REDUCING PROJECT DURATION
No project is implemented in isolation. Events happening around the project may affect its progress. A nation-wide strike, an un-expected calamity or an abrupt economic change may bring the project to a grinding halt. Even if everything goes well, the sponsors may be tempted to enter the market early. In all cases, the project manager plays a vital role in shortening the project schedule. To start with, a manager should study fast-tracking or shift to an advanced technology. If nothing helps, more resources can be introduced for an early completion. Since it would invariably result in more costs, a manager must find out if, within the same time-frame, the costs could be brought lower than the crash-cost limit. This has been explained by Crashing Techniques through an example of a Yacht Project.
CRASHING DIFFERS FROM FAST TRACK
In crashing, the time is reduced by increasing resources. But the sequence is not disturbed. For example, a project involves raising a boundary wall in 16 days and moving machinery crates in 8 days, the total duration being 24 days. By engaging more workers and excavators, the boundary wall can be made in 12 days and machinery shifted in 4 days, reducing total time to 16 days.
In fast tracking, shifting of machinery would start when boundary is only partially complete, usually 2/3, and the entire job would be completed in 16 days without incurring extra cost. But it would increase risk to a certain degree. It is like drinking coffee or using mobile phone while driving in a fast lane.
To sum up, crashing involve time and cost trade off without any change in sequence of activities or task-dependencies. On the other hand, fast tracking does not increase costs but increases the risk as many jobs are done in parallel rather sequentially.
SWITCHING OVER TO ADVANCED TECHNOLOGY FOR TIME REDUCTION.
In theory, crashing is done by throwing in additional resources but using the same techniques as in normal conditions. It is not a switch over to an advanced technology to complete a job in a very short time as shown below:
- In Sri Lanka, a flyover was completed in just 60 days setting a world record. Instead of bringing sand, cement and steel to the site, pre-fabricated pillars and beams were moved in, lifted by cranes and bolted together.
- In Scandinavian countries, helicopters are being extensively used for transporting large items like furniture, building materials, pipes, tiles and boards.
- By using Micro-ovens, food can be cooked in a matter of minutes.
- Angioplasty has displaced bypass surgery. Angioplasty requires a mere slit and one-night stay as opposed to Open Heart Surgery taking 5-7 days in hospital and six weeks of recovery.
A simple example
In order to help the manager, two types of networks are prepared. One represents normal conditions and the other crash conditions. Time and costs are calculated for each activity under both scenarios.
The activity 'A', shown in the side-table, can normally be completed within 5 days at a total cost of Rs.5,000. It may be possible to reduce the time to three days by (i) putting in more resources, (ii) allowing overtime-premium and / or (iii) introducing incentives to increase productivity.
Three consideration in time reduction
If we want to reduce the duration, we would have to consider three aspects:
(1) Time can only be reduced if we reduce duration of any activity on the critical path. For example, if we reduce A by 2 days, the total time would be reduced to 15 days. But if we reduce B by 2 days, total time would still remain the same I.e. 17 days.
(2) In this example, both A&C can be crashed as both are on the Critical Path. We should crash that activity which is cheaper. Incremental Cost for crashing A is Rs.1,250 (difference in Costs divided by difference in Time). The same cost in case of C would be Rs.500 per day. Obviously, we would prefer to reduce C by permissible time of 8 days.
(3) After crashing any activity, we would re-draw the network and re-assess the situation.
There are many paths in a network. When we crash activities on the Critical Path, another path may become critical as will be observed later in this hub.
As stated above, we can crash C by 8 days for which would have to incur an extra Rs.4,000 (8 days @ Rs.500 per day). After the crash, we re-draw the network.
A glance at the revised network would reveal that total time under the path A- C has reduced to 9 but B, on the other path, has time duration of 12 days. As critical path is the longest path, total time duration has only reduced to 12. Since our crash time is 10 days, we would now reduce B by two days.
For technological reasons, it is not possible to shorten the duration below the crash limit of 10 days even by spending more money or resources. But we can review the situation and reduce the crash cost to some extent. This is done through un-crashing.
After second crash, we observed that path A&C had a duration of 9 days. If we can increase any activity by one day, we would still be under the permissible limt of 10 days. As a rule, an activity with the highest per-day cost should be un-crashed. In this case, however, only C can be uncrashed for one day as the other A has never been crashed.
By doing so, we would make all paths as critical paths. Total cost would now be Rs.39,100 as under.
MOVING TO A COMPLICATED EXAMPLE
In the previous example, only three activities were used which resulted in two paths. Life is not as simple as that. In next example, 8 activities are introduced which brings in five paths. This would be a little difficult to solve. At the same time, some readers may find it interesting how a yacht can bring thrills and pleasure.
A simple example of Time & Cost under two scenarios
In turning the above statement into a network, we would draw a box for 'A' since it is a start activity. Once this is done, both B&C can be shown side by side. We would keep on adding the remaining activities keeping in mind their precedents as shown in the following sketch.
Yatch Project - Network under Normal Conditions
Once we have draw the network, we can insert durations of each activities. It would be noted that in normal circumstances, the project completion stands at 28 days. If we swtich normal durations with crash durations in the same network, the time-frame would get reduced to 18 days.
Going back to normal network, we observe that there are five paths of varying duration. Critical Path is the longest path which is A-B-D-G with 28 days duration. Naturally, if we reduce any activity in this path, our project time would be reduced. Of A,B,D & G, the cheapest is D with per day cost of Rs.80,000. We can crash it by two days.
The CPM has now shifted to A-C-E-G with 27 days duration. Among them G is the cheapest and can be crashed for 3 days. Since G is included in another path (A-B-E-G), we reduce 3 days from both the paths. Similarly, we would crash C,B & A. We can go on till we reach the crash time, 18 days in this case.
Finally, we can uncrash some activities provided that: (i) the same are not on the critical path, and (ii) have been crashed before. The activity to be uncrashed would be the one with highest per day cost. In our case, we find only C meeting that criterion and add back crash cost for two days. Hence, our final crash cost would be Rs.10,916(,000) as against original crash cost of Rs.11,240(,000), showing a saving of Rs.324,000.
This is explained by a short statement:
YATCH BUILDING PROJECT - CRASHING PROCESS
WHEN A CONFLICT ARISES?
Sometimes we are faced with conflicting situation like two critical paths or two activities in the same path with the same crashing costs per period. The priority rules are:
- If there is more than one critical path, crash one which contains cheapest activity.
- In case, a path contains two activities with the same crashing cost per day, crash one with the high reduction time.
- In case, reduction time is also the same, crash one with higher ID.
For example, if there are two activities,C&E, and both are in the same path, have the same daily crashing costs, have the same reduction time, we would crash E as it has a higher ID.
Apart from Activity Costs, there are Indirect Costs like Managerial Services, Site Office Maintenance and Consultants Fees to be paid on daily or weekly basis. Unlike direct costs, the indirect costs would decrease with the reduction in time. In other words, indirect costs have a perfect positive correlation with the time period as against negative correlation of the activity cost. Because of this, their slopes differ as shown below:
Direct, Indirect & Total Cost behavior
Crashing may be taken as a war against time. It may fire back. Inducting new workers may result in classic conflict between old and new. Moreover, the new workers may not be well oriented with job and the environment. In a worst scenario, this may lengthen the project schedule instead of reducing it.
As a thumb rule, more you crash, more you spend. In some cases, this would not pass the traditional cost & benefit test. Unless there are clear-cut advantages, a manager should not resort to crashing as some important aspects may be ignored in a haste.