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weight factor

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medhat wageeh
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hi every body

that is first time for me and i need some help from prof. people please.
i want to know in detail or example the method to measure the phisecal progress by using weieght factor and earned value thank u all in advance

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Gary Whitehead
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Hason,

 

This discussion finished 4 1/2 years ago.

 

You are more likely to get a response if you start a new topic, rather than resurrect such an old discussion.

hanson California
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Dear Ashraf Jahangeer ,

You said Accepted by client - 10%. In my case the Client dosn't Accept the RFQ and we have to redo the all thing again which cost us ManHours and more money. So, how I can add this in my schedule I mean can I add one more activity to show if the Client refuse our perchse order PO? and how much it weight?

 

Thank you,

 

HANSON

James Griffiths
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Nar,

It is really quite simple.

If you originally had a baseline budget (planned budget) for procuring the equipment - and your current equipment list has already spent the baseline budget (although there is more equipment to buy) - then the only choices you have are:

1) Overspend on the equipment.

2) Take the budget away from the construction/installation phase of the project.

Of course, if you take budget away from the construction phase, then you will probably "overspend" on the construction phase - because you now have less money than originally planned.

James.
Anoon Iimos
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I believe that all projects start from concepts. Conceptual Planning may also have budget. Conceptual Design maybe different from Detailed Design so as Conceptual Budget and Detailed Budget.

Actual Progress can only be derived from actual accomplishment measured from/against Detailed Engineering and Planning.
Nar Thap
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Anoon,
Do you mean shall I take budget only of those equipments already designed? If so where can I lump up the budget for those equipments I never know. Further I lose the part of budget of those and you think progress really representing actual progress ( out of total budget)
cheers
Anoon Iimos
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Nar,

Take it from the budget, i’m sure there is budget for all the equipment; should there be none, then you’ll be doing unlimited planning
James Griffiths
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Hi Nar,

I appreciate that a continually growing list of equipment is just really annoying. All you can do is ask the engineers if they think they have captured all the equipment. If not, and they cannot provide you with an estimated list, then you will have to allocate a "contingency" $ value to cover the extra. I see no other options.

Cheers.

James.
Nar Thap
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Thanks James,
Thank you very much for very helpful tips.My progress measurement in procurement is designed as money value at each stages of procurement process. I.e. RFQ issued 20%, Bid award 30%, PO placed 40%.. and so on. I think what yousaid validates the way of progress I am measuring.

Problems is I don’t have yet complete equipment list as design is underway to finalise the equipment list. I am having one more item added in the list each week. I am now having difficult situation to distribute money value to each forthcoming item. How to accomodate this situation in plan can anybody help me?
cheers
James Griffiths
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Nar,

This is decision that you must make. I agree with you in that, during the procurement phase, it can be diffcult to measure true progress. There is no singularly accurate way of doing so. Each method will have its merits. However, I would imagine that MONEY will be the unit of measure.

The method by which you measure progress is your choice. You may measure progress on the $ value of orders placed, on the $ value of equipment that has been delivered (or even a combination of both). You could use the $ value of invoices paid (this may depend upon the equipments lead-time and if you are making staggered-payments). Regardless of how you do it, the increment claim on progress should be proportinate to the cost or value of the equipment.

An example of how NOT to do it, would be if you had two items. One of them worth $5 million and the other worth $100k. The progress value, or weighting, should not be 50% for each bit of kit - even though there are only two of them.

cheers.

James.
Nar Thap
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James and Ashraf,
Thanks for your valuable posts. Agreed - one common unit must be chosen to monitored the overall progress. However, the procurement phase of a EPC project where money is dominant than anything else ( I never get MHs from equipment vendors) , how do you justify priority to MHs over money?
Cheers
James Griffiths
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Thank you Ashraf.

James.
Ashraf Jahangeer
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Hi James,

I am tempted to write after long time.

I had an interview last month for an EPC company and they asked me the same question, I got confused and took long corcles before comming up with stupind answers. To use this opportunity of failure I asked the person who was interviewing me and ......guess what MANHOURS was the answer for all phases of project be it ENGINEERING, PROCUREMENT or CONSTRUCTION.

