Comprehension Program Resource Management through Earned Value Analysis

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Plan. Earned Value Management and Resource ManagementEssential Data Elements and GraphicsEarned Value AnalysisEVA ScenariosEVA and Funding StatusBaseline ManagementSummary. Asset Management. Earned Value Management = Resource ManagementResources are work, material and other immediate and backhanded expenses required to execute the programFAA applies EVM at Program level to incorporate prime and subcontr

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Understanding Program Resource Management through Earned Value Analysis " Reading the Abba Charts" Wayne Abba PMI WDC Tool Time, July 18, 2006 Abba Consulting

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Agenda Earned Value Management and Resource Management Essential Data Elements and Graphics Earned Value Analysis EVA Scenarios EVA and Funding Status Basel i ne Management Summary

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Resource Management Earned Value Management = Resource Management Resources are work, material and other immediate and backhanded costs required to execute the program FAA applies EVM at Program level to incorporate prime and subcontractors, government FTEs, bolster temporary workers Managed in dollars, hours, or any quantifiable unit Cost and timetable information outlined specifically from contracts and projects for administration and revealing at all levels

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Budgeted Cost for Work Scheduled Budgeted Cost for Work Performed Actual Cost of Work Performed - Approved benchmark time-staged arrangement for assets to be expended (e.g. 100 hours) - Work finished as far as arranged assets (e.g. 100 hours) - Actual cost of the assets devoured (e.g. 120 hours) -Reconcilable to bookkeeping framework EVM Terminology and Resource Management Assume fundamental comprehension – Earned Value Management Concept and Terminology

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Agenda Earned Value Management and Resource Management Essential Data Elements and Graphics Earned Value Analysis EVA Scenarios EVA and Funding Status Baseline Management Summary

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At Complete Variance Risk Schedule Slip J M J An A J EVM Trend Analysis: Cumulative Time Now Prog Budget Management Reserve ACWP (Actual Cost) Resources BCWS (Planned Value) Cost Variance 400 Schedule Variance BCWP (Earned Value) 300 200 100 Time ▲ M F Approx. Time Variance

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Management Reserve EVM Trend Analysis: Cost/Schedule Variances Management Reserve Consumption $ Favorable Schedule Variance at Completion 0 $ Unfavorable Cost Variance at Completion Time Schedule Slip Cost Variance - Schedule Variance

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Agenda Earned Value Management and Resource Management Essential Data Elements and Graphics Earned Value Analysis EVA Scenarios EVA and Funding Status Basel i ne Management Summary

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A-10 A-12 B-1 B-2 C-17 DDG-51 F-18 F-22 C-130H & J Chinook Apache Longbow Blackhawk Kiowa Seahawk Comanche T-45 T-46 CVN-68 SSN-21 SSN-688 SSN-774 T-AOE-6 LHD-1 Crusader M1 M2/M3 FVS MK-48 ADCAP MK-50 ALWT SSBN-726 CG-47 MH-53 V-22 Osprey P-3 Orion RCAS LIF Hawk DoD Experience B-1 Engines F-414-GE-400 Engines Chem. Demilitirization D-5 TRIDENT II Javelin Pershing II FAMECE/UET Satellites A/BSY-2 THAAD ABL GBL * Aggregate overwhelm 5.5% on 115 biggest DoD contracts ($3.0B on $84.8B @ 60% finish), balanced for over target baselines an/o 4/30/2000 * OUSD(AT&L)ARA/AM, 1/16/01

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Earned Value Analysis Earned Value Analysis = Understanding the connections among the EVM information components EVM teach gives certainty Contractor and PM administration frameworks are sufficient Data are compressed from the Control Account level, where specialized/plan/taken a toll coordination happens Use the information for administration and oversight Data quality gets to be "self-policing" Ask questions – be an educated, basic purchaser

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J Planned Resource Consumption Program Budget $M 40 Management Reserve 35 30 25 Resources BCWS (Planned Value) Time-Phased Plan for Consumption of Resources Typical "S" Curve 20 15 10 5 ▲ M J F M A J D A S O N Time

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J M J An A J Integrated Baseline Review (IBR): Does Planned Resource Consumption Make Sense? Program Budget $ Resources Front Loaded Normal 400 End Loaded 300 200 100 Time M F

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Program Budget Front Loaded $ Resources 400 300 J An A J M J 200 100 Time M F Baseline Extremes: Front-Loaded Rapid begin Most assets to be expended right on time in plan Questions What is reason for plan? Are assets accessible? Do IBR and audit supporting documentation

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Program Budget $ Resources 400 End Loaded 300 200 100 A J M J A J Time M F Baseline Extremes: End-Loaded Slow begin Most assets to be devoured late in plan Questions What is reason for plan? Is calendar sensible? Do IBR and survey supporting documentation

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Normal Baselines Normal "S" bend for arranged esteem Questions Is extension completely and commonly comprehended (utilizing WBS)? Does the standard catch all work? Work assets Are in-house assets accessible and sufficient? Are temporary worker assets accessible and sufficient? Material assets Are contracts granted/arranged? Is the calendar consistent and finish? Chance administration Is Management Reserve sufficient given expected hazard?

