Cost-Related to Project Crashing - Essay Example

PROJECT CRASHING Name: Course: Instructor: Institution: City: Date Introduction Projects involve various phases. Various factors may affect progress from one phase to another, for example, project owners desire to use the project earlier, strikes and delay in disbursement of project funds. Changes in a project in order to accommodate certain aspects results in deviation from the original schedule, for example, increase project cost or reduction in the completion time. This may require the project implementers to crash the project process. Crashing involves introducing more resources in a project in order to ensure a reduction in the completion time. Crashing requires appropriate management of the project’s baseline plan in order to enable it accommodate the changes and avoid interfere with the project sequence. To manage change and facilitate comparison of the project progress managers should use multiple baseline plans. Crash – Cost Concept Crashing involves reducing the project duration without interfering with its sequence. For it to take place effectively, resources for the project completion are increased (Nagarajan, 2005). Crashing causes an increase in the cost of project because of introduction of more resources. Project Managers involved in the crashing process should ensure the increase in the cost does not surpass the crash-cost limit (Nagarajan, 2005). Crashing entails interaction of time and cost and ensuring the sequence of activities in a project is not interfered with (Jones, 2007). To facilitate project crashing, Harrison, & Lock, (2004), a manager can introduce more resources, throw in incentives to the employees to enhance their productivity and provide premium for overtime. Cost Related to Project Crashing Crashing process involves increasing the project resources in order to reduce project completion time (Jones, 2007). This requires increase in project costs. The costs associated with crashing are the direct coats and indirect costs. Direct costs are the costs that are that are directly related to a project activity the costs that directly relate to project activity. Direct costs are the activity-based costs since they directly relate to project activities (Jones, 2007). They includes, material costs, equipment costs, cost of labor and subcontractors fee. Directs cost increases as a result of crashing as more resources in required to shorten the project period. A reduction in project duration causes an increase in direct cost. Indirect costs are the cost that varies with the project completion time. They are the cost that cannot be associated directly to project activity (Harrison, & Lock, 2004). Indirect costs Harrison, & Lock, (2004), include administration costs, supervision costs, consultation fees and maintenance cost. Indirect costs decreases with the decrease in project completion time. Therefore crashing leads to reduction in the indirect costs. Saving Project Baseline Considering Changing Nature of the Project Baseline line of a project refers to its scope. Baseline plan shows the project time schedule, cost and resource requirements (Nagarajan, 2005). A change that causes change in the scope might require project-crashing (Charles et al, 1965). Crashing a project involves introducing various changes into a project in order to reduce the completion time without interfering with the project sequence. Changes in the baseline involves changes from the baseline and changes to the baseline. Changes from the baseline involves analyzing whether, the crashing process is within the project budget and schedule (Nagarajan, 2005).  Changes to the baseline involves analyzing what needs to be added, removed or substituted in order to facilitate project crashing. Saving a project baseline requires the project manager to recognize project changes in time. Handling changes in a project requires a manager to draw an appropriate plan. Firstly, the manager needs to recognize the change (Charles et al, 1965). Recognizing a change enables the manager to handle any deviation from the plans without affecting the project sequence. Secondly, the project manager needs to assess what to be changed. This will enable him handle the change more appropriately. Saving the baseline requires the management of the baseline plan appropriately. The manager needs to define the scope of the work due to changes. This should be separated from the issues of performance. Managers should ensure they stick to the baseline plan and failure of performance and the project’s current schedule does not affect it. The change in the baseline should be due to change in the project’s scope. A change in the scope entails adding, removing or substituting some of the projects activities (Charles et al, 1965). To save a project baseline, Nagarajan, (2005), requires appropriate management of the changes in the scope of the project. Managing the changes in the scope requires: The project manager to establish an appropriate activity to be added into the project’s scope. Establishing an appropriate practice to add to the scope facilitates the crashing process and presents the manager with the specific activity to concentrate on. The manager to provide guidance documents to enhance the activity or a standard practice. These documents will enable those handling the project to follow also the necessary procedures to facilitate crashing process. The manager to outline specific roles, such as identifying those responsible for originating a cope change and those responsible for approving the changes in the project scope. The manager to determine the activities and tasks involved in the scope changes. This should include the breakdown of all the activities and cost of the project. The manager to establish the source of fund to facilitate project crashing: it should be determined whether the project cost is increasing. In addition, the project manager should determine the most appropriate source of funding. Adding more work theoretically means increasing the cost of the project and influencing with the schedule of the project. The manager to update and maintain the scope of changes records. Maintenance of records facilitates comparison process. Project stakeholders are able to analyze whether the crashing process had been effective. To handle a change in the scope that involves reduction in the scope of the projects, all the suggested activities are removed from the project baseline (Harrison, & Lock, 2004). . These might include activities related to cost, quality, schedule and requirements of the project. Introducing a change in the baseline might interfere with the baseline plan of the project. The baseline of project should indicate all the projects activities (Harrison, & Lock, 2004).  Any changes in the baseline, Harrison, & Lock, (2004), should therefore reflect the initial baseline plan. Project stakeholders should ensure crashing process do not interfere with the objectives of the project. This requires efficient management. Advantages of Multiple Baselines Multiple baselines are very important for long-term projects. Long-term projects require multiple baselines in order to ensure all the information for future reference is made available (Harrison, & Lock, 2004). Since these, are projects that take long duration, to avoid information loss, multiple baselines ensure data for each project stage or face is properly stored. This helps in making comparisons and future references. Multiple baselines are important when incorporating changes in a project. When incorporating new changes in a project for example increasing or decreasing the project scope, a new baseline is introduced to accommodate contents of the change (Nagarajan, 2005). With the multiple baselines, the manager is able to maintain the original baseline. Maintaining the original baseline enables the manager to provide an explanation to other stakeholders on reason for the change in cost and completion time (Nagarajan, 2005). Multiple baselines are able to store more data. Having multiple baselines enables the project stakeholders to store more information especially with the long-term projects (Jones, 2007). Long-term projects might have various faces with different subcontractors. To store all these information can be facilitated by multiple baselines. In addition, multiple baselines facilitate comparison of planned values against the actual values. Having multiple baselines facilitates comparison of values especially where a project has several faces (Jones, 2007). Project stakeholders are able to compare actual progress on various faces with the planned progress. Multiple baselines also enable documentation of a trend over a given period. Multiple baselines are very important for use to document project progress over time (Nagarajan, 2005). For example, when project stakeholders feel that their project is behind the set schedule, they may set a recovery strategy baseline. However, with the multiple baselines they are able to store the project’s previous information on the original baseline. This enables comparison of the documents, and stakeholders are able to determine whether there is any deviation from the baseline plans. Conclusion Crashing of projects requires appropriate management of the project activities. It is an important task when the proposed change undergoes appropriate implementation. Crashing reduces indirect costs and causes an increase in the direct cost since it involves addition of resources to ensure reduction in project completion time. To accommodate changes in a project, stakeholders should ensure their changes do not affect their baseline plans. This requires appropriate project management skills such as planning, coordinating and organizing. To facilitate comparison of the project progress, stakeholders should have multiple baseline plans since they facilitate documentation of project progress over time, storage of more data and important when incorporating new changes. References Harrison, F. L., & Lock, D. (2004). Advanced project management: a structured approach. Aldershot, England, Gower Jones, R. (2007). Project management survival: a practical guide to leading, managing & delivering challenging projects. London, Kogan Page. Nagarajan, K. (2005). Project management. New Delhi, New Age International. Charles H. Kepner, Benjamin B. 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