What I am saying is that there should be no doubt in a planners mind that we have to use SAME measuring unit and also MANHOURS is the best unit for a large EPC project.

Regards,

Ashraf
James Griffiths
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Nar,

Maybe I am being a bit stupid but, without converting to a common unit, I cannot see how anyone can calculate overall % Complete or produce an S-curve.

The software that they use is of little concern. Some people prefer Excel because of its flexibility, others are happy to use the scheduling software if it can do what is required. Sometimes this requires inputting custom formulae. MSP, however, automatically calculates summary % Work Complete (using HOURS) as part of the inbuilt code (Primavera probably does also).

We had one project that used a "personal interpretation" as to the % complete on each of certain activity types. Each of the activities then had a pre-assigned weighting (arbitrarily defined). Either XL or MSP could have been used to calculate the individual and summary progress values. HOWEVER, none of the individual progress values were using a "unit-of-measurement" that described a true time or cost value (they were using the quantity of purchase orders and tenders that were issued/responded to plus other activities used a "personal intepretation" of progress). Technically, therefore, all the calculations were a pile of bollocks - even though the resulting progress values looked very impressive.


In essence. If you want to use different units of measurement, or methods of calculating progress for different types of item, then you must assign a weighting for each of the activities (these choice of weighting is entirely yours - but should be based on something that you can measure). When you sum all the different activities, they must equal 1.00 or 100% or whatever index value you care to define. This is a bit of a sh*t to do - because when you add or remove activities or quantities, your total weighting should also change. This is where money or manhours has its advantages, because they define their own weighting, and will automatically change as you add or remove items. Not only that, but the scheduling software does all the calculations for you.

James.
Nar Thap
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Thanks James,
Just wondering about that as some guys were posting msg as if they had monitored the progress at different weight factors. I have bulk BQ and BC for the overall project and now I have to monitor progress with s-curve production. I don’t have any reference to subdivide the BQ or BC for every activities. How can I subdivide it? Also my project is dynamic , not all the equipments required is not known yet, design is ongoing and every time new equipment is added in the equipment list for procure. How can I co-op with it?

Next, some people say that it is not good way to produce S-curve in suretrak. They prefer excel. But I dont know how to produce it in excel? Is it possible to produce s-curve in excel with ( Cost/Quantity Vs Time or % completion vs time)Does Somebody know that how to dio it in excel?
James Griffiths
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Hi Nar,

In order to calculate the overall % complete, you MUST CONVERT all progress citeria to a common unit - such as money or manhours. If you do not do this, then you are attempting to compare/calculate apples and oranges.

Example: 2 apples + 3 oranges = ????. You only get a sensible answer if you convert to a common unit. In this case, the common unit would be "FRUIT". The answer is therefore "5 PIECES OF FRUIT". Exactly the same principle applies to a construction project. Q: 50% of 100 metres of cable laid + 35% of 10CuM of concrete poured = % complete ???. However, should you calculate the cost of the cabling of 100 metres at $10 per metre (including the labour and material cost) and the concrete @ $25 per CuM, then the overall cost is $1000+$250 = $1250. If you are 50% complete of the cabling and 35% complete of the concrete (calculated via the physical quantities), then (assuming all is on schedule) you are (0.5x1000) + (0.35x250) = 500+87.5 = 587.5. therefore, the total % complete is 587.5/1250 = 0.47 ie. 47%.

If you prefer to use manhours, then everything is initially converted to manhours before performing the calculations.

Software like Suretrak, MSP and Primavera will only allow a "summary" calculation on a common unit such as money or hours - as it does not understand and cannot calculate physical progress of different measurement units.

Hope this helps

James.
Nar Thap
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Thanks Asraf and James for your healthy discussion. I believe planners must have benefited with this including me. I am wondering how it is possible to fit in my EPC project, if I need to monitor %progress for overall and each EPC phase using multi weight crieteria ( manhours , money, physical progress) at different phases? I use sure trak. Hope some of you come forward to help me.
Cheers
James Griffiths
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Hi Ashraf,

Of course, you are free to use whatever monitoring method that you feel suitable and comfortable with. If your current systems are all set-up to easily input the data and automatically perform the calculations, then that’s fine.

