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Negative Schedule Variance

31 replies [Last post]
Sat, 2004-12-11 14:41
Renee LaRocca
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Is it possible for a project to have a negative schedule variance (SV) and still be behind Schedule?
SV = EV - PV
EV = Total budgeted cost of work x % complete
PV = Budgeted cost of work scheduled at this point of completion

I don’t think you can but am a little confused about the question, does anyone have any enlightening thoughts?
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Fri, 2016-04-01 20:53
#1
KHALIL ABBAS
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Hello,  

Can anyone please send me Vladimir Liberzon presentation on my gmail: khalilabb@gmail.com

 

Thank you in advance.

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Wed, 2005-10-26 21:56
#2
Zhang Haixiang
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Hi,

neg. SV does not mean we are behind schedule in terms of target date at the moment.
But it shows us there are some delay, and the schedule have high probablity of delay in future.
Some activites are consuming the float of the schedule, more activities trends to be critical.
We may have more problem with resource management.

thinking of 2 schedules (both of them have no delay on critical path),which is better?

1. zero SV, 100 remaining activities, 30% on critical path
2. Neg SV, 100 remaining activities, 45% on critical path
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Wed, 2005-10-26 06:20
#3
Jorge Taguinod
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Renee,

Thank you for posting this topic. It has been a great eye opener for me. I’ve been confused about the relationship of SPI and project finish variance. Now I understand.

Vladimir and Daya,

Thank you for expounding on what EV is. Now I know that it is totally useless if you want to know if you’re going to finish on time.

Jaco,

Thank you for clearing the clouds about finishin on time. It was so simple, I got confused for several years. One had to explain a simple concept in a simple way so that I could understand it.


Come to think of it, wouldn’t the contractors use SPI to show a good performance even if they’re not actually going to finish on time? They could accomplish a lot of expensive non-critical activities and use EV to show a good performance. But when you check the CP, you know that you’re going to be delayed.

Best regards,

Jorge
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Tue, 2004-12-21 01:44
#4
Neal Taylor
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Remember that all of these indicators are there to help us see the trends of where a project is heading. It is often best to listen to what each of the indicators is telling us and make a reasoned judgement based on all. Planning is more of an art than a science and subjective and open to interpretation.
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Mon, 2004-12-20 21:23
#5
Alex Wong
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Jaco

Becasue there is a lot of "what-if" in the relationship between Behind schedule and negative SV, that’s why I stated that -neg SV is not always correct to determinate ahead or behind schedule. Rely on the CPM is a lot more accurate than using the SV.

Alex
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Thu, 2004-12-16 08:37
#6
Dayanidhi Dhandapany
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Yes, Vladimir you are right; that is what Schedule Variance is said to be a subjective indicator.
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Thu, 2004-12-16 03:57
#7
Vladimir Liberzon
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Jaco,
you are right only if all project activities belong to a single critical path.
Vladimir
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Thu, 2004-12-16 01:24
#8
Jaco Stadler
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Hi Alex
Their is a Direct Relationship between SV and On Schedule. for your SV to be Negative something must be later than planned. (Not Necasary the CP).

Wat happens if your planned line is based on your late Dates ???. IF your SV is negative you are late. (Not just behind schedule) What if all your activities is Critical again you are late if your SV is Negative.

Cheers
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Thu, 2004-12-16 00:09
#9
Alex Wong
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If we go back to the original question

Is it possible for a project to have a negative schedule variance (SV) and still be behind Schedule?
SV = EV - PV
EV = Total budgeted cost of work x % complete
PV = Budgeted cost of work scheduled at this point of completion

I don’t think you can but am a little confused about the question, does anyone have any enlightening thoughts?

The answer is Yes, however, the relationship between - SV and Behind schedule is not a direct relationship. It would work both ways. The best way to determinate Ahead or behind schedule is with the CPM in your schedule.
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Wed, 2004-12-15 23:38
#10
Jaco Stadler
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Hi Alex if you have a project with a variable Budget (Normally used in a cost plus type contract)you would use Earned Value with a Variable budget.

It does not change things much except you will have a variable Budget (Qauntity Adjusted Budget).

Cheers
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Wed, 2004-12-15 23:29
#11
Alex Wong
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Of course is the approved budget.
This sort of situation always happen in contract when the original estimate differ from the actual.
No estimate is perfect so SV is not necessary a good indicator for whether the project is ahead or behind schedule. The whole plan need to review to see whether the project is actually late or not. And a lot of the time the assessment will creat a lot of disagreement between the Engineer (client) and the contractor.
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Wed, 2004-12-15 22:33
#12
Jaco Stadler
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Hi Alex

I from what do you calculate your earned value from your Budget. (Fixed or Variable) Remember it is Earned and Not Actual.

