Would you agree with me that time and cost overruns seem to be a recurring theme for projects globally? The constant project resource shortages in an ever-uncertain landscape are only making matters worse. Most think that the primary problem is the lack of visibility and monitoring. And hence, technology seems to be the proverbial silver bullet for all our project woes.
Since the 1960-s, computational abilities have multiplied in jumps. In recent times, with high-speed internet and increased mobile access, we should expect huge improvements in visibility. With APIs becoming commonplace, there is also the promise of an interconnected and aligned project ecosystem. And all of these, appear to be easy and well within our reach.
Yet, even during the last 15-20 years, time and cost overruns continue to be impervious to these advancements. Worse still – after countless man-months spent to create a unified system, organizations generally settle for a compromised scope of semi-automatic and semi-manual processes and continue to experience the same de-synchronization as before.
How is it possible that technology, for all the leaps and bounds made in the past century, cannot pierce through the armor of time and cost overruns?
Perhaps a good starting point is to look at how projects are planned, executed, and monitored around the world. The answer is well known – we manage our projects using the Critical Path method.
In this context, it might be important to refer to the original paper submitted by Kelley and Walker. When talking about how to deal with project resource shortages this is what the authors had to say:
“All schedules computed by the technique are technologically feasible but not necessarily practical. For example, the equipment and manpower requirements for a particular schedule may exceed those available or may fluctuate violently with time. A means of handling these difficulties must therefore be sought – a method that levels these requirements…”
“…The difficult part of treating manpower leveling problem from a mathematical point of view is the lack of any explicit criteria with which the ‘best’ use of manpower can be obtained”
Given that projects almost always face a shortage of resources (Direct, Indirect or Managerial) and no alternate technique is available yet, is it possible that we can control project timelines by applying the Critical Path method?
If not, then can we possibly benefit by applying layers of technology to something that does not work?
How Should We React to Project Resource Shortages?
You may be aware of the unitary method. If 10 resources can perform 10 jobs in 10 days and only 5 resources show up, we expect the same 10 jobs to take a longer period of 20 days. The impact is known and predictable. So why should we worry about facing shortages in project situations? We should always be able to predict the impact and take recovery actions.
The reason why Walker and Kelley highlighted this as a major problem, in their seminal paper on the Critical Path method, is because the above does not hold when it comes to projects.
What do we do when we face project resource shortages in projects? The answer is a no-brainer – we look at all the available work and prioritize and postpone some. Some prioritize based on critical (in terms of time) over non-critical, some look at best cash flow opportunities, some consider the risks involved, etc.
What may not be apparent is that each choice has a different impact on the rest of the project. If we cannot predict the choices that individuals are going to make, it is not possible to make reliable predictions about the fate of the project. Remember that prioritization choices are made by every stakeholder (internal or external), again and again, over the entire life cycle of the project.
If the above is true, do you think reliable predictability will ever be possible in the case of project resource shortages?
How Much Damage Can Project Resource Shortages Do to Projects?
To test this, let’s consider a simple example comprising 7 tasks performed by 3 different resource types, as shown in Fig. 1 below:
Figure 1: Initial Scenario to Demonstrate Impact of Project Resource Shortages
In the above example,
Each task colour represents a different type of resource. The Total Float and Free Float values for each task are also displayed.
If we plan to execute the project in the planned duration of 28 days, it is obvious that we need 4 Blue resources, 2 Green resources, and 1 Purple resource.
Now, imagine that during execution we are only able to mobilize 2 Blue, 1 Green, and 1 Purple resource. Some questions immediately come to mind regarding the original plan:
- How much time will it now take if using Critical Path logic (Float sorting, ascending)?
- How many possible ways are there to execute?
- What is the best time at which the project can be executed?
- Is there any known logic by which we can arrive at the answer to (3)?
- What is the range of possible answers (Maximum delay/Minimum delay)?
It’ll be easier for us to answer these questions if we first map out the possible execution paths in Fig. 2 below:
Figure 2: Possible Ways to Execute the Work After Considering Project Resource Shortages
Let’s analyze the possible execution paths to get insights into our questions above:
- How much time will it now take if using Critical Path logic (Float sorting, ascending)? Answer: 40 days (Option 1)
- How many possible ways are there to execute? Answer: Theoretically, 24. However, if we assume rational decision-making, then 14.
- What is the best time at which the project can be executed? Answer: 34 days (Option 3)
- Is there any known logic by which we can arrive at the answer to (3)? Answer: No
- What is the range of possible answers (Maximum delay/Minimum delay)?
Answer: Due to a 50% shortage of resources:
- Best case: 34 days – delay of 6 days over the 28-day plan
- Worst case: 40 days – delay of 12 days over the 28-day plan
The worst case incurs 2 times the delay of the best case
Additionally, most of the possible outcomes are closer to the worst case. Only 1 of the 14 is close to the best case.
So, what could we conclude from these results are the following?
a. As mentioned by Kelley and Walker, the Critical Path method does not guarantee optimal solutions
b. If we apply it nevertheless, it can multiply the delays (causes 2 times the delay in this case)
c. Depending on the choices made, there is a different impact on the project
d. There is no known logic by which we can ensure an efficient resource allocation
If the above is true, what do you think happens in real projects with thousands of tasks and hundreds of resources when shortages are faced left, right and center?
Are the local choices made by different individuals throughout the life cycle of the project going to allow synchronization, control, or predictability?
Join us in our next blog as we explore how we can solve the seemingly impossible late project problem.
Find out more interesting blogs and videos at: www.realization.com
Summary
Despite advancements in technology and the availability of software to resolve our project woes, we still face challenges with time and cost overruns in most projects.
Resources are the primary reason and the underlying cause behind these time and cost overruns. Most projects face challenges with resource shortages. Managing project timelines using the Critical Path Method then poses a challenge.
When we face project resource shortages in projects, the next natural step would be to review available work, prioritize some tasks, and postpone others based on several factors.
Each of these choices by different individuals during the project will have a different impact on the remaining project. To make reliable predictions about the project, we must first be able to predict the choices that individuals will make.
By prioritizing when facing a resource shortage, there is a wide range of unpredictable outcomes including delays and issues with synchronization in the project.
References:
- Keller, James E., and Walker, Morgan R. “Critical-Path Planning and Scheduling.” Proceedings of the Eastern Joint Computer Conference (USA), 1959.
- Ghorbani, Shohreh. “Understanding Critical Path Method (CPM)“. Project Control Academy, 9 Oct 2014.
About The Author
Dr. Sourav Basu is GM, India Business Operations, in Realization Technologies.
Since joining Realization in 2009, he has been involved in over 30 Critical Chain implementations in Capex, NPD and ETO environments, in India. He has a doctorate in Operations Research and System Analysis from Indian Institute of Management, Calcutta.
Connect with Dr. Sourav on LinkedIn.
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