We have all been told that time equals money. Even, time is money. But what does any of that truly mean? Time and money separately are highly debatable subjects. The combination of the two can certainly be a conundrum. However, it is this author’s belief that in construction, this may as well be a law of the universe. Consider this. He or she who controls the schedule of the project controls the cost of the project. Thus, the schedule is one of the most important documents a particular project may ever possess. More specifically, a schedule that is smoothed and calculated based on budgeted-cost of the project and relative funding-cash-flows-available equals a useful and valuable tool for managing and understanding a project.
Materials cost money; labor costs money; equipment costs money. Each of these unique facets of a project carries an inherent time-cost, as well. It takes time to deliver critical materials; time to excavate foundations, pour concrete, install piping, etc. When time and cost are considered congruently and in parallel, a different picture starts to develop than when the components of time and money are considered separately. That picture gives the project manager, owner and all other stakeholders;
1) the vision of individual, time-phased, cost weighted project components;
2) the ability to forecast cash flow requirements;
3) a method of stating the project’s truthful earned-value; and
4) an auditable payment trail for services or goods rendered.
Construction scheduling can take on many forms. However, the most prominent type of construction schedule is the critical-path-method (CPM). This scheduling methodology boasts a lengthy track record of use dating back to the 1960’s. Essentially, a CPM schedule identifies each specific component of the project and in which area of the project it will be performed. In order to do this, a discrete work breakdown structure (WBS) must be developed. From there, sub-networks may be incorporated to further breakdown and understand specific areas of the project. Labor, equipment and material dollar values can then be integrated into the schedule. All of this will allow for increased control and greater insight into projected funding requirements throughout the life of the project. CPM scheduling is used in this manner as a roadmap of past, present and future activity and costs on the project.
As the pressures of both time, money and claims continue to escalate in today’s construction industry, it is interesting to find how undervalued the cost-loaded schedule is when developing, executing and maintaining time and cost on a notable amount of complex construction projects. Moreover, some projects do not require scheduling congruent with the critical-path-method, and generally exert very little energy in scheduling and cash flow documentation at all. Some of today’s managers and construction professionals, delivering projects under more progressive contracting methods, nearly eliminate the use of schedules altogether. This is alarming given that a cost-loaded schedule is an invaluable tool for planning and executing a project. In addition, this method contributes to healthier relationships between stakeholders. Monthly project status evaluations using tangible and meaningful data encourage improved communication and foster a healthier atmosphere of coordination such that both time and money can be controlled with greater accuracy and transparency. Finally, it is paramount that a realistic, accurate and quality schedule be developed from the outset of the project, as this will ultimately illustrate and embody the projects true goals and objectives.