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    COVID19- Compression

    We have continued to receive praise on all of the information we have been providing in our COVID19 whitepapers.  This has prompted us to keep going.  The next big item that I feel is necessary, to provide insights on, is Schedule Compression and how it will undoubtedly cause even more problems if not properly understood and managed during COVID19

    As a result of the COVID pandemic, there is a lot of disruption in the world right now that will negatively affect ongoing construction projects across the globe.  Most of these COVID related items are uncontrollable and thus best managed by closely monitoring, analyzing, and responding to them.  But there are other current project risk issues that are happening right now and actually reside within our ability to control.  One of these more impactful risk issues within our ability to control is the over compression of project schedules.   Over compression of project schedules is much more common than one would think and typically results in considerable amounts of unnecessary costs related to inefficiencies, delays, and disputes.  This is a problem the construction industry has fought for decades, one that has resulted in billions upon billions of dollars in wasted spending year after year, and will be many times worse if implemented throughout in the COVID period.  The purpose of this paper is to be helpful in guiding stakeholders to understand schedule compression, when & how it occurs and how to recognize when a schedule has been over-compressed and leading a project down a bad path.

    What is Compression and Why Does it Occur

    In simple terms, compression in construction occurs when the decision is made to complete the remaining amount of work in less amount of time than originally planned.  It usually results from decisions to push off future work with float, or accelerate critical and near critical path activities in an attempt to mitigate historical delays.  Compression of schedules is common in construction because there are a lot of moving parts, tight budgets and the execution of project activities rarely goes as originally planned.  Not to mention, the industry as a whole consists of optimistic people with engineering mindsets and can-do attitudes.

    In addition, incorporating compression into the construction schedule can be a very effective way to manage a project – if done right.  However, and unfortunately, most of the time compression is not managed appropriately, leading to over-compression and impacting budgets, timelines, quality & relationships.  The fine line of managing acceptable levels of compression and over compression is unfortunately the tipping point for a project that is managed very well and one that goes sideways.  Therefore, finding the tipping point of acceptable levels of compression in a schedule is instrumental in project success.

    Calculating the level of compression in a schedule serves as a key indicator of risk associated with inefficiencies, delays, overruns, damages, claims and disputes and ultimately the reasonableness and viability of the schedule.  The higher the level of compression, the greater the risk. 

    So, as we enter into a new world of construction impacted by COVID, it is in all stakeholders’ best interests to understand the compression of the schedule in order to ensure acceptable compression levels exist.  Focusing on this one metric alone could end up saving the industry billions in unnecessary spending. 

    How to Calculate Compression on a Construction Project

    As previously stated, compression analysis is essentially a gauge of how much more work we intend to do in the remaining time left – and then comparing that to the original plan.  Therefore, in order to do this effectively, one must obtain and analyze project schedules and then perform the following steps:

    1. Calculate the current “earned” percent complete on the project, as per the most recent schedule update.
    2. Calculate the Remaining Duration of a project as per the most recent schedule update. Calculate in “calendar days” by adding up number of days between the “data date” of the most recent schedule update and the estimated project completion date (as indicated in the schedule).
    3. Determine the date in the original baseline schedule when the project should have achieved the “earned” percent complete that it had achieved to date (as per the most recent schedule update).
    4. Calculate the remaining duration of the project in the baseline from the date which the project should have achieved the “earned” percent complete (Step 3) and the planned completion date in the baseline schedule.
    5. Divide the planned remaining duration calculated in Step 4 with the current remaining duration obtained in Step 2 to calculate the Compression Index.
    6. Subtract 1 (or 100%) from the Compression Index to determine how much less (or more time) is allocated to completing the remaining work as compared to the baseline schedule.

    If you would like to download a more comprehensive document and  a visual and mathematical representation of how to calculate a compression index using the planned versus actual progress curves- See Below

    SmartPM™ was founded by Construction Industry Professionals who saw the need to solve a chronic problem in the construction industry; too many projects suffer from delays and cost overruns caused by the misinterpretation of available project data.  SmartPM™ is a real-time automated analytics platform that translates construction schedule data into objective, reliable, and concise visuals all stakeholders can understand and utilize proactively to address critical project risk issues. Automation allows for on-demand answers so better decisions can be made and the project can move forward.

    About SmartPM

    For additional support here, please give us a call at SmartPM or reach out to me directly via email at mpink@smartpmtech.com. We are here to help keep everyone on the same page and working together through this difficult time.

     

     

    Author: Michael Pink

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