Earned schedule management as a complement for earned value management

©2018 by he au ho s. Licensee AEIPRO, Spain. This a icle is licensed unde a C ea i e Commons A ibu ion-NonComme cial-NoDe i a i es 4.0 In e na ional License (h ps://c ea i ecommons.o g/licenses/by-nc-nd/4.0/). 01-006 EARNED SCHEDULE MANAGEMENT AS A COMPLEMENT FOR EARNED VALUE MANAGEMENT Mon e o Fe nández - Vi ancos, Guille mo Uni e sidad de Se illa Ea ned Value Managemen is a well-known echnique wi hin p ojec managemen , which allows o con ol and o ecas he p ojec based on you budge and i s deg ee o execu ion. Howe e , he beha io o his ool has a mo e signi ican signi icance om 20% o he p ojec 's p og ess. Many o hei indica o s a e calcula ed in e ms o cos and ha e been shown o pe o m poo ly in he inal s ages o he p ojec , showing a co ec beha io when he p ojec is delayed. Ea ned Schedule Managemen is an "e olu ion" o Ea ned Value Managemen ha sol es his de iciency. Keywo ds: Ea ned Value Managemen ; EVM; Ea ned Schedule Managemen ; ESM; moni o ing and con ollingl; o ecas ing GESTIÓN DE LA PROGRAMACIÓN GANADA COMO COMPLEMENTO A LA GESTIÓN DEL VALOR GANADO La Ges ión del Valo Ganado es una écnica ampliamen e conocida den o de la ges ión de p oyec os, que pe mi e con ola y p onos ica el p oyec o a pa i de su p esupues o y su g ado de ejecución. Sin emba go, el compo amien o de es a he amien a iene una signi icancia más conside able a pa i del 20% de a ance del p oyec o. Muchos de sus indicado es se calculan en é minos de cos e y se ha demos ado que se desempeñan mal en las e apas inales del p oyec o, mos ando un compo amien o co ec o, cuando el p oyec o es á e asado. La Ges ión de la P og amación Ganada es una “e olución” de la Ges ión del Valo Ganado que sol en a es a de iciencia. Palab as cla e: Ges ión del Valo Ganado; EVM; Ges ión de la P og amación Ganada; ESM; seguimien o y con ol; p onós ico Co espondencia: Guille mo Mon e o; [email p o ec ed] 22nd In e na ional Cong ess on P ojec Managemen and Enginee ing Mad id, 11 h – 13 h July 2018 41 1. In oduc ion In Decembe 1967, he Uni ed S a es Depa men o De ence (DoD) issued a di ec i e o p i a e indus ies who wan ed o apply in i s majo p ocu emen p og ammes o incen i es wi h 35 Cos /Schedule Con ol Sys ems C i e ia, C/SCSC, ha means s anda ds o compliance. O he go e nmen agencies in he Uni ed S a es, as well in o he na ions such as Aus alia, Canada, Sweden, e c. adop ed simila ea ned- alue c i e ia in he managemen o hei majo sys em acquisi ions (Fleming and Koppelman 2010, 1998). The concep appea s in ea ly 1900s and came om indus ial enginee s in ac o ies who o yea s ha e employed a h ee-dimensional app oach o assess ue “cos -pe o mance” e iciencies (Fleming and Koppelman 1998). These dimensions consis s in: 1. Compa ison be ween ea ned s anda ds o ac o y ou pu s and incu ed cos s. 2. Compa ison be ween ea ned s anda ds and o iginal planed ones, o assess he schedule esul s. 3. Cos a iance as he di e ence be ween he ac ual cos s spen and he ea ned s anda ds in he ac o y. Ea ned Value Managemen (EVM) is a p ojec managemen echnique ha allows you o con ol he execu ion o a p ojec h ough i s budge and i s execu ion schedule and ela es he esou ce planning, use o schedule and echnical pe o mance equi emen s (Abba 1997). I he li e a u e is e iewed you can be seen some con o e sy. On he one hand au ho s who ind he me hodology e y use ul (Kim, Wells, and Du ey 2003; Fleming and Koppelman 1998), while on he o he hand o he s ind de iciencies (A hu 1983; Lukas 2008; Paja es Gu ié ez and López Pa edes 2007). On a mo e gene ic le el, some o hese a e: quali y is ne e conside ed, planned