Concept: Some project topologies degrade the reliability of ES metrics early in a project’s timeline. ES Longest Path (ES-LP) alleviates the difficulty.
Chart 1
Practice: The basic idea behind Longest Path is straight-forward. Research shows that standard ES forecasts suffer from reliability problems, especially at the start of projects. Research also demonstrates that forecasts for serial schedules are more reliable than they are for parallel schedules. The conclusion is straightforward: serialize the schedule and improve the reliability of ES forecasts.
By contrast, LP calculations are complicated. To serialize the schedule, you need to exhaustively identify its serial paths. Then, you need to compute the forecast for each path—an effort that involves first idealizing the pattern of PV and EV and then factoring in offsets to account for void periods. Finally, you must select the longest duration for each period, avoiding anomalies.
The effort required to complete LP calculations is so significant that, without automation, we have found it to be impractical for forecasting real-life projects. With automation, however, you gain “an unparalleled advantage in forecasting schedule outcomes” (Walt Lipke, private correspondence, 2016).
Fortunately, commercial tools that perform ES-LP calculations are emerging. (For more information on ProjectFlightDeck’s LP Analyzer, click here.) The remainder of the post describes how to use the output from such a tool to manage projects.
LP Duration Forecast
As implied by Lipke’s comment, the most obvious use of LP is to forecast project duration. Chart 1 illustrates the difference between the LP forecast and the standard ES forecast. Early in the project, the LP forecast is clearly superior to the standard forecast. As ES reliability is most severely questioned early in the project, the advantage of using LP is obvious. What is not so obvious is how forecasts in general and LP forecasts in particular help us manage schedules.
At ProjectFlightDeck, we use forecast thresholds to assess schedule performance. The thresholds help identify problems and guide responses. The approach for LP is essentially the same as the one described for standard ES forecasts, but the reaction to threshold breaches is expedited. The greater accuracy of LP forecasts enables us to shrink response time.
A brief description of the LP-tailored approach follows.
Diagram 1
Diagram 1 depicts the basis for the thresholds. The terms used for LP forecasts are the same as standard ES forecast terms. In short, thresholds are based on the amount of Contingency (which accounts for predictable uncertainty) and of Reserve (which accounts for aleatory uncertainty). See Alleman (2014, pp 52-54) for a similar approach to Contingency and Reserve.
Red-yellow-green labels are associated with threshold values to help the project team and stakeholders understand the implications of completion forecasts and the motivation for action plans related to the forecasts. Keep in mind that the threshold values are heuristic, rather than deterministic. That is, they are adjusted based on experience with each project, rather than left as fixed limits.
LP Threshold Values
Table 1 summarizes the threshold values.
Table 1
If a single LP forecast lands in the Contingency Zone, it is worth investigation, but it is not taken as necessarily signaling a problem. The natural variation in schedule performance means that forecast values will hover around the Baseline Finish Date but will rarely align with it perfectly.
Individual LP readings outside the Contingency Zone are treated differently. While draw-down on Contingency is expected, use of Reserve signals increased likelihood of problems with the plan. So, if an LP forecast lands in the Reserve Zone, it indicates a problem and deserves immediate attention.
Dramatic (say, 10% or more) change in the LP forecast from one period to the next is another call to action. Although such differences are sometimes caused by failures in reporting, it is possible that the project team made a sudden change in tactics, causing productivity to dive or to soar.
Threshold breaches are another worrisome type of change. Even if the period-over-period change is small, when the forecast moves into a zone other than the Contingency Zone, you need to take further action.
Finally, two or more LP forecasts headed in the same direction indicate a trend. At ProjectFlightDeck, we generally build action plans for schedule correction based on trends, rather than on individual readings.
Whether it is an individual reading or a trend that demands further action, the generic response is the same: identification of potential problems, root-cause analysis, action planning for remediation, and management communication. The urgency of the analysis, extent of remediating actions, and type of communication varies with breach severity and root-cause.
Action Plans
In most cases, if the breach results in a red status, analysis is done immediately. Action plans vary widely but commonly contain rapid, and sometimes extensive, shifts in schedule and staffing. Communications reflect the seriousness of the problem and extent of adjustment required.
For other statuses, the response is essentially the same, but it is moderately paced, involves smaller adjustments, and employs low-key messaging.
The next describes the impact of ES-LP on other ES metrics, introducing the opportunity for improved performance assessment and communication.
References
Alleman, G.B. (2014). Performance-based Project Management: Increasing the Probability of Project Success. New York, NY: AMACOM.
[Edited 31 May 2016] |
