Steve Pinnell

From Engineer to Entrepreneur: Developing Managers Within a Matrix Structure

ASCE Fall Convention – October 1982
By Steven Pinnell

ABSTRACT

Experience in the management of projects is one of the best means of training future general managers and entrepreneurs. This paper examines the matrix management structure and “culture” as a vehicle to assist in training project managers and in preparing them for general management responsibilities.

An overview of matrix management is given along with comments on implementing a matrix structure. The effect of a matrix structure on the development of project managers is then discussed in detail along with some recommendations to enhance the management development process, and how to avoid some of the pitfalls. The transition from project management to functional and general management is also briefly covered and the paper concludes with some recommendations for both the individual engineer who is interested in becoming a manager, and the organization that needs to develop new managers.

INTRODUCTION

General

All permanent organizations need to develop new managers, if only to replace those who eventually retire. Hiring already experienced managers is only a partial alternative, as current employees must have an opportunity to develop and outsiders need time to learn the ropes. If continued development of existing managers is a basic premise of healthy organizations, as it should be, then management training is an essential, ongoing function.

This paper examines the experience of project management as a means of developing functional managers and general managers. In particular, it considers a matrix management structure with overlapping responsibility of both functional managers and project managers as not solely an effective means of managing work, but, also an excellent vehicle for developing managers.

Definitions

The following definitions are provided to ensure clarity:

A project is a series of related tasks (activities), all of which must be done to accomplish a specified objective. A function is a number of similar but not directly related tasks that must be continually performed to fulfill an ongoing responsibility. A project task may be indistinguishable from a functional task — except that one leads toward a specific objective. A program is a long range, sometimes open-ended series of projects (or functional tasks) that are being managed as a group. The projects are usually related in that the program is directed towards some long-range general goal of the organization.

A functional organization accomplishes a project by allocating the tasks to various functional departments (engineering disciplines and support groups) and usually centrally monitors their accomplishment. Aproject organization assigns full responsibility to a separate team that has all the resources required to accomplish the project (except perhaps accounting, computer services, etc.). A matrix organization is a blend of the other two with primary project responsibility given to a project manager and some or all of the resources required to accomplish the project assigned to functional managers.

Matrix management is the management of projects (and functional tasks) in an organizational structure and culture that combines features of functional and project management. Program management is the overseeing of the management of many individual but related projects by several project managers and integrating their accomplishment in the achievement of some overall organizational goal. General management is the management of the departments and the overall organization. Entrepreneurial management is similar to general management except that it stresses dealing with the formation, growth, and transformation of an organization.

MATRIX MANAGEMENT STRUCTURE AND CULTURE: AN OVERVIEW

Different From Functional or Separate Projects Organizations

A functional organization is structured by function in a hierarchical structure (the pyramid) with a boss at the top, workers at the bottom and middle managers in between. This severely limits the opportunity for managing. Each functional department approaches a project independently with a project engineer who coordinates the activities of his or her department for that project and then passes the project on to another department.

The functional organization is efficient, secure and works well. It is often somewhat rigid with a tendency to emphasize technical specialties over project needs. It sometimes results in less than satisfactory effectiveness.

A project organization is structured by project with a separate, independent team, led by a project manager assigned to each project. A small support staff is usually available at the organizational level to assist and monitor performance. The project teams are often internally organized by function and are totally responsible for their projects. The separate projects organization is usually very effective in accomplishing project objectives due to: (1) the singleness of purpose and responsibility of the project manager and his or her team, (2) their full control of the needed resources, and (3) the team spirit. Its weaknesses, on the other hand, are: (1) a lack of organizational continuity when projects close down, (2) duplication of facilities; (3) some rigidity in the use of personnel and, (4) almost total reliance on the abilities of one person — the project manager. It is often not very efficient in the use of resources.

The Two-Dimensional Matrix Structure

The matrix organization has both a vertical, hierarchical structure and a horizontal, project structure. It blends functional department management and project team management. The term “matrix management” refers to this structure and includes the management practices and employee attitudes that result from the structure and help make it work.