alue is he baseline and is calcula ed om unce ain p edic ions, high implemen a ion cos s o high e o o cap u e cu en cos da a, especially in la ge p ojec s. Ea ned Value Analysis loses p edic i e capaci y a he end o he p ojec . This happens because as he p ojec p og esses, he ea ned alue ends o he planned alue. In ac , when he p ojec ends, bo h alues mus ma ch. To o e come his de iciency, Lipke p oposes in 2003 he concep o "ea ned schedule" (Lipke 2003). O he issue o no ice is he lea ning e ec ha akes place h oughou he li e cycle o he p ojec (Paja es Gu ié ez and López Pa edes 2007). O he poin o conside is he mo phology o he ne wo k. The p edic i e capaci y o he ea ned alue, as well as he ea ned scheduled, in s ongly in luenced by his mo phology (Vanhoucke and Vande oo de 2005, 2006). In he planning phase, cos s o ime es ima ions a e s a ic, and a e wo d in he execu ing phase he managemen need a lexible pe spec i e. Applying simula ions by inco po a ing he a o emen ioned lexibili y in o he models, cos and ime es ima es a e ob ained ha a e signi ican ly di e en om hose p o ided by he s a ic models (Jø gensen and Wallace 2000). Also, he me hodology needs o in eg a e ac i i y sensi i i y in o ma ion o ime o ecas ing (Elshae 2013). An al e na i e o he model in oduces ea ned du a ion managemen , whe e schedule pe o mance is calcula ed om me ics exp essed in ime uni s, and no in cos uni s (Khamooshi and Gola shani 2014). The Ea ned Value Managemen is de eloped unde condi ions wi hou unce ain y and ha by in oducing a iabili y in he model, he p ojec manage can know i he de ia ions o he planned alues a e in acco dance wi h he s a is ical a iabili y (Acebes, Paja es, and López- Pa edes 2011; Acebes 2015; Acebes e al. 2014; Williams 1992, 1993). 22nd In e na ional Cong ess on P ojec Managemen and Enginee ing Mad id, 11 h – 13 h July 2018 42 2. O e iew o he Concep s o Ea ned Schedule The concep o he ea ned schedule is analogous o he ea ned alue. Howe e , ins ead o using cos o measu e he pe o mance o he schedule, i would use ime. The nex poin s desc ibe he basic glossa y1. The Ea ned Value Managemen (EVM) is based on ou key a iables:  Planned Value (PV): The au ho ized budge assigned o scheduled wo k as o a gi en epo ing da e.  Ac ual Cos (AC): The ealized cos incu ed o he wo k pe o med on an ac i i y du ing a speci ic ime pe iod.  Ea ned Value (EV): The measu e o he wo k pe o med, exp essed in e ms o he budge au ho ized o ha wo k.  Budge a Comple ion (BAC): The sum o all he budge s es ablished o he wo k o be pe o med on a p ojec , wo k b eakdown s uc u e componen , con ol accoun , o wo k package. Conside ing hem, he Ea ned Value Managemen allows analyse he p ojec pe o mance in he wo le els, cos and schedule:  Cos Va iance (CV): The amoun o budge de ici o su plus a a gi en poin in ime.  Schedule Va iance (SV): A measu e o schedule pe o mance on a p ojec . I is he di e ence be ween he ea ned alue and he planned alue. Fo hese bo h indica o s a alue equal o o g ea e han ze o indica es a a ou able condi ion and a alue o less han ze o indica es an un a ou able condi ion.  Cos Pe o mance Index (CPI): A measu e o he cos e iciency o budge ed esou ces exp essed as he a io o ea ned alue o ac ual cos .  Schedule Pe o mance Index (SPI): A measu e o schedule e iciency on a p ojec . I is he a io o ea ned alue o planned alue. As in he p e ious indica o s, a a io equal o o g ea e han one indica es a a ou able condi ion and a alue o less han one indica es an un a ou able condi ion. In pa allel, he Ea ned Schedule Managemen (ESM) s a s om wo a iables:  Ac ual Time (AT): The numbe o ime pe iods om he s a o he p ojec o he p ojec s a us da e.  