In contrast to our discussions, and to add some extra "food-for-thought", here is a wonderful example of how you can get two entirely different results.

Brick wall of 30 bricks. 10 bricks long x 3 bricks high. Cost of resource = $10 hr. Total project cost = 4.5hrs x $10 hr = $45. This will generate a linear BCWS curve.

Planned time: Layer 1=1 hour. Layer 2=1.5hours. Layer 3=2 hours. Total time =4.5hrs (270 minutes). You would probably assign a % Complete based on the number of layers that had been completed (each layer equating to 33.33...%) Therefore, when layer 1/3 has been completed, your % complete =33.33. If I were to use manhours, then I’ve completed 1/4.5 = 22.22%. Can anyone tell me which value is the correct figure? As you will conclude for yourself, they are both correct....and are wholly dependent upon the method of calculating and interpreting progress. However, if you input this data onto a BCWS curve, and use the equation of BCWP= % Complete x Total BCWS, you may discover that, after completing the 1st layer within 1 hour, your EV or BCWP = $15, and your CPI is BCWP/ACWP = $15/$10 = 1.5 - which is clearly incorrect. This is because you have, in fact, completed the 1st layer of bricks in 1 hour at a cost of $10...exactly as planned and shown on the BCWS curve. Subsequently applying a statistical extrapolation to determine the EAC, you would probably conclude that the project is going be cheaper than planned.

If you use the same equation on manhours, the result is that your BCWP = $10 and your resultant CPI is 1.00....exactly as it should be.

Of course – this is just one example. You might be using a different series of equations or methodologies. Anyway, feel free to share your experience.

Cheers.

James.
Ashraf Jahangeer
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Hi medhat,

If after all this discussion you still need an excell file then I dont know what to say, anyway I hope somebody can send you something, but it is better you make your own format.

Hi James,

Without offence to you I am not convinced about monitoring the external agency based on manhours,being a Consultant Engineer myself and I would like to see the change in stage of each drawing before agreeing to increase in the % complete for Engineering. I cannot just agree that the contractor has burnt X manhours so he has got Y % increment.

We can also do the audit to check his claim whenever we like.

Regards,

Ashraf



medhat wageeh
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thanks very much Ponnaganti Sridhar ,oliver,ashraf and james

that is very kindly to discuss this subject ,and i would like to know more about how can i start from B.O.Q will i work with cost or quantity and which of them is more logic
and after that how can i estimate the actual progress of each activity?if any body has an excel file or p3 showing this matter please send it to me at medhat_wageeh@yahoo.com

thaks again
medhat
James Griffiths
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Ashraf,

This is where you might be missing the point. Internal and external monitoring of the project should use the same methodology. As soon as you start using different methods, you’ll start to get different results - and that’s just a recipe for argument.

With regard to your client wishing to know the stage at which the document is; there is absolutely no problem with that. All you do is keep a note of where it is. However, there does NOT need to be a connection between the physical stage of the document and the claiming of Earned Value (unless, of course, you are able to accurately define the hours required in order to reach each stage). A classic example is where some companies claim 10% for the "Start". How on earth can anyone think that having "started" something is equivalent to 10% of its value? Would you pay your builder 10% of the cost of your house, just because he had dug one spoonful of earth? I certainly wouldn’t.

My contention is that the Earned Value that you claim should be in proportion to the costs/price of the activity. That way, you can use the system to more accurately track the true progress of the project.

Referring back to your client and the requirement to understand the physical stage: This is just such "Old Hat" and is reminiscent of their need to "see a lump of concrete" and equate it to a sense of "value" or "progress". This is absolutely fine if there is a reasonably close correlation between what is claimed, in EV, and its true value within the project. The problem is that a quantification of "value" is near impossible: it is totally subjective; whereas quantifying the cost/price of a lump of concrete is far easier and places a much more accurate perspective on the overall proportion of work that is being done.

Cheers.

James.
Ashraf Jahangeer
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James,

I understand what what you are saying but it is more useful for internally monitoring the project.

