Commercial Construction Site

The Power of Project Controls: Monitoring Schedule Compression

A proper project control process uses real-time data to arm project management with key metrics that positively influence project outcomes. Project controls are becoming increasingly more important, as the current built environment experiences many unexpected challenges, which tend to negatively impact project end dates. 

When unexpected delay events or resource availability issues arise, understanding schedule compression becomes highly useful in keeping projects on track. And, while compressing construction schedules to mitigate historic impacts offers an avenue for keeping projects within their prospective deadlines, it tends to add an abundance of unnecessary risk to construction projects.

Compression should be studied thoroughly to ensure that the right decisions are made during the project, the data-driven decisions.  This article takes a deeper dive into what schedule compression is, how it is calculated, and the risks associated with it.

 

What is Schedule Compression?

 

Let’s face it: unexpected delays happen in commercial construction. It’s inevitable–there are simply too many moving parts involved in multi-million dollar projects.  With supply chain shortages and other issues impacting the current built environment, most of the time, construction schedules need to be adjusted to deliver on time. How you manage these delays is up to you. But, one of the most common delay mitigation strategies is through compressing the schedule. 

According to PMBOK, schedule compression shortens project schedules without changing project scope, to meet contractual deadlines or other project goals. In other words, schedule compression results from projects progressing slower than initially planned and the desire to keep the end date from changing.  The inevitable result?  More work has to be earned over less time than originally anticipated.

logic ties showing logic without compression in green and logic with compression in red below

 

This may seem like an ideal way to recover against critical path delays, meet deadlines, avoid disputes, and accomplish other project objectives. However, in reality, compression should only be used when it's achievable, understood, and doesn’t put the project at risk.

 

Risks Associated with Schedule Compression

 

Compressing project schedules is risky because it means project teams are trying to squeeze more work in less time than originally planned. SmartPM has been studying schedule compression for years and has found some interesting data that points out the criticality of understanding schedule compression.

SmartPM studied over 15,000 project schedules and found that 70% of projects are earning less than 90% of their originally planned progress at any given point in time.  So, on average, most schedules require compression to get done on time at one point or another.  

With this in mind, it is crucial for project teams to always be aware of the level of compression throughout the project to manage time and budget more effectively. Otherwise, projects are going to be putting quality, safety, and ultimately trade contractor performance in danger.

 

risks of schedule compression shown in red with icons depicting the result of delay

 

How to Calculate Schedule Compression:

 

To understand compression, one needs to be able to quantify it.  Calculating compression levels offers an opportunity to effectively manage and avoid the instability associated with highly compressed construction projects. Furthermore, developing an understanding of the compression levels within a schedule ensures acceptable levels are not exceeded. This is critical for getting an accurate estimate of the work remaining and the time left to finish a project. Take a look at how you can calculate the level of compression within your projects to better understand the risks associated with it:

  1. Calculate Earned Value - Calculate how much of the project has been completed using the Earned Value (EV) of the most recent schedule update.
  2. Calculate Expected Days Remaining - Calculate how many calendar days are expected to be in between the most recent schedule update and the projected completion date.
  3. Determine Planned Progress - Using the original baseline schedule, determine the date where the current earned value (EV) should have happened.
  4. Calculate Planned Remaining Duration as Per the Original Plan - Calculate what the remaining duration of the project should have been in the baseline schedule from the date that the project should have achieved the "earned" percent complete (step 3) and the planned completion date in the baseline schedule.
  5. Calculate Compression Index - Divide the planned remaining duration calculated in step 4 with the current remaining duration obtained in step 2 to calculate the compression index. 
  6. Determine Time Allocation - 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. 

 

graphical representation of planned versus actual percent complete in a construction schedule

 

Calculating schedule compression offers stakeholders the opportunity to save loads of cash in unnecessary spending by way of avoiding the costly risks associated with inefficiencies, delays, overruns,  and resultant disputes. With the opportunity of cash savings in mind, it is in the best interest of all stakeholders to understand schedule compression thoroughly so they can focus on this metric throughout the project lifecycle. 

 

Schedule Compression Best Practices

 

While some project teams are okay with making massive amounts of changes to logic and durations to achieve completion dates, we believe it should be watched very closely as it can be a driver to projects “going off the rails”. 

As such, SmartPM recommends the compression metric should not exceed 20%. This is because a compression level of 20% means you are planning to complete the same amount of work originally intended in 20% less time. This is exactly the level where an extra workday per week (Saturdays) is required, or 20% more workforce is needed to reach a deadline.  And, that’s only if intended productivity is being met on the critical and near-critical trades. 

graphic showing schedule compression shouldn't exceed 20% in orange

At the end of the day, the higher the compression, the greater the risk. Frankly, it is just unrealistic to assume things will happen faster in the future without the same issues from the past arising on a much shorter timeline. 

To accurately and automatically review the level of compression in your construction projects, review the in-depth analysis we offer in our eBook explaining the importance of monitoring compression during the current supply chain crisis. 


 

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Author: Michael Pink

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