Caught in a time warp
In the first part of his article on the benefits of using Critical Chain Project Management (CCPM) techniques, Satyashri Mohanty, founding director, Vector Consulting Group, the largest TOC (theory of constraints) consulting company in India and South East Asia analyses why large construction projects are seldom delivered ahead of time and within budget.
Large construction and erection projects seem to have a dubious record – most of them are delayed with significant cost overruns. The problem of delayed projects is well documented in statistics released by various government agencies, not only in India but also in countries like the US and Japan.
While statistics in the public domain are mostly that of work executed by government agencies, the story in private sector is equally bad. At Vector, we have come across many organisations which have a perfect record – never have they delivered a large capital project on the initially committed due date with full scope and within budget.
The ones which claim to be on time do so mostly on revised due dates. It’s not that all projects are delayed.
However a highly successful project, delivered ahead of time while being within budget is such a rare event that it usually ends up as a newspaper item.
The analysis of delayed projects points to numerous uncertainties. Most project managers will point to issues like:
- Delays in decisions/approvals
- Changes in scope of work /Rework
- Delays in appointment of contractors/vendors
- Bad weather
- Inadequate resources or incompetent contractors
Can we improve the situation?
For answers, let us look at the existing body of knowledge of project management. It talks about implementing numerous tools, templates and processes in areas of integration management, scope management, time, cost, quality, human resource, risk, communication and procurement management to solve the problem.
Interestingly enough most of the processes are in the domain of planning. So if we plan better, we can deliver better. Or in other words, the better we are in envisaging the future the better will be the reality.
But reality is cruel – however good the plans may be, uncertainties spoil the show. It is no wonder then that despite the widely held belief (great planning leads to great delivery) in many environments the plans are not even made or made just to show it to outside agencies.
The initial plans, made with enthusiasm, of starting the project go haywire within no time. The rest is managed based on perception of urgency of the day in the mind of the project manager. But how do we know that the cause ‘improper planning’ leads to the effect of ‘delayed projects’?
If improper planning is the reason behind project delays, why don’t managers plan better using all the established processes and tools of planning to solve the problem? I would assume that after one failed project, managers would follow all the established guidelines and planning processes and we should have a much better record of project performance. But despite the many developments in the area of project management a project delivered ahead of time and within budget and full scope is rare.
Every project starts with a plan which goes haywire when uncertainty hits the project. We all turn wise in hindsight. But then we cannot go back in time.
Are there better, simpler and practical ways to solve this seemingly complex problem? Is there an inherent simplicity hidden in the complexity of managing a large project involving many stake holders?
The opportunity in projects – Controllable Wastages
The lead time of projects can be classified into value-added touch time on the longest path, interruptions (or waiting time) and lastly rework. Even though most managers point to “out of locus of control” reasons for project failure, an analysis of time at the end of a project will point out that the touch time is only 20-30% of the lead time.
As this excerpt taken from the book Lean Thinking by James P Womack and Daniel T Jones explains: “Five-sixth of a typical construction schedule for a custom-built house is occupied with two activities: waiting for the next set of specialists (architects, drafters, plumbers, electricians, roofers) to work a particular job into their complex schedule and rework to rip out and correct the work just done.”
About 70% of the lead time is either lost in wastages which can be controlled or are uncontrollable uncertainties.
Significant part of time in a project is lost due to controllable wastages which can be eliminated to create buffers for absorbing the uncontrollable uncertainties. How is that in most projects we end up with wastages? Is it something to do with the way we manage the projects? Turning task estimates to commitments – is it a good practice?
Most project managers would talk about problems caused by inaccurate estimates. But the problem is not so much in the estimates arrived at, but the way they are used. When estimates are converted to commitments in an uncertain environment, we get buffered estimates.
‘Realistic estimates’ always have buffers embedded into them when they are used as commitments for an uncertain environment. This is natural as people would try and protect themselves. Despite the protection, when uncertainty strikes, the buffers are usually not enough to absorb the delays. Despite protection planned around the milestones, the buffers are wasted in execution primarily due to following behavioural issues. The paradox: speeding up when costs are high.
Parkinson’s effect is defined as work expanding to fill up the allotted time. Parkinson’s effect is widely seen in the pre-erection phase of the project, when the project is being executed mostly in an office. The monitoring of time in this phase is usually almost absent, primarily because not much funds are committed at this stage.
One can see time passing away in contractor finalisation, drawings approvals, etc. In many situations commercial decisions are only taken by a committee of managers who meet infrequently. This leads to batching of all important decisions while the project almost stands still between two committee meetings.
Without any urgency of time, civil drawings get into multiple iterations with every drawing inviting a new idea from a different stakeholder. If one evaluates the net touch time incurred on the project in the pre-erection phase, it will be less than 10% of the lead time till start of erection. Ironically the cost of expediting at this phase of the project is much less than in the later part of the project where expediting costs are very high.
Parkinson’s also creeps in during the erection phase in slow mobilisation of resources by a contractor. The various norms used for defining contracts become self-fulfilling prophecies, where contractors work only as per defined norms even when work can move at a faster pace. As due dates are agreed upon, most resources get into “leave it to us – we will manage it” syndrome, when questioned on the wastages. In projects, the task durations are also like self fulfilling prophecies.
The student’s syndrome
Student’s syndrome is a date driven behaviour, where managers postpone the start of the work close to the milestone.
As a result the buffer is wasted even before the start of the work. For example, the follow up for long lead items starts more vigorously, close to the delivery dates – as a result when uncertainties are discovered nothing much can be done. The milestones of various office work like technical evaluation of vendor quotations are done close to milestones leading to wastages of buffers and leaving nothing to manage the uncertainties. A deadline provides information on how much one can afford to delay the start of the job.
Both Students Syndrome and Parkinson’s Effect ensure tasks are at the best either completed on milestones or delayed when uncertainty hits. So we do not see gains making up for delays in a series of dependent tasks of a path.
Worse, at every integration point, only the worse delays of the multiple converging paths are passed on leading to pile up of accumulated delays. It’s no wonder that departments working at the end of the project phase are usually under high pressure to recover the accumulated delays.
In some projects, managers try and slow down work on feeding chains to match up delays in longest path leading to cascading effect of delays across many converging paths.
Rework and Interruptions at site
At the integration points the worse of delays propagate. Gains are never passed on. Due to delays in pre-erection work, projects are usually delayed at the start of the erection work. In such situations, managers resort to fast tracking (starting the site work even before finalisation of drawings specs and decisions) to gain on time. This usually leads to interruptions at site or worse rework when drawings are changed.
Bad multi-tasking: the most devastating form of wastage
With multi-tasking, the elapsed time at every work front increases causing wastage of resource capacity. When too many work fronts are started simultaneously with limited resources – bad multi-tasking
creeps in causing delays in the project’s lead time, wastage of resource capacity (due to additional setups) and rework (due to frequent switching).
Bad multi-tasking is predominant in the pre-construction phase of the project, where resources switch between projects or between various modules on the same project. Bad-multi tasking can also be observed in the design or architect’s office when too much work is started with too few resources.
In erection, bad multi-tasking creeps in when multiple erection sites are opened at the same time. The frequent shifting of contractor labour across multiple sites significantly delays progress of many work fronts. Many erection work fronts also put pressure on limited band-width of management and as a result the issue resolution time goes up significantly.