Project Cost & Schedule Monitoring Process Using MS Excel & MS Project

Transcription

1 Project Cost & Schedule Monitoring Process Using MS Excel & MS Project Presented by: Rajesh Jujare

2 About Us Solutions is founded with objectives a. To share its expertise and experiences to overcome the challenges faced by the construction companies b. To help them to meet their ambitious goals c. To fill the gap between the Need and Availability d. To provide right information at right time to create impact through correct decision making e. Our Solutions shall be to provide the required data to our esteemed Clients by which they can create impact through their decisions. The founder of the Company Mr. Rajesh Jujare, has over 18 years rich experience in Project Management, Business Development, Tendering, Site & Construction Management, Planning & Scheduling, Quantity Surveying, Contract Management and ERP implementation as project head with well known organizations. With an aspiration to excel and share his expertise, he has ventured in this consultancy business.

3 Advantages of Cost Estimation Solutions The construction cost shall be determined along with the design process. Major cost savings in construction cost can be achieved using Value Engineering techniques. Along with the cost definition, alternative materials, construction methodologies and machinery etc. compared to achieve optimized costing. Hence lot of execution time can be saved as proper planning can be done using the well defined data. As the specifications are mostly final, bench marks can be established for quality parameter. This also saves a lot of Time and Cost in decision making. With accuracy in data procurement is more simple which can save on material and labour costs. With pre-decided specifications and design lot of time in coordination and decision making can be saved.

4 Advantages of Schedule Management Solutions The well planned schedule with time and cost shall serve as a bench mark to measure the project performance. The cost variations can be easily known, hence timely measures can be taken to control the costs. Time deviations can be easily measured and the project performance can be judged. This helps control the remaining activities to complete the project in desired time. The cost and time tracking gives projected costs and projected time required. This helps to establish the IRR (Internal Rate of Return). The projected cost also helps to establish the selling price of the project. The interests on the capital employed can also be controlled with timely knowledge of the escalations in costs and delays in time.

5 Introduction The project needs to be tracked on three different aspects i.e. Time, Cost and Quality In the proposed system the Time and Costs are monitored to control the cash flow The bench marks (time schedule and budgets) needs to be created against which the time and cost data needs to be compared to monitor the progress The assumptions/ projections made for the schedule and budgets shall be validated timely and necessary changes shall be made to correct the bench marks The present system is mainly for providing data to take decisions to optimize the cash flow.

6 Proposed Solutions Project Estimation Solutions Detailed estimates of Conceptual Designs along with recording assumption Value Engineering to optimize the estimated costs by applying suitable designs, using new technology & materials and specifications Assisting in finalizing the design, specifications and materials Deriving detailed final estimates and creating Project Budget based on finalized working drawings and specifications List and record all Assumptions & Constraints Project Scheduling Solutions Preparing detailed project schedule and linking all costs derived in the Budget Creating bench marks of Scheduled Time and Budgeted Costs to measure the project performance Measure the project performance by entering the daily reports to check variance in Time & Cost Validating the assumptions and constraints from time to time

7 Proposed Solutions Contract Management Preparing Tender Documents along with all the terms & Conditions Pre-Qualification of Vendors as per the work package requirement Inviting, negotiating, finalizing & awarding contract Contract Administration i.e. ensuring the contractual obligations are met by the Vendors Recommendation & Certification of Payments to the Vendors Negotiate & Certify claims for extra cost & time Ensuring proper closure of the contract A very detailed list of the Solutions is given in our profile

8 Cost Estimation The project costing is a tread-bare costing by identifying the smallest detail which is affecting on the cost. While doing the detailing the procedure is kept simple and effective as the details are organized properly The assumptions are recorded separately which are lined to measurements. The changes in assumptions then easily gives effect till the final cost. This also helps to validate the assumptions at the time of actual execution The Resource rates are also recorded in separate sheet. The escalation and the taxes are considered which helps to minimize the errors due to unpredictable data. This also can be validated at the time of actual execution The quantities are calculated to its minutest detail and with proper identification Instead of doing a rate analysis for each item the resource quantities are calculated separately which gives a overlook of the cost accrual and helps to avoid the unnecessary details The budget sheet is the highlight point which gives all the information regarding the cost in single sheet, thus the decision making can be more simpler With this process the value engineering is very simple

9 Cost Estimation Process Recording Assumptions The assumptions are recorded in separate sheet which are linked to measurement sheets. The changes in assumptions then helps to check the impact. Also these records helps to validate the same at the time of execution

10 Cost Estimation Process Basic Rates of Resources The resource rates are recorded separately which are linked to project abstract. The escalation for the project period is considered here.

