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CM-PE-902 Procedure for Progress and Performance Measurement

CM-PE-902 Procedure for

Progress and Performance
Measurement
Last Updated: 03 September 2013

Table of Contents
1. Purpose (http://www.red-bag.com/jcms/#1)
2. General (http://www.red-bag.com/jcms/#2)
3. Responsibilities (http://www.red-bag.com/jcms/#3)
4. Procedure (http://www.red-bag.com/jcms/#4)
5. Flowchart (http://www.red-bag.com/jcms/#5)
6. References (http://www.red-bag.com/jcms/#6)

1. Purpose

It is company policy that baseline plans are established for each project, which de ne the targets
against which project progress and performance is measured and judged. Changes to the baseline must
be well controlled. Project progress and performance against the baselines must be monitored in a
consistent manner throughout the life of the project.

The purpose of this procedure is to de ne the principles to be used in progress and performance
measurement. Speci c details are covered elsewhere (see references).

2. General

The procedure applies to engineering progress and performance as well as to construction. Note that
for procurement the manhours are tracked in the engineering system, while procurement progress (e.g.
items purchased and delivered) is tracked in RMMS and is not covered here.

The application of this standard is mandatory for all projects with more than 20,000 H.O. manhours or
50,000 construction manhours, unless company management waives this requirement.

2.1 De nitions
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 Performance: A comparison of actual achievements with the
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baseline.
Baseline: (for this The project manhour budgets and schedules
procedure) (including the planned progress and manhour
expenditure curves) against which project
performance is measured.
Schedule baseline Approved project schedule(s). Note that schedule
set-up and performance is covered in the planning
procedures
Budget hours Budget hours are extracted from the project
estimate and should include all development
allowances and exclude contingency. Only direct
hours are to be included in progress calculations.
Scenario (weights): Cumulative budgeted percentages established at
each progress milestone, e.g. issued for comment
= 30%.
Earned value (manhours): The budgeted value (in manhours) of completed
work.
Percent complete: (at Earned manhours divided by total (current) budget
summary levels) manhours
Ef ciency: A comparison of earned and expended manhours.
Ef ciency is calculated by dividing earned
manhours by expended manhours. Ef ciency is
expressed as a percentage (>100% is good).
Work Breakdown Structure A standardized breakdown of the project, where
(WBS) all elements are coded in a hierarchical structure.
Project Execution Control: Standard company system that tracks document
(PEC) progress and calculates summary progress and
ef ciency.
Construction Performance A similar system for construction.
Monitoring System (CPMS):
 

3. Responsibilities

3.1 Individual Responsibilities

A. Project Manager

It is the responsibility of the project manager to ensure that the progress and performance
measurement program is set up and executed in accordance with this procedure.
It is the responsibility of the project manager to ensure that trends and variances identi ed by the
progress and performance measurement program are evaluated and that problems are mitigated
through corrective action.

B. Project Engineering Manager (Home Of ce System)

C. Project Control Manager (Home Of ce System)

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D. Construction Manager (Field System)
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It is the responsibility of these managers (B, C and D) to:

Oversee and supervise the implementation of the system.

Review the input to the system and ensure that it properly re ects the status.
Ensure that the results / reports are analyzed for trends.
Provide the project manager with timely and accurate performance data and analysis, especially for
items that are important to the overall project.
Provide recovery planning if important variances are identi ed.
Ensure that accurate records of project data are maintained.

3.2 General Implementation Responsibilities

Responsibility for detail implementation will be speci ed in other procedures and work instructions. In
general following applies:

home of ce progress input: discipline leads and project clerk

home of ce reports (and co-ordination of set-up): H.O. project control staff

eld system input: subcontractors, veri ed by construction personnel

eld system reports (and set-up): eld of ce project control staff.

4. Procedure

4.1 Requirements

Progress and performance must be monitored on a uniform basis using the earned value method with
manhours as a basis. This monitoring takes the form of the following speci c methods:

establishment of a WBS
establishment of budgets and scenarios
establishment of baseline plans
assessment of the value of the work done
assessment of manhours expended
production of reports
analysis and corrective action
incorporation of baseline changes

The following text describes the speci c requirements associated with each of the above mentioned
methods.

4.1.1 Establishment of a WBS

The WBS shall be in accordance with company and project guidelines and must cover the full scope.
Very large WBS elements should be avoided, because they limit the clarity of the reporting. See ref.6.3.

4.1.2 Establishment of Budgets and Scenarios

The total manhour budget must be distributed over the WBS elements to the lowest level required by
the systems (PEC or CPMS).

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Scenarios for the steps that a deliverable goes through should be based on the latest company
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standard or guide or on speci c client requirements. If custom scenarios are created for a project they
should generally be as simple as possible.

