I read an interesting account recently of a nuclear facility that began experiencing severe problems. The expert operators responded by the book and made all the right decisions. The end result was catastrophic failure because the right decisions were the wrong moves at that particular time. Why? It was because a sophisticated computer virus was feeding them ânormalâ data while simultaneously generating an abnormal condition. Many turnaround failures are caused by similar means: smart, well-trained managers making correct decisions with incorrect information. Flawed data is a flawed decision waiting to happen.
One principal data item that has persistently been a point of miscommunication for turnarounds is actual job progress. While one personâs honest assessment of a certain job is 50 percent, another personâs honest assessment yields only 35 percent. Both individuals may have very strong opinions concerning the accuracy of their assessments, but the fact there is disagreement at all is evidence there is a significant problem. It may be that both individuals are relying on subjective personal estimates rather than relying on rules of credit â an empirical, reliable system for calculating progress.
How can we improve the use of rules of credit for better turnaround performance? Arguably, rules of credit donât matter much for short-duration activities that fit within a shift. These short-duration activities start at an indisputable value of zero percent and typically go directly to an indisputable value of 100 percent. But where rules of credit do matter, they matter a lot. Here are a few examples of how they can be improved:
⢠Donât estimate or negotiate rules of credit â Rules of credit are not something one establishes arbitrarily, nor are they settled through bargaining. They are established based on a mathematical distribution of preapproved units of measurement. This presupposes 1) an agreement on âpercent complete typeâ is in place for all activities in the schedule and 2) the updater is informed on the precise values assigned to each activity.
⢠Assign the appropriate schedule percent complete type â Percent complete type should be set to âdurationâ for activities where remaining time is the basis of progress, set to âunitsâ where remaining man-hours are the basis of progress and set to âphysicalâ where remaining linear measurements (e.g., square feet, tons, boxes, gallons) are the basis of progress. When 50 percent of the units are remaining, this alone forms the basis for a 50-percent rule of credit.
⢠Include percent values in key activity descriptions â âTransport valve to shopâ could be rendered instead âtransport valve to shop (25 percent)â if 75 percent of the man-hours remain to be earned. This takes the unpredictable guesswork out of updating schedule progress, eliminates disagreement between owners and contractors on what the actual progress is, and prevents project managers from making critical decisions based on suspect data. One cannot formulate good strategy from bad data.
⢠Use activity steps on long-duration activities â Activity steps have not received due recognition for their high value because so many project controllers do not understand how to use them. They can be printed for use in the field, reduce the amount of clutter, logic and coding assignments required in a schedule, and automatically assign the correct percent complete to long-duration activities. (Steps can be used only with physical percent complete type activities.)
An added bonus for using rules of credit is it allows for easier reassignment of jobs in progress from one contractor to another. Before work is reassigned, the recipient contractor is given an opportunity to inspect and agree on the quality and quantitative status of the work heretofore performed, placing clear accountability for remaining work squarely on the recipient contractor.
Remember to update the schedule baseline to ensure earned man-hours are properly credited!
For more information, contact Mike Bischoff or Ray Smith at (281) 461-9340, email sales@onpointdifference.com or visit www.onpointdifference.com.
