June 1st, 2015
So how much would you spend on a full time scheduler? More correctly put, how much scheduler can you afford?
The task of CPM scheduling is very heavily front-loaded with the creation of the Baseline schedule. The balance of a scheduler’s time is running Monthly Updates or implementing weekly changes. The hours utilized performing the tasks of an average schedule mean that an experienced scheduler for a company would only be productive for less than 20% of a 2,000-hour year.
National averages show compensation for varying levels of skill and experience for Construction Scheduler run between $60,000 and $130,000. The temptation for the small company would be to hire the entry level scheduler, but with this strategy comes risk. Where most projects come with some level of liquidated damages, how much faith can you put in the ability of an entry level scheduler to properly categorized and prove owner responsible delay? A 90-day delay with a fairly modest $1,000 per day liquidated damages results in a $90,000 hit to the bottom line. Can a small company tolerate spending the extra dollars to get a more experienced scheduler, and how will they retain the individual if he or she is only busy 20 percent of the time?
Time is money in any economy. On any project, time is the one parameter over which you can have some level of control by properly managing the schedule, so consider these time wasters caused by a failure to effectively plan:
- Failure to Manage Shop Drawings to Meet Need Dates – This critical process is often relegated to a spreadsheet segregated from the schedule and easily forgotten.
- The Back of the Line Policy – Subcontractors schedule significant backlogs of work in an attempt to keep their crews continuously and profitably employed. If your job is not ready for your critical subcontractor when they arrive, you may find yourself put at the end of their “line” of other clients resulting in weeks and months of delay.
- Poorly estimated “Need” Dates – Superintendents flying blind without a reliable schedule often do not find out until the last minute that key components were not ordered in sufficient time to support construction, resulting in more delay. Poorly estimated need dates may also result in materials arriving early, resulting in additional cost.
- Idle Leased Equipment – Superintendents bring expensive leased equipment on site too early due to poor sequencing of the work. They they hold on to it, afraid they might not be able to “get it back” when they really need it.
- Rework because of incorrect sequencing – We cannot even begin to list all the examples that come to mind under this heading. Examples include: Slabs that need to be core drilled to run a storm drain because someone forgot to complete the before finish floor plumbing. Conduit that has to run on the outside of the wall because someone forgot the in-wall electrical. Such events add millions to the cost on construction in any given year.
For any small company to grow into a big company there must be respect and understanding for the planning and scheduling process. Young companies often regard the schedule as “window dressing” for the client.
They do not see planning and scheduling as essential to their long term success. It is remarkable how large a company can grow with such a defective attitude, but eventually they get eaten up by liquidated damages, cost overruns or competitors. Companies that learn the lessons of sound scheduling and understand all the benefits early on can grow quickly with less risk.
The Project Manager as Scheduler
The key to making this approach work is to have at least one member of the organization who can act as a mentor or scheduling guru. While a number of engineering programs around the country do a good job of teaching construction scheduling, it is highly unlikely any program will produce a full grown scheduler ready to jump in and plan a project. The mentor is necessary to develop the planning/scheduling skill set of the newly hired or recently promoted project manager. The mentor can also perform a quality control function, ensuring that schedules prepared across the organization are to the minimum standard expected by the company and their clients.
Hiring practices and an internal training program are another key ingredient to making this approach work.
Experienced project managers do not automatically have the skill set to plan and schedule even though they may be capable contract administrators. The people doing the hiring must be looking for the qualities and educational background that will enable a project manager to act as their own scheduler.
Senior managers must also carefully monitor workload to ensure that the project manager has the time to devote to proper planning/scheduling and the updating and maintenance. The time crunch on the project manager will likely be the driver that signals the need to hire a scheduler on a full time or outsourcing basis. As projects become larger and more complex they reach a point where duties such as schedule maintenance must be shed. Senior management must be constantly aware of this, as the project manager may not recognize they are overwhelmed until it is too late.
The Project Engineer/Scheduler
This solution is more commonly found among larger contractors working on projects of less than $50 million, as previously discussed. The degree to which this strategy is successful depends to a great extent on the culture of the contractor and supporting stakeholders. For the owner with a project less than $50 million in value an aggressively enforced schedule specification is the best vehicle they have to ensure their needs are met. Due to the unbalanced nature of the scheduler’s workload, hours committed to the effort do not automatically translate into a better schedule. Owners will be better served educating themselves on what a good schedule is and intelligently enforcing their specification.