I am not sure that the client/consultant will bye the idea. They may still need to see at which stage the document has reached. Specially till the time a document is not issued to the clinet (generally at 80%) it will be hard for them to just accept the % complte based on hours spent.

Regards,

Ashraf
James Griffiths
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Oliver,

You are absolutely correct in your assertions. However, you are now entering into the political elements and the smoke-and-mirrors. If you do this, then you will fail yourself, the project and the integrity of the methodology. Spin your web and you will get caught in a right-old-sticky-mess. Correct application, based on honesty, integrity and the basic arithmetic will give you the most accurate figures that are fully justifiable and traceable. They will give the “true” figures upon which you can base the most appropriate management decisions. Anything less than total honesty and best, genuine estimates and you will immediately set yourself to fail. I’m sorry to say that I’ve been there, watched them spin it, and watched the whole damned thing collapse.

Ashraf

You are also absolutely correct in that the total manhours may keep changing; therefore your “% Complete” also changes. The concession, therefore, is that you do not declare a lower progress value – otherwise you might start showing a negative EV curve (a point of debate!!!). However, your CPI (Cost Performance Index) will correctly indicate that no progress has been achieved, but you have incurred costs – thus reducing the resultant CPI value, as well as increasing your EAC (Estimate At Completion). Remember, in a correctly applied EV system, you cannot “lose” hours. It all manifests itself in the resultant arithmetic – howsoever is badly reflects on the project. This is where the politics come into being: If a project really is running into trouble, some companies may continue working on the project but will assign the costs to another project (or wherever else). All that does is fool everyone, including the company. Lessons will not get learned because the project data said that all went well, and so it just sets-up the company to fall into the same trap on the next contract.

Cheers.

James.
Ashraf Jahangeer
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Hi James,

That sounds pretty impressive !

In fact I know this method used in PMC project, where we keep on raising trends. What you are saying is that the Total manhours are constantly changing based on the trends. This also means that no document has fixed weightage it keeps on changing.

I only have one problem with it, how do you counter the productivity factor meaning if the standard hours for a drawing is 100 and it took 150 hors to complete what we are going to do about the loss of manhours.



Regards,


Ashraf
Oliver Melling
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James,Ashraf

Using earned value ’weighted’ milestones can work both ways for claiming EV.It doesn’t always mean you earn value without achieving work.
If you are a little ’stingey’ with the amount of EV you allow for reaching a ceratin stage of an activity, then you can use the fact that the weighting causes you to appear to be under achieving to drive the acceleration of the project.

The use of this theory is more applicable to the client, but can also be useful to help drive any large sub-contracts that you may have (if they are large enough to warrant a detailed EV programme!).

Regards

Oliver
James Griffiths
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Hi Ashraf,

You are not alone in the "visualisation process" of using manhours. In fact, it is extremely simple and just requires that you think only of the "end product" and the numbers of hours (work) it takes to reach it. Remember, the price/cost/value of a product is the sum of its individual elements; not what someone subjectively perceives it to be (OK, there might be some argument on this one, with regard to "value"). Moreover, projects are costed/priced on the basis of manhours + materials: so why not monitor the project on that basis? With the common denominator being money, everything needs to be converted to that denominator, as quickly, easily and accurately as possible.

You are absolutely correct in that if you have spent 50/100 hours, and you require no more than the remaining 50 hours to complete the rest of the work, then you are arithmetically 50% complete. Therefore, you claim 50% of the Earned Value etc. If you think about it, it makes not a jot of difference at what physical stage the drawings are.

You are also absolutely correct in that it is essential that the engineers book their hours correctly, against the correct activity and also amend their remaining hours. In short, it puts the onus on the individual engineer to manage his own activities, take full responsibility and ownership (a long educational process).

In order to help achieve the above, we have a system called Project Central, where the programme activity descriptions are issued to each engineer, on their computer. They literally book their timesheet hours onto these activities - and it all gets automatically incorporated into the programme. Relevant analyses can then be performed. I then spend my time focussing on the trend data etc., as opposed to spending hours and hours discussing subjective rubbish with them. It works extremely well; because at the end-of-the-day, it doesn’t matter where they think they are; it’s how much time (work/hours) it takes to complete. The fact that a quantity of hours just EQUATES to a "% complete", once again, is of little consequence. However, most people (once you educate them) can more easily relate to the quantifiable fact that, if they have taken 50 hours to reach where they are, and they need another 50 hours to reach the end, then they are "50% Complete". The good thing: even the most basic scheduling software will do this for you.

