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Weight factor

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Imron Asran
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This is my first time involved in this forum. I am now working for a Construction Company in Indonesia. I have a problem regarding the Weigth Factor for EPC project (oil & gas )in preparing S-Curve by Excel. I used to utilize the MONEY (US$) as weight factor for each activity or WBS, but now my boss want to utilize the MANHOURS as weight factor. My question is which one the rigth one to be used as weight factor between MONEY and MANHOUR for EPC (Engineering, Proc, Constr.) project. As far as Iknow, MANHOUR is only applicable as weigth factor for Engineering Project. I am looking forward your advices. Thank you.

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Arturo Dobla
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Hi, heres my comments

 

Weight Factor - you can use either/both whenever it is required, primavera is capable to do this, it is only a matter of how you set up your programme coding.

Money wise, it is good to use money as the weight factor, but physical progress wise and labour productivity it is in manhours.

 

hope I have made a contribution..

 

regards

 

Amar Aghan
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For an EPC Project, we should be able to bring activities of all phases (Design, Procurement, Sub-Contract, Construction, Fabrication, Assembly, Commissioning) to one platform. 

 

Weight Factor on the basis of Cost: This is only practical method to bring all types of activities of all phases to one platform. The S-Curve that is generated using weight factor based on cost will also inform company and client the estimated value of work done.

Over all S-Curve for EPC Project: Overall S-Curve shall be based on the S-Curve generated based on cost as Weight factor. S-Curve can be generated based on man-hour or quantity as long as all the activities are similar. For eg: S-Curve may be generated for excavation based on Quantity as weight factor. S-Cureve may be generated for engineering based on man-hours.  It is strongly recommended to use S-Curve based on cost as weight factor for EPC Projects. 

The S-Curve based on cost has another advantage. In the event of project being cancelled, the S-Curve as part of monthly progress report (or weekly) provides one of the basis of Value of Work Done for disputre redressal. 

(Remember: 

1) Weight Factor on the basis of Man-hour: One hour invested on concreting is not the same in terms of value generation as compared to one hour invested on Process Simulation Calculation. 

2) Weight Factor on the basis of Quantity: One unit ie 1m3 of excavation is not equal to 1 m of cable laying or 1 drawing generation)

Safak Vural
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Dear planners,

The main idea will be setting up a weight resource in order to monitor the project with all phases involved (MOB, ENG, PROC, CONST, COMM, DEMOB).

The cost can be used to determine the weight of each phase in the project. Then each phase can use own driving resources to measure progress. For example

LVL 1 PHASE
MOB 5m USD 5 %
ENG 20m USD 20%
PROC. 35m USD 35%
CONS. 30m USD 30%
COM. 10m USD 10%

If a equipment installation in CONSTRUCTION PHASE has 100Mhr/10,000 ins CONSTRUCTION (1 %) then the weight of the activity will be 30% X 1% = 0.3% for the project.

Mobilization: Milestones could have the progress percentage.

Engineering : Engineering Manhours can be used for progress measurement (document type X unit eng. Manhours for that type of document and total eng manhours required for review design basis activities or construction support activities that will not produce certain # of documents).

Procurement: Can be divided in to procurement packages. Each package cost can be weight of the item in the project. Worksteps can be determined and weight of a step can be fixed for the items (Issue PO 10%, Ex-W. 5% Material at Site 50%......)

Construction: Direct Labour Manhours can be used as all of us used to.

Commissioning: Handover packages can be identified and used. You can pass this item as a few activities at the start of the project, you will detail the phase in a rebaseline after certain amount of engineering progress.

You can define a resource called “PROG” and the sum of all resources can be 100,000 (due to decimal restrictions of Primavera), the earned PROG resource/100,000 will be your progress.

The important point is you will need to load other resources in order to plan and monitor the important points of the WORK. Such as “Engineering Manhours”, “Direct Manhours”, “# of Documents IFC” ………..

You should also be aware of where you can claim the progress. If you can claim the progress of an equipment deliverable when it is on site, you shall not load the resource to all fabrication, ex-works and transportation activities. (resource curves can be a good solution here)

The key point: You need to write a narrative, document or a procedure to fix the way of your progress monitoring, then you can load your schedule accordingly and everybody can comment or agree on something.


