Schedule Margin
Glen Alleman MSSM
Vietnam Veteran, Applying Systems Engineering Principles, Processes & Practices to Increase the Probability of Program Success for Complex Systems in Aerospace & Defense, Enterprise IT, and Process and Safety Industries
The term schedule margin is well-known in project management. What needs to be better known outside the US Government (USG) contracting world is how schedule margin is treated in the Performance Measurement Baseline (PMB). The PMB is the program record document subject to the Defense Contract Management Agency (DCMA) oversight. This oversight starts and ends with Earned Value Management (EVM), defined in ANSI-748-B.
This may seem irrelevant to those outside the USG program, but it should not. EVM is a powerful tool for project and program management, no matter the domain or the context within that domain.
Schedule Margin and the PMB
Schedule margin is a project management tool for dealing with schedule contingencies. Schedule margin provides a separately designated "buffer" to "protect" the delivery dates.
There are two approaches to schedule margin.
In the first, the final task is baselined to be finished ten days before an End-of-contract (EOC) milestone is aligned with the contract need date. The calculated difference between the final task completion and the contract need date is the schedule margin to the contract need date.
In the second, the EOC milestone is baselined to finish immediately after the final task – which is still baselined to finish before the contract needs a date. The calculated difference is the schedule margin to the contract need date.
The margin is the same in both examples, but the method used to calculate the margin is different. In the first case, the margin is implicit if the Contract Completion Date is usually not included in the Integrated Master Schedule as an activity. The second is explicit since the Finish Milestone is in the Integrated Master Schedule.
The second example is preferred simply because a visible activity connects the last task with the "need" date. In both cases, the "Planned Finish" is the same - the end of the Last Task. Or any Task if there is a margin for intermediate deliverables.
No matter which approach is used, a Schedule Margin is needed. No schedule margin means you're late.
How To Calculate Schedule Margin
Now comes the question of calculating the schedule margin. Yes, the schedule margin is calculated. It can be "stated." However, the schedule margin is like the "stated end date" many blogs, white papers, and voices complain about. If you have a stated end date and need to know the schedule required margin, your project is late before it starts.
Here's how we calculate the space and defense business schedule margin - Monte Carlo Simulation. It's that simple, and it's that hard.
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The schedule itself must be credible. There are no hard constraints. No weird dependencies - only Finish to Start. No bogus durations. The Most Likely duration, for the starting point of the calculation, must be "most likely." That is not the average. The duration would appear most often if you performed this work repeatedly and did not learn anything from it. This is a common mistake when first learning about probabilistic risk analysis.
Sizing Schedule Margin using Monte Carlo Simulation
The Monte Carlo approach is discussed as well. Both are needed for a credible plan in our domain. Here's how you do it:
The probabilistic duration needs to be discussed a bit more. There are several approaches here.
With this three-point information, the MSC can be run (Risk+ assumes 0/100, @Risk can be used with 10/90).
It is important to remember that the probabilistic and deterministic completion dates are two very different things. The buffers must be set to zero for the deterministic date to match the probabilistic date. When the schedule is being executed, they are set to the forecasted duration needed to "protect" the assigned dates.
Finally, the MSC is usually run weekly after the status meeting when the Estimates to Complete are from the project team. This run forecasts any changes in the probabilistic complete dates and any margin erosion. Tracking margin erosion is a critical indicator of project health.
Here's an example of an MSC tool pointed at a task with a symmetric distribution - which rarely happens in real life (the symmetric part).
The 80% confidence value is shown in the table to the right. The Cumulative Distribution Function (CDF) shows the likelihood of each specific date occurring during the simulation. The symmetric form of the distribution is suspect since, in practice, tasks hardly ever finish early in the same number of times. They finish late by randomly sampling all the durations in the distribution, describing the task's duration.
Teacher & Coach in Projects and Procurement
6 个月You said "There are two approaches to schedule margin." That might be the case if you are not scheduling using the #CriticalChain approach. That uses quite a different approach. If EVM is mandated under contract, then a common approach is to calculate an unbuffered version of the CC schedule to use for EVM calculation to meet the contractual commitments. This EVM/un-buffered version of the schedule is only used for client reporting, not to manage work within the project team itself, where things like CC's fever chart and other flow-based metrics are preferred.
Project Support/Controls for Interesting Projects - Canada/EU/Africa/Asia, Construction, Power to X, Minerals and Metals, Power, Infrastructure, Data Analysis, M. Sc.ME, SCS, SE, EV, Multilingual portfolio
6 个月Thank you all for the good discussion.
Portfolio Planning & Delivery | PMP | P3O Practitioner | AgilePM Practitioner | Six Sigma | Project Data Modelling | PredAptivePM
6 个月You said; ‘The schedule itself must be credible. There are no hard constraints. No weird dependencies - only Finish to Start.’ It is guaranteed that the result will be inaccurate. Such a Monte Carlo simulation model doesn’t represent reality, as even a simple project has parallel activities. 2. Reliable MCS modelling requires a detailed Dynamic Delivery Model, not a high-level progress tracker. There are many other requirements for the DDM to be creditable.
Post Graduate Student Masters in AI at La Trobe University
6 个月There are possibly 2 reasons why organisations don't carry out schedule risk to determine contingency: 1). Ignorance, 2). Are risk takers, or gamblers with their clients time and money. I was recently threatened by the sack if I mentioned the word "Contingency".
Global Director - Risk and Consulting at Hatch
6 个月I like this post. I am continually amazed how many people don't think of schedule contingency for their project schedule. They of course always have a contingency for the estimate but don't seem to realise that you need it for the schedule as well to protect key Milestones and of course a more reliable and predictable start of revenue. Also creates problems trying to explain to them the schedule risk analysis results and why their schedule has nearly zero chance of being achieved given the level of risk, merge bias and of course we are comparing against a schedule with no contingency allowance. Cheers Greg