Why hasn't CPM scheduling reduced delays?
By Cory Davis, MBA, MSc, PSP
It’s been widely reported that over 90% of construction projects worldwide are not completed on time.
Construction is a very risky business and CPM scheduling is the basis of the evaluation of delays both during projects (contemporaneously) and after the fact (forensically). CPM scheduling has been entrenched in construction since the 1950’s but there are both strong proponents and naysayers as to its true effectiveness.
With the increased complexity of construction and greater need to manage risk, the requirement for a robust scheduling system has become more important than ever. However, construction projects continue to be delayed in greater quantities and productivity remains flat for the past fifty years.
In most cases, the CPM schedule is the only tool available to all parties to contractually manage time on the construction project. The complexity of CPM scheduling in construction requires comprehensive software to assist in the deterministic calculations required to continually update these algorithms. However, with the increased and intuitive nature of scheduling software it has become more likely that poor quality CPM schedules will be produced as well.
Due to the complexity and specialized nature of construction in the past fifty years, scheduling is largely outsourced to consultants. Traditionally, for most construction projects, a small group of individuals maintain and update the project schedule through the course of construction. This process has been named “push planning” whereas the collaboration from a planning perspective is limited to those few individuals responsible for maintaining the project’s schedule over the course of the project.
When construction projects are delayed there are many costs that reverberate throughout the supply chain. Owners and contractors will abdicate profits when their construction projects are extended from “extended superintendence, additional site security, temporary facilities such as site office, telephone, internet, power, toilets, transportation, fencing, and possibly hoisting and scaffolding”. Additionally, home office support will be extended as well as any interest coverage on any retainage money being held by the owner. There are clear cost savings for ensuring that construction projects close on time.
The main problem with CPM scheduling is the complexity of the projects and the sophistication of the software required to manage these schedules. Project Scheduling, especially in the construction field, is inherently complex and dynamic, involving multiple feedback processes and nonlinear relationships. While problems encountered during construction are fundamentally dynamic, most analysts have been treating the problems individually within a partial view of a project. A specific lack of understanding of the scope of the project and interdependencies pervades construction schedules and results in widely inaccurate estimates on both the task and dependency level.
While there are innumerable variables that affect the success of any large, complex project, modern scheduling software seems to have done little to make the rate of project success any greater than it was 50 years ago.
Coincidentally, the productivity loss in construction coincides exactly with the period that CPM scheduling has been entrenched in construction.
Below I have outlined some of the main reasons why CPM scheduling in construction has not achieved the benefits in the industry.
Lack of Due Diligence in Schedule Reviews
The lack of due diligence by the project team to ensure that CPM schedules are accurate is one of the main drivers of construction delays. Real start dates are not properly verified and there is limited monitoring to ensure objectiveness of schedule reviews leading to non-factual information being reported by site staff. According to the CIOB report in 2002, “in a fifth of the cases reported, the quality assurance of the project schedule was either left to the scheduler’s discretion to check the master schedule, or there was no checking process at all” .
Another issue to overcome in CPM scheduling is Parkinson’s Law which states that “work expands to fill the time available. Because the time estimates provided are negotiated numbers, reporting an early finish of a task means that the future estimate provided by a project team will most likely be shaved by the manager. To avoid this possibility, rather than report early task completion, the worker is likely to spend the extra time performing work not strictly required by the specifications.”
Lack of Adequate Planning
Another issue is that in the scramble of aggressive bidding by contractors, lack of foresight is provided to generate a practical construction time schedule. Some estimators are disillusioned by the competitiveness of the estimating process or take risks to preserve backlog for their company and become myopic when reviewing contractual milestones. The belief is that “the field” will analyze the project and determine how to make milestone dates work. To compound this issue, in 2009 Olawale et al. found that “only 35.7% of contractors determine the duration of their construction projects by techniques based on calculations”.
Another detriment is that many owners do not understand the value of CPM scheduling. Some owners do not demand quality schedules and therefore contractors submit a minimum amount of effort to prepare and maintain the project schedule because it is not a contract requirement.
In other cases the owner does not want to spend the necessary money to contract with a consultant to assist in reviewing the construction schedules due to monetary constraints or lack of trust in the schedule itself.
Lack of Collaboration between Supply Chain Partners
Another critical issue to overcome in CPM is the lack of coordination among supply chain partners. Limited collaboration “inhibits the project’s ability to synchronize accurate project information”, which complicates coordination between general contractors, specialty contractors and suppliers involved in a single project because each stakeholder uses it’s own information system. Since there is a lack of formal communication systems dedicated to project controls throughout the supply chain in construction, communication usually depends on verbal information exchanges between site teams and supervisors/managers further compounding the errors in communication.
