Schedule Risk Analysisy(SRA)

Pedram DaneshmandAssociate Director

Blue Visions Management Pty Ltd

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Content

Project Time ManagementProject Time ManagementRisk & OpportunitiesProject Risk ManagementSchedule Risk AnalysisyResults ReviewA ti PlAction Plan

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P j t Ti M tProject Time ManagementHistory

Every project must be managed against a schedule;Every project must be managed against a schedule;

Project Scheduling has been around a long time;

Scheduling is one of the most widely practiced project management disciplines (Archibald and Villoria 1967).   

Project Time Management includes the processes required to accomplish timely completion of the 

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project (PMBOK, 2004).

P j t Ti M tProject Time ManagementProcess

Activity DefinitionActivity Definition

Activity Sequencing (logic)

Activity Resource Estimating

Activity Duration Estimating

Schedule Development

Schedule ControlSchedule Control(PMBOK, 2004)

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P j t Ti M tProject Time ManagementSchedule Development

The Schedule Development process includesThe Schedule Development process includes selecting a scheduling Method, scheduling Tool, incorporating project specific data within thatincorporating project specific data within that scheduling tool to develop project specific schedule Model and generating Project ScheduleModel, and generating Project Schedule.

(PMI‐PS for Scheduling, 2007)

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S h d l D l tSchedule DevelopmentMethods

Logic‐based Scheduling Methods (LSM)Logic‐based Scheduling Methods (LSM)Deterministic Techniques

E g Critical Path Method (CPM) Resource Optimisation CriticalE.g. Critical Path Method (CPM), Resource Optimisation, CriticalChain Method (CCM), etc.

Stochastic TechniquesE.g. Probabilistic Evaluation and Review Technique (PERT), PNET,Monte Carlo Simulation (MCS), etc.

( )Repetitive Scheduling Methods (RSM)Line of Balance (LOB)

Flowline Method

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S h d l D l t Schedule Development Inputs

Planners develop the project schedule by using:Planners develop the project schedule by using:Available templates;

Available quantities resources and productivity rates;Available quantities, resources and productivity rates;

Available work/scope statements;

Available construction logic andAvailable construction logic; and

Other assumptions/documents e.g. calendars, PMP, etc.

All these add uncertainties to schedule and reduce the confidence level. What about risks and 

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opportunities in the schedule?

S h d l D l t Schedule Development Outputs

The outputs of Schedule Development process are:The outputs of Schedule Development process are:(Deterministic) Project Schedule;

(Deterministic) Schedule Model Data(Deterministic) Schedule Model Data

(Deterministic) Schedule Baseline

(Deterministic) Resource Requirements(Deterministic) Resource Requirements

With all those uncertainties in the inputs and the possible risks and opportunities in the schedule, the 

i i h fid i hi h d l ?

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question is, how confident we are in this schedule? 

S h d l D l t Schedule Development Major Challenges

Uncertainties due to assumptions;Uncertainties due to assumptions;

Logic, constraints, resources, calendars and activity durations are not always clear and agreeddurations are not always clear and agreed;

What‐If Scenarios; and

Risks and Opportunities   

To have a realistic schedule, Schedule Development process should be improved by using Schedule Risk Analysis In other words Project Time Management

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Analysis.  In other words Project Time Management and Project Risk Management need to be integrated! 

S h d l D l tSchedule DevelopmentRisks & Opportunities

Every schedule has uncertainties/assumptions.Every schedule has uncertainties/assumptions.

Every schedule has risks and opportunities.Eff jEffect on project(positive or negative)

Time

ScopeCostQuality

So, Risks and Opportunities should be managed effectively to minimize the surprises!!

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Q y

P j t Ri k M t Project Risk Management Process

AS/NZS ISO 31000:2009

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Establish ContextA

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Identify Risks

SME

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Analyse Risks

E l Ri k SK A

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NEvaluate Risks

Treat RisksR

IS

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P j t Ri k M tProject Risk ManagementRisk Assessment

Risk Assessment includeRisk Assessment includeRisk Identification (both Uncertainties and Events)

Risk AnalysisRisk AnalysisQualitative

Quantitative (Schedule Risk Analysis or SRA)Quantitative (Schedule Risk Analysis or SRA)

Risk Evaluation

The goal is to have a better understanding of risks / opportunities and their overall impact on project completion date This will bridges the gap between

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completion date.  This will bridges the gap between traditional CPM schedule and the REAL project.

P j t Ri k M tProject Risk ManagementRisk Analysis

Risk Analysis is the process to comprehend theRisk Analysis is the process to comprehend the nature of risks (or opportunities) and to determine the level of risks (or opportunities) in the schedulethe level of risks (or opportunities) in the schedule

Risk analysis provides the basis for risk evaluation anddecisions about risk treatment; anddecisions about risk treatment; and

Risk Analysis includes risk estimation.

By Schedule Risk Analysis (SRA), we model the risks and opportunities (uncertainties and events) within the complexity of the interrelationships between

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the complexity of the interrelationships between the various tasks of the schedule.

