Among the most effective and indispensable project management techniques are the CPM (Critical Path Method) e l'evm (Earned Value Management). In this post I deepen one aspect, often ignored, which concerns the congruence between the two techniques.

Introduction

One of the essential characteristics of the projects is the uncertainty about times and costs: It is a constant and intrinsic element to the nature of the projects intended as complex activities, which influences every aspect of the planning and execution.

Understand this feature is, Therefore, essential to frame project management techniques and successfully apply them.

The Project Management is a systemic approach to complex processes interrelated to each other: therefore it is not a question of correctly applying one or more techniques, How much, rather, to develop a project management system that allows you to integrate processes, techniques, tools and organization. The projects are made by people, But only one effective project management system Allows it to be successfully made.

Because it is important to identify the critical path in the field of project management?

The planning of the activities of a modest project can be made on a sheet of paper or through a simple electronic sheet. For many cases, Gantt's diagram is sufficient. But what happens in a complex project that implies the execution of hundreds or thousands of activities?

The CPM was developed in 1957, more or less at the same time as the Pert method, in the military (Polaris project), with hundreds of performers involved in the realization of the project. In these contexts, The control of the timing is essential and this has requested the development of reticular methodologies (CPM e PERT), which allow to identify the so -called critical path, that is, the sequence of those activities that determine the total duration of the project.

Critical Path's activities cannot slip or delay, under penalty of an impact on the date of completion of the project or on basic intermediate dates (milestone). Already in medium complexity projects it therefore becomes essential to identify the critical path. This must be a primary task of any project manager.

Similarly, During the executive phase, The monitoring of the critical path becomes essential to take into account the real trend of the project, determine the margins available and identify the activities on which the efforts must be concentrated to avoid delays. This becomes essential especially in complex projects.

Bases of the EVM methodology

The metodologia Earned Value Management (EVM) it is very powerful and allows you to manage a project by keeping under control times, Costs and performances.

EVM is today one of the most advanced tools for integrated time control, Costs and performances in complex projects. Its origin dates back to the 1960s, When it was developed in the context of military projects to ensure effective monitoring of the economic and temporal trend of activities. Subsequently, has evolved to become a world recognized worldwide.

Obviously, This happened first in the USA. In the 1998, The Earned Value Management Systems (EVMS) they have officially become an anxi standard 748, marking a crucial moment in their regulation. The same year, The Department of Defense of the United States (US DoD) has adopted the EVMS standard ani 748-98 as an official reference for the management of costs in government projects. Only in recent times, In the 2018, The ISO standard has been published 21508:2018 – Earned Value Management in Project and Programme Management.

EVM is an integrated management system of Project Control processes. As illustrated in the course, It is not limited to providing a photograph, albeit articulated and complete, of the progress of a project, But it represents a complete system of management and control of performance. Furthermore, It is a powerful project monitoring tool (project monitoring).

The need for congruence between the two techniques

Anyone who means correctly implement the metrics of Enedned Value (EV) It must guarantee the congruence between the Schedule Performance Index index (SPI) e il Critical Path. In the absence of this alignment, the Metrics EV they can be distorted, especially in the presence of activities performed out of sequence (out-of-sequence work). In these cases, Positive values ​​of the SPI index (>1) they could mask effective delays on the Critical Paths

The problem

The fundamental question is that the metodologia Earned Value It is not integrated with the Critical Path Method method (CPM), why the Metrics EV do not distinguish between critical and non -critical activities. This aspect is particularly relevant for the SPI index, calculated as a relationship between the Enedned value and the Planned Value.

• Planned Value is a pre -established value because it derives from the baseline of the project.

• ENED VALUE instead measures the value of the work actually performed.

The key question we have to ask ourselves is: The work carried out has only concerned the planned activities or unscheduled activities have also been carried out (i.e. sequence)?

Working out of sequence is a fairly common situation in many projects but this can lead to distorted readings of the project performance using the metrica Earned Value.