Regards,

Safak VURAL

Hans Masuy
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Yes, i agree with izam for point no. 1 and 2. May i give a clear idea, to start weight distribution we have to start distribute it to the larger scale, such as EPCC. How to determine EPCC percentage? Basically, it based on your experience and also your price calculation.

H.M
Project Manager
Izam Zakaria
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Weight factor :-

1)based on price that material
2)Include the manpower loading(involving that act. only)
3)Equipments No.

So u have so many solution to get that weight factor.
Zhang Haixiang
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For weight factor,It is used to establish a target for later comparison. The value is not so importane, 38% or 35% no difference. trend is more importane. For me I will use contract value to determine the weight factor, it’s the easyest way, don’t make it too hard.

for progress monitoring, I agree with David Watters.

Actually both cost/manhour/duration can be misleading. only the critical path can tell you the true, S-curve should be used only for reference.

Before you start, thinking about what support you can get from your team & contractor, a full cost & resource loaded schedule is not so easy to handle, not all contractors can give you what you want. Hope you will not go to site to count bolt&nut for progress updating.
For me, i’ll use duration, It’s the easyest way ( I’m lazy :)),but give you the same(may be better) efffect as other measurement.
AALAP PAREKH
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hi all
i like to know how to calculate wtg% for engineering??
wats d steps for it??
Forum Guest
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Can anyone tell me how to calculate the weight factor on a large EPC project?
David Watters
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Never ever use cost based progress calculations. I am amazed to see a moderator stating that there is no real difference !!

This is why.

Q> If you are tracking progress based on cost for a Purchase order, how do you "achieve" it. By actual expenditure or commitment?

Q>Then if by either, how do you tackle the issue of retention? (This is only one small elelment mind you)

That would leave me to believe that if you were dealing with and Oil & Gas project (as in the start of this thread), you could very well find yourself in the situation of having a piece of kit ordered, delivered, installed and finally commissioned that would not be complete by utilising a cost based method.

So ignore the retention issue? Then your playing games with numbers and leave before you get found out!

DESIGN CRITICAL DOCUMENTATION - Watch word of planning.

You can only progress your own detailed design phase with critical information supplied by vendors.

• Mass
• Weight
• Height
• Operation Pressure
• Utilities
• Power usage
• General Arrangements (GA’s)

For example - GA’s are usually pretty important in oil and gas projects. When/if your plants go BOOM, they need to be designed so that overpressure is shed equally and does not destroy other key areas of the plant. Congestion. So if the total number of GA’s is ,say, 10 - then you have ten steps of 10% progress to achieve to get that aspect of design critical vendor data complete. If they only manage to get 9 to you by the baselined completion date “Hey sorry guys - but your now late!”. And you now know you have a problem - even better, you would have known it some time ago !!

Use the quantity of documentation as your measure of progress


Summary:
Talk to the lead engineers and determine what the design critical information actually is in their terms.

Base progress to date on the actual number of design critical documents received - a direct correlation to your own design process.

Your schedule will be cross linked for design critical information. Engineering will be able to relate the progress of a package in terms that actually "mean" something to them (instead of "We’ve paid them some more money - so we must be doing well").

It will also provide your client with invaluable data over which vendor to beat up next, as the impact on your critical path can be seen instantly. Again, how would you recognise this when using a cost based approach?



It is a sod of a job to actually implement, but I’m planning three rigs in parallel at the moment, and its working really well for us. Forget cost based progress measurement - leave that to the Cost engineers and PLAN the job !
BASHEER AHAMED
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How to we measure Procurement Activities? Can any one in the forum explain with some typical example
Raj Singh
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To make life very simple and as pointed out by some persons already theres is NO WRONG METHOD. I will suggest as follows:

At the beginning of the project discuss this issue along with other major planning issues with all major participants : Contractor, Client & Consultants. The way forward depends on type of contract, individual preferences of various parties, geographical location, project magnitude, duration of the contract etc. The Weight factor will be very important from the point of view of payments to the Contractor and this should be his prime concern.

The basic job function is to provide clarity to the various issues so keep things simple. Internally try to maximize the approach yet present only the relevant to the concerned parties. In third world countries the manpower is between 10-20% of the Contract and thus does not make sense to provide too much time and weightage to this issue. This is more applicable to high manpower cost projects and areas. On large projects only durations and costs are more than adequate and smaller projects will require more detailing.