S h d l Ri k A l iSchedule Risk Analysis(SRA)

SRA is a probabilistic analysis to quantify theSRA is a probabilistic analysis to quantify the impacts to a project, program or portfolio as a result of carrying uncertainties and/or risks andresult of carrying uncertainties and/or risks and opportunities or to simulate the possible what‐if scenariosscenarios. 

Relying on a accurate most likely schedule as a base, SRA takes the project time management to h l l f d fid

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the next level of accuracy and confidence.

S h d l Ri k A l iSchedule Risk AnalysisOverview

Available data gatheringAvailable data gathering

Schedule Review

Technical Research

Risks & Opportunities RegisterBoth Uncertainties and Events

Schedule Risk ModelSchedule Risk Model

Simulation

Res lts and Disc ssionsResults and Discussions

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S h d l Ri k A l i Schedule Risk Analysis Data Gathering

Required information for a SRARequired information for a SRAWell‐developed project scope;

Quality estimate excluding contingency and escalation;Quality estimate excluding contingency and escalation;

Schedule reflecting the estimate;

Risk management policy/processes in your organisationRisk management policy/processes in your organisation;

Risk checklist presenting typical risks and opportunities;

Ri k & O t iti T l tRisk & Opportunities Template;

Schedule Risk Templates/Models; and

S l f h d d iSample report of the process and recommendations.

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S h d l Ri k A l i Schedule Risk Analysis Schedule Review

How to review the deterministic schedule?How to review the deterministic schedule?Validation of all quantities (most likely);

Validation of all productivity rates (most likely);Validation of all productivity rates (most likely);

Validation of all durations (most likely);

Minimum number of constraintsMinimum number of constraints;

Complete logic network;

R bl d ti f t k dReasonable duration for tasks; and

Reasonable Critical Path.

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SRA S h d l R iSRA – Schedule ReviewSample Report

Confidential

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S h d l Ri k A l i Schedule Risk Analysis Technical Research

When the team is confident that the projectWhen the team is confident that the project deterministic schedule reflects the most likely case, the technical research can beginthe technical research can begin.

Historical data research

InterviewsInterviews

Internet searches, etc.

Issues may include items such as site access, Environmental Approvals, inclement weather, construction productivity concerns construction

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construction productivity concerns, construction modifications, equipment and material deliver, etc. 

S h d l Ri k A l i Schedule Risk Analysis Risk Register

The Technical Research will enable the scheduleThe Technical Research will enable the schedulerisk analyst to complete the Risk Register file:

The identified risks & opportunitiesThe identified risks & opportunities

Likelihood of the identified risks and opportunities

Impacted activitiesImpacted activities

Schedule and/or Cost Impact/s

S h d l d/ C t V i tiSchedule and/or Cost Variations

Correlation of risks and opportunities to one another

N t tNotes, etc.

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S h d l Ri k A l i Schedule Risk Analysis Risk Register (Sample)

Confidential

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SRA Ri k R i t (S l )SRA – Risk Register (Sample)Rain details

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SRA Ri k R i tSRA – Risk RegisterQuality Check

Major risks and opportunities been identified;Major risks and opportunities been identified;

The likelihood and impacts been assessed;

Risk Matrix aligned with the company’s risk management policy;

Impacts checked against the allocated calendars;

Correlations between risks been identified;;

Stage the opportunities if required; and

Duplications are minimised and addressedDuplications are minimised and addressed.

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SRA S h d l Ri k M d lSRA – Schedule Risk ModelUncertainties & Events

Developing the Schedule Risk Model involvesDeveloping the Schedule Risk Model involves modelling the potential impacts and the likelihood of the risks and opportunities on the project andof the risks and opportunities on the project and then applying those to the schedule.

Two aspects of the risks and opportunities shouldTwo aspects of the risks and opportunities should be modelled within the schedule:

E i U i i (O i i i M Lik l dEstimate Uncertainties (Optimistic, Most Likely and Pessimistic)

Events including probabilistic branching (probability andEvents including probabilistic branching  (probability and the impacts) 

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SRA S h d l Ri k M d lSRA – Schedule Risk ModelProbability Distributions

Probability Distribution is a way to indicate theProbability Distribution is a way to indicate the likelihood of values between the optimistic and pessimistic valuespessimistic values. 

Probability Distribution can be:U if (fl )Uniform (flat),

Normal (bell shaped),

( k b ll h )Beta (skinny bell shaped),

Triangle (pyramid shaped), or

Customised (user defined).

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SRA S h d l Ri k M d lSRA – Schedule Risk ModelProbability Distributions

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SRA S h d l Ri k M d lSRA – Schedule Risk ModelSpecial Conditions

Special conditions which needs extra attention:Special conditions which needs extra attention:Probabilistic Branching – which considers the situation where the outcome of an event can cause in two orwhere the outcome of an event can cause in two or multiple possible courses of activities.

Correlation between risksPositive Correlation: occurs when one risk goes higher, so must the other.

Negative or Adverse Correlation: occurs when one risk increases, the other must decrease. 

