1.040/1.401 Project Management Spring 2007 Lecture 7 Dr. SangHyun Lee Department of Civil and Environmental Engineering Massachusetts Institute of Technology Planning Basics

Project Management Phase FEASIBILITY CLOSEOUT DEVELOPMENT OPERATIONS Fin.&Eval. Risk Estimating Planning DESIGNPLANNING Organization

Outline  Planning – Hierarchical Project Structures  Work Breakdown Structure  Organization Breakdown Structure  Cost Breakdown Structure

Planning Components What: Work Breakdown Structure What: Work Breakdown Structure How: Plans and Specifications How: Plans and Specifications Who: Organization Breakdown Structure Who: Organization Breakdown Structure How much: Cost Breakdown Structure (via estimate) How much: Cost Breakdown Structure (via estimate) When: Schedule When: Schedule

Outline  Planning – Hierarchical Project Structures  Work Breakdown Structure  Organization Breakdown Structure  Cost Breakdown Structure

Work Breakdown Structure A WBS is a deliverable-oriented grouping of project components that organizes and defines the total scope of the project A WBS is a deliverable-oriented grouping of project components that organizes and defines the total scope of the project Work not in the WBS is outside the scope of the project Work not in the WBS is outside the scope of the project WBS is usually an operative tool used by contractors WBS is usually an operative tool used by contractors First step towards constructing a schedule First step towards constructing a schedule Central role in project monitoring and control Central role in project monitoring and control

WBS: Example Source: Shtub et al., 1994 different summary level

Work Package Lowest level Lowest level Distinguish from Others Distinguish from Others Single Responsible Organization Single Responsible Organization Assigned Start and Finish Assigned Start and Finish Assigned Budget Assigned Budget Limited Duration Limited Duration

Types of WBS Project WBS Project WBS Operative tool for monitoring and control contractor work Operative tool for monitoring and control contractor work Contractual WBS Contractual WBS Defines the level of reporting that the seller will provide the buyer Defines the level of reporting that the seller will provide the buyer May include less detail than Project WBS May include less detail than Project WBS Agreed between owner and contractor Agreed between owner and contractor

level 0 level 1 level 2 level 3 level 4 level 5 Functional Approach GAS-STEAM COMBINED POWER PLANT MAIN FUNCTIONS OF PLANT UNITS GAS INTERFACES STEAM TURBINE COMPRESSION STATION GENERATOR COMPRESSORS ENCLOSURE GAS TREATMENT SUB-UNITS WORK PACKAGES ITEMS COMPRESSOR 1 FOUNDATIONS COMPRESSOR 2 DESIGN INSTALLATION PROCUREMENT

Physical Space Approach Project Project Main building Main building 1st floor 1st floor Structures Structures Plumbings Plumbings Electrical Electrical HVAC HVAC 2nd floor 2nd floor Service building Service building Structures Structures Plumbings Plumbings Electrical Electrical HVAC HVAC

Procedure Approach Project Project Feasibility Feasibility Design Design Basic Basic Detail Detail Bid documents Bid documents Shop drawings Shop drawings Bid Bid Construction Construction Foundations subcontract Foundations subcontract Main building Main building Piles Piles Concrete foundations Concrete foundations Service building Service building Piles Piles Concrete foundations Concrete foundations Steel erection Steel erection Finishings Finishings Commissioning Commissioning

WBS: CSI Master Format - Example Source: Schaufelberger et al., 2002 Sample

Outline  Planning – Hierarchical Project Structures Work Breakdown Structure Work Breakdown Structure  Organization Breakdown Structure  Cost Breakdown Structure

Organization Breakdown Structure Decomposition of necessary resources to perform job Decomposition of necessary resources to perform job Identification & organization of the resources responsible with carrying out activities associated with the project Identification & organization of the resources responsible with carrying out activities associated with the project Used to keep track of specific work assignments & resource allocations Used to keep track of specific work assignments & resource allocations

Organization Breakdown Structure Project resources Project resources Project management team Project management team Project manager Project manager Construction superintendent Construction superintendent Field superintendent Field superintendent Office manager Office manager Scheduler Scheduler Accounter/controller Accounter/controller Field engineer Field engineer Construction force Construction force Worker Worker Subcontractor Subcontractor Electrical Electrical Plumbing Plumbing Insulation Insulation Tankage Tankage Roads Roads

OBS/WBS Linkages Source: Shtub et al., 1994

Outline  Planning – Hierarchical Project Structures Work Breakdown Structure Work Breakdown Structure Organization Breakdown Structure Organization Breakdown Structure  Cost Breakdown Structure

Cost Breakdown Structure (CBS) Breakdown of the costs of the various components of the structure including all work done by the subcontractors Breakdown of the costs of the various components of the structure including all work done by the subcontractors Serves as a basis for subsequent monthly pay requests by the contractor Serves as a basis for subsequent monthly pay requests by the contractor Used to continuously compare costs as they actually occur with the budget Used to continuously compare costs as they actually occur with the budget

Cost Breakdown Structure (CBS) Source: Shtub et al., 1994

Two Main Approaches CBS = WBS CBS = WBS CBS is the project cost control structure CBS is the project cost control structure CBS ≠ WBS CBS ≠ WBS CBS is the corporate multi-project cost control structure CBS is the corporate multi-project cost control structure Usually the case of a firm that has an integrated cost control system Usually the case of a firm that has an integrated cost control system

Diverse Combinations WBS + OBS: Task assignments WBS + OBS: Task assignments CBS + OBS: Budget monitoring of crews, etc. CBS + OBS: Budget monitoring of crews, etc. OBS + Schedule: Time-specific crew assignments OBS + Schedule: Time-specific crew assignments CBS + Schedule: Cost monitoring CBS + Schedule: Cost monitoring