Learn as you go!
Forum Guest
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Mr. Asran,
Tell to your boss, there is no way to use Manhour to measure quantity of the work for an EPC project as a basis for Weight Factor (WF). Even for only Engineering project alone, still there are some non-manhour based activities involved. So this is absolutely un-recommended and not practicable to use this method. All quantities unit are convertible to cost, not otherwise.

So don’t make things complicated. I believe you know better than them. Just explain to them as it is.

Regards,
Rusydi
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Is there any categoty that identified what factor use for any kind of projects?
Anil Gupta
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Hi All
I went through all the replies and i feel all are right depending upon which side u r in ..I mean Contractor shall have different objective then client and consultant.
So to arrive on common platform where cost and duration(or Manhours) are both important. I have used mix of both Cost and Time for allocating weightage to each every activity of project schedule.
One has to analyise criticality in terms of resources cost and then weightage.Roughly i should work out to be 60% cost and 40% time .Then make s curve using mix of these weighatges.
Hope i am clear....
Anil
Mehdi Rashidi Ala...
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Deaf Asran & all,
In the oil & Gas project , converting any items to cost is better for weighting.
I have complete manual for weighting for oil & Gas projects.
I you want any information about this, please contact me with email address : Mehdi.Rashidi@engineer.com

Regards
Forum Guest
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I agree to this reply very much as it it the perspective that is weighing heavily on the parameters for fixing the baseline.
For a contractor , it is the earned value in terms of the labour and theINfrastructure/ POL that he spends on the Project that is commensurate with what his budgetted cost of work scheduled. it is the Progress payment that he is concerned and that is what forms his benchmark.
For a Project management team from the client and the Consultant , it the work scheduled and the target/ Milestone that defines the weighted value. Even an insignificant but important Material as a bolt will have a bearing on the Project schedule depending on the Factors surrounding it.
In addition , the Manhour costs , keep on rising in Engineering , if the Oppposite party does not realize the importance of a Particular information that is required at a stage which is crucial to meet a deadline.
It remains to be envisaged during the time of fixing a baseline for the project that the client -consultant fix a philosophy that relates to the actuial contract philosophy and the Importance that should be attached to the project.THis Philosophy , then shall be Binding on all the Work package Contractor regardless of the Type of Contract , Wheteher , LS, Fixed Variable target cost , etc.
I hope i have put up a realistic approcah to Progress Measurement View that we all have .
Thanks
NIshikant
Tomas Rivera
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From one point of view, you are right in everything you said. But, as Paul Harris said there is no wrong method. It depends on the intended use or on what you are trying to measure. If there is no cost or resources on your schedule you have to use durations as you said. This is not necesarily wrong. Your comments focus on cost very heavily, probably too heavily. What if I am an owner and I only care about the contractor meeting my milestones. I would not care whether a bolt or a one million dollar machine is preventing the contractor to give me my facility. I am still going to pay the full cost of the facility, that is something I am already prepared to do and I do not care about that as much as I care about having my facility finished. If you have not finished this facility (or part of it) on time, it does not matter to me whether you need to spend 10 cents or one million dollars. As you can see, the focus here is on meeting the deadline. It is not on having activities underestimated or overestimated in terms of cost. In order to make sure we meet the project deadline we need to measure progress relative to a baseline. If you want to use cost as the basis for measurement, that is fine with me but we do not have to do it this way. I can use durations or something else, as long as we track progress over against a baseline progress chart that uses the same basis for progress measurement. If you need to track costs and that is your main focus, then you will have to do it that way. But if your main focus is not cost and just be able to track progress in general and evaluate whether your project is on target, you can use durations as your basis. Yes, some activities will give misleading progress IF your basis is cost. But if your basis is milestone measurement, are you going to give each milestone a value proportional to its cost? Do you think the owner will give each milestone the same value? Is the value of each milestone to the owner the same as it is to the contractor? Does not click yet? Think of Enterprise Project Management. Is the value of each project to the enterprise, proportional to the cost of the projects? Let me ask you another question. If a 10 cent bolt is preventing you to install a one million dollar machine, is that bolt worth 10 cents to you? Is that bolt 10,000,000 times less important than that machine? I am not saying that cost should not be used as a basis for progress measurement. I am not saying either, that durations should be used as basis for progress measurement. In order to give a recommendation, we need to question the intended use first. One word of caution. Progress tracking is one side of the coin for making sure a project is on target. There are other parameters that need to be tracked. Excuse me if I got a little bit excited with my reply
