen from Fig. 20, activity A begins on work day 1 and ends (the beginning of) work day 6.

Next step is to draw the activities directly following activity A (see Fig. 21). The natural tendency is to draw activity C starting day 12, directly after the finish of activity B. However, activity C is also dependent upon activity D and therefore can’t start before day 14. Therefore, activity C has a two-day float arrow from activity B and a vertical relationship (dummy) arrow from activity D
 (see Fig. 22).

Activity E starts immediately after activity D is completed, then continues as a float arrow until the end of C. Activity F follows C & E and takes 4 days.

A quick review of this network diagram will reveal that Activity B has 2 days float; activity E has 3 days float; and activity path A, D, C, F have zero float and is therefore critical. In addition, one can quickly determine early start and early finish days (ESF = 19, EFE = 16, ESB = 6, etc.).

Comparison with Bar Chart

It’s interesting to compare the time-scale arrow diagram with the bar chart (Fig. 24). Both are easy to read and understand. The time-scale arrow diagram takes less space, shows the relationship between activities, and shows float.

It has been found that the time-scale arrow diagram is but slightly more difficult to prepare than the bar chart and can be just as simple. Yet it has many advantages over the bar chart.

But the bar chart is still a good technique for projects without a critical path. For example, a process machine shutdown is often more dependent upon resources than upon a certain sequence of activities. In such cases, either a bar chart or a modified time-scale arrow diagram may be used.

Criticisms

Alleged criticisms of the time-scale arrow diagram are:
1) too hard to draw
2) too difficult to update
3) too long a drawing
4) too little information

None of these criticisms have been found to be true.

First of all, one should remember that the vast majority of work in CPM scheduling is in gathering and evaluating information — not drafting the network. Secondly, a network diagram always has to be drawn in order to schedule a project; it also frequently is erased and redrawn before it is satisfactory. Although time-scale diagrams are more work to draft and change than non time-scale diagrams, the extra effort is negligible. Besides, drafting techniques developed by Pinnell Engineering more than compensate for the additional work. In fact, they make time-scaling easier than normal methods of non time-scale networking.

One time-saving technique is to eliminate the i-j nodes (they aren’t needed unless the schedule is computerized with the i-j method). The amount of work required to draw the circles is much greater than normally realized. Also, the circles clutter up the diagram, making it difficult to read. Instead of circles to mark the beginning and end of activities one need only use arrowheads to give a sense of flow.

Another time-saving technique is to draft the network on fade-out grid paper (a translucent grid paper with light blue lines at 1-in. or 25-mm intervals). A blueline preprint drops out the grid lines, leaving only items drafted onto the network. The grid lines greatly facilitate drafting the network because:
1) horizontal lines are easily drawn
2) activities are easily and evenly spaced 1-in. apart, with subnetworks separated by 2-in. (50 mm) for clarity, and overlooked activities inserted at 1/2-in. spacing
3) lettering is fast because the small grid lines provide an adequate guide
4) time-scaling is simplified – if a scale of 1-in. per week is used, then 1 working day = two 1/10-in. grid lines on a 10 x 10 grid, or if a scale of 1-in. per month is used, then 1 week equals approximately two 1/8-in. grid lines
5) drawing of consistently sloped angle portions of activity arrows is facilitated as one can easily lay out a 1:10 or 1:8 slope.

Difficult to Update

One of the most frequent criticisms of the time-scale arrow diagram is that it is too time consuming to update when work falls behind or gets ahead of schedule.

First, there is no more need to redraw a time-scale arrow diagram. An out-of-date time-scale arrow diagram is at least as valid as the non time-scale arrow diagram.  Second, the preferred method of showing deviation from plans is not to redraft the network (obscuring the original plans and deviations) but, rather, to show a vertical status line.  This starts at the revision date, drops vertically to the first activity, jogs horizontally to the percent complete of that activity arrow, and continues to the bottom of the page(see Fig. 25 for an example of an update line).

As can be seen in Fig. 25, “Pour Concrete” is 4 days behind, “Excavate Footings” is on-schedule, and “Mechanical & Electrical Work” is one week ahead.  This provides an excellent guide for the project manager as to what needs expediting.  Naturally, if the project gets too far ahead or behind schedule – or if there are major logic changes – redrafting is necessary in order to maintain the usefulness of time-scale.

A classic example is the computer-generated, time-scale arrow diagram that starts over the project engineer’s desk, runs across the wall, around the corner into the next office, and clear down to the other end of the job trailer.

One need not do this.  The smallest necessary scale is usually 1-in. per week.  This allows one working day equal 2/10-in. (10 x 10 grid paper) and is enough to draw a very short arrow with an arrowhead for those infrequent activities that require only one day.  If some activities take less than a day, they can be combined with others.  If there isn’t room to put the description directly over the activity, then it can be put up out of the way with a leader (see Fig. 26). Sometimes, of course, one inch per week doesn’t give enough room (as in a paper machine shutdown).  In these cases, overall project duration is usually quite small and the scale can be expanded.

At 1-in. per week, a one-year project becomes rather unwieldy (52-in. plus 2-in. margins or 1320-mm plus 50-mm), and a two-year project becomes impossible.  One solution is to stack one half of the schedule over the other on the same sheet of paper.  Using a 30-in. (762-mm) wide sheet with ½-in. margins top and bottom – plus 2-in. between the halves – 14-in. (355-mm) widths are available for each half.  Since some activities will be separated by ½-in. and a few by 2-in., there is room for about 20 concurrent activities at the same time (which is adequate for most projects).  If a schedule is stacked, plenty of room must be left between halves so that the two are already delineated.

