ProjectFlightDeck

Concept: When work is done out of sequence, knowledge gaps are inevitable. To bridge the gaps, performers must make assumptions about missing inputs. At some point, the missing information becomes available, and when it does, it often differs from the assumptions. That means what has already been done must be reworked.

Knowing rework will be required and even knowing which tasks are likely to cause rework are important but only part of what it takes to identify schedule problems. [1]  What’s missing is a fix on the impact of rework.

Practice: One key impact of rework is on cost. The Schedule Adherence Index (SAI) offers a way to forecast the cost of rework. The first step is to approximate the amount of rework, specifically the rework created within a single period. A mathematical model is used to make the estimate.

Let SAI₁ and SAI₂ indicate the fraction of work that is likely to require revision at the end of two successive periods. In addition, let C₁ and C₂ represent the fraction of work that is complete at the end of the same two periods. How much rework is incurred during the intervening period?

The amount can be determined using geometry. First, express SAI1, SAI2, C1, and C2 as successive points on a chart (see Figure 1).

Figure 1

The amount of rework equals the area under the curve (the shaded portion of Figure 1). It is the product of two terms related to the period: (1) the fraction of work likely to require revision, and (2) the total amount of work completed in the period.

Given that SAI rarely stays the same from one period to the next, the area under the curve is generally a more complex shape than in Figure 1. It can still be broken into simple geometric shapes, namely, a triangle and a rectangle (see dotted lines in Figure 2), and the same principle can be applied.

Figure 2

For the amount of rework in a period, the area of the rectangle (Width times Length) is given by the following formula:

…where Width is defined as the fraction complete and Length as the amount of SAI₁.For the amount of rework in a period, the area of the triangle (half of the Base times the Height) is given by the following equation:

…where the Base is defined as the fraction complete and Height as the difference between SAI₂ and SAI₁. [2]

The sum of the two areas gives the area under the curve.That sum, in turn, reduces to the following equation:

…and that is the formula for the area of a trapezoid, ((1/2 * (a+b)) * h. Hence, this is a special case of the trapezoidal approximation technique.

Given that the amount of rework equals the area under the curve, the cost of rework for the period can now be calculated. It is simply that area multiplied by the budget, that is:

By adding up the rework cost for each period, we get the cumulative cost of work for the project up to and including the Actual Time:

The rework cost for the whole project (Rework_Tot) can then be forecasted:

The forecast acknowledges the estimated cost of rework up to the current time (Rework_Cum) and then forecasts the budget impact over the remainder of the project. The forecast uses the current value of SAI as a benchmark level of performance, specifically for adherence to the schedule. It then applies that level of performance to the remaining budget.

In effect, the forecast says that, assuming the same level of performance on the remaining work (as represented by the remaining budget), here is the amount of budget that will be required for the rework that is to come. Add that to the rework cost already incurred, and the result is the rework cost for the whole project. [3]

Finally, we’ve arrived at the cost of rework—a metric that can be used to assess schedule performance.

Notes:

[1] Identifying schedule variance is only the first step in improving schedule performance. Root-cause analysis must reveal the underlying problems. Then, remediation plans must be developed, applied, and monitored to ensure they remain effective.