Colin Cropley
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I feel compelled to respond to your preference Tomas to use durations as your method of tracking progress. This is the default method used by scheduling software for schedules with no resource or cost information included. It is VERY MISLEADING to use durations as the basis for progress measurement. It works by adding up the lengths of all the bars in the schedule to represent the total work to be done. It divides this total length into the sum of the lengths of the progress bars in the schedule to calculate the percent complete. It equates length of bar to quantity of work, so you could have some long activities representing small amounts of work or value being given disprortionately high weighting in the project, compared with short bars with high cost or lots of resources actually allocated to them which are underestimated in weighting by this default method. Paul Harris has provided the definitive information on use of weighting methods - each of cost, resource and counting of similar kinds of items (drawings, chainage, cubic metres) can have their uses. But in simple terms, where there are significant purchased items or services as well as manhour expenditures, cost is the more accurate overall parameter by which to track progress because projects are paid for in money and each part of the project has a value for the client for which he/she is prepared to pay. Usually, it is also the best way for the contractor to report weighted progress because the contractor normally has to pay for all the aspects of the project first, then be reimbursed by the client through progress payments. It makes sense for the contractor to match the method of weighting as closely as possible to the way costs are incurred by the contractor.
Tomas Rivera
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Please allow me to express my opinion. To me, it is more important to know whether I am doing okay in my project than what is the percentage of progress by itself. If somebody is arguing that the project is 40% complete and not 60% for example, it is an empty discussion if it is not related to a benchmark. First, you should have a baseline schedule and a working schedule that you update regularly. If you have assigned cost, hours and whatever other measurement parameter you want to use; then you are able to plot your progress chart (using any of the measurement parameters)with 3 curves: early progress, late progress and actual progress. If you compare all the progress charts (each with a diferent measurement parameter) then you should see that all charts show proportionally the same actual progress compared to your baseline. Then the line of questions should be: what is the progress percentage in terms of (cost, hours or something else)? Are we progressing as scheduled? By the way, my prefered way of reporting progress is using activity durations as my measurement parameter. I hope I have put some clarity on the concerns and not otherwise.
Paul Harris
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When I prepare reports for my clients I am prepared to provide both as this gives a clear picture of the project is progressing. Should I have to report only one, then I would normally report the costs. This is because the projects I work on often have areas with no hours, such as large Purchase Contracts, so the complete project may only be seen with a cost focus. Other projects may have another focus, and cost not important, so I might report hours. There is no right or wrong in my opinion, the requirements of the project should decide the reporting requirements. Regards Paul E Harris www.eh.com.au
Imron Asran
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Dear Paul, Thanks on your reply, I found already your article on your Web and that is very good article, but for me it is so complicated in practice. I agreed with you that neither using hours nor cost are wrong. But in my opinion, we should define one of the parameters (hours or cost) that represent a valid physical plan and progress of the EPC project for client with a strong argument. I am still confuse, which one I should propose to client. Let me show you a sample as below : Just a sample of EPC Project for comparison: Description Weight(cost) weight(hours) Engineering 10% 11% Procurement 40% 25% Fabrication 30% 38% Instal.&Transport. 18% 23% Commisioning 2% 3% Total 100% 100% With difference of Weight parameter certainly the overall progress every month must be different. My question is which one a valid one ?. I am looking forward your advice. Thank a lot. Imron
Tomas Rivera
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Nice answer! This should end most questions and concerns about which parameter is better, that are being raised all the time.
Paul Harris
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I feel that neither using hours nor costs are wrong. They are both useful and give you a different perspective of a project. A project which is very labour intensive should have both in my opinion. In very simple terms the hours let you know if the labour productivity is meeting the estimate and the costs let you know if you are paying the people more of less than the budget. S-Curves may take several forms, and one of my fovourates is a committed costs curve, eg are you placing the procurement orders quick enough. You may also produce curves for deliverables such as m3 placed, tonnes errected, drawings completed, again these are still valid parameters to graph. You will find an article on my web page at www.eh.com.au about the practical application of EVPM using P3, this has some examples at the end of the article that may interest you. Regards Paul E Harris