Inherent Mistrust of Contractors
There is also an inherent mistrust of contractors by owners. Litigious contractors know how to use the project schedule to not only protect their risk, but also as a tool against the owner. In these cases, owners who do not obtain the services of an experienced CPM scheduler to review and comment on the project schedule submissions are not able to respond to project issues or the contractor’s allegations in a proactive manner. Analysis by CIOB determined that in more than “a third of building projects and four-fifths of engineering projects, it was perceived that the contractor was the cause to blame for any delay to completion” with only a third of respondents believe they have a high level of trust in their contractor's.
Further compounding challenges with CPM scheduling is that much of schedule analysis is performed outside of a formal system which hinders benchmarking and cataloging issues over time. Often times the analysis is either done using a paper based approach, a one-off software solution or spreadsheet software. This approach makes these independent records counterproductive for performing trend analysis, managing the causes of delays across programs and recognizing the true data that creates loss-causing events without double or triple entry of information.
Schedule Review Times
The time it takes to complete a schedule review also introduces delays to the project. Delays in CPM baseline reviews, in most cases, delays the start of construction activities so no work can begin until it is approved. In addition, progress schedule review delays and“a lack of timely agreement on the project schedule status results in contractor acceleration, cost overruns, late project delivery, and disputes that frequently last well past project completion. Also, unessential submittal requirements increases overall submittal preparation costs which requires resources to be allocated to meet these demands.
Lack of Qualified Schedulers
Another well studied problem is the lack of qualified scheduling personnel worldwide. According to McKinsey Consulting, 45% of executives noted a lack planners and project managers as an issue to a successful project completion. There is also a concern that schedulers’ qualifications merely extend to a basic knowledge of scheduling software. The need to understand construction in addition to scheduling is more pronounced with the increased project scope, schedule, cost, and the specification requirements. Many stakeholders have suffered through projects with unqualified schedulers who were either unable to adequately perform their tasks, or were not able to communicate clearly enough to gain the team’s trust and confidence.
It is hard to gain the trust of a project team if a scheduler calculates the schedule and cannot explain the results due to incorrect activity actualizations, erroneous logic relationships, or inaccurate project calendars so training is an area for improvement. Furthermore, in order to accomplish schedule tasks, the field team needs to value the input of the scheduler without blaming the scheduler for “not being a team player”. The scheduling position requires people and technical skills beyond a beginning project scheduler position.
In a well received paper in 2008, Buziak analyzed from a cost benefit perspective when it makes sense to hire a construction scheduler. He found that “CPM schedulers (which used to be contractually required on only the largest capital projects) are now often required on many more construction projects at every level of government.” Buziak calculated that an experienced scheduler for a company that only bids $20M+ projects “would only be productive for 17.5 percent of a 2000 hour year which is not sustainable”. Additionally, the workload for a scheduler is front-loaded so the productivity rate is much lower once the project begins.
Buziak further analyzed the cost of schedule consulting using the RSMeans database and for a project of “$15,000,000 it would incur fees of more $66,000 for scheduling services”. Good hiring procedures and a robust training program are important ingredients to acquiring successful schedulers. According to the research completed by CIOB, “nearly 90% of executives thought that there was a need for improved training and education of project schedulers”. Moreover, the National Council of Examiners for Engineering and Surveying (NCEES) has recognized that since 2008, CPM scheduling is a “professional service” that qualifies an Engineer-in-Training (EIT) to take the Professional Engineering (PE) exam.
Inadequate Contract Requirements
Outdated, inadequate, non-existent and improper scheduling contract requirements are also a reason for some of the issues with widespread CPM adoption. In some cases the scheduling specifications are outdated, relying on dated versions of CPM software, reports that are unnecessary and information that is not verified.
Some of the requirements in the specifications make the contract requirements so arduous that it requires a third party scheduling consultant to perform the tasks. Further, it’s difficult to get buy-in from contractors and project stakeholders when the scheduling specification is outdated. It’s important to keep in mind that the project specification is a contractual requirement and when ambiguity exists as to which parts of the contract are required it makes it difficult on all project participants.
Evasiveness in one part of the contract opens the door for legal anxiety in others. To further compound the issue, a CPM schedule that does not meet requirements of the (bad) specification, often times means delay of payment to the contractor until it is corrected. This results in animosity amongst the stakeholders from the beginning of the project and further strains the finances for second and third tier subcontractors. Furthermore, the owner may choose to ignore selected contractual variances for the sake of project success. Because of this, specific schedule specifications are often waived by the owner. Sometimes the variance has little impact on the quality of the schedule and the specification is not applicable or relevant to the current project. Other times, the variance may have a large negative impact on the contractor and the owner will waive the variance in the interest of timeliness and in the spirit of cooperation that must exist for a project to be truly successful.
There is also the costs involved with ensuring that outdated, inadequate or improper scheduling specifications are met. In some cases the scheduling specification may be so onerous that it might not be worth the cost of enforcing them. There is also additional liability with unnecessary submittal requirements since the owner is now responsible for reviewing the contents of all submittals and if they do not review them properly and miss critical changes by the contractor they could be responsible for their negligence in addressing critical issues.
Continue reading on LinkedIn
Tags: Planning , Projectmanagement