Another solution is match lines and two or more sheets.  Although this may be required in some cases, it is obviously not as desirable as viewing the entire schedule in one piece.

Yet another solution is to break the scale, drafting the first part at 1-in. per week and the rest at another scale or not-to-scale.  This often works well, as it is best to avoid too much detail too far into the future because: 1) one seldom has sufficient time, and 2) plans will probably change by the time one gets closer to doing the work.

The final solution is to use a different scale.  One inch per two weeks works very well and even one inch per month does well for many projects.  This is about as far as one need go, as a 4-ft. (1.2 m) drawing can then cover about four years.

Too Little Information

The time-scale arrow diagram does have some limitations, however.  Assume an average vertical spacing of 1 in., an average activity length of 1½ weeks at in./week, and 25% of the space unused due to the organization of the network. A large drawing (36 in. x 60 in. or 1524 mm x 914 mm) can have up to 1000 activities and a medium-sized drawing (30 in. x 36 in. or 762 mm x 914 mm) can have up to 500 activities.

For projects up to $30 million, Pinnell Engineering has seldom exceeded 300 activities on anyone network. It is best to have additional detail in subnetwork schedules tied to the master schedule but prepared and maintained by the organization responsible for that portion of the project. Not only does this reduce the information required, it places the scheduling responsibility where it belongs.

This firm does not, in fact, recommend having over 500 activities on a network (at anyone time) as managers cannot and should not grapple with such detail. However, as the project progresses, completed activities are dropped off and new activities added so that the total number of activities may be several thousand over the life of the project.

Advantages of Time-Scale Arrow Diagram

Rather than being inferior to computer scheduling, timescale arrow diagramming actually has several distinct advantages; these are:

  1. greater flexibility
  2. quicker and clearer communication and visualization
  3. faster and cheaper preparation
  4. more power

Good graphics (time-scale arrow diagram) implies relationships between two concurrent activities or shows an approximate relationship between activities that computer printout could never do. Many work activities (e.g., Mechanical embedded in concrete), take only a short time to accomplish, must occur sometime concurrent with another activity (e.g., form for concrete), yet cannot (and need not) be precisely defined as to exactly when they will occur (see Fig. 27).

Other activities must be completed at some uncertain time prior to completion of another activity (e.g., rebar footings before completing form footings in Fig. 27). The computer requires precise relationships and cannot show generalities.

In addition, the time-scale arrow diagram can show assumptions: questions about durations, relationships or activity descriptions, and alternatives that are impossible to show with computer printout. All that is needed is a brief note on the diagram informing readers as to what assumptions have been made, questioning what the relationship should be, or a different type of line (say a dot-dash) to show an alternative path from a decision point or a differing outcome event.

The human eye and brain can grasp the fundamental organization, repetitive patterns, critical path, float, and a sense of the overall criticality and complexity of the entire project and subnetworks from a brief review of a well-prepared time-scale arrow diagram. A similar understanding gleaned from computer printout would take hours of dedicated concentration and elude all but the most determined.

Time-scaling takes longer to draft initially, but once the network is drafted, there is no delay or cost to keypunch data, make the computer run, or wait for printout and debug the data. It also costs much less to update. If a status line is used to show current status instead of redrafting, the cost of monthly or weekly revisions can be negligible compared to computer runs.

More powerful

Finally, the time-scale arrow diagram can permit concurrent consideration of resource availability, space limitations, weather effects, and related activities. If the scheduler rough drafts the schedule in time-scale instead of converting later, all these factors can be considered initially instead of first going through the laborious, expensive and inaccurate process of computer rescheduling, resource leveling, and least-cost expediting. In fact, no existing or contemplated computer system can begin to compete with the sophistication, power, and accuracy of an experienced manager with such a practical tool to aid him in visualizing and analyzing a project.

Summary

In summary, CPM and PERT are seldom used or understood in spite of over 20 years availability. In fact, many are strongly opposed to it, having had reams of computer printout and unreasonably detailed, poorly planned CPM schedules forced upon them.

Computer printout alone is not adequate for scheduling. Computer scheduling without an understanding of the basics is largely responsible for CPM’s limited use; it is similar to finding one’s way from a list of streets and intersections instead of from a map.

Computer-generated, time-scale network diagrams, at least the ones seen by this firm, are not yet satisfactory due to the poor quality of graphics. They do, however, hold promise for the future.

Precedence scheduling, although recently quite popular, also is not the answer. If a computer is used, precedence computing is far superior to i-j node computing. In addition, precedence diagramming does have some advantages over arrow diagramming, especially when “roughing out” a very complex network (because it is easy to modify relationships). It doesn’t, however, lend itself to time-scaling, and always must be eventually converted to time-scale arrow diagram.

The most important step to increase the use of CPM scheduling is for everyone to understand it, and to use more judgment when applying it. Whether one uses i-j node or precedence computer computing; non time-scale or time-scale arrow diagramming; precedence diagramming or other methods isn’t as important as properly understanding and using the method selected. The profession must first learn and apply the basics before attempting sophisticated computer technology.

By |January 21st, 2015|Steve Pinnell|

Capital Program Management (Supporting Project Owners)

Capital Program Management: supporting project owners

We have found that successful project owners focus on four critical issues to ensure the success of their capital design and construction programs.

1. Clear Vision & Improved Function

To achieve clear vision and improve function, successful owners implement one or more of these strategies:

  • Define the Mission
  • Re-Engineer, Teambuild, and Train
  • Initiate Total Quality Management (TQM)
  • Improve Program Management Systems.