In applying this to a genuine project, there is a little more to it, of course; but the principles are very sound, they work extremely well and nobody, but nobody will ever argue the fact that 50/100 = 0.5 = 50%....as this contravenes every known mathematical concept.

Cheers.

James.
Ashraf Jahangeer
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Hi James,

Thanks for the appreciation...

Comming back to the question of progress milestones for Design. I could not visualize how we will could monitor the progress based on hours only,If we just monitor the hours spent say out of 100 hours if we spent 50 hours we must get the 50% of drawing done this is sometimes not the case as people may not be so correct in booking their hours.

In our document control system once a stage is reached we enter the date and the % is automatically selected. Then we mutiply the % by the weight factor to get the earned wight.

I will appreciate if you can share your experience here.

Regards,


Ashraf
James Griffiths
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Ashraf,

That was a very nice explanation: well done!!

The only element on which I would begin the discussion is on the DESIGN. If you are using the man-hours, then there is absolutely no need to further split it into Start, Squad Check, Approval etc. All this does is just massively complicate the issue even further - and just leads to skewed EV results. For instance, claiming 10% (which is actually quite "normal") is a recipe for everyone to claim huge amounts of EV and yet have achieved virtually nothing and spent almost nothing. This applies to any of the "Milestone = X%" weighting methodologies.

My contention is that, if you are using man-hours as a weight factor, then the man-hours are to be used for calculating % complete. This way, the software does it all for you, faster and more accurately. Moreover, as you were saying: each activity defines its own weight factor by virtue of the quantity of man-hours. By all means, keep a general idea as to the stage that the drawings are in the physical process - but there is no need to complicate the issue by applying a weight factor to something that already has a weight factor.

Feel free to discuss.

James.
Ashraf Jahangeer
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Hi There,

Please note the general method followed in EPC project.


ENGINEERING DESIGN

Engineering design is divided into several disciplines and weight value for each discipline is based on the estimated man-hours against total estimated man-hour

Each discipline is divided into several engineering deliverable and the weighted value of each engineering deliverables assigned to each discipline is a ratio of the man-hours required for each deliverable to the man-hours required for each discipline.

Dividing the deliverable into the stages for measuring the progress each deliverable is divided into various milestone stages and measured by those activities. For exmaple, start drawing - 10%, squad check - 20%, Issue for Approval - 40 %, Issue for Construction - 20 % and issue as built - 10%.\


PROCUREMENT AND MATERIALS

Plant, Equipment and Materials is divided into several disciplines and weighted value for each discipline is based on the estimated cost against the total cost for procurement.

Each discipline is divided into several procurement packages and the weighted value of each procurement package is the ratio of the estimated cost required for each procurement package to the cost required for each discipline.

Dividing the procurement package into the stages for measuring the progress each package is divided into various milestone stages and measured by those activities. For example raise RFQ - 10%, Bid evaluation - 20%, Issue PO - 10%, Complete Factory test - 40%, Deliver to site - 10%, Accepted by client - 10%.


CONSTRUCTION :

Construction and Installation are divided into the disciplines which are weighted % according to contract price per disciplines for each area.

For measuring the progress of each work items, each work items will be divided into the activities, as necessary, by portion, area or work type and their weighted value will be assigned on the basis of quantity of measuring unit. The progress of each activity will be measured in several stages required for measuring the progress.

The measurement stages and their progress point has to be agreed with Company/consultant, it is mainly based on the physical quantity of construction.


Regards,


Ashraf
Ponnaganti Sridhar
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Hi medhat wageeh!

i think it would be better if calculate the weightage factor depending on the value of the activities of your project, i think the best guide would be your B.O.Q

this is my view , you once again check with some expert

cheer!
Sridhar
Anoon Iimos
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the search engine is now working, you can try it, just be careful with your spelling...try "weight factor", if you found nothing, just Shout!!!