% Work Completed x Budget.

BCWS
BCWP
ACWS
ACWP
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Wed, 2004-12-15 17:34
#13
Alex Wong
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In a contractial situation budget is budget, unless a variation is issue your budget remains unchange.

However, remaining is estimate by the contractor, it could be less than the original budget EAC (Estimate At Completion).
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Tue, 2004-12-14 00:28
#14
Jaco Stadler
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Alex

Their is a variance between Earned Value and Actual value.

Please note we are only discussing Earned Value on fixed Budget.

If you do earned Value on veriable budget you would have a QAB. (This is not very different)

Cheers
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Tue, 2004-12-14 00:07
#15
Alex Wong
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In Daya example: it demostrate that at any point of time SV can be misleading because the different between PV for critical and non critical activity. In addition to the discussion, I would like to add another deminson: Remaining $ and quantity. What if the SV is negative but remaining Q is less than the scheduled remaining - Is the project behind or ahead??
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Mon, 2004-12-13 10:34
#16
Dayanidhi Dhandapany
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Hi Dinesh,

Sure without completing the non-critical activities we can’t finish the project, but the EV1 & EV2 values are given in the example is meant for some % of Overall Budgeted cost during the point in time not at the end of the project, (refer Renee’s initial Post) hope this will clear your doubt.

in addition to yours, you can add the following, SPI=BCWP/BCWS, CPI=BCWP/ACWP, SCI=SPI*CPI, TCPI=(BAC-BCWP)/(BAC-ACWP) etc etc...........

It is worth to refer Vladimir’s Presentation............

Cheers!!

Daya

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Mon, 2004-12-13 05:08
#17
Dinesh Kumar Dama...
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Hi Daya,

One thing you did not consider in your Case 1 is : How can a project be completed without completing the non critical activities, non-critical activities will become critical if they are not completed and project will be delayed.In both your cases project is delayed.

Hi Renee,

Negative schedule variance means that the project is running behind schedule and positive variance means project is ahead of a schedule.Project can never be a head with negetive schedule variance provided your baseline is correct. There is also one more variance called cost variance (ACWP-BCWP), the negetive variance means project is costing more than it supposed to be.

I hope this clarifies your question.

Thanks & regards

Dinesh
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Mon, 2004-12-13 04:46
#18
Vladimir Liberzon
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Jaco, let’s define what is on schedule. Defining schedule is a separate topic.
Being on schedule means that your actual and planned dates are on or ahead of target dates, if your actual and planned dates are behind target dates then you are behind schedule.
If to use more complex approach with the risk simulation then you are on schedule if the probabilities to meet target dates are higher than initial and you are behind schedule if some of these probabilities are lower.
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Mon, 2004-12-13 04:33
#19
Jaco Stadler
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Vladimir

Since you have defined behind schedule please define schedule as well.
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Mon, 2004-12-13 04:10
#20
Vladimir Liberzon
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We shall define what is behind schedule.
First of all no project will be on schedule - you are not able to do all activities just in time because there is always some uncertainty.
If we are late with the critical activities and the prognosed project finish is late you are certainly behind schedule even if you have done some non-critical activity faster than was expected. If this non-critical activity was expensive then your CV will be positive.
If you are successful with the critical activities (ahead of schedule) and for some reason postponed an activity that has large float it does not mean that you are behind schedule though your CV may be negative.
I think that being behind schedule means that some target dates may be violated and not that you spend less money than expected delaying activities that have sufficient float.
Resource example:
Your project consists of two parallel activities of the same duration executed by two different resources, one is expensive and another cheap. Expensive resource works faster than expected, cheap one - slower. You may have excellent positive CV for some time but your project finish will be delayed. And CV will not show that there is a problem for too long!
Regards,
Vladimir
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Mon, 2004-12-13 03:50
#21
Jaco Stadler
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Strange Daya

I agree with what you are saying but you will notice that in both cases you are behind schedule. Schedule has to do with the amount of work to be completed. Not the critical path. That is why wording is so important.

If you say we are behind schedule without impact on the critical path. It means you have done less work than planned but you will finish on time.

If you say you are behind schedule with impact on the critical path. It means you will be finishing "late".

Remember you can be Early as well.

I Would like to make a statement. Out of every 20 schedule I see one will be ahead of planned 19 will be behind schedule. Out of the 19 One or Two will finish later the rest we normally take corrective action and ensure that no time impact is incured.