Most Pinnell/Busch clients first establish a mission statement that defines the organization’s goals. Some re-engineer the organizational process to refocus on essential functions. Others develop work teams and implement Total Quality Management (TQM) throughout the organization. In all cases, staff training is an essential component of success.

2. Dispute Avoidance and Resolution

Partnering is probably the most important concept to affect the construction industry in the past 30 years. It offers an opportunity to greatly reduce claims and acrimonious disputes, while making construction more enjoyable and satisfying for all participants. Pinnell/Busch partnering services have supported a range of clients, including the U.S. Coast Guard, the City of Los Angeles, the City of McMinnville, the Alaska Court System and the Oregon Department of Transportation.
To be successful, dispute resolution must be accomplished within a partnering framework. This framework, which we call a Dispute Management Program, should be in place when a project begins. It includes a spectrum of dispute avoidance and resolution techniques, starting with Total Quality Project Management (TQPM), focusing on partnering and win/win negotiation, but including a claims management program and mediation, arbitration or litigation, if required.

3. Better Project Management

Project management procedures and tools can be improved by training your personnel and providing better tools and procedures. Supplementing staff capabilities with special skills (critical path scheduling, conceptual estimating, value engineering, etc.) will help your organization cope with peak workloads. Improved program management may be needed to manage a very large project or an organization’s entire design and construction program.
4. Claims Analysis and Defense

Partnering and a Dispute Management Program will avoid many disputes and resolve most of those that do occur, but project owners must always be ready to firmly resist unwarranted claims and litigation. Trained staff and procedures that ensure timely notice and good. documentation are essential. Also needed are construction experts (in-house or consultant) to analyze claims, prepare a defense, and advise you and your attorney on technical and construction management issues.
As-built schedules are one of the most important job site records, along with daily diaries. A good as-planned schedule and the faithful recording of actual start and finish dates are critical, as are logic changes, and the reasons for delays or impact.

 

By |January 21st, 2015|Steve Pinnell|

Bottom Line Management (Tips for Contractors)

Construction Scheduling
by Steve Pinnell, Principal

Importance of Scheduling
A good schedule will save time and extended overhead costs, avoid delays, eliminate most overtime, ensure a more efficient construction sequence, and substantiate claims for owner delays or impact. Scheduling software is helpful but will not guarantee a good schedule. Schedulers, including project managers and superintendents, need to master critical path scheduling (taught in an intensive one-day seminar). A working knowledge of the software and access to an expert will aid in special applications or resolving problems.
   The project team is often too busy mobilizing and running the job to spend enough time on scheduling. Because they need to “own” the schedule, I advise using a scheduler to assist the project team in preparing their schedule. An expert will prevent staff wasting time struggling with software and the problems that occur when updating or trying to prove owner-caused delays.

Crew Chases
   Resource leveled schedules are desirable, but they are too much work for most projects. Instead, show “crew chases” by tracing major pieces of equipment (cranes, scraper fleet, etc.) and key labor crews from activity to activity. This prevents scheduling them for two places at the same time or leaving gaps which cause multiple mobilizations, lowered morale, and poor productivity.

Subcontractor Scheduling
To schedule your subcontractors: (1) prepare an initial schedule with all subcontract work; (2) get each subcontractor’s commitment to meet their dates; (3) save some float in the schedule for unexpected problems; (4) write your subcontracts to clearly define the subcontractors’ scheduling responsibilities; and (5) hold everyone (including your crews) to the agreed schedule.
If you are a subcontractor, schedule and resource load all of your projects on a master schedule at your home office. Otherwise, you may run short of work or become overcommitted, delay some projects, and be back charged.

Monthly Updates
Update your schedule every month: record actual start and finish dates, percent complete or days remaining of ongoing activities, delays or impact, and revisions if needed.

Short-Interval (Look-Ahead) Schedules
Tie your superintendent’s weekly short-interval schedules to the master schedule to avoid overlooking critical activities. Use an Excel™ spreadsheet or Microsoft Project™ to show actual progress for the previous two weeks, planned work for the next three weeks, and the previous month’s schedule activities below the activities for the current schedule.

Scheduling for Changes and Delay
Revise the schedule as changes occur or it will become inaccurate and unusable, which may preclude time extensions and compensation. Use fragnents (network diagrams of only the affected work) to identify and explain delays to the critical path.
Analyzing scheduling claims may require a Detailed As-Built Schedule. This schedule economically and quickly creates a very detailed and accurate as-built schedule from the basic job records (daily reports, correspondence, inspector’s logs, cost reports, and other record of progress, impacts, crew size, weather, etc.). Spreadsheet macros make this a relatively fast process. For details, visit our web site atwww.pinnellbusch.com.

Steve Pinnell has provided scheduling and claims expertise on over a thousand projects for several hundred contractors since 1975. He is the author of HOW TO GET PAID for Construction Changes. See our website for details.

By |January 21st, 2015|Steve Pinnell|

Schedule Review For Construction Project Owners

Tricks, Traps, and Ploys in Scheduling Claims

Project schedules often go awry. What begins with a realistic plan can quickly snowball into a major dispute. Below are a number of tips to minimize delays and scheduling claims.

Critical Path Schedule
Most project Owners require a CPM (critical path) schedule on large, complex or risky projects. The CPM schedule assures the Owner that the Contractor has a viable plan to complete the project on time. It enables you to track progress to quickly identify delays, provides a blueprint for recovery of lost time, and protects against unwarranted delay and impact claims.

