Project Recovery. . It Can Be Done


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1 Project Recovery. It Cn Be Done IPM Conference Wshington, D.C. Nov 47, 200 Wlt Lipke Oklhom City Air Logistics Center Tinker AFB, OK
2 Overview Mngement Reserve Project Sttus Indictors Performnce Correction Correction Exmple Project Recovery Recovery Exmple Summry
3 Mngement Reserve Totl Funding Avilble Funding Reserve Plnned Project Cost Budget t Completion Cost BCWS Plnned Project Completion Schedule Reserve Negotited Completion Dte Time
4 Cost nd Schedule Anlysis EAC Cost Overrun Cost BAC Schedule Vrince BCWS ACWP BCWP Cost Vrince Schedule Slippge Plnned Completion ECD Time Now
5 Mngement Questions Cn the project be completed within the Totl Funding Avilble nd by the Negotited Completion Dte? When nd Where should MR be pplied?
6 Performnce Anlysis Negotited Cost Plnned Time
7 Mngement Indictors Desirble Chrcteristics Similr ppernce for both cost & schedule Simple visul nlysis  R / Y / G Simple or no project tiloring needed Simple clcultions Useful!!
8 Performnce Indictors Cost Dimension Where, Cost Rtio= Schedule Dimension Cost Rtio vs CPI  CPI = BCWP / ACWP ( > is Good) Where, Schedule Rtio= Totl Funding Avilble BAC Schedule Rtio vs SPI  Negotited Period of Performnce Plnned Period of Performnce SPI = BCWP / BCWS ( > is Good) (Dollrs) Work ( ) Dys
9 Indictors Comprison Conceptully Identicl Indices < Rtios, Project is in Good Shpe Indices =.0, Perfect Execution Single Difference Cost Rtio cn Vry Schedule Rtio is Fixed
10 Cost vs Schedule Rtio Performnce of Extrs Decreses vilble funding Adds risk to meeting project pln nd customer commitment Without reimbursement, or negotited chnges Totl Funding Avilble (nd thus, CR) decreses Period of Performnce (nd, SR) is unchnged
11 Simple Anlysis CPI  & SPI  x < [Project cn be completed s plnned] CPI  & SPI  < x < Rtio [Project Mnger nd Employees get to keep their jobs] CPI  & SPI  x > Rtio [A bd sitution for those involved]
12  Cost Rtio vs CPI Rtio CR CPI  Green Yellow Red Jn Feb M r A pr M y Jun Time
13  Schedule Rtio vs SPI .3 Rtio SR SPI  Green Yellow Red Jn Feb Mr Apr My Jun Time
14 Mngement Use If Green, Wht, me worry? If not Green, Wht cn I do? () Adjust Overtime or Number of Employees (2) Relign Employees (increse efficiency) (3) Reduce Performnce Requirements (4) Obtin Additionl Funding /o Schedule () & (2) Project Mnger s Prerogtive (3) & (4) Unplesnt nd Dmging
15 Mnger Strtegies CR vs CPI  SR vs SPI  Action Green Green Rewrd Employees Green Yellow Increse OT Green Red Increse OT or People Yellow Green Decrese OT Yellow Yellow Review & Adjust Assignments Yellow Red Adjust Assignments; Consider Negotition (Schedule) Red Green Decrese OT or People Red Yellow Adjust Assignments; Consider Negotition (Funding) Red Red Negotition (Funding/Schedule/Rqmts); Fire Mnger
16 Adjusting Overtime & Employees Schedule Recovery (Reserve Funding is used) E SR = (SPI  / TCSI  ) E, where E = Effective level of stffing OT SR = (SPI  / TCSI  ) ( + OT A )  where TCSI = [.0 (BCWP/BAC)] / [.0 (BCWS/BAC)] Cost Recovery (Schedule Reserve is used) E CR = (TCPI  / CPI  ) E OT CR = (TCPI  / CPI  ) ( + OT A )  where TCPI = [.0 (BCWP/BAC)] / [.0 (ACWP/BAC)] Bnd the Recovery Strtegy Substitute CR, or SR (s pproprite) for.0 in denomintor of To Complete equtions
17 WARNING Risk of OverCorrection  Tmpering Yellow or Red erly in project Investigte nd Anlyze Wit for next review to ct
18 ReCp Mngement Questions Simple Visul Aids Mngement Tools Tble Clcultions
19 Performnce Correction Exmple Dt: BCWS/BAC = 0.6 CR =. E = 20 BCWP/BAC = 0.5 SR =. OT = 7% ACWP/BAC = 0.45 (cum vlues) Clculte:. CPI  & SPI Compre result to plnned performnce (.0) nd CR & SR. Color Code Project Sttus. 3. Use Tble  Recommend Mgmt Action. 4. Clculte TCSI (or TCPI) s pproprite. 5. Clculte E nd OT required for correction. 6. Are E nd OT vlues resonble? 7. Bnd the recovery. Reclculte TCSI (or TCPI) using, s pproprite, SR or CR. 8. Reclculte E nd OT. 9. Recommend recovery strtegy.
20 Performnce Correction Exmple Dt: BCWS/BAC = 0.6 CR =. E = 20 BCWP/BAC = 0.5 SR =. OT = 7% ACWP/BAC = 0.45 (cum vlues) CPI  = = 0.9 SPI  = = CPI  = (0.9) <.0 < CR (.) SPI  = (.2) > SR (.) >.0 Green Red 3. CR vs CPI  Green SR vs SPI  Red Increse OT or People
21 Performnce Correction Exmple 4. TCSI = ( BCWP/BAC) / ( BCWS/BAC) = (  0.5) / (  0.6) =.5 /.40 TCSI = E SR = (SPI  / TCSI  ) E = [.2 / (/.25)] 20 E SR = 30 OT SR = (SPI  / TCSI  ) ( + OT)  = (.2 / (/.25)) ( +.07)  = OT SR = 60.5% 6. OT is unresonble. Stffing must increse.