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Normal Baselines cont'd Management System Does administration framework meet ANSI EVMS rules? Are administrators prepared? Are EVM strategies objective? Is "Level of Effort" extension appropriately classified? The Bottom Line Does the program have an executable arrangement that incorporates scope, arranged cost and timetable assets and hazard? Assuming "no," go moderate… preferable to do it directly over to fizzle

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Time - Based Planning Horizons Rolling Wave 2 Rolling Wave 3 Rolling Wave 1 Program Budget $ Resources Initial detail arranging (6 Months) 400 300 Future work in arranging bundles Detail arranging in view of date-book Arbitrary 200 100 Time S D M J D M J S

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Event - Based Planning Horizons Critical Design Review Preliminary Design Review Program Budget $ Resources Initial detail arranging Future work in arranging bundles Detail arranging in light of specialized targets Facilitates occasion based announcing motivations Better coordination of specialized, calendar and cost execution and hazard administration 400 300 200 100 Time S D M J D M J S

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Agenda Earned Value Management and Resource Management Essential Data Elements and Graphics Earned Value Analysis EVA Scenarios EVA and Funding Status Basel i ne Management Summary

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Earned Value Analysis Scenarios The Ideal Portfolio Management Early Warning Indicators Know How to Get Help

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Schedule Slips Problem pointers Early, vast and ominous timetable fluctuation Front-stacked pattern Zero change "Pipe dream" Slow asset utilization "Can't arrive from here"

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Unfavorable Schedule Performance Time Now Prog Budget BCWS (Planned Value) Schedule Slip $ Resources 400 Schedule Variance BCWP (Earned Value) 300 200 100 Time ▲ A M J F M A

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Unfavorable Schedule Performance Time Now Schedule Variance at finish is zero by definition-regardless of the possibility that program finishes late $ Favorable 0 $ Unfavorable Time Schedule Variance Schedule difference ought to supplement "genuine" timetable examination

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Cost Overruns Problem markers Early, huge, horrible calendar change Time is cash Unfavorable cost difference Front-stacked benchmark Zero fluctuation "Pipe dream" Excessive asset utilization "Can't arrive from here"

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At Complete Variance J M J An A J Unfavorable Cost Performance Time Now Prog Budget Management Reserve ACWP (Actual Cost) $ Resources BCWS (Planned Value) Cost Variance 400 BCWP (Earned Value) 300 200 100 Time ▲ M F

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Management Reserve Unfavorable Cost Performance Time Now $ Favorable 0 $ Unfavorable Time Cost Variance -

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Management Reserve Evaluating Future Performance Time Now $ Favorable 0 PM Variance at Completion $ Unfavorable Time Cost Variance - When/by what means will execution make strides? Survey at suitable time Tie PM assessment to consistency

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Management Reserve Evaluating Future Performance Time Now $ Favorable 0 PM Variance at Completion $ Unfavorable Time Cost Variance - When/by what method will execution move forward? Audit at suitable time Tie PM assessment to consistency

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A-12 Contract – Front Loaded Large ominous differences "Draw an obvious conclusion" Front-stacked Baseline (or consummation date isn't right) No work arranged '93 – '96?

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A-12 Contract – Actual Cost versus EAC Contractor and PM EACs both suggest no cost gathering for quite a long while amid key assembling/test stages Realistic EAC "off the diagram"

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Excessive Optimism Problem pointers Future execution anticipated to be fundamentally superior to anything verifiable execution Variance drift examination Cost Performance Index contrasted with To Complete Performance Index (CPI versus TCPI) Actual pattern and inferred future pattern veering One of most intense EVA strategies Independent EV investigation equalizations PM inclination

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A-12 Contract – Optimistic EACs Contractor gauges program will start to underrun PM evaluates all issues will be settled – and no new issues will happen Realistic EAC difference "off the outline"

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Super Hornet Cumulative Trends Cost-sort contract Significant cost hazard No changes Too great to be valid? No extension change Effective arranging IPTs utilized EVM adequately Excellent execution

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Super Hornet Variance Trends Substantial Management Reserve

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Average Future Performance must Equal TCPI To Achieve Indicated Efficiency in Estimate at Completion Given Performance to Date (total CPI) Past versus Future Efficiency: CPI versus TCPI Time Now TCPI EAC Efficiency Index CPI Cum CPI Current >1.0 1.0 <1.0 Time

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CPI CUM TCPI EAC ( ) 1 x 100 No Confidence Questionable Percent Difference Cumulative Efficiency/Required Efficiency Acceptable Questionable No Confidence Contract: FAA XXX Contractor : Air Systems Inc. as of January 2006 Confidence in Estimate Can program finish at PM's present gauge? Adjusted from USAF

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Zeroing in on the EAC Contract Budget: PM Estimate: Independent High: Independent Low: $20.8M $23.3M $22.0M $19 $20 $21 $22 $23 Contract: FAA XXX Contractor: FA

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