Each person in a matrix management organization works for two or more bosses — a department head and one or more project managers. This results in occasional problems with project team members sometimes caught in the middle of a conflict between a project manager and a department head.

In visualizing a matrix structure, one should consider a graduation of organizational structure from functional departments with no project coordinator nor sense of team effort on the left to independent teams 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.

Diversity of Form

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 tasks.

A matrix structure can also be “de facto”. In order to get critical work done, many supposedly pure functionally structured organizations work as an informal matrix structure.

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.

The author’s initial matrix management experience was with a consulting firm where the project managers came from one of the departments. All projects were first assigned to a department, either the department that brought in the work or the one with the major amount of work. The department manager then assigned a project manager. Upon being assigned to a project, the project manager and team members remained in their departments, usually continuing to perform some functional tasks within their department. Upon completion of a project, they resumed their normal functional tasks, if not reassigned to another project. More often, most would have a number of smaller, overlapping projects and would always be doing a mix of project work and functional tasks. The result is probably better than having a separate project management department as it: (1) encourages an interchange of ideas between managers, (2) forces a mutual dependency between project managers and department personnel, and (3) avoids elitism and jealousy between project and department.

When initiating a matrix structure, it may be best to initially have the project managers in a separate department under the supervision of an experienced projects (program) manager. Otherwise, the functional managers whose job it is to supervise the project managers may be too inexperienced at project management to give them proper supervision and assistance.

Performance of Work

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/her team). This is usually a mistake as it does not foster a team spirit. Project team members 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 or her project team.

Program Management In A Matrix

Most organizations with more than a few projects will group them into programs for better multi-project management. If an organization has a broad mission with several distinct general objectives or goals, each goal will be associated with a program. The programs may be supervised by separate program managers or the department managers. This extra layer of work structure often allows better overall control by the organizational general manager and the program managers who are assigned to each program. Costs, time and resources can be budgeted and controlled at both the program level and the project level. If the programs accurately reflect the organization’s general objectives, they are more likely to be fulfilled.

As work progresses, some projects fall behind, go over budget, need additional resources, or lose importance. The program manager then changes priorities or schedules, and reassigns resources to maximize the overall program results.

Attitudes

Quite simply, the major factor in successful matrix management is people’s attitudes and expectations — the “culture” of the organization.

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 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 all 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.

Multi-Dimensional Matrix Management

A matrix structure can have more than two dimensions. The third dimension can be the program managers. Some large consulting engineering firms have a third dimension consisting of discipline directors with firm-wide responsibility for technical aspects and marketing of all work within their discipline.

Another dimension may be geographic. Large national firms with several regional offices may split project responsibilities between several 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. The major advantage of a geographical matrix 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.

Implementing A Matrix Structure

The current vogue in the 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.

DEVELOPING PROJECT MANAGERS: THE EFFECT OF A MATRIX STRUCTURE

Transition From Junior Engineer To Project Manager

The first step in the management of others is the management of one’s self. A matrix organization (and many project organizations) usually expects/demands a high degree of personal discipline and hence forces young engineers to plan and control their own work. When a junior engineer is assigned a task, he or she is (or should be) given a clear scope of work, a budgeted number of hours to be expended, and a desired completion date. The engineer is expected to perform within the objectives given or to provide a valid reason for not doing so. The management information system or an informal inquiry by the project manager will verify performance. Junior engineers who consistently meet their objectives will not only continue with the organization, they will soon be given an opportunity for more responsibility.

The second step in the gestation of a project manager is the technical supervision of an engineering technician or more junior engineer in the accomplishment of a task. This, of course, also occurs in a functional or project structure. Non-project work, like membership on internal committees, may also be assigned to improve management skills.

The third step is usually as a team leader, responsible for several people in accomplishing one or more tasks as part of a project. Examples are editing of the specifications, coordinating drafting, managing small sub-projects, etc.

