10 Reasons Cost and Resource Loadings Are Seldom Implemented


By Derek Graham - CPM Scheduler | Defect & Delay Claim Specialist

CPM Schedule Cost and Resource Loading have always been the bane of the scheduler’s existence. So much so  that schedulers - including this scheduler, routinely exclude cost and resource loading requirements for their assignments. Exclusion of cost and resource loading is so commonplace that GCs, CMs, and stakeholders accept it as a fact of life.

It’s no fault of experienced CPM schedulers that resource and cost loading is not well mainstreamed, rather the fault lies with the industry and its parsimonious investment in training that makes us less productive than peer countries.

There are a number of reasons why a contractor or scheduler may exclude both resource and cost loading requirements

  1. Proper resource and cost loading go together - you can’t have one without the other. If you are missing data in either or both tables, your reports will not calculate properly.
  2. Contractors and estimators routinely estimate duration in standard units: months, weeks, days, and less frequently, fractions of days. Such estimates are not informed by calculated rates of production that can facilitate accurate resource and cost loading.
  3. Schedulers who can expeditiously draft proper cost and resource loading are the exception. All others struggle mightily, and require resources that few are willing to adequately finance.
  4. CPM training programs don’t focus on resource and cost loading, nor do they require working knowledge of one in order to become certified.
  5. Schedulers who have no construction or field experience are completely reliant on estimators’ labor and material rates and units to populate resource and cost loading data. Often, they are not privy to it, or more often: it may simply not exist. Even a scheduler with construction field experience can be quite challenged.
  6. The paucity of scheduling programs with adequate or better resource and cost loading modules is an inhibitor to adoption.
  7. P6 seems to be the go-to program for resource and cost loading; however, given the complexity and clunkiness of Primavera 6 resource and cost loading modules: they are difficult to learn and implement.Moreover, I see no development in these modules from Oracle. P6 is not the resource and cost loading I would choose Cobra, or Spider.
  8. Resource and cost loading efforts can easily be disrupted or scuttled when input data is variable or inconsistent (see comment re production rates).
  9. P6 resource and cost loading do not provide enough operability to drill down on critical aspects, such as variable production rates, and the complication between duration based and physical % based activities.
  10. The cost summaries generated by P6 are seldom  in lock-step with payment applications. Accordingly, a double-entry recording system is created (P6 and Accounting), where the P6 cost summary is manually entered so that it is consistent with payment applications.
Of course, there are public projects in which there is no option but to produce the resource and cost loading reports. In such circumstances there are two avenues from which to choose in order to achieve the same outcome. It will be self-evident which is the preferred choice of most schedulers

Proper CPM Resource and Cost Loading Requirements

A. Labor rates

B. Rates of production

C. Material unit cost

ABC, simple as it were, couldn’t be more elusive to most of us; especially those who toil with P6. To carry out the report, we must create and assign “Resources,” and “Resource Assignments.” Progress in the cost charts will be a factor of “physical % complete,” whereas in the GANTT chart, they are duration based. If there is a compendium of activities and resources that all must be manually researched and input, the outgo can be prohibitive.

This additional quandary of dealing with inconsistent progress % types is enough to induce anyone to resort to the manual, or “tweak,” method. The tweak method has the added benefit of aligning the cost tables with payment applications.

In tweaking resource and cost loading, we are no longer, in fact, implementing proper  resource and cost loading. Not to worry, the end product is the focus here. If we need the GANNT and cost summaries to align, me must:

  1. Calibrate resource assignments in days.
  2. Assign a rate of $1./hr to all activities

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Tags: Planning , Financieelmanagement , Capaciteitsmanagement
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