How to ensure MS Project is a great tool for your construction business
6 minute read – by Kobus le Roux
How to ensure MS Project is a great tool for your construction business.
“Chaos is a friend of mine”- Bob Dylan
If I walk onto your project right now, would you have this level of control?
For some contractors, chaos is the only way they know to run their business.
In my experience, many contractors have a love/hate relationship with scheduling.
They see it as being too complex. There are so many details to plan and track that they get lost. Also, they feel that the effort is not worth it. “Why plan, if the plan is going to change anyway?”
This leads us to some obvious questions: Is an MS Project project schedule really worth the effort? If so, how can you ensure it is a great tool that can provide your business with genuine value? Let’s break it down:
1. What’s the point of having an MS Project construction schedule on your projects?
The purpose of a construction schedule is to give you more control. You may wonder, what is control and why is it important?
Project control is the knowledge area that enables a project manager to monitor and control the project’s progress and cost.
Having control is one of the most important indicators of successful contractors. Contractors who have little to no control on a site, fail to build sustainable businesses. Period! I’ve seen many such contractors and unfortunately, I’ve witnessed their inevitable demise.
Successful contractors on the other hand, have a lot of control on their projects. They understand the differences between planned and actual cost, production (time) and quality at any time during execution.
2. Is it truly possible to control cost and time?
Yes, absolutely! Nothing is 100% controllable but that is not our goal here. Our goal is to take action on those small portions we have control over. Let’s look at a practical example of this…
Contractors control cost and time by taking action after monitoring progress. The simplest example to explain this is as follows:
You have an employee who steals a substantial amount of copper piping from your jobsite.
If you have little or no control, it means you cannot measure or monitor your stock to realise there is a problem. The result is that you lose thousands to this treacle every month and you have no control to stop it. You aren’t even aware of it. You scratch your head at the end of the project as you realise you’ve made 4% less profit. You have no idea how this happened.
If you have proper control, it means you can measure and monitor your stock and find there is a problem. A great variance exist between your planned copper installation and your actual cost on this item. This leads you to take action (read, take control of cost). You measure the actuals on site and realise they correspond with planned. So, someone is siphoning your stock. You take action by setting a trap. You catch the thief. You deduct money, fire the employee and/or stop the bleeding. You only lose 1% not 4%. You have controlled cost by taking action.
3. How would I know if I have control or not?
If I walk onto your project right now, would you be able tell me exactly, what is the difference between your allowable and actual cost? If so, would you be able to pinpoint the reasons for the variance?
Would you be able to tell me exactly, what’s the difference between your planned and actual progress? If so, would you be able to pinpoint the reasons for delays? Do you have a clear picture of the apportionment of risk on those claims?
If you’ve answered yes to the questions above, you have a very high degree of control. If you have a few no’s, there is room for improvement and MS Project can help.
4. How can MS Project help me get more control
Your MS Project construction schedule sits at the epicenter of project control. Project control have 2 legs: Planned vs Actual. This gives us access to a variance. The variance is what enables control (taking action).
STEP 1 Schedule correctly –
Once scheduled MS Project gives you a very detailed and accurate planned cost and time. Consider the following programme. It’s a simple pipeline project planned in accordance with good principles.
If you drill down into each activity you will see the allocated resources and costs.
Let’s look at the Pipe Section 0-200 for instance.
The total cost for this section is R218,940.00 ($14,500). It’s the summarised cost of all the tasks below it. Each task has its own resources assigned.
Let’s look at the Excavation for pipe trench task. It has the following allocation of resources.
So, we have 1 TLB at R340/hour. 1 Tipper at R250/hour. 2 Operators at R45/hour and 2 General labourers at R25/hour. These resources are set to work for 4 days to complete the excavation which means this activity will cost the contractor R23,360 ($1,500) to complete.
Now you may think this too complex to set up? Not at all. MS Project does the hard work for you here. Any person with basic MS Project skills can set this work package up with resources in less than 10 minutes. If you want to see step-by-step how you can do the same with your MS Project click here – MS Project Course for Construction
STEP 2 Monitor and track – Your plan will change!
There’s one thing I always want to make clear about scheduling.
Good schedulers know they have to be ready for possible surprises and changes during construction. Great schedulers use their skills to allow for the changes and surprises they are certain, will exist.
That is why you need to plan, because you know change will happen and we need a way to measure the change!
Let’s say you are delayed on the first section of pipe for 2 days. No biggie right? Let me show you the impact:
Below I’ve done a tracking exercise. You will see the actual duration on excavation is now 2 days longer than the baseline.
If I monitor the impact of this on my cost and time. The following is noted:
It caused a 2 day delay on my completion date. Also, my equipment and labour lost 2 day’s worth of production for which you are paying their cost. It creates a whopping R11,680.00 ($780) additional cost!! You can easily add R10,000/day penalty and this exercise is costing the contractor R31,680 ($2,200) extra! That’s 1.25% less profit on the project’s total revenue! Only 2 days worth of delay!
See the impact shown below:
STEP 3 Take action – Control
How do y0u exercise control here? By acting. By making decisions, by implementing changes, by claiming, by negotiating, by guessing, by forecasting, by accelerating, by increasing, by accepting, by communicating, by fighting, by terminating… and the list goes on.
Imagine one of your own projects, how many of these small delays take place. If you have 10 of them on an average project, you’ve just lost around 12.5% of your potential profit. No wonder contractors are struggling. The problem is you won’t be able to do anything about it, if you don’t even know you are losing money.
5. “I don’t have the time or skill to micromanage my projects like this”.
I’ve heard this excuse many times. The thing is, once you set up a resource list in MS Project, you never have to do it again. You can simply change the rates to the most recent when pricing a new project.
The same goes for setting up tasks. Once you have built a schedule that is accurate, you can re-use portions of it. It would take a skilled scheduler around 3 hours to set up ‘n complete schedule like the example we used. To track this on a weekly or bi-weekly basis would not add a lot of workload and measured against the potential saving of having control, can you afford not to?
I’ve scheduled over a 100 projects for small to medium construction contractors over the last 15 years and can tell you with a high degree of certainty that MS Project is a great tool for such a company.
In my experience, most users of MS Project in the construction industry use less than 20% of the software’s capability.
Small construction companies can use the software to get control!
This post was compiled by Kobus le Roux for Le Roux Consulting, all rights reserved. Please contact us for your professional project planning, project control, claims or adjudication assistance services in the heavy civil and building industry.
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