The scheduler and the estimator administer complementary processes and rely heavily on each other’s work output. In both instances their participation is front loaded to the project. The estimator is also likely to prepare many more estimates than the scheduler schedules. This is simply because detail schedules are generally only prepared for contracted work, where many estimates are prepared for projects that never materialize.
This type of asymmetrical workload clearly provides challenges for management that is conditioned to expect 40 hours of effort a week for every worker on the payroll. This is another instance where senior management must be constantly vigilant to ensure human resources are being properly employed and one business process is not neglected in favor of the other as a company’s workload ebbs and flows.
Outsourcing planning and scheduling functions can be a great help to small contractors trying to take on more complex projects. By having the consultant absorb the workload at the front end of a project the contractor can be saved from hiring an employee who may be difficult to both fund and retain. By observing an experienced planner/scheduler at work they can develop their own expertise more rapidly without suffering the pain of the trial and error method. There is an additional element of safety working with a competent scheduling consultant in that they can recognize situations requiring documentation of delay that can help the contractor assess the risk of a claim.
RISK VERSUS REWARD: IN HOUSE OR OUTSOURCE?
The key to answering the question as to whether you should build your own schedules with organic assets or to outsource depends on your ability to honestly assess your company’s capabilities. Small growing companies may not have any scheduling expertise, in which case the decision is an easy one. Companies that are contemplating employing one of the hybrid solutions probably have some level of scheduling expertise. Is their level of expertise sufficient to produce professional schedules that meet the needs of their organizations? Below are a few specific factors to consider when deciding when to outsource.
Are Your Clients Litigious?
If your clients are predominantly churches and non-profit organizations your chance that you will have to defend your schedule in court is small. If your clients are large corporate entities and your contracts include substantial liquidated damages your need for a well maintained high caliber schedule may be a necessity. Professional planner/schedulers are more likely to participate in continuing education classes where they stay informed of the current tendencies and practices of the courts and corresponding case law.
What Kind of Schedules Do Your Competitors Produce?
If a request for proposal requires a sample schedule, how will your schedule look sitting alongside your competitors’? When scoring a proposal you may think the schedule is only worth five or ten points. It has been my experience that most human beings do not compartmentalize well. So while you may only lose five points for a lame schedule, the impression that leaves can permeate other areas of grading.
Are You Using Mainstream Software?
Bar charts done in Excel are not as good as any CPM schedule. Microsoft Project schedules also have a distinctive look which will telegraph certain characteristics about your organization. There is also a reason that Primavera practically owns the back page of Engineering News Record (ENR). All these software applications have their passionate adherents who will sit in judgment of your schedule. Know your client and conduct your business accordingly.
Can You Live With a Second Rate Schedule?
Time challenged personnel juggling multiple duties will find ways to economize on time. This tendency often translates into schedules that lack sufficient detail to properly sequence the work. Time challenged personnel may also update the schedule less frequently, impairing the manager’s ability to detect negative trends and reducing reaction time when encountering problems.
Can You Find a Qualified Planner Scheduler?
The farther out of area you have to go for expertise the more you are likely to have to pay. Without reliable references it is difficult to know if you will get your money’s worth.
The question you need to ask yourself is “What is the core competency of our company?” If CPM scheduling is not included in the answer, then why not allow a third party to take on that burden and allow your project managers, estimators and other multi-taskers to focus on their areas of expertise. You will not give up control of your project and if you have a good scheduling firm, they will provide you with the strategic answers you need to meet your due date ahead of schedule, thereby making more profit on your job.
There are many challenges to meeting a due date on a project. The reality is that most due dates are not met, but it does not behoove anyone to end up in mediation or court over liquidated damages. The benefit of having a third party take on your schedule is that their sole focus is making sure you are making your due dates or identifying issues early enough to head off any delays. An additional benefit is that they become your consultants on any mediation or claims that do arise.
Excerpts from “The Problem With Hiring A Scheduler,” John P Buziak, PE 2008