Ea ned Schedule (ES): I measu es he scheduled wo k accomplished, exp essed in he ime based uni o measu e being u ilized.  Planned Du a ion (PD): The planned du a ion o he p ojec . The equa ion (1) ep esen s he way o calcula e he ea ned alue, whe e n is he longes pe iod which PVn ≤ EV. 𝐸𝑆 = 𝑛 + 𝐸𝑉 − 𝑃𝑉  𝑃𝑉    − 𝑃𝑉  (1) The Figu e 1 shows hese a iables. The ea ned alue (EV) o he assessmen da e, which ep esen he ac ual ime (AT), p ojec ed in he planed alue cu e p o ides he measu e o he ea ned schedule. 1 The shown de ini ions come om he P ac ice S anda d o Ea ned Value Managemen (PMI 2005) 22nd In e na ional Cong ess on P ojec Managemen and Enginee ing Mad id, 11 h – 13 h July 2018 43 Figu e 1: Main a iables o he ea ned alue and ea ned schedule o an assessmen da e. Wi h hese, he me hod analyses also he p ojec pe o mance wi h he nex indica o s:  Schedule Va iance ( ime) (SV ): A measu e o schedule pe o mance on a p ojec calcula ed using ea ned schedule. A alue equal o o g ea e han ze o indica es a a ou able condi ion and a alue o less han ze o indica es an un a ou able condi ion and will only e e o ze o a p ojec comple ion i on- ime comple ion has been achie ed.  Schedule Pe o mance Index ( ime) (SPI ): A. measu e o ime-based schedule e iciency on a p ojec calcula ed using ea ned schedule. I is he a io o ea ned schedule o ac ual ime. A SPI equal o o g ea e han one indica es a a ou able condi ion and a alue o less han one indica es an un a ou able condi ion. The SPI will only e e o one a p ojec comple ion i on ime comple ion has been achie ed. Table 1. Pa allelism o he calcula ion o SV and SPI in he EVM and ESM pe spec i es. EVM ESM Schedule Va iance 𝑆𝑉 = 𝐸𝑉 − 𝑃𝑉 𝑆𝑉  = 𝐸𝑆 − 𝐴𝑇 Schedule Pe o mance Index 𝑆𝑃𝐼 = 𝐸𝑉 𝑃𝑉  𝑆𝑃𝐼  = 𝐸𝑆 𝐴𝑇  The Table 1 shows he pa allelism in he calcula ion o he schedule a iance and schedule pe o mance index in he bo h pe spec i es. Bea ing in mind, ha in case o he schedule a iance he uni o measu e o he Ea ned Value Managemen is mone a y, while o Ea ned Schedule Managemen is ime. As he p ojec p og esses, o ecas s can be de eloped o cos and schedule pe o mance. Common o ecas ing i ems in Ea ned Value Managemen includes:  Es ima e a Comple ion (EAC): The expec ed o al cos o comple ing all wo k exp essed as he sum o he ac ual cos o da e (AC) and he es ima e o comple e (ETC).  Es ima e o Comple e (ETC): The es ima ed cos o comple ing he emaining wo k. 22nd In e na ional Cong ess on P ojec Managemen and Enginee ing Mad id, 11 h – 13 h July 2018 44  Va iance a Comple ion (VAC): A p ojec ion o he amoun o budge de ici o su plus, exp essed as he di e ence be ween he budge a comple ion (BAC) and he es ima e a comple ion (EAC).  To-Comple e Pe o mance Index (TCPI): A measu e o he cos pe o mance ha mus be achie ed wi h he emaining esou ces in o de o mee a speci ied managemen goal, such as he EAC o he BAC. In his case, a alue g ea e han one indica es an un a ou able condi ion and a alue equal o o less han ze o indica es a a ou able condi ion. As be o e, by ans e ing hese a ios o Ea ned Value Managemen , he o ecas ing indica o s a e:  Es ima e a Comple ion ( ime) (EAC ): The expec ed o al ime o comple ing p ojec wo k. I is equal o he ac ual ime plus he es ima e o comple e ( ime) o he emaining wo k.  Es ima e o Comple e ( ime) (ETC ): The es ima ed du a ion o comple ing he emaining wo k.  Va iance a Comple ion ( ime) (VAC ): The di e ence be ween he planned du a ion assigned o a p ojec .  To-Comple e Schedule Pe o mance Index (TSPI): The calcula ed p ojec ion o schedule pe o mance ha mus be achie ed on emaining wo k o mee a speci ied goal, such as he EAC o he planed du a ion calcula ed using ea ned schedule. 