:AACE CERTIFICATION 2009-2010:

Next reading on Humphrey’s books on Chapter 19 , “Schedule Risk Assessment” supports my previous understanding in regards definition and relationship between technical risk, schedule risk and cost risk that they are unlikely talking about classification of risks but the classification on “assessment “ of risk. I put some highlights and summary the reading to complete the terminology of schedule risk assessment as follows : the schedule risk assessment are consisted on two analysis from the critical path and the highest risk path. The highest risk path analysis is interested one beside it’s something new , the analysis has given my understanding how deep and important the risk analysis to be implemented in the project management as the risk drive delayed on schedule and budget overrun of project. Unfortunately, schedule risk assessment is rarely addressed at current works while it’s analysis are considered earlier warning of threats to the schedule and allows integration of risk concern into project planning. Practically in current project management activities, It is just the critical path will be receiving more attention result that a non critical path may be less well managed but still have a lot of overrun risk where the high risk may be located in the non critical path. Additionally, CPM is just the beginning of a complete schedule risk analysis but does not explore the likelihood of other durations occurring where the highest risk path are generally identified at long duration and risky, but may not be the critical path. Results can be serious when the potential impacts of high risk schedule path are ignored such on the contractor’s side : incur penalties, lost of incentive payments, additional costs may be incurred in the rush to accelerate efforts in an attempt to meet the completion schedule. Also on the owner’s side are lose revenue and profits on a daily basis because of the unavailability of the product as well as late schedules will be lead to budget overrun.

The steps involved in assessing the risk of a schedule are as follows :

1. Create CPM/PDM network
2. Develop activity duration estimates
3. Calculate a duration distribution for activities
4. Compute the path distribution
5. Evaluate the results include estimated completion contingency and identify high risk paths
6. Initiate status monitoring

Learning on Developing the Critical Path Method
Precedence Diagram Method is first step to create to develop logical network activities which will be applied on the Critical Path Method in the Mine Road Development Project. Initially, I had improperly approached by straightly way to develop the time phased bar chart to create the CPM and result that the bar chart is useless and quite messy to apply on the CPM as the logic activities network is incomplete to develop. The PDM shows three possible relationships i.e. : Finish to Start (FS), Finish to Finish (FF), Start to Start (SS) and most activities content logic patterns of series, parallel and divergent with an exception of convergent pattern at commissioning activities where all activities have to be completed for commissioning. However, there are 4 activities have an cycle connection with each others show the activities have integrated operational system and depended each others such :

• Sub base construction could not be started and finished prior drilling and blasting commenced and finished.
• Load and haul of overburden and ore could not be commenced prior sub base construction commenced and on the other hand sub base construction could not be finished prior load and haul of overburden and ore completed.
• Bench sloping could not be started and finished prior load and haul of overburden and ore commenced and finished.

CPM Analysis of Mine Road Development Project

The CPM shows that the relationship of those 4 activities result that those activities are located in the critical path even if the some activities have duration less than it is required in the critical path such drilling and blasting and sub base construction, but delayed on starting or finishing the activities will result the longest activity (load and haul overburden and ore) will be on delayed. An exception activity of bench sloping, CPM shows that the early/last start is in the critical path but early/last finish is not located in the critical path. As some critical path activities have less duration that it is required in the critical path duration i.e. : drilling and blasting, sub base construction and sloping the bench, these activities have potential overrun cost due to contractor may add more contingency on standby cost and lower productivity of the equipments cost as should be unless the standby equipments could be allocated to support other potential parallel activities or may somehow the contract of scope of those equipments could be jointed with other project at adjacent area (there is plan to contract out another project of sediment pond construction in the same period time of construction).

Now, the 2 of 6 steps schedule risk assessment have just been accomplished . Hope, get some exciting learning points to work on the highest risk path analysis on next week.

# posted by Andy @ 12/05/2009 11:11:00 AM