BUS606: Operations and Supply Chain Management

Most of the project control techniques non-uniformly focus on the qualitative (risk) and quantitative (time and cost) parameters. Among them, CCM/BM and EVM/ES are two new scientific techniques proposed in project management, and they both have advantages and disadvantages. The CCM/BM method is derived from limitations theories and focuses on the time of the project time discussion. To complete a project at the certain time, we usually have to interfere with the project scope. Therefore, we apply only scheduling buffers in the project and disregard the cost items; this is the greatest limitation of the method. Another main constraint of this approach is its failure to provide accurate charts and formulas for control, estimated duration, and cost at completion of the project.

The EVM/ES method emphasizes the project cost, and it integrates the cost, value, and time control of the project. This method is limited by the correlation between time and cost parameters, the lack of confidence in the SV and SPI compared with the CV and CPI, the lack of usage of buffer time and cost, project risks, and the disregard for the path and the critical chain of the project (whether delays are related to what activities is not exactly determined). In other words, the EVM/ES indices are applied based on cost without considering the impact time, and they are not related to path risk and the critical chain. In this method, the unique advantages of CCM/BM, such as the focus on the critical chain instead of the critical path, prevention of confidence time for each activity, avoidance of student syndrome, and the lack of concurrent tasks, are not used.

Investigation on CCM/BM demonstrates a superior focus on time parameter and time-based risks in a concurrent manner and on the other hand, the key advantage of EVM/ES is to concentrate on cost parameters thereby establishing equations for EDAC and ECAC. As such, integration of the above techniques leads to developing a framework incorporating the above advantages all in one which suits the needs of applied control on sustainable projects by taking into consideration quantitative parameters (time and cost), as well as qualitative parameters (risk).

In the integrated risk–efficiency methodology, we use the CCM/BM method by combining the CCM/BM and EVM/ES techniques. We include one cost buffer in our calculations aside from the schedule buffer. We perform simultaneous management of the schedule and cost of project by correcting the control of these two buffers. By using the formulas and concepts of EVM/ES in the estimated duration and cost at completion, new formulations are developed with maximum accuracy and efficiency through buffer management.

More precisely, two recently-developed techniques, known as CCM/BM and EVM/ES, have attracted considerable attention while each one has its own disadvantages. In the case of CCM/BM, the main limitation is a dominant focus on time and paying no attention to cost and related risks which cannot bring illustrative equations of EDAC and ECAC with respect to the project development. On the other hand, EVM/ES fails to consider the time parameter comparing to cost, time risks, and cost risk. According to this background, the proposed methodology eliminates the above limitations attributed to either CCM/BM or EVM/ES. The integrated technique exerts a significant importance on the cost parameter, as well as time parameters in a risk–efficiency approach. Correspondingly, the cost buffer is added to the time buffer, leading to control the whole time and of the cost risks associated to a project. Meanwhile, equations of EDAC and ECAC are derived similar to relations given on EVM/ES with respect to project progress, and time and cost buffers. In brief, the following are the most important advantages resulting from the integrated approach:

• Taking full advantages of CCM/BM (allocating precaution time to the whole project and not to each individual activity, preventing the occurrence of Student Syndrome and parallel activities) and EVM/ES (concurrent control on time and cost, thereby drawing equations for ECAC and EDAC);
• Integrated control on the efficiency (time and cost) and risk of projects;
• Calculation of time and cost buffers to deal with cost and time risks;
• Providing a tight control (fast and accurate) on time, cost, and related risks with the help of developed buffers;
• Giving an estimation on EDAC and ECAC with respect to the percentage of project progress, as well as the consumed time–cost buffers;
• Providing an applied procedure to implement the methodology in practice.

Based on the analysis of the obtained results from the case study, the buffer is in the green zone in terms of cost and schedule buffers in the control period of 15 days. As shown in Table 2, the proposed method does not require special action. In the control period of 30 days, the buffer is in the yellow zone in terms of cost and in the red zone in terms of schedule. In the proposed method, the speed of the project implementation should be increased without extra cost by using new techniques (Table 2). Figure 6 plots the value of the project progress and usage percent of the buffer in two control periods. Note that, with regard to cost and duration progress, the duration and cost variance of the project are in the green zone in the control period of 15 days. The duration variance is in the red zone and the cost variance is in the green zone in the control period of 30 days.

Figure 6. Case study project status based on project progress and the buffer usage percent (cost and schedule).

The estimate cost at completion in the first period is equal to $200,841 and that in the second period is equal to $232,983, because of the delays occurring in the control periods. In addition, the estimate duration at completion in the first period is equal to 61 days and that in the second period is equal to 93 days.

By applying the proposed technique to a case study, the results show that, in two time periods of 15 and 30 days and the percentages of time–cost buffers consumed, an integrated control of the quantitative parameters and risks are well achieved and, subsequently, necessary actions to be taken in each period are addressed in Table 2. Above all, a good estimation of EDAC and ECAC are provided.

The present article contributes to further research by using single or multivariate statistical control charts to accurately monitor the buffers and present the integrated risk–efficiency methodology in the controlling program and project portfolio.