The fourth and final step before becoming a project manager is acting as a project engineer. Usually this involves technical responsibility for the project with full responsibility for meeting the scope of work, but with less than full responsibility for cost and time performance or resource use. The project engineer usually has little or no client/user contact and no marketing responsibility. The project manager is responsible for administration, client contact and cost/time performance.

The author’s opinion is that a matrix structure is better for developing a junior engineer into a project manager. With the focus on meeting cost (labor hours), time and scope objectives, the junior engineer will be encouraged to control the portion of the work under his or her control. At the same time, there will be more support and supervision. Proficiency in managing will be gained much earlier than with another organizational structure.

Gradually Increasing Project Management Responsibility

New project managers should be gradually moved from a small, simple project with a lot of attention and support to larger, more complex and more critical projects, with little supervision. Mistakes made on the job in the learning process will therefore tend to be less serious and the young project manager will be continually challenged without a high probability of failure.

In a functional organization, project responsibility is not, of course, possible. In a separate project organization, the support and close supervision are often lacking so that it becomes a case of “sink or swim.” Matrix organizations not only can provide support and close supervision but also have greater flexibility in breaking a large project into several phases or smaller sub-projects. It can, therefore, have a greater number of small, medium and large projects and hence more opportunity to practice management skills.

The progression from project manager of small projects to manager of large projects is not only as project manager. Usually it includes assignments as a project engineer, team leader or assistant project manager on larger projects.

Management Style

The three general classifications of management style are authoritarian, consultative and participative. Functional management organizations often use an authoritarian management style. Separate project management can be any of the three but is often also authoritarian. Matrix management, however, tends to result in a consultative and even participative management style as opposed to authoritarian. It spreads and lowers the decision-making process.

The involvement in decision-making by many members of the organization leads to a greater awareness of the organization’s needs and the individual’s role in it. It also improves the quality of decisions since they are made closer to where the work is done and the impact of the decision is felt. Naturally, the individuals being consulted or participating in the decisions learn how to make better decisions without the serious failures that often occur if they had to wait for full responsibility before being given an opportunity to make decisions.

If an authoritarian, functional organization shifts to matrix management, the prevailing style of management will probably shift to consultative and to some extent participative. This will place considerable stress on existing managers whose very perception of themselves may be based on the authoritarian style. It is important to work closely with these existing middle managers to help them realize that they are not losing authority and control but rather will have more control.

Scheduling, Estimating and Control Skills

In addition to long-term strategic planning, matrix management requires extensive tactical planning or scheduling, accurate estimates of resource (manpower) needs, and control of their use. Good scheduling, estimating and control are, in fact, essential to minimize conflicts between project managers and department heads as 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 initial project planning, scheduling, resource estimating and forecasting is done at the organizational or program level, just as in a functional organization. Also, monitoring of actual progress and resource use, adjustment of project priorities and reassignment of resources is done centrally. When a project manager is assigned however, one of the first jobs is to verify that the work plan, schedule and resource budget are adequate. As the project progresses he or she monitors actual progress and resource use, compares it with the plan and takes corrective action as needed. In the end, the project manager’s performance is measured in large part by how well the plan is met.

The result is that project managers, both in separate project and matrix structures, quickly learn how to schedule, estimate and control. The requirement to justify and share resources in a matrix environment, however, probably results in a greater expertise in resource management.

Unfortunately, most functional managers do not have adequate skills or experience in the techniques of scheduling, estimating and control. When a functional organization attempts matrix management, it must first train its managers in these techniques and implement procedures and systems to encourage their use.

Communication and Human Relations Skills

Unlike the separate project or functional manager, a matrix manager does not have direct control of the resources needed to accomplish his or her objectives. He or she must rely more on persuasion and other human relations skills to obtain the needed commitments and to motivate the project team. Thus, the matrix manager will have to achieve a higher degree of interpersonal skills than the separate project manager or even the functional manager. As one moves into general management, these interpersonal skills become extremely important.

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 communication is 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.

