Work Breakdown Structure

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The successful accomplishment of both contract and corporate objectives requires a plan that defines all effort to be expended, assigns responsibility to a specially identified organizational element, and establishes schedules and budgets for the accomplishment of the work. The preparation of this plan is the responsibility of the program manager, who is assisted by the program team assigned in accordance with program management system directives. The detailed planning is also established in accordance with company budgeting policy before contractural efforts are initiated.

In planning a project, the project manager must structure the work into small elements that are:

• Manageable, in that specific authority and responsibility can be assigned

• Independent, or with minimum interfacing with and dependence on other ongoing elements

• Integratable so that the total package can be seen

• Measurable in terms of progress

The first major step in the planning process after project requirements definition is the development of the work breakdown structure (WBS). A WBS is a product-oriented family tree subdivision of the hardware, services, and data required to produce the end product. The WBS is structured in accordance with the way the work will be performed and reflects the way in which project costs and data will be summarized and eventually reported. Preparation of the WBS also considers other areas that require structured data, such as scheduling, configuration management, contract funding, and technical performance parameters. The WBS is the single most important element because it provides a common framework from which:

• The total program can be described as a summation of subdivided elements.

• Planning can be performed.

• Costs and budgets can be established.

• Time, cost, and performance can be tracked.

• Objectives can be linked to company resources in a logical manner.

• Schedules and status-reporting procedures can be established.

• Network construction and control planning can be initiated.

• The responsibility assignments for each element can be established.

The work breakdown structure acts as a vehicle for breaking the work down into smaller elements, thus providing a greater probability that every major and minor activity will be accounted for. Although a variety of work breakdown structures exist, the most common is the six-level indented structure shown below:

Managerial f I

Technical f 4

levels ! 5

Description Total program Project Task

S'.ihhiisk

Level 1 is the total program and is composed of a set of projects. The summation of the activities and costs associated with each project must equal the total program. Each project, however, can be broken down into tasks, where the summation of all tasks equals the summation of all projects, which, in turn, comprises the total program. The reason for this subdivision of effort is simply ease of control. Program management therefore becomes synonymous with the integration of activities, and the project manager acts as the integrator, using the work breakdown structure as the common framework.

Careful consideration must be given to the design and development of the WBS. From Figure 11-3, the work breakdown structure can be used to provide the basis for:

Figure 11-3.

Work breakdown structure for objective control and evaluation. Source: Paul Mali, Managing by Objectives (New York: Wiley, 1972) p. 163. Copyright © 1972 by John Wiley & Sons, New York. Reprinted by permission of the publisher.

Figure 11-3.

Work breakdown structure for objective control and evaluation. Source: Paul Mali, Managing by Objectives (New York: Wiley, 1972) p. 163. Copyright © 1972 by John Wiley & Sons, New York. Reprinted by permission of the publisher.

• The responsibility matrix

• Network scheduling

• Risk analysis

• Organizational structure

• Coordination of objectives

• Control (including contract administration)

The upper three levels of the WBS are normally specified by the customer (if part of an RFP/RFQ) as summary levels for reporting purposes. The lower levels are generated by the contractor for in-house control. Each level serves a vital purpose: Level 1 is generally used for the authorization and release o work, budgets are prepared at level 2, and schedules are prepared at level 3. Certain characteristics ca be generalized for these levels:

• The top three levels of the WBS reflect integrated efforts and should not be related to one specific department. Effort required by departments or sections should be defined in subtasks and work packages.

• The summation of all elements in one level must be the sum of all work in the next lower level.

• Each element of work should be assigned to one and only one level of effort. For example, the construction of the foundation of a house should be included in one project (or task), not extended over two or three. (At level 5, the work packages should be identifiable and homogeneous.)

• The level at which the project is managed is generally called the work package level. Actually, the work package can exist at any level below level one.

• The WBS must be accompanied by a description of the scope of effort required, or else only those individuals who issue the WBS will have a complete understanding of what work has to be accomplished. It is common practice to reproduce the customer's statement of work as the description for the WBS.

• It is often the best policy for the project manager, regardless of his technical expertise, to allow all of the line managers to assess the risks in the SOW. After all, the line managers are usually the recognized experts in the organization.

