Wednesday 2 February 2022

Project implementation timeline

One of the main distinguishing features of any project is its limited time, that is, the presence of a start and end point. Based on the scale of the plan, as well as the number of processes that need to be performed to achieve the goal, it is possible to calculate the approximate timing of the implementation of the project task. Correct time calculation allows you to avoid additional costs, especially at the stage of construction and installation works, and disruption of the date of commissioning of the facility.

The concept of the timing of the implementation of the plan and the importance of managing them
Tracking the timing of the project from the smartphone screen.

Given that the total project implementation period consists of the amount of time spent to complete the work at each successive stage, it is necessary to determine with a high level of accuracy what the time budget for each stage of the entire undertaking is. Directly related to this is the level of responsibility of the contractor performing specific work. When implementing a large-scale plan, several contractors perform different processes, so non-compliance with the planned deadlines by one of them can slow down the start of work by another organization, which, ultimately, will lead to losses for the investor.

The time periods for which the implementation of projects is carried out most often depends on such factors:

  • organizational, territorial or functional scope of the idea;
  • the technology used to conduct the undertaking;
  • implementation of a standard design solution or development of a unique one on its own the presence of a trained professional team.

Modern management science involves various types of management, including risk management, cost, communications, quality, etc. In these areas, a clear conceptual field has already crystallized in the managerial environment over a long period. As for the management of the time of implementation of actions, this issue is controversial and ambiguous. The reasons for the failures of various ideas are often sought in anything, not wanting to admit that during the planning the time parameters necessary for the implementation of each operation were mistakenly calculated.

And if with the parallel planning method it is still possible to somehow try to correct the situation by reducing the critical path as much as possible (if this is technologically permissible), then with the sequential method, this failure will definitely postpone the date of delivery of the object.

Some see the reasons for the problems that arise in the fact that recently time moments in the preparation of the justification of projects are handled by planners, who often do not have the necessary knowledge regarding the established standards and rules for carrying out construction and installation works. The computer applications they use, such as MS Project, Primavera, Spider, effectively calculate all the construction stages only when they are given the correct parameters. Therefore, the best option is in which a planner and an experienced civil engineer work together on the schedule.

In any case, such a question as the implementation of the project task in time remains open today. Various researchers and practitioners offer various options for solving the problem, first of all, regarding the possibility of thoughtful planning of the event horizon.

Calendar-network planning method

In undertakings related to capital construction, and there are most of them among investment projects, the method of planning according to the calendar-network schedule is traditionally used. It is a model that illustrates how the implementation of the idea will proceed in terms of time and process parameters. In fact, such a chart is a tool:

  • analysis, description and approval by all parties (investor, customer and general contractor) of the technology of construction work;
  • current interaction of project participants;
  • managing the initiative on a number of indicators (resources, time, finances) and making the necessary adjustments;
  • forecasting potential problems and risks, compensating for them or minimizing the consequences.
  • However, the graphs are made by people, so there are constantly problems with their observance. For example, if you make a scheme based on the development of capital investments, then when conducting a number of parallel operations, there are constantly overlaps in the positive or negative direction. The critical path is often derived manually, it is not an economically justified calculated value, but is "drawn" by a certain date, which is not regularly observed.

In fact, such schedules only set time limits for lower performers, but weakly depend on other factors (readiness of the necessary components or structures, logistical problems, availability of qualified personnel). In this case, the project manager cannot accurately predict its course and influence the potential problem in advance. Therefore, delaying the time of completion of individual stages and construction as a whole with this approach is not uncommon, as well as the need for additional financing.

The start dates of the project are marked on the Gantt chart.

Sometimes the customer is forced to make a choice what is better: a fast, but expensive option, or a longer, but cheaper one. Practice shows that in initiatives in which the ultimate goal is to make a profit, the investor is more likely to lean towards the first option, because reducing the duration of the pre-investment and investment phases allows you to quickly recoup investments. With social projects, the situation may be different, here the price of the issue plays an important role.

Calendar-network planning based on the technology of performing the required work is more effective. If there is a clearly defined technology agreed with contractors and the investor, then the timing of all processes can be accurately prescribed on the scheme and reasonably calculate the critical construction path. This approach helps to avoid delaying the work, entailing additional rental costs, overhead costs, staff maintenance, maintenance of equipment, interest payments on loans, etc. In addition, thanks to this method, you can see who exactly is to blame for the delay due to an incorrect decision or failure to solve a particular issue.

How to correctly calculate the time of project implementation

When it comes to an investment project, the calculation horizon (calculation period) covers the entire life cycle of the undertaking - from the development of the concept to the completion or liquidation. When determining the total duration of the project, the following factors are taken into account:

  • depreciation of the main means of production or their critical part;
  • full saturation of the market with products;
  • lack of need in the market for products due to loss of competitiveness, obsolescence or changes in legislative norms and standards regarding specific types of products or required working conditions;
  • exhaustion of available stocks of raw materials;
  • termination of the lease agreement for structures, buildings or land plots;
  • full payback of the project and access to the planned total profit.
  • For a more adequate assessment of the situation, the calculation horizon is divided into separate steps.