Matrix managers learn somewhat different communication skills than their counterparts in functional or separate project organizations. They tend to rely more on verbal, one-to-one conversation and less on written, formal reports.

Conflict Management

Conflict is inevitable. In fact, some is probably good for organizational health, if it does not lead to destructive response or excessive stress. When conflict is brought to the surface, it can be addressed, and hopefully resolved. The ability to do this is very helpful in the career of a manager.

Having two bosses is the major source of conflict in a matrix structure. When these bosses clash over an individual’s efforts, a great deal of stress can be placed on the individual. This can be very damaging if the bosses do not share adequate concern for the individual’s well-being.

Job Satisfaction

Matrix management offers greater opportunities to participate in decision-making plus a more versatile work experience. A matrix project manager can both manage and do technical work, depending on the size of the project. Even on larger projects, by breaking the work down into sub-projects and assigning team leaders to each sub-project, many administrative duties can be passed on to others, freeing the project manager to better manage and to act as a technical consultant to the project team or even participate in the work. The result is a higher degree of job satisfaction.

Ambiguity and Constant Change

It sometimes appears that we are hurtling towards a world of even faster change. Alvin Toffler’s book, Future Shock, for example, emphasizes the stress that frequent change places on people. This same stress occurs in a matrix structure as it frequently changes in response to changing conditions.

The ambiguities of matrix management are another problem as reporting relationships and responsibilities are often not as clearly delineated as might be.

The combination of frequent change and ambiguity are too much for some people to handle. Consequently, they do not do well in a matrix structure. When implementing a matrix structure, it is important to maintain as much stability as possible within the organization.

Accountability

Some organizations have trouble implementing matrix management due to the failure to hold someone accountable. In other organizations, one person (the project manager) is held accountable but cannot succeed due to lack of cooperation from the functional manager. The answer is to hold both accountable — the project manager for achieving project results and the functional manager for supporting the project. This is easier said than done, but a good program (e.g. multi-project) management system is one means to achieve it.

Another source of difficulty in implementing matrix management is an inadequate cost accounting system. It is nearly impossible for a project manager to accurately plan, estimate and control (or to learn how to) unless adequate feedback from a good cost accounting system is available. In addition to collecting and reporting costs by project, a good cost accounting system needs to summarize by activity or some other breakdown in the project (e.g. survey, preliminary design, final design, printing, etc), so that the project manager can control cost on a line item basis. It also should differentiate between cost categories (labor, materials and expenses, subcontract, capital cost, etc.). Finally, it should identify who committed the cost or charged time against the project.

Other Problems of Matrix Organizations

Few people realize how difficult it is to successfully implement a matrix reorganization. There are a number of inherent problems that must be recognized and addressed. Otherwise, a badly conceived and poorly implemented matrix will receive less than enthusiastic endorsement or even be abandoned. One of the best discussions of these problems, their, causes and treatment is the article titled “Problems of Matrix Organizations” by Stanley M. Davis and Paul R. Lawrence in the May-June, 1978, issue of Harvard Business Review. It is required reading for anyone contemplating matrix or dealing with an unsuccessful one.

Training Programs To Enhance The Development Process

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

Business schools can provide either a degree program or courses and seminars of specific interest. Any organization interested in development of its managers should encourage them to pursue business studies. Unfortunately, except for a few specific courses, an MBA program tends to train people to be presidents rather than project managers.

Engineering schools have begun to offer a few courses in project management skills. They focus on either construction management or engineering management and are probably good at teaching the skills and concepts for project management.

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 also can provide an opportunity for those who are eager to advance.

In-house training programs can vary from being effective to marginal. One tool that worked well at one consulting firm where the author worked was a weekly brown bag lunch where an in-house 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 management support make this work. Another effective training tool was 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. The result was not only a good learning experience but an opportunity to build esprit de corps.

On-the-job training is the most effective tool — if it consists of more than just dumping people into a new situation and letting them “sink or swim”. Although a formal training program with “tours” of the different departments is not essential, 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.