Specifications
Your first step is a well-written specification, which should require the following:

  • Submittal of electronic schedule files
  • Joint schedule review by the Owner’s representative, and the Contractor’s scheduler and superintendent
  • Monthly schedule updates with narrative reports
  • Daily field reports from the Contractor’s superintendent and all subcontractors
  • Recovery schedules if work falls behind
  • Time impact analyses to justify time extension requests
  • Partial withholding of progress payments for failure to comply

Software Tricks and Traps
By utilizing little-known features of Primavera P3 or Microsoft Project, Contractors can distort the schedule to hide delays or fabricate a claim. More often, CPM concepts or software features are not fully understood, inadvertently creating an inaccurate schedule. You need to know how to recognize these electronic ploys, or bring in professional assistance to find hidden traps.

Action if Delayed
Despite everyone’s best efforts, projects can still experience unforeseen delays. If the delay is the responsibility of the Contractor, Owners should require a recovery schedule. If the Owner causes the delay, insist on a prompt, detailed, joint review of the problem. First, try to re-sequence operations to avoid a delay. If necessary, compare the acceleration cost to the delay cost and choose the optimum solution. Also, take special care when preparing global settlements.

Defense of Scheduling Claims
When a scheduling dispute arises, insist on a detailed time impact analysis, including a comparison of as-planned with as-built. For weather delays, require a comparison to NOAA records. Require submission of all supporting documents (daily reports, timecards, etc.), and a narrative that explains entitlement and how the events or actions by the Owner caused the delays and subsequent costs. To discourage fraud, require certification of all claims.

Through a proactive approach, you can maintain control of your project schedule and adapt to changes without excessive costs. Please contact our office for assistance in reviewing a Contractor’s schedule or improving your own schedule tracking process.

Tips to Avoid Traps
Below are a few tips from our Schedule Review Checklist for project Owners:

  • Out-Of-Sequence Logic: Use the ‘Retained Logic’ option instead of ‘Progress Override’ to avoid invalid progress and delays.
  • Excessive Lag: Lags greater than one week need to be verified and possibly changed to a separate activity.
  • Incorrect Actual Dates: Verify the actual dates. Wrong dates can be used to hide delays or set up for a claim.
  • Multiple Calendars: When analyzing the critical path, unexplained variations in float may be due to multiple calendars.
  • Erroneous Constraints: Check if constraints are invalid or used incorrectly. Constraints can unnecessarily delay the start of critical activities, falsely create another critical path, or cause negative float. Do not use Mandatory Start and Finish constraints, or the ‘Zero Total Float’ constraint.
  • Auto-Cost Rules: Select the ‘Link Remaining Duration and Schedule Percent Complete’ option. If you don’t, separate updating is required that could result in error if one is overlooked.
  • Scheduling Report: Run P3’s Scheduling Report to review constraints, open-ended activities, out-of- sequence logic, and statistics.
  • Check The Data Date: Verify that the report Data Date is correct for the current status.
By |January 21st, 2015|Steve Pinnell|

Scheduling Best Practices To Avoid Changes, Delays and Claims

For over 30 years, Pinnell Busch has helped our clients reduce claims, resolve disputes, and improve their scheduling and we have developed Best Practices based on our experience. This spring, we surveyed industry practitioners to determine their experiences and recommendations to avoid changes, delays, and claims. We presented the results at the Project Management Institute College of Scheduling Conference in May. The report, a six-page summary, and the raw data are available on our website,www.pinnellbusch.com/library/.

Contract Changes
Project owners and contractors both reported that construction changes averaged 10% of their annual volume of work. Building contractors reported 8%, heavy/highway contractors 10%, and subcontractors 12%. However, individual owners and contractors reported widely varying results:
• Nearly half of owners averaged 5% or less of annual volume.
• Nearly one-fifth reported 15% or more and some reported 50%.

Reason for Variation
The wide variation is due to more than a difference in type of projects and working conditions. It must be due to a difference in procedures and standards. In other words, some organizations do a better job of limiting change than others. More importantly, major improvements are possible through better practices.

Cause of Changes
Both contractors and owners reported scope change as the primary cause of changes. Design errors and differing site conditions were the next most frequent causes, followed by owner delays.

Reducing Changes
Owners have control, or at least influence in the case of design, over 85% of the reasons for change. With better practices, owners can significantly reduce the extent of changes and, therefore, of claims and delays.

We prepared a list of Best Practices to reduce claims, as summarized in the adjacent figure, based on the survey responses and our experience on projects.

Claims
The percentage of changes that become claims varies widely – from zero to 50%, with an average of 61⁄2%. The wide variance between individual organizations means that major improvements can be made. There is a strong correlation between a higher percent of changes and more of those changes becoming claims.

Best Practices to reduce claims include: (1) better people skills and attitude/trust, (2) prompt and fair negotiation and payment for changes, (3) fair contract administration, (4) timely notice of change, and (5) clear communication. We strongly recommend partnering as the best overall method to avoid claims and help settle those that do occur.

Most claims (85%) are settled in negotiation with the balance by mediation, arbitration, or litigation. Mediation, however, should always be used before arbitration or litigation to save time, cost and business relationships.

Project ReAlignment, formerly called Intervention Partnering, is a new means of saving troubled projects midway through construction. It ‘wipes the slate clean’ with one change order for all delays and claims to date. Project ReAlignment turns around a troubled project in 30 to 45 days using a small team of experts and in-house staff. The cost savings are enormous and, unlike mediation, based upon documented facts. The ‘bleeding’ is stopped and progress resumes in a positive environment.