22 Performnce Correction Exmple 7. TCSI = ( BCWP/BAC) / (SR BCWS/BAC) = (  0.5) / ( ) =.5 /.5 TCSI =.0 8. E SR = (SPI  / TCSI  ) E = (.2 / (/.0)) 20 E SR = 24 OT SR = (SPI  / TCSI  ) ( + OT)  = (.2 / (/.0)) (. 07)  = OT SR = 28.4% 9. Add 5 people to project
23 Project Recovery The Bsics Improve SPI or CPI Sched Recovery Add People/Increse OT Cost Recovery Decrese People (Which Ones?) Recovery is not Free Sched Recovery increses Cost Cost Recovery lengthens Schedule BAC will (very likely) be Exceeded
24 Project Recovery (con t( con t) Recovery Strtegy must chieve Gols  Meet or Better Customer Requirements (Price & Compl Dt CR & SR) Is Recovery Strtegy Achievble? (Is sufficient MR vilble?)
25 Project Recovery (con t) The chnge in recovering, cost performnce, for exmple, induces proportionl negtive chnge in the schedule performnce (nd vice vers) (CPI r CPI ) c s where denotes chnge (c = cost, s = schedule) Thus, (SPI r SPI where r = recovery vlue, = current vlue )
26 Project Recovery (con t( con t) The bsolute vlue of the rtio of the chnges is, t best, identicl to the rtio of the current performnce indices Thus, for the best cse (including the negtive sign) Or, s c / c /CPI = (SPI + s /CPI /SPI = ) 0
27 Project Recovery (con t( con t) Any chnge induces inefficiency The lrger the chnge, the greter the inefficiency Sometimes, there is good reson to do nothing Accounting for inefficiency, the performnce reltionship becomes: c /CPI + s/spi > or = The chnge strtegy is prepred using the equlity, understnding tht the solution is best cse 0
28 Project Recovery (con t( con t) Recovery Strtegy Determintion Determine chnge to poor indictor to chieve index =.0 nd = Rtio Clculte the chnge induced in the corresponding indictor (SPI, if CPI is poor) for ech condition (.0 nd Rtio) Identify impossible strtegies (Induced indictor exceeds it s Rtio limit) Select recovery vlue on Recovery Line
29 Project Recovery (con t( con t) Test Recovery Line selection, using pproprite formul Cost Performnce Recovery = SPI + ( CPI SPI SPI r .0 ) ln CPI CPI.0 CPI r.0 Schedule Performnce Recovery CPI r = CPI + ( SPI .0 ) ln CPI SPI SPI.0 SPI r.0 Iterte Recovery Line selections until strtegy stisfctory
30 Project Recovery (con t( con t) Clculte TCPI nd TCSI (s pproprite) using selected recovery vlue (CPI s  or SPI s  ) TCPI = (BCWP/BAC) / (CPI s  ACWP/BAC) TCSI = (BCWP/BAC) / (SPI s  BCWS/BAC) Adjust between E & OT to finlize strtegy
31 Project Recovery Exmple Dt: CR =.2 SR =.3 ACWP/BAC = 0.5 BCWP/BAC = 0.4 BCWS/BAC = 0.45 CPI  =.25 Red SPI  =.25 Yellow Clculte SPI  vlues corresponding to CPI  Recovery Points CPI r  = CR CPI r  =.0
32 Project Recovery Exmple Project Recovery Exmple (con t con t) Exceeds SR.350 SPI.0) ( SPI.2) ( : ) CPI (CPI CPI SPI SPI SPI SPI 0 for /SPI /CPI Solve: r r r r r r r s c = + = = + = + = = + Points define Strtegy Line
33 Project Recovery Exmple.4 Dt : CR =.2, SR =.3 CPI Eqution: ACWP/BAC = 0.5, BCWP/BAC = 0.4, ā =.25, SPI CPI c ā + SPI ā s  =.25 = 0 BCWS/BAC = 0.45 CPI Actul (.25,.25)!! (.7,.2) Strtegy (.22,.4) x.0 (.35,.0)! SPI 
34 Project Recovery Exmple Test the Strtegy Selected => Cost Recovery SPI r CPI SPI = SPI =.250 =.25 + (CPI =.25 + (.250.0) SPI.0) CPI CPI SPI s s =.4 =.22 CPI ln CPI.250 ln.40 r SPI r = Performnce Strtegy is vible
35 Project Recovery Exmple Project Dt: BCWS/BAC = 0.45 BCWP/BAC = 0.4 ACWP/BAC = 0.5 Cost Recvry Strtegy: CPI s  =.4, SPI s  =.256 Present Stffing: 20 Present Overtime: 7% Initil E & OT Clcultions TCPI Er = (BCWP/BAC) / (CPI  s  ACWP/BAC) = (0.4) / (.40.5) = = [(TCPI s  ) / (CPI  )] x E = (.067 /.25) (20) = 7% OT
36 Project Recovery Exmple (con t) Or, OT r = [(TCPI  s ) / (CPI  )] (+OT )  = (.067 /.25) ( +.07)  = = 20 people = impossible Clculte OT r for E r = 7 nd 8 people OT r (7) = (7. / 7) (.07)  = = 7.6% OT r (8) = (7. / 8) (.07)  =.07  =.7% Select the Strtegy
37 Summry Mngement Reserve Performnce Rtios SPI  & CPI  vs Performnce Rtios Indictors Anlysis Action Action Personnel/Overtime Adjustment Recovery Concepts SPI  /CPI  Reltionship Reltionship Vible Recovery
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