Class 109: Gantt Charts

WHAT IS A GANTT CHART?

A Gantt Chart is a type of bar chart that provides a graphical representation of a project that includes the activities that make up the project. The activities, represented as bars, are time scaled and show activity ID, description, duration, start and finish dates, and an overall sequencing of the flow of work.¹

Example of a Gantt Chart:

The example above shows a typical construction schedule. The left half of the schedule identifies important information in the WBS; information such as start and finish dates, activity durations and total float for each activity. The right half of the schedule displays the Gantt chart. The rectangular horizontal bars represent activities. The red bars identify forecasted critical activities, the green bars identify forecasted activities with positive float, and the blue bars identify activities that have been completed. The diamonds are milestones and typically represent important contractual items, such as substantial completion. The yellow bars and diamonds identify dates from the attached baseline schedule. The varying lengths represent the activity durations. The activity bars are logically tied to other activities or milestones. 

Additionally, a time scale is applied to the Gantt Chart, which provides the viewer a sense of the amount of work remaining at any point in time and can help prioritize completion of the work.  With activity names noted beside the activity bars, a simplistic view allows for a quick and easy review of the schedule. 

What are some other reasons to have a Gantt chart?

Gantt charts can help identify how many resources are required to complete the project.  For example, overlapping bars indicate activities that will be executed at the same time and will require multiple resources to complete. 

Gantt charts can also be used to identify various risks in execution. For example, activities with very long durations, identified in the Gantt chart by long uninterrupted horizontal bars, are likely made up of multiple smaller activities that are logically tied but not broken out in the schedule.  If any of the smaller activities are delayed, the larger bar’s duration is extended. Since the activities are summarized by one long bar rather than shorter specific activities, it would be difficult to identify the specific event causing delay within the summary activity. From reviewing the Gantt chart and noticing the summary activity, project schedulers can break out the summary activity into more detail and avoid future issues with analyzing project delays.

Gantt Chart Summary:

1.      Gantt charts graphically represent a construction schedule.

2.      Gantt charts make it easier to identify schedule risks and can help create a mitigation strategy.

Key Terms:

Construction Schedule - a comprehensive and realistic plan that represents the specific activities, reasonable duration for the activities, and the planned sequence of work for the project

  Logic - Relationship describing the interdependency of starts and finishes between activities or events

 

Resources:

1. AACE International Recommended Practice.  91-R16: Schedule Development AACE International Recommended Practice https://web.aacei.org/docs/default-source/vl-papers/22776.pdf

Class 108: Work Breakdown Structures

WHAT IS A WORK BREAKDOWN STRUCTURE?

A Work Breakdown Structure, commonly abbreviated to WBS, organizes a construction schedule by grouping together activities based on similar trade or physical location in an expandable outline format. A well-organized WBS enables an efficient review of a construction schedule. AACE defines a WBS as a “systematic approach to reflect a top-down product-oriented hierarchy structure with each lower level providing more detail and smaller elements of the overall work.”¹

Example of a WBS:

The example above shows a construction schedule for a high-end mixed-use skyscraper.  All activities are organized in a multi-level WBS. The project is first organized by phase (owner milestones, pre-construction, etc.) and then by trade (electrical, plumbing, etc.). For example, to review the work remaining to “Bid and Award” the “Plumbing” scope of work, simply locate this section in the WBS and review the required work and its associated dates and logic. Without a succinct WBS, searching through thousands of activities in a schedule or trying to locate specific trades would be an inefficient process. 

Why is a WBS important?

A WBS becomes more important as schedules complexity increases.  A project can have multiple areas or phases, each with its own activities and milestones tied to contractual obligations. Breaking out the phases of work before and during construction helps organize the project and define responsibility for different tasks. Using a consistent WBS can also help non-project personnel quickly understand the status of the project without having to understand the intricacies of the schedule.