Delays
Half of all projects are delayed, with over 10% by more than 3 months. The variation between organizations is extreme: one- quarter of building contractors finished 95% of their projects on time, while half were 1 month late on 30% of their projects and 3 months late on 10%. Owners had similar records: 30% of municipal owners’ projects finished on time, but 25% had frequent or severe delays.

The causes of delay mirror the causes of change: scope change, design error, and differing site conditions. Other causes were poor schedules, third party delays, and weather. Most delays are under the owner’s control. Best Practices to reduce delays include those for reducing changes plus: (1) training in critical path scheduling, (2) owners writing better scheduling specifications, (3) contractors preparing better schedules, and (4) owner representatives enforcing the scheduling specifications and tracking of progress more closely.

Scheduling
Scheduling performance by all parties (contractors, owners, and owner representatives) was abysmal.

Owners’ Scheduling Specifications and Enforcement Most owners (60%) were satisfied with their scheduling specifications, but only half required narrative reports which are essential to understanding schedule logic, tracking progress, and identifying pending delays. Only half required electronic schedules, which are needed for independent progress tracking and delay analysis, or contemporaneous time impact analyses to justify delays.

Contractors’ Scheduling Procedures and Results
Most contractors (75%) were satisfied with their scheduling procedures and results – including many of those with frequent and/or severe delays. Owners reported that only one-third of their contractors were good schedulers, one-third were fair, and one-third were poor.

Subcontractors also had a dim view of general contractors’ scheduling practices, which closely matched the owners’ responses. Too few general contractors requested subcontractor input, prepared monthly updates, kept the subs informed, or prepared recovery schedules when delayed. Worst of all, most hid delays and caused trade stacking.

Owner Representatives Scheduling Skills & Practices
Contractors had a very different opinion than owners of owner representative practices. The most serious shortcoming was untimely and unreasonable responses to RFIs and change order proposals, which was also one of the major causes of claims. The survey showed a clear relationship between timely and fair responses and fewer claims.

Best Practices
Our recommended Best Practices include those mentioned above, plus: (1) partnering, (2) achievable schedules, (3) accurate recordkeeping, (4) increased staffing on troubled projects, (5) win/win negotiation and mediation to resolve disputes, (6) training owners and contractors in contract law and scheduling, and (7) more timely submittal of and response to requests for information, notices of change, and change order proposals.

For details, call Steve Pinnell.

By |January 21st, 2015|Steve Pinnell|

Matrix Management – A Blend of Functional Departments and Project Teams

Presentation at The Pacific Northwest Conference
American Water Works Association, May 1978
By Steven Pinnell

Ladies and Gentlemen, my talk today will be on Matrix Management, a relatively new concept that blends functional department management with project management. Many of you may already be practicing matrix management without knowing what it is called. Some may be calling it “project management”. Others may find in it some new ideas to help resolve their organizational problems.

I wish to caution you, however, that many of my remarks are based on personal observation and opinion and may not be applicable to your particular situation.

I. Why worry about a New Method of Management?

If you are facing a major new capital expansion project that threatens to overwhelm your staff, you probably heed a better organizational system.

Other reasons to look at matrix management are:

  • Costs getting out of control
  • Schedules not being kept
  • A shortage of trained manpower
  • Poor management practices resulting in recurring technical errors
  • Poor communication and organizational rigor mortis
  • Personnel dissatisfaction
  • A growing sense of loss of control

Need a quick, cheap, painless cure-all?
Try matrix management.

No, it is not quick, cheap, or necessarily painless; but it might be a means to improve your organization.

II. What is Matrix Management?

A. What it isn’t – the Functional Organization

Water Works organizations (and almost all others) are organized in a basic hierarchical structure (the pyramid). The structure is by functional department (engineering, maintenance, administration) with the boss at the top, workers at the bottom, and middle managers in between. Work is passed from one functional group to another. Each department approaches a project independently with a project engineer for that department who coordinates the activities of his department.
The functional organization is based on such management theories (proverbs) as specialization, line and staff relations, authority and responsibility, and span of control. It is an efficient, secure organization that works well. The problems with the functional organization are rigidity, a tendency to emphasize technical specialties over project needs, and frequent conflicts over resources.

B. What it isn’t – the Separate Projects Organization

The opposite end of the spectrum from the hierarchical functional structure is the separate projects organization.

A construction company is a good example of the separate projects organization. A construction company has the typical functional organization at the main office (accounting, estimating, operating manager). The fieldwork, however, is usually organized by separate independent units. A project manager (superintendent on smaller projects) has full authority over the job with direct control over all project personnel, including the power to hire and fire.

The project itself, however, is usually organized as a functional structure with engineering (project engineer), field operations (project superintendent), administration (office manager), and top management (project manager).

The strengths of the separate projects organization result largely from: (1) the singleness of purpose and responsibility of the project manager and his team, (2) his full control of all needed resources, and (3) the team spirit.

The weaknesses are: (1) a lack of organizational continuity when projects close down, (2) duplication of facilities, (3) some rigidity in use of personnel, and (4) almost total reliance on the abilities of one man-the project manager.

C. What it is – A Multidimensional Matrix Structure

The matrix organization has both a vertical, hierarchical structure and a horizontal, project structure.

Each person works for 2 (or more) bosses–his department head and his project manager(s). This results in occasional problems with team members sometimes caught in the middle of a conflict between a project manager and department head.

Matrix management is based on an organizational structure that blends functional department and project management. The term “matrix management” refers to this structure. It also includes the management practices and employee attitudes that result from the structure and help make it work.

The advantage of matrix management is that one can enjoy many of the strengths of both project and functional management while avoiding most of their weaknesses.