3. Applica ion o Real P ojec s As p e iously men ioned, he schedule a ia ion (SV) and he schedule pe o mance index (SPI) beha e e oneously in he inal s age o a p ojec , and his is e en wo se when we know ha he p ojec has inished mo e la e han expec ed, since hese indica o s indica e ha he p ojec has been comple ed as planned when in eali y i is no so. Lipke (2003) conside s wo special cases: Ea ly Finish P ojec and La e Finish P ojec , in o de o in oduce he Schedule Value Managemen . La e on, Vande oo de and Vanhoucke (2006) in hei conduc ed analysis abou his me hodology di e en ia e also when p ojec s unde - un and o e - un cos . Following his classi ica ion, he Figu e 2 shows he di e en si ua ions, conside ing i he ac ual ime a he end (ATend) o he p ojec exceeds o no he planed du a ion (PD) and i he ac ual cos a he end (ACend) exceeds o no he budge a comple ion (BAC). 22nd In e na ional Cong ess on P ojec Managemen and Enginee ing Mad id, 11 h – 13 h July 2018 45 Figu e 2: Classi ica ion o p ojec s acco ding o cos and ime si ua ion. The Ea ned Value Managemen was applied in h ee di e en p ojec s ela ed o ae onau ical indus y, as shown in he Table 2. These can be loca ed in he uppe igh a ea o he Figu e 2. Table 2. P ojec po olio. Cos (€) Time (mon hs) P ojec Classi ica ion BAC ACend PD ATend Implemen a ion o p ocu emen p ocedu e La e Finish O e -Run Cos 650,000 697,125 12 13 S anda diza ion o KPIs and epo s La e Finish O e -Run Cos 1,150,000 1,497,990 12 16 Implemen a ion o imp o emen o inal assembly line (FAL) o a comme cial plane La e Finish O e -Run Cos 2,250,000 2,742,425 12 18 The h ee p ojec s a e o la e comple ion. As men ioned p e iously, he accu acy and eliabili y o he ea ned schedule me ics can be clea ly seen when he p ojec has inished la e han expec ed, since in his case he schedule pe o mance indica o s o he Ea ned Value Managemen show inco ec ly ha he p ojec has been comple ed on ime when in eali y i is no ue. This does no mean ha Ea ned Schedule Managemen canno be applied o p ojec s o ea ly comple ion, since as we ha e seen p e iously, i can be applied o any ype o p ojec as wi h Ea ned Value Managemen . I can also be obse ed ha he h ee p ojec s end wi h an o e - un cos , al hough in his case i is i ele an o he pu pose o his esea ch, since we a e only analysing he pe o mance o he schedule indica o s. The ea ned alue me ics a e only applicable o he ime a iable, so i is i ele an ha he p ojec has inished wi h a low budge , as planned o wi h an excess o budge . The i s p ojec co esponds o he implemen a ion o p ocu emen p ocedu e, he second one o he s anda diza ion o KPIs and epo s in he p ojec managemen o ice and he hi d one o he implemen a ion o imp o emen o inal assembly line (FAL) o a comme cial ai c a . 22nd In e na ional Cong ess on P ojec Managemen and Enginee ing Mad id, 11 h – 13 h July 2018 46 The Table 3 shows he calcula ed da a o he schedule pe o mance indica o s o he Ea ned Value Managemen , as well as o Ea ned Value Managemen , which a e he mos in e es ed o e i y he eliabili y o his las me hodology. Table 3. Schedule indica o s o he i s p ojec . Pe iod SV SPI n ES SV SPI 1 -975 0.93 0 0.93 -0.08 0.93 2 -10,010 0.85 1 1.81 -0.19 0.90 3 -17,875 0.88 2 2.77 -0.23 0.92 4 -18,850 0.90 3 3.64 -0.36 0.91 5 -52,065 0.83 4 4.53 -0.47 0.91 6 -85,020 0.76 5 4.64 -1.36 0.77 7 13,780 1.04 6 7.27 0.27 1.04 8 21,645 1.05 7 8.56 0.56 1.07 9 38,220 1.08 8 9.37 0.37 1.04 10 -23,985 0.96 9 9.77 -0.23 0.98 11 -35,425 0.94 10 9.97 -1.03 0.91 12 -31,655 0.95 11 11.03 -0.97 0.92 13 0 1.00 12 12.00 -1.00 0.92 As can be seen, he