WBS Summary:

1.      Work Breakdown Structures help keep construction schedules organized and manageable.

2.      Work Breakdown Structures reflect a top-down product-oriented hierarchy structure with each lower level providing more detail.

Key Terms:

Work Breakdown Structure (WBS) - grouping of activities within a construction schedule based on similar trade or physical location

Construction Schedule - a comprehensive and realistic plan that represents the specific activities, reasonable duration for the activities, and the planned sequence of work for the project

Logic - Relationship describing the interdependency of starts and finishes between    activities or events

Resources:

1.      AACE International Recommended Practice.  10S-90: Cost Engineering Terminology. https://web.aacei.org/docs/default-source/rps/10s-90.pdf?sfvrsn=58

Three Key Tips to Optimizing a Contractor’s Risk Management Function

Every single day we encounter uncertainty that stems from risk. We constantly come across countless activities that have the potential for undesirable consequences. There are varying level of risks. One area where risk is consistently high is in the construction industry – mainly on project sites. Several factors can jeopardize a multi-million-dollar construction project, so the risk on a project must be well-managed. Not only can risk management help avoid unwanted outcomes, but it also has the potential to streamline operations, improve safety, and boost project confidence as well as profit.

              Risk Managers are a key component of the construction industry as they assess, control, and monitor the possible hazards of a project. In a recent interview with Peter Kapler, Senior Vice-President and National Director of Performance Security at AON, he states that “Risk Managers can play a vital role as an information and knowledge hub.” By doing so, they can beneficially serve the overall enterprise at a construction company. During our sit-down with Peter, he shared three tips on how contractors can optimize their risk management function:

1.      Breaking Down Silos

2.      Leveraging Data

3.      Empowering Your Risk Management Team

Breaking Down Silos

              A Contractor’s Risk Management team sits in a unique position as they have the ability to make connections between Operations, C-Suite, and external insurance carriers. Risk Managers serve as a knowledge hub because they have access to several sources of information – their internal risk data, and guidance from industry sources such as RIMs and IRMI, and benchmarked data and Risk Engineering insights from their Carriers.  By utilizing Carrier input, Risk Managers can provide insights into managing risk better; however, this is only possible if the silos within an organization are broken down and better connectivity established between Risk Management, Operations, and the C Suite.

Leveraging Data

              Another way Contractors can help optimize their Risk Management function is by leveraging data. What does this mean? To harness data into something meaningful. According to Peter Kapler, there are several pools of data available within a construction company’s ecosystem; if this data is not appropriately pooled and linked together, there is a missed opportunity for the discovery of the true cost of risk. Data can help Risk Managers make intelligent decisions on how to price risk - it is important that the data is evaluated and used efficiently and effectively. Integrating this data across Operations, Finance, and Risk Management can improve the overall enterprise of the construction project; however, this cannot be effective if the data is appropriately linked together.

Empowering Your Risk Management Team

              The third tip Peter shared with us on optimizing a contractor’s risk management function is to empower the risk management team. If Risk Managers develop internal relationships and build alliances within Operations, they will have an easier time delivering important risk information. When a solid relationship with the operational team exists, Risk Managers can also influence the C-Suite by providing comprehensive data that significantly affects the contractor’s profitability and well-being.

In conclusion, is important that silos within an organization are broken down, so a vested Risk Management team can effectively communicate important data and information to operations, C-Suite, and external Insurers. By breaking down silos, leveraging data, and empowering the risk management team, a construction company will see an improvement in their enterprise. An entire organization can benefit from the wealth of knowledge risk managers possess about both the marketplace and its organization. If you would like to learn more about what Peter Kapler has to say, listen to our podcast, 3 Key Tips to Optimizing a Contractor’s Risk Management Function.

Links:

Connect with Peter on LinkedIn
Follow AON on LinkedIn
Visit AON on the web here 
Email Peter at peter.kapler@aon.ca 
Connect with Peter Duggan
Connect with Mike Diercksen