In visualizing a matrix structure, one should consider a blending of organizational structure from functional departments with no project coordinator nor sense of team effort on the left to an independent team with their own support services on the right. The matrix fills the broad area between and can vary from a weak matrix with a part-time coordinator and little else, to a strong matrix with a full-time project manager, separate project office, and internal administration.

In describing the relative strength of a matrix structure, some people refer to the balance of power between project managers and department heads as defining weak versus strong matrixes. Others refer to whether the team works full-time or part-time or, to the proportion of the work done by project team members versus functional department staff.

D. Separate Project Managers For Matrix Management

Most of the literature refers to a project manager operating separately from the departments. These people are titled project managers, work strictly on projects, and are not assigned to a functional department but have their own project management department.

My own experience was with a firm where the project managers came from one of the departments. I feel that this is usually a better system.

The literature also assumes most of the work will be done by functional departments with only management functions provided by the project manager (and his team). I feel that this is usually a mistake as it doesn’t foster a team spirit.

Work is done by people. They may be physically located in the department spaces and accountable to their departmental manager for certain tasks and overall direction, but when working on a project, they should be answerable to that project manager and should think of themselves as being on his project team. Projects can be assigned to an individual department. The department head can then assign a project manager and staff and other department heads can assign a project engineer and other staff from their department. The combined team works for the project manager.

The project should have its own cost accounting and the project manager be held responsible for maintaining the budget. The department heads should also be held responsible for the budgets of projects assigned to their departments since the cost status of these projects can be reflected in their departmental cost report.

E. Diversity

A matrix organization does not require that all work be done under both functional and project control. Some projects can be done by teams independent of the functional departments. Other projects (or tasks) can be done by the functional departments without benefit of a project team. Some departments (e.g. drafting) can continue as functional departments. Even a single project can be handled by all three types of structure—either at different points in time or at the -same time for different functional sub-areas.

F. Attitudes

Quite simply, the major factor in successful matrix management is people’s attitudes.

A sense of belonging and loyalty to the department must be supplemented by a sense of responsibility to the project. The best way to do this is to teach people that whenever they do any work on a project, they are a part of the project team.

The second major attitude is one of cooperation with others to achieve both joint and individual goals. This is best fostered by having personnel, including department heads, participate in some project teamwork. This forces them to depend upon other departments and reminds them of the need for cooperation. Having project managers come from the functional departments instead of a separate project management department also helps foster this attitude.

G. Project Management

“Project Management” is a new buzzword in engineering management. Its meaning and relationship to matrix management needs clarification.

Matrix management is an organizational structure and style (management practices and employee attitudes). It also requires good project management practices to be successful.

“Project Management” means several different, but similar things:

(1) The management of projects.
(2) A group of specific skills for good management of projects. For example, my course in Engineering Project Management at Portland State University covers critical path scheduling, cost estimating, budgeting, cost accounting, cost control, reporting, contracts, contract administration, technical writing, and a brief discussion of communications and human relations.
(3) An organizational structure and style (i.e. matrix management). When people say they use “project management”, they usually mean they use an incomplete matrix structure with most of the work done by functional departments, but some projects done by separate project teams.

I prefer to use the term “matrix management” to describe the organizational structure and style and the term “project management” to describe the management of projects or the specific skills required of the project manager.

The rest of this paper will discuss the matrix management style. One should remember, however, that good project management practices are required prior to implementing a matrix management structure. At least a few projects should be done with project teams and all managers should learn good project management practices before an organization considers changing from functional to matrix structure.

III. When do you Use Matrix Management?

A. Contingency Theory

The current vogue in management literature is that there is no ideal method of management. The best solution is contingent upon the key factors in the environment in which the solution will have to operate. Put simply, “Use whatever fits the situation.”

B. Implementation

One should approach implementation of matrix management in the same way-. Not all organizations need matrix management. Not all managers can handle it. It is complex, difficult to implement, and requires much better communication and interpersonal relations skills than functional or separate projects management. Unless used in the proper circumstances and after careful preparation, it can be very frustrating.

C. What Size of Project

Size alone is not a deciding factor. The matrix system works as well for small projects as large projects. The only difference is that the project manager (and team) work part-time on small projects.

Organizations with a great number of small projects can probably do as well with functional management. Organizations with a few, large projects might do best with a separate projects organization. Firms with a mix of large and small projects probably need matrix management.

D. What Type of Project

Organizations with repetitive projects requiring little outside coordination and only one “client” to satisfy could probably continue to do well with functional departments. Those with projects requiring great speed and which are independent of each other might use separate project management. However, those organizations with projects requiring extensive coordination, many disciplines, high technology, etc., might do better with matrix management.

E. What Size and Type of Agency or Firm

Most small organizations have well-developed informal communications and probably do not need a matrix structure anyway. A growing organization should probably go to a matrix structure if the intent is to develop their own managers. A large organization with a wide mix of projects would probably benefit from the matrix structure.

IV. How Do You Use Matrix Management?

A. An Example

First, let’s look at how some large consulting firms operate with a matrix system.

I worked for a large consulting firm for several years and although I never heard the phrase “matrix management” while there, they had one of the best-developed and most successful matrix organizations ill the business.

1. Functional Organization
The primary organization is by regional offices that operate as independent profit-and-loss centers. The office had five major divisions and several departments within each division. The departments were the lowest level functional units. They had a department head, their own profit-and-loss statement, and an overhead budget and common office area.