Cheers



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Mon, 2004-12-13 03:39
#22
Vladimir Liberzon
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Jaco,
I think that Daya’s example is good and explains the problem.
I want to add some thoughts about limited resources. My experience shows that resources are always limited though not all of them. You cannot use unlimited number of cranes on the construction site, you may have limited number of skilled programmers, you have restricted finances and some schedule of supplies. You may have unlimited resources also (you can hire necessary number of construction workers, etc.). If you create project schedule that does not take into account resource limitations it will not be feasible. So your schedule shall show your resource requirements but take into consideration your resource restrictions.
Regards,
Vladimir
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Mon, 2004-12-13 03:21
#23
Dayanidhi Dhandapany
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Dear Jaco,

Correct me if i am wrong; I hope the following two cases will clarify the issue:
Case 1:
PV = PV1(Critical Activities) + PV2(Non Critical Activities)
PV1 = $20,000
PV2= $15,000
PV= $35,000 (budgeted cost of work scheduled at this point of completion)
EV = EV1(Critical Activities) + EV2(Non Critical Activities)
EV1 = $20,000
EV2 = $5000
EV= $25,000 (% completion based on the overall Budgeted cost)
SV = EV – PV
SV = $25,000 – $35,000
SV = -$10,000
Still your project could be on schedule due to completion of all critical activities and earned the required value on critical activities.

Case 2:
PV = PV1(Critical Activities) + PV2(Non Critical Activities)
PV1 = $20,000
PV2= $15,000
PV= $35,000 (budgeted cost of work scheduled at this point of completion)
EV = EV1(Critical Activities) + EV2(Non Critical Activities)
EV1 = $10,000
EV2 = $15,000
EV= $25,000 (% completion based on the overall Budgeted cost)
SV = EV – PV
SV = $25,000 – $35,000
SV = -$10,000
your project will behind schedule completion due to non-completion of all critical activities and earned the value on critical activities is lesser than the planned earned value on critical activities.

Cheers!!!

Daya
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Mon, 2004-12-13 01:54
#24
Jaco Stadler
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Negative Schedule Variance.

First we need to establish what is the schedule. I would assume in this case it would be a logical linked resource based network. Once you have completed it you will have a Early & Late Curve (Planned Value).

Then Based on your resource availability you will start tracking progress you should be in the envelope. (If you are not you have a problem with the logic or you will be finishing the project early or late.

So if your planned value is no good and your schedule Variance is Negative yes it is possible to be ahead of schedule.

But remember the Q has to do with behind schedule and does not say you will complete late. You can be late / or Early on non Critical items which have no impact on your CP.

But once you fall behind your late Value you have impacted your CP and you will complete late if you do not accelerate or do corrective actions. But Normally I would put input my forecast which will reflect when you will be completing.

Yes Vlad I have read the presentation but I use a total different approach to planning than you. I don’t believe in using resources as a constraint. I believed the schedule will tell us the amount of resources required rather than allowing the resources to tell us what schedule they can achieve. (That is how I understand the presentation) Please correct me if I am wrong.

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Sun, 2004-12-12 09:34
#25
Dayanidhi Dhandapany
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Dear Jaco,

I think you are over enthusiastic, If the SV is having negative value that doesn’t mean that the over all project experiences delay. In the sameway for the reverse case also. Its really worth to refer Vladimir’s presentation .........................

Regards

Daya
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Sun, 2004-12-12 08:59
#26
Vladimir Liberzon
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Jaco,
read the presentation and then let’s discuss.
You can assume anything if you don’t know the arguments of your discussion partners.
Regards,
Vladimir
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Sun, 2004-12-12 07:27
#27
Jaco Stadler
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Maybe it is because you do not use logic in the schedule.
.
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Sun, 2004-12-12 06:51
#28
Vladimir Liberzon
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Hi Jaco,
Want an example?
I had made a presentation at the Performance Management Congress in Australia where this problem was discussed. If you are interested download it from http://www.spiderproject.ru/library/SDPM_Canberra2004.pdf

Best Regards,
Vladimir
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Sun, 2004-12-12 06:32
#29
Jaco Stadler
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Hi Vladimir

I would suggest you write to AACE.
If the budgeted workhours are less than the earned workhours it means more was done than planned and the project is ahead of schedule. The reverse would place the project behind schedule.

Skills & Knowledge of Cost Engineering 5th Edition 14.4

Jaco
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Sun, 2004-12-12 05:18
#30
Vladimir Liberzon
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If SV is negative it means that you have done a work that has planned cost less than a work that was planned to be done to the moment. It does not mean that you are ahead or behind the schedule.
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Sat, 2004-12-11 22:48
#31
Jaco Stadler
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The Answer is Yes.

EV = Earned Value
PV = Planned Value

SV= EV-PV

So if PV is greater than EV your are running late on your schedule. (S-Curve)

I must admit the still part in the qeeustion did put me of track I think it should read something else. Because if it is Negative the overall schedule should not be able to be ahead of schedule.

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