FROM PROJECT MANAGER TO GENERAL MANAGEMENT: A TRANSITION

Eventually, the up and coming project manager will be promoted to functional management with responsibility for a department, program or product line. Management of a department in a matrix organization is similar to management in a functional organization. There are, however, some differences.

Depth of Management Talent

Due to the extensive management experience of the many project managers, a matrix organization will have a greater depth of management talent ready to move into functional and general management. There will, therefore, be stronger competition for each position. This also allows the organization to expand rapidly with growth and promotion from within. The organization’s culture is not so likely to be diluted by the hiring of managers from the outside.

Continued Project Involvement

The extent of project involvement of the functional manager will depend upon whether the project managers remain in the functional departments or assigned to a separate project management group.

If a separate project management group is used, the functional managers will have little project involvement and focus on administration. If, however, projects are assigned to departments and the project managers remain in the departments, the functional manager will have fewer administrative and coordination responsibilities since much of it will be done by the project managers. This will allow more time to plan and focus on the truly important tasks and to become involved in projects. Thus, the organization’s best people will not be lost to paperwork but can continue to contribute their technical expertise. The result will be a higher level of satisfaction for the functional manager. Also, they will not be so likely to become technologically obsolete.

Management of Managers

The supervision of subordinate managers is considerably different from the supervision of technicians and design engineers. If a functional manager in a matrix organization moves into general management, the experience of supervising project managers will be very helpful in managing the functional managers.

Management of Multiple Disciplines

As a project manager, one must supervise many different technical disciplines, an opportunity which is not available in a functional organization until one reaches general management. This forces the individual to become familiar with these disciplines at an early stage when the inevitable mistakes that are made will not have such a serious impact.

A functional organization provides promising functional managers an exposure to the different disciplines by rotating them through the departments. This is not very efficient due to the catch-up time in each department.

From Project Manager to Entrepreneur

The author’s own experience in moving directly from a matrix project manager to an entrepreneur illustrates an additional advantage to the individual as well as one of the risks to the organization. If there is lack of opportunity, inadequate recognition or personal conflicts with a supervisor, the individual is more capable of striking out on his or her own.

Experience in looking at the entire situation, familiarity with multiple disciplines (especially marketing and sales), awareness of cost/time/scope performance, and confidence in one’s self are essential and can be gained as a project manager in a matrix organization. In a functional organization, one does not have similar opportunities until reaching senior functional management or general management positions. In a separate projects organization (e.g. a construction company), there are even greater opportunities to learn general management and entrepreneurial skills. Those companies have learned to deal with the risks and to keep many of their best people. Matrix organizations must learn to do the same.

SUMMARY: CONCLUSIONS AND RECOMMENDATIONS

Advantages of Matrix Management

Matrix management offers an engineer excellent opportunities to advance toward management while enjoying job satisfaction and continued technical involvement. It also provides an organization the best possible vehicle to train and test future managers. Any organization requiring a great depth of management skill for rapid, sustained growth without losing control or its basic culture should consider it.

Difficulty of Implementation

The successful transition from functional to matrix management is extremely difficult. It requires not solely a restructuring of roles, responsibilities and procedures, but a fundamental change in people’s attitudes and expectations. It also requires a firm grasp of project management concepts and techniques, strong skills in communication and interpersonal relations, a comprehensive project/program management information system, a cooperative attitude, patience and hard work. Implementation must be flexible and evolve over time while maintaining stability.

Many problems are likely to be encountered when implementing or operating a matrix. The most serious are stress and destructive behavior resulting from frequent change, ambiguity and open conflict between two bosses. Others include a loss of self-image by authoritarian functional managers, frustration if growth opportunities are limited, anarchy, power struggles and inability to make decisions.

Opportunities

The author’s opinion is that the opportunities far exceed the difficulties. The challenge of developing and implementing a difficult but dynamic and effective organizational structure, the opportunity for many people to participate in management, and the potential for an extremely successful organization are all worth the risk.

By |January 21st, 2015|Steve Pinnell|

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|