2. Project Organization
All projects within the regional office were assigned to a department, either the department that brought in the project or the one with the major amount of work. On major projects, a project director was assigned to exercise overall review. Normally, however, the project manager was the senior project officer. He was responsible for selling the job, establishing the fee, supervising the work, reviewing the product, meeting budgets and schedules, and maintaining client contact. The project manager would report to the department head if there were no project director. On many smaller projects – a project engineer was assigned who was responsible for technical matters while a project manager handled only administration and client contact.

One interesting aspect of their matrix management style was that senior engineers (and even one’s supervisor) were sometimes team members under a more junior engineer who had been assigned as project manager. In fact, all office personnel were available for consultation on any project (but, of course, they charged their time against that project).

3. Discipline Directors
Another aspect of a more complex matrix was the role of the discipline director who had firm-wide responsibility for technical aspects of all work w1thin his discipline. He assisted with new business development within his discipline. He also provided additional technical support to the department managers and facilitated utilizing discipline staff from other regional offices.

4. Regional Matrix
The matrix system and the ensuing cooperation made possible extensive cooperation between regional offices. Thus, a project in California, under the responsibility of the San Francisco office may have the soils design done by the Denver office, sanitary design in Seattle, and Construction Management from San Francisco with scheduling assistance from the Portland office.

One major advantage of this system is the reduced need to staff-up and lay-off people at one office or attempt to relocate people around the country. The telephone and transportation costs increase dramatically, but these are more than offset by reduced employee turnover, attendant learning time, etc.

B. Basic Management Functions for Matrix Management

Management is not a science, but like all other disciplines that focus on people, is an art. It has no immutable laws, but only rules-of-thumb. There are, however. six basic functions that a manager performs regardless of whether he is operating on a functional, separate project, or matrix structure. These are: planning, organizing, staffing, coordinating, directing, and budgeting.

C. Planning

In addition to long-term strategic planning, matrix management requires more extensive tactical planning or scheduling. Good scheduling is, in fact, essential to minimize conflict between project managers and department heads. One of the major problems of matrix management is the tendency to overwork the departments and create conflict over the use of resources (people, equipment, and funds).

The first step is to accurately estimate the use of resources on each project. This is difficult for construction and even more so for maintenance and design organizations. It requires a careful review of the work to be accomplished and good feedback (cost reports) from previous projects.

The second step is for the project managers to schedule the work activities for each of their projects and determine their resource requirements over time. This can only be done with critical path schedules. Forecasting and probabilities can be used to determine the most probable requirements of future projects.

The third step is to add up the resource requirements for each time period from all projects plus departmental overhead (vacation, administration time, etc.).

The fourth step is to compare the demands with the availability of resources. The project (and overhead) demands should balance with the department availability. Usually they don’t.

If availability exceeds demand, the fifth step is to either schedule more work or declare some resources surplus (lay-off excess people). The latter, of course, does not make for good employee relations.

More often, demand exceeds availability. In that case, the fifth step would be one or more of the following:

1. Hire more people (or get whatever other resource is needed).
2. Plan on substantial overtime.
3. Have more work done outside by consultants and contractors.
4. Assign priorities to projects and reschedule.

The sixth step is to monitor and update the plans to keep them current and to provide feedback for future projects.

The entire process of planning: forecasting future projects, scheduling current and future projects, resource demand listing, controlling, and feedback can be done intuitively; with time-scale critical path schedule networks plus a few manual computations; or, with sophisticated computer programs.

I have found that a manual system, if kept relatively simple, works well for scheduling engineering manpower. It is only necessary to prepare a time-scale critical path network, assign resources to each activity, and add up the resources for each time frame. Most of the computer programs that schedule engineering manpower are too complex and difficult to use. The only one that is satisfactory for scheduling and resource listing lacks controlling and feedback options. Hopefully, that will be corrected in the near future.

D. Organizing

1. Positions
The difference between a project coordinator and a project manager is the difference between mere integration and actual decision-making. The difference between a part-time project manager and a full-time project manager is usually the size of the project (in terms of management effort required).

When a project coordinator is utilized (even if he is called a project manager), a project representative is sometimes appointed within each department to serve as a focal point. This person could as well be a sub-project manager.

2. Delegation of Authority and Responsibility
Responsibility for cost, time, and quality must be given to the project manager. He cannot just be called a project manager; he must be given authority and resources and be held responsible. The department heads should have either a specific responsibility for providing resources or share in the responsibility for maintaining cost, time, and quality.

The project manager has a different type of authority than the department head. He often has no direct authority over his team, but must exercise authority through his knowledge, leadership skills, interpersonal relations skills, and ability to “horse-trade”. This lack of traditional authority makes a project manager’s job rather difficult.

3. Communication
A project management structure does not require sophisticated communication systems, as the team is usually fairly small and all oriented towards the same objective.

A functional organization requires a great number of formal communications — plans, schedules, budgets, and reports.

A matrix organization requires even more sophisticated (but more informal) communication than a functional system. In fact, good communications are essential to the matrix concept. The importance of the informal communication system makes familiarity with the organization and other people in it a prerequisite to successful matrix management.

E. Staffing

1. Personalities

The organizational design must consider the individual project manager — his style, strengths, and weaknesses.

A project organization requires a project manager with broad general management skills

A matrix organization requires a project manager who is good at interpersonal relations, working across jurisdictional lines, and communication.

Since the matrix organization depends heavily on informal communication, the project manager should know the organization well or have an assistant who does.

Also, a matrix organization requires certain longevity of people in order for them to function well together. A brand-new, rapidly expanding, or high employee-turnover organization might do better with either the project or functional organization structure.

2. Management Styles

The generally recognized management styles are authoritarian, consultative, and participative.