11 Cost Estimation Process Budget Sheet Resources are calculated based on the quantities taken off. The resources and its rate are linked over here. This single page budget sheet gives a detailed idea of the cost accruals. Also the changes in assumptions or basic rates give immediate effect of the changes

12 Cost Estimation Process Value Engineering Statement All these linkages are helpful to check the effects of value engineering and makes it very easy. With this method the costing can be used to its fullest efficiency

13 Cost Estimation Process Details of Value Engineering This is the detailing of the value engineering exercise.

14 Project Scheduling Process Execution strategy for executing the project shall be decided The Work Breakdown Structure (WBS) is created till the Activity Definition The period required to complete the activity is calculated based on the volume of work to be completed The logical sequencing of the activities shall be defined to create the schedule The time schedule shall be created using Microsoft Project The Resource data then shall be linked to MS Project to get the resource schedule and Cash flow The assumed rates shall be incorporated in MS Project to arrive to the Project Cost and Cash Flow Projections This process shall be iterated till arriving to final Costing & Schedule The finalized Time schedule and Resources then shall be saved as Baseline schedule and used as bench mark to measure the progress and deviations

15 Project Scheduling Process Creating Project Schedule using MS Project

16 Project Planning Process - Cost & Schedule Merging The project costing which defines the resources through Items and project scheduling which defines the Activities are done separately. The resource quantities are to be attached to he Activities defined. The resource quantities are calculated for items which needs to be converted in Activities. E.g. for 1 st slab activity concrete, reinforcement and labor resources are required in combination, but in project costing the same is calculated in separate items. Also the quantities are calculated in toto e.g. concreting for slab, which needs to be broken down for activities like 1 st slab, 2 nd slab and so on Most project schedules are incomplete due to non linking of resources to the activities for the problems mentioned above. Mostly the costing is done using spreadsheets like MS Excel and the scheduling is done using scheduling software like MS Project. The changes done in costing reflects changes in resource requirements and the same is easy in spreadsheets. But the difficult part is to change the resource requirement in MS Project as the data entry is manual. A typical and brief flow diagram for Project Scheduling and Costing is given in the next slide

17 Project Planning Process - Cost & Schedule Merging Project Costing Basic Rates Item Quantities Rate Analysis Resource Calculations Item (Related to Cost) Project Schedule Activities Project Schedule Item Dependencies & Sequencing Resource Schedule Time Period Activity (Related to Time)

18 Project Scheduling Process - Resource Requirement After creating the project schedule the activities and items are combined together to calculate the resource requirements for activities Basic rates are assumed to arrive at a budget which shall be tracked further The calculated resources then shall be linked to activities in MS Project. The dynamic link provided for this from MS Excel to MS Project shall be useful to append changes till the schedule and costing is finalized. The process is explained in next two slides

19 Project Scheduling Process - Weekly Resource Requirement Schedule in MS Project

20 Project Scheduling Process - Cash Flow Created by MS Project

21 Project Scheduling Process Project Tracking After finalizing the initial schedule and the project cost the same shall be converted as baseline schedule MS Project gives facility to enter the day to day resource consumptions which is used to track the activity performance in terms of time and cost As the data is entered the impact is immediately reflected on schedule, cost and cash flow There are three major variables to be tracked to measure the project performance. Those are Variation in budgeted quantities Variation in resources consumptions Escalation in resource rates Variation in activity duration including Delay/ gain in start and finish of the activities A sample tracking of activities is enclosed in next slide

22 Tracked Schedule in MS Project Only Resource Consumptions are entered for Activities Project Scheduling Process Project Tracking

23 Project Scheduling Process Project Tracking Tracked Schedule in MS Project Impact on Time Schedule of data entered for Resource Consumptions

24 Project Scheduling Process Project Tracking Tracked Schedule in MS Project Impact on Payment Schedule Triggers (Refer the changes in Slab Concreting Dates)

25 Project Scheduling Process Project Tracking Tracked Schedule in MS Project Impact on Cash Flow

26 Project Scheduling Process Project Tracking Changes in Resource Rates Tracing Limit up to 25 Changes in Rates

27 Project Scheduling Process Project Tracking Baseline, Actual and Projected Cost Comparison Cost Report (Rs. In Lakhs) Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Baseline Cost Actual Cost Projected Cost Cum Baseline Cost Cum Actual Cost Cum Projected Cost

28 Conclusion Although the importance of Project Tracking is known, but due to non availability of proper system, the same is neglected In some cases, the projects are tracked, but the reports are delayed due to time required for collection and processing of data. Proper use of software like MS Excel and MS Project, project costing and schedules can be created precisely Daily updating of resource consumptions in MS Project, shall enable to track the project performance in terms of time and cost. The tracked schedule shows the projections with respect to time and cost required to complete the project. The data entered for past performance gives the revised/ projected milestones. These dates can be used to show the impact on scheduled revenue dates. Finally the impact of projected time and costs, changes in revenue dates gives an impact on total (expenses and Revenue) Cash Flow. Thus the effect on IRR can be measured and timely decisions can be taken to maintain the IRR