The most indicative from the point of view of the effectiveness of the plan are the steps within which certain statistical and operational information is collected (year, half-year, quarter, month).

When planning the total period of implementation of the investment plan and dividing it into smaller steps, it is necessary to take into account the following significant factors:

  • Determining the purpose of the calculation, i.e. why all this is done. For example, to clarify the financial feasibility, monitor management actions, generally assess the effectiveness of the undertaking.
  • The duration of each phase of the overall life cycle of the initiative being implemented. With proper planning, the end of one process should be the actual start of another process. So, the moment of completion of construction work in a particular workshop should be the start for the installation of equipment and commissioning, etc. This approach allows you to control the financial viability of the project at different stages.
  • Seasonal fluctuations in the volume of production and sale of output, therefore, uneven capital inflows.
  • Frequency of financing, especially in the case of attracting credit capital. In this case, the step may be non-standard and be determined taking into account the timing of the loan repayment or interest payment. It is also important to take into account the terms of investment in terms of the ratio of own and borrowed funds.
  • The level of inflationary processes and rising prices for raw materials and components. With a high level of inflation, smaller steps should be taken so that within one step the price does not increase by more than 10%.

All investment projects consist of the following main time periods:

  • preparatory phase up to the commissioning of the facility;
  • the phase of development of production and market entry;
  • operation of the enterprise at full capacity until the closure of the project or full payback.

To avoid errors in calculations regarding the timing of the start of full-fledged work of the future enterprise, it is necessary to pay special attention to the first phase, each component of which requires certain time costs. This is especially true for sequential processes, when the next activity cannot begin without the complete completion of the previous one. The pre-production stage may tentatively include the following actions:

  • preparation and coordination of documents on state registration of the enterprise;
  • obtaining a license for the relevant activity;
  • development of project documentation and its examination;
  • solving all issues with the acquisition or lease of a land plot and the preparation of all communications for the creation of a construction site;
  • construction (earthworks, stone, facing works);
  • purchase and installation of equipment, its debugging;
  • selection and training of the required personnel;
  • commissioning of the finished object.

For some of these actions, there are approved standards regarding the time spent. However, it is necessary to take into account local features that can shift the timing forward (climate, soil condition, the need for additional work, the ability to quickly attract the necessary equipment or specialists).

Cost management system of terms

Recognizing all the advantages of the method of calendar and network planning used in construction, it is impossible not to note its shortcomings: the inability to accurately calculate the time parameters of all documentary designs and technological operations, the time for negotiations and coordination of certain decisions. Therefore, a number of specialists propose to implement such a system, where each unit of time deviation from the developed plan should have its own cost for the customer or contractor:

  • delinquency from the investor's point of view may have a different value for performers, depending on the degree of readiness of the object;
  • delay due to the fault of the customer threatens him with the payment of a penalty to the contractor for the downtime of equipment and personnel;
  • the minimum and marginal cost of a period of time is calculated from the IRT schedule, which determines their maximum allowable terms, for violation of which the contractor is punished.

In order not to disrupt strictly established deadlines, with the cost method, the following management system is proposed:

Economically justified minimum and deadline terms for the implementation of the entire idea are calculated. Thus, a relevant (permissible) corridor of possible deviations is formed.

Based on the above deadlines, a regulatory and technological period (STS) is being developed, which is necessary for the preparation and approval of the necessary documents and the implementation of preliminary actions. If the calculated STS does not meet the deadline, then the developers are looking for ways to optimize the processes (changes in the project, innovative technical solutions, the search for more productive mechanisms and more professional workers).

The search and study of all possible risks, as well as ways to minimize them, allow us to calculate the necessary time reserve for the implementation of the entire initiative.

With information about the available time reserve, planners can define a target project completion date, which should also fit into the "extreme-minimum" corridor. The best option is the one in which the target period differs slightly (by 10-25%) from the regulatory and technological one, and that, in turn, also slightly differs from the minimum.

It is also important to consider the time spent directly on planning. It is proposed not to do it on their own after the examination of all documentation has been carried out, but to hire special engineering companies that will calculate the approximate time milestones already at the stage of development of the basic document, and in the future only monitor and manage the deadlines.

Practice shows that only a small number of investment ideas are implemented in a pre-approved time frame, this is especially true in Russian realities.

Such situations occur due to the fact that people who plan and perform work act autonomously relative to each other and have different motivations. There are frequent cases when the contractor, wishing to receive the order, agrees to the time frame declared by the customer, knowing that he will not be able to meet them or, not having sufficiently qualified specialists who could calculate its real capabilities. In such cases, the customer should stipulate in advance the system of serious penalties for each delay.

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