Functional management lends itself to an authoritarian management style. Project management can be authoritarian, consultative, or even participative. Matrix management does not work well with an authoritarian management style, but should probably use consultative or participative· styles.

3. Job Satisfaction

Matrix management offers an increased involvement in projects, a generally more versatile work-experience, an increased opportunity to participate in management, an egalitarian attitude among all levels of employees, and technical support from a functional department. It appears to be particularly suitable for engineers as it matches their personality, training, and experience. For some people, however, the ambiguity can create problems.

4. Training

Implementation of matrix management requires a major training effort both in project management skills and familiarity with the matrix structure and style.

1. Business Schools can provide either a degree program or courses and seminars of specific interest. Any organization interested in development of itself and its people should encourage people to pursue a business degree. Unfortunately, except for a few specific courses, an MBA program tends to train a man to be a president instead of a project manager.

2. Engineering Schools have started to offer a few courses in project management skills. Portland State University, where I teach part-time, offers one course in engineering project management and this fall we intend to add a course in contracts, specifications, and claims. I suspect that a school in your area offers similar courses.

3. Self Improvement is another good means of training. People can be encouraged to attend seminars or take correspondence courses – often packaged by the various professional societies. A good organization library can also provide an opportunity for those who are eager to advance.

4. In-House Training programs can vary from effective to marginal.
One tool that worked well at the consulting firm where I worked was a weekly brown bag lunch where a firm or outside expert in either technical or managerial subjects would give a talk over the lunch hour to anyone interested in the subject. Good speakers and some management support are needed to make this work. Another effective training tool is a monthly evening meeting of project managers. The firm would provide beer, fried chicken, and a well-prepared discussion on some aspect of project management. The project managers gave up an evening, but everyone really enjoyed it.

5. On-The-Job Training is the most effective training tool–if it consists of more than just dumping a man into a new situation and letting him sink or swim. Although a formal training program with “tours” of the different departments is unnecessary or even undesirable, an informal system of giving new personnel an opportunity to manage a small project while supporting them closely and moving them into ever-increasing responsibility is a very effective tool.

One, if not the biggest advantage, of the matrix structure is the opportunity to offer junior managers a chance to manage small, then ever-larger projects yet give them support (and supervision).

6. Overtraining in project management skills can be a serious problem if the organization does not offer an opportunity to manage and to grow.

F. Directing and Coordinating

Good communication is an essential element of directing and coordinating. This includes oral presentation, individual or small group discussion, technical report writing, and the use of a wide range of reports and other records. All these skills are necessary for good project management with only a few special adaptations for the matrix structure.

G. Budgeting

A good cost accounting system is essential to matrix management. Costs must be reported by project if the project manager is going to be held accountable. The total cost and income for each project [I1ust also be reported by department if the department head is held accountable for projects assigned to his department.

Costs should be summarized by function or activity (survey, preliminary design, final design, printing, administration) for each project in order for the project-manager to know how his costs compare with his budget. Under each major activity or for the project overall, the costs should also be reported by expense category (telephone, auto, labor) in order for the project manager to take action to maintain costs within the budget.

In addition, the project manager should be able to either identify who expended funds and charged time on a project, or he should receive a sub-report for each department involved in the project so that he can control the costs of people in other departments. Some departments could have a subproject with any under run or overrun directly reflected in the department cost report.

V. The Effect of Matrix Management

A. Conflict

Some conflict is inevitable. In fact, some is good for organizational health. Matrix management tends to bring conflict to the surface, especially since most people have two bosses and these bosses sometimes clash. In order to minimize the unpleasant aspects of conflict, a strong sense of teamwork and personal friendships should be encouraged.

B. A Spreading and lowering of Decision Making

Matrix management should result in a decrease in the decisions made by senior management. This should allow them more time for the critical decisions. The matrix structure should prevent decisions from being made on the basis of a parochial department interest.

Decisions will thus be made faster and closer to where they will be implemented

C. Communications

Vertical and especially lateral communication will increase in volume and tend to be more informal

D. Training

The depth of management skills should substantially increase.

E. Individual Satisfaction

Technical professionals usually perform better in an “organic” environment where they can participate in the management of goals, planning, and production. Generally, these people will be more satisfied under matrix management.

Individuals who want management experience will have greater opportunity to manage themselves and others. Those who are promoted will not have to give up project work when they move into management.

Some people, however, prefer more structure and have difficulty with the ambiguity of matrix management.

F. Leadership Styles

The leadership style will tend to change from authoritarian to participative or consultative. Some managers will have difficulty coping with this.

G. Availability of Manager’s Technical Expertise

The best people will not be “lost to projects” when they move up to “administration”. Instead, the administrative duties should be lighter and more time should be available for project work—either as a project manager or at least on a consultative basis.

H. Organizational Effectiveness

Under the right circumstances and with the right implementation, matrix organization can substantially improve organizational effectiveness by balancing the needs of the organization and people with the needs of the projects.

I. Organizational Development

Implementation of matrix management can serve as a vehicle for extensive organizational development.

J. Control of Costs and Schedules

Better project management techniques under either a matrix structure or a separate projects structure should substantially improve the control of project costs and schedules.

K. Technical Quality of Work Product

I suspect that many design errors and obsolete design practices can be traced to poor management practices. Improvements in management techniques should, therefore, lead to improved design work.

In conclusion, full-scale matrix management (organizational structure, management practices and employee attitudes) may offer significant advantages over functional management for larger organizations. All organizations, however, no matter how small, should benefit from the use of project management in a limited matrix.

By |January 21st, 2015|Steve Pinnell|