same hing happens as p e iously men ioned o la e inish p ojec s. The indica o s o Ea ned Value Managemen , SV and SPI, show he alues 0 and 1, espec i ely, indica ing a pe ec comple ion, when we know ha his is no he case, while he indica o s o he Ea ned Schedule Managemen , SV and SPI , indica e he alues -1 and 0.92, espec i ely, ha i hey show eally wha is happening, since p ojec has inished a mon h la e han planned. In he same way, he Table 4 and Table 5 show he da a o he second and hi d p ojec . As in he case o he i s p ojec , he indica o s SV and SPI indica e he alues 0 and 1, espec i ely, while he indica o s SV and SPI show he alues -4 and 0.75 in he second p ojec (Table 4) and -6 y 0.67 o he las one (Table 5), as we al eady in ui ed a he beginning. The e o e, ea ned schedule indica o s show wha is eally happening, ha is why hey ha e g ea e eliabili y, in addi ion o gi ing esul s in uni s o ime and no in mone a y uni s as i happens wi h he schedule indica o s o he Ea ned Value Managemen . 22nd In e na ional Cong ess on P ojec Managemen and Enginee ing Mad id, 11 h – 13 h July 2018 47 Table 4. Schedule indica o s o he second p ojec . Pe iod SV SPI n ES SV SPI 1 2,415 1.04 1 1.02 0.02 1.02 2 -8,855 0.95 1 1.91 -0.09 0.96 3 -61,755 0.79 2 2.51 -0.49 0.84 4 -112,585 0.73 3 3.02 -0.98 0.76 5 -133,515 0.74 3 3.74 -1.26 0.75 6 -161,920 0.74 4 4.55 -1.45 0.76 7 -125,465 0.82 5 5.61 -1.39 0.80 8 -158,010 0.80 5 5.93 -2.07 0.74 9 -234,600 0.74 6 6.51 -2.49 0.72 10 -255,875 0.74 7 7.13 -2.88 0.71 11 -269,215 0.75 8 8.05 -2.95 0.73 12 -291,870 0.75 8 8.60 -3.40 0.72 13 -238,855 0.79 9 9.04 -3.96 0.70 14 -170,085 0.85 10 10.03 -3.97 0.72 15 -77,510 0.93 11 11.16 -3.84 0.74 16 0 1.00 12 12.00 -4.00 0.75 Table 5. Schedule indica o s o he hi d p ojec . Pe iod SV SPI n ES SV SPI 1 22,470 1.19 1 1.17 0.17 1.17 2 44,965 1.18 2 2.23 0.23 1.11 3 -40,774 0.91 2 2.79 -0.21 0.93 4 -307,800 0.62 3 3.14 -0.86 0.78 5 -315,031 0.68 3 3.58 -1.42 0.72 6 -247,623 0.77 4 4.18 -1.82 0.70 7 -337,572 0.74 4 5.00 -2.00 0.71 8 -468,274 0.69 5 5.60 -2.40 0.70 9 -521,360 0.69 6 6.38 -2.62 0.71 10 -517,310 0.72 7 7.11 -2.89 0.71 11 -644,754 0.69 7 7.71 -3.29 0.70 12 -684,900 0.70 8 8.30 -3.70 0.69 13 -532,575 0.76 9 9.14 -3.86 0.70 14 -406,125 0.82 9 9.95 -4.05 0.71 15 -284,400 0.87 10 10.46 -4.54 0.70 16 -176,625 0.92 10 10.90 -5.10 0.68 17 -72,900 0.97 11 11.52 -5.48 0.68 18 0 1.00 12 12.00 -6.00 0.67 22nd In e na ional Cong ess on P ojec Managemen and Enginee ing Mad id, 11 h – 13 h July 2018 48 4. Conclusions Wi h he de elopmen o he Ea ned Value Managemen , di e en au ho s indica e ha he schedule indica o s beha e e oneously, especially in he inal s age o a p ojec . Fo his eason, p ojec manage s conside ha cos indica o s a e mo e eliable han schedule ones. As a esul o his p oblem, in 2003 Lipke p oposed a new me hod o calcula ing he schedule indica o s, called "Ea ned Schedule". As I ha e shown h oughou he documen , hese ea ned schedule indica o s a e mo e eliable and accu a e han he co esponden s in he Ea ned Value Managemen . So much has been he impac o he Ea ned Schedule Managemen ha he P ojec Managemen Ins i u e (PMI) has included i in i s book "P ac ice S anda d o Ea ned Value Managemen ", explaining he concep o ea ned schedule and how o calcula e i . Th oughou hese almos i een yea s, since he concep ion o he ea ned schedule concep , nume ous esea che s ha e been ca ied ou o e i y he accu acy and applicabili y o his new me hod. I is no in ended ha his new me hod, Ea ned Schedule Managemen , eplaces Ea ned Value Managemen , bu ha bo h me hods a e used oge he . 5. 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