4.1.3 Establishment of a Baseline Plan

The project can report against one or more of the following:

Preliminary baseline (in case a plan is needed before suf cient information such as WBS, schedule,
etc. is available).
Baseline plan.
Forecast or revised baseline (see below).

Reports should clearly show which of the above is used.

As early as possible, the baseline plan (in the form of S-curves) must be developed on the basis of the
WBS, the budgets and approved schedules. Integrated baseline (original) plans must be made for
manhours (or staf ng) and for progress; the only difference between the two is the (assumed) ef ciency
variance over time.

If a new baseline plan for the project is required it shall be called “XXX forecast” where XXX represents
the month / year (e.g. April 2000) that the new forecast was implemented. Such a revision may for
instance be necessary near the end of the design period, to produce a realistic construction plan based
on the real scope. Another instance could be if major change orders have signi cantly impacted the
manhours and/or schedule.

4.1.4 Assessment of the Value of Work Done

Work done is to be entered in the progress system at the detail level. This can be as items or quantity
completed or as a progress step in a scenario.

For smaller tasks (low number of manhours) no credit should be taken until a scenario step is fully
completed and the full percentage for the scenario can be applied. This method generally applies to all
subcontracted construction.

Intermediate credit between scenario steps should be applied in case not doing so would result in
signi cant inaccuracy.

4.1.5 Assessment of Manhours Expended

Only manhours directly associated with the production of the deliverable should be included. General,
indirect and (H.O.) follow-up manhours should be booked to separate WBS codes and should not be
used in progress calculations.

4.1.6 Production of Reports

A proper system (preferably computerized) must be used to collect all data and perform all calculations.
Currently the PEC system is the standard system used for engineering and CPMS for construction.
Reports from these systems should be made available to all parties involved and to all that need to
know.

The reporting should cover the full range from “report by deliverable” to a “one page summary”.
Especially the high level summaries must be easy to understand by people who do not regularly work
with the system, such as clients. It is not required that summaries and graphs are part of the underlying
automated system.
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Frequency of reporting will be as de ned in other procedures or in the PPEM. Generally the H.O. will be
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on a monthly and construction on a weekly update cycle. Full status reporting for both will be monthly
in accordance with the project calendar.

Progress, ef ciency and manhours expended must be plotted on graphs against the baseline plan
and/or forecast. The number and format of graphs should follow project or company guidelines.

If an overall project progress percentage is to be reported, the following weighting will be used, unless
the client requires different weighting:

engineering 35%, construction 65% (preferred) or

engineering 25%, procurement 30%,construction 45% (alternate).

4.1.7 Analysis and Corrective Action

Using (preliminary) reports, the data will be analyzed for:

A. Inaccuracies in progress or manhour input;

If inaccuracies are found this may result in corrections to the input and rerunning the reports or this
may result in a manual correction to the summary reports only. Such manual corrections shall be
recorded in an auditable way (including reason), signed off by the project (control) manager and led
with the record copy of the reports.

B. Performance trends and problems;

All signi cant or undesirable trends shall be brought immediately to the attention of the project
manager, who will decide if action needs to be taken. Negative trends in ef ciency at the discipline
level should always be subject to a thorough review because they are often the result of structural
problems.

4.1.8 Incorporation of Baseline Changes

All changes to the project manhours that have been fully agreed (e.g. change orders approved by the
client) must be immediately (monthly) incorporated in the overall (summary) reports. The decision
when to incorporate these changes at the lower levels of the system may be based on practical
considerations by the project (control) manager.

4.2 Procedure for Set-up

During system set-up the following elements must be de ned and included in the monitoring system
by the people responsible (mostly project controls):

WBS
manhour budget and detailed distribution over the WBS elements
progress assessment scenarios
schedule
planned progress S-curves

Refer also to section 5 owchart.

4.3 Procedure for Running the System

Running the system consists of:

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 Assess the work done (quantity or percent). For engineering the disciplines themselves provide
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most of this input and in construction the subcontractors (veri ed by eld supervisors and/or
project controls)
Obtain the expended manhours.
Run the system and produce trial reports.

The trial reports will be reviewed by all responsible parties and corrections will be made as necessary
(see also 4.1.7.A)

The reports will be carefully analyzed for possible trends and problems (by all) and where appropriate,
corrective action will be initiated (project manager’s responsibility).

Refer also to section 5 owchart.

5. Flowchart

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6. References

  Document Number Title Level

6.1 CM-PE-920 Procedure for Project Execution control 2
(PEC)
6.2 BN-W-UC002 Work Instruction for Construction 4
Performance Measurement
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 6.3 CM-PE-921 Procedure for Project Work Breakdown 2
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