Inclement Weather or other external influencesInclement Weather or other external influences

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SRA S h d l Ri k M d lSRA – Schedule Risk ModelInclement Weather

Inclement Weather can be a significant factor in aInclement Weather can be a significant factor in a project schedule. Very often there is good data available but understanding the impact on theavailable but understanding the impact on the schedule is challenging.

A proper modelling will allow the team to defineA proper modelling will allow the team to define risk assessment criteria for inclement weather conditions in the schedule and include theseconditions in the schedule, and include these uncertain weather conditions in the risk analysis.

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SRA S h d l Ri k M d lSRA – Schedule Risk ModelInclement Weather

There are two distinct ways of defining inclementThere are two distinct ways of defining inclement weather events:

Event with results in an uncertain number of nonEvent with results in an uncertain number of non working days scattered throughout a period, e.g. rain or snow.

Event with results in a single block of non working time with a probability of occurrence, e.g. chance of a hurricane in a period.

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S h d l Ri k A l i Schedule Risk Analysis Simulation Methods

The SRA performs multiple simulations of theThe SRA performs multiple simulations of the project using random samplings of the relevant risks and opportunities considering their probabilityrisks and opportunities considering their probability and impact.

Two popular methodsTwo popular methods:Monte Carlo Simulation (MCS) – faster method but has a larger possibility of sampling errorlarger possibility of sampling error

Latin Hypercube Sampling (LHS) – slower method but less sampling errorsless sampling errors

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S h d l Ri k A l i Schedule Risk Analysis Simulation Process

Analysis does the simulation through multipleAnalysis does the simulation through multiple samplings or iterations.

Each iteration is picking one sample point fromEach iteration is picking one sample point from each activity and calculating the project outcome. 

User defines the number of iteration (e.g. 1000, 5000, etc) depending on the complexity of the project and its risk model.

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S h d l Ri k A l i Schedule Risk Analysis Simulation Tools

Main tools been widely used for simulation are:Main tools been widely used for simulation are:Primavera Risk Analysis (previously known as Pertmaster)Pertmaster)

@Risk for Project

Crystal BallCrystal Ball

The next slides are presenting results from simulations by using Primavera Risk Analysis.

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simulations by using  Primavera Risk Analysis.

S h d l Ri k A l i Schedule Risk Analysis Sample Programme

Confidential

Confidential

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S h d l Ri k A l i Schedule Risk Analysis Finish Date Histogram

Confidential

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S h d l Ri k A l i Schedule Risk Analysis Histogram & Statistics

Confidential

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S h d l Ri k A l i Schedule Risk Analysis Criticality Index Tornado

Confidential The Criticality Index of an e ca y de o aactivity is the proportion of the iterations in which the activity was critical Usuallyactivity was critical. Usually more attention will be given to the activities with Criticality Index of more thanCriticality Index of more than 50%.

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S h d l Ri k A l i Schedule Risk Analysis Criticality Path Report

The Criticality Path Report Confidentialhighlights the path through the project containing the tasks with the highest gCriticality Index values.

Percent Criticality is thePercent Criticality is the probability that an activity will be on the critical path; this indicates the relativethis indicates the relative importance of the activity to other activities in the 

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programme.

S h d l Ri k A l i Schedule Risk Analysis Criticality Distribution Profile

Confidential Criticality Distribution Profile plots the spread of Criticality Index in a project which gives an indication of the number and threat of near to critical path.

A high percentage (more than 40%) indicates a relatively tight programmetight programme.

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S h d l Ri k A l i Schedule Risk Analysis Action Plan

The accuracy of the SRA outcomes should beThe accuracy of the SRA outcomes should be improved through a number of iterations of this processprocess.

Based on the initial results, the team should:R i th i k i t d k difi ti h iReview the risk register and make modifications where require;

Make changes to the risk model accordingly;

Run the simulation again and repeat the process to achieve theRun the simulation again and repeat the process to achieve the most cost‐effective risk mitigation plan;

Finalise the Risk Action Plan as well as the Contingency Plan; and

Communicate this schedule with the team and then monitor it.

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About the Author

Pedram Daneshmand Associate DirectorPedram Daneshmand, Associate Director

Blue Visions ManagementPedram is a civil engineer with over 15 years experience in the construction industry He isPedram is a civil engineer with over 15 years experience in the construction industry. He ishighly skilled and technically proficient in many aspects of construction includingProgramming, Programme Performance Measurement, Quantitative Risk Analysis,Contract Management, Schedule Risk Analysis (SRA), Cost Risk Analysis (CRA), ProjectMonitoring & Controls (PMC) Systems, Earned Value Performance Measurementtechnique (EVPM) and POW (Program of Work) Planning & Controls.

As an industry innovation award winner for his programming and risk analysis skills,Pedram is currently an Associate Director with Blue Visions Management leading a teamof planning and controls professionals within the infrastructure sector. With more than 15articles in the professional conferences/journals he is been regularly invited to thearticles in the professional conferences/journals, he is been regularly invited to thetechnical presentations as one of the industry leaders in his field.

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