A real case

The first time I faced a situation of this type was in the construction of a two -lane viaduct, part of an important road infrastructure, that crossed a river.

The Baseline program provided that, After building the batteries on a bank, we proceed with those on the other side.

This approach was necessary to allow the transit of the necessary equipment to the launch of the beams.

To simplify, Suppose that the program expected this construction sequence:

• Pila for a lane on the first bank from the Pulvino foundation poles – cross beam -.
• Corresponding pile on the opposite quay.
• Same process for the second lane.

Ma, contrary to the program, The construction site management decided to simultaneously also create the pile of the other via del viaduct, Since all the equipment was already available on site. This choice, apparently logical from an operational point of view, involved an alteration of the execution expected in Baseline.

At the end of the period, However, two batteries were completed. The SPI index would not report any deviation, because the volume of work planned (production) had been respected. However, The reality is that this choice had caused a delay on the critical path, that the SPI only had not been able to highlight.

Analysis of the combinations of TF and SPI

To correctly evaluate the progress of the project, You can use the following control panel (Source: Jelen’s Cost and Optimization Engineering – Sponsored by AACE) which relates the value of the SPI index with the value of the total float (TF):

Total Float (TF)	SPI > 1.0	SPI = 1.0	SPI < 1.0
TF > 0 (Available time)	In anticipo sul critical path; More work performed than what is planned.	In anticipo sul critical path; lack of work on non -critical activities.	In anticipo sul critical path; significant work deficiency on non -critical activities.
TF = 0 (Critical path respected)	Critical Path in the time; More work performed on non -critical activities than planned.	Critical path on time; Total work volume in accordance with planning.	Critical path on time; lack of work on non -critical activities.
TF < 0 (Delay on the critical path)	Activities of the late critical course; higher overall work volume than expected, indicating excessive attention to non -critical activities.	Activities of the late critical course; Total work volume in accordance with planning, but with too much attention to non -critical activities.	Activities of the Critical Path late; overall work volume lower than expected; a greater overall effort is needed.

Considerations on advancement reports

The publication of advancement reports showing SPI values > 1, In the presence of activities outside sequence, It can generate misunderstandings and a false sense of safety.
The incorrect perception that "the important thing is production" risks hiding real delays on the Critical Paths.

Furthermore, When the activities outside sequence occur frequently, The Project Controls Manager/Engineer is forced to a demanding job to explain, case by case, the real situation.

However, also with detailed and attentive reports, The risk of distorted information or misunderstandings about the progress of the project remains high, Unless adequate metrics are adopted.


How to avoid distortions between the Enedned Value metrics and the reticular program

There are Cost Engineering techniques that allow you to mitigate the Distortions in EV metrics and that must be integrated both in the contractual clauses and in procedure di Project Controls.

The main strategies are two:

• Baseline performance definition.
  • It must be built using the "Late" dates instead of the "Early" dates.
• Progress registration criteria (progress tracking).
  • The progress that contributes to the value of the SPI must be recorded only in the period in which the activity was actually planned (I.E., to Float consumed), unless the activity in question is part of the current critical path.

Following this approach, SPI values > 1 they will only occur when critical activities are actually anticipated, that is, the only scenario in which a real advance of the project timing is possible.

The use of Credit Manhours

Another advanced Cost Engineering technique, Less known but extremely useful, it concerns the concept of Credit Manhours.

This approach is not directly connected to the SPI index, But rather at the Cost Performance Index (CPI), that measures efficiency in the use of resources.
An example of application:

• The CPI is calculated as EV/AC (Earned Value diviso per Actual Cost).
• Instead of using the Ened Hours parameter, Credit Hours are adopted, which allow you to monitor productivity independently of the budget variations.

Credit Manhours allow you to obtain a coherent production index even in case of variations in the budget, resulting particularly useful in complex projects.

Find out how to apply the best planning techniques!