Project managers normally manage at the top three levels of the WBS and prefer to provide status reports to management at these levels also. Some companies are trying to standardize reporting to management by requiring the top three levels of the WBS to be the same for every project, the only differences being in levels 4-6. For companies with a great deal of similarity among projects, this approach has merit. For most companies, however, the differences between projects make it almost impossible to standardize the top levels of the WBS.

The work package is the critical level for managing a work breakdown structure as shown in Figure 11-4. However, it is possible that the actual management of the work packages are supervised and performed by the line managers with status reporting provided to the project manager at higher levels of the WBS.

Work packages are natural subdivisions of cost accounts and constitute the basic building blocks used by the contractor in planning, controlling, and measuring contract performance. A work package is simply a low-level task or job assignment. It describes the work to be accomplished by a specific performing organization or a group of cost centers and serves as a vehicle for monitoring and reporting progress of work. Documents that authorize and assign work to a performing organization are designated by various names throughout industry. "Work package" is the generic term used in the criteria to identify discrete tasks that have definable end results. Ideal work packages are 80 hours and less than 2-4 weeks. However, this may not be possible on large projects.

It is not necessary that work package documentation contain complete, stand-alone descriptions. Supplemental documentation may augment the work package descriptions. However, the work package descriptions must permit cost

Wbs For Obtaining Permits
Figure 11-4. The cost account intersection.

account managers and work package supervisors to understand and clearly distinguish one work package effort from another. In the review of work package documentation, it may be necessary to obtain explanations from personnel routinely involved in the work, rather than requiring the work package descriptions to be completely self-explanatory.

A key feature from the standpoint of evaluation accomplishment is the desirability of having short-term work packages. This requirement is not intended to force arbitrary cutoff points simply to have short-term work packages. Work packages should be natural subdivisions of effort planned according to the way the work will be done. However, when work packages are relatively short, little or no assessment of work-in-process is required and the evaluation of status is possible mainly on the basis of work package completions. The longer the work packages, the more difficult and subjective the work-in-process assessment becomes unless the packages are subdivided by objective indicators such as discrete milestones with preassigned budget values or completion percentages.

In setting up the work breakdown structure, tasks should:

• Have clearly defined start and end dates

• Be usable as a communications tool in which results can be compared with expectations

• Be estimated on a "total" time duration, not when the task must start or end

• Be structured so that a minimum of project office control and documentation (i.e., forms) is necessary

For large projects, planning will be time phased at the work package level of the WBS. The work package has the following characteristics:

• Represents units of work at the level where the work is performed

• Clearly distinguishes one work package from all others assigned to a single functional group

• Contains clearly defined start and end dates that are representative of physical accomplishment

• Specifies a budget in terms of dollars, man-hours, or other measurable units

• Limits the work to be performed to relatively short periods of time to minimize the work-in-process effort

Table 11-3 shows a simple work breakdown structure with the associated numbering system following the work breakdown. The first number represents the total program (in this case, it is represented by 01), the second number represents the project, and the third number identifies the task. Therefore, number 01-03-00 represents project 3 of program 01, whereas 01-03-02 represents task 2 of project 3. This type of numbering system is not standard; each company may have its own system, depending on how costs are to be controlled.

TABLE 11-3. WORK BREAKDOWN STRUCTURE FOR NEW PLANT CONSTRUCTION AND START-UP

Program: New Plant Construction and Start-up Project 1: Analytical Study Task 1: Marketing/Production Study Task 2: Cost Effectiveness Analysis Project 2: Design and Layout Task 1: Product Processing Sketches Task 2: Product Processing Blueprints Project 3: Installation Task 1: Fabrication

01-03-01

01-03-00

01-01-02

01-01-01

01-01-00

Task 2: Setup Task 3: Testing and Run Project 4: Program Support Task 1: Management Task 2: Purchasing Raw Materials

01-03-02

01-03-03

01-04-01

The preparation of the work breakdown structure is not easy. The WBS is a communications tool, providing detailed information to different levels of management. If it does not contain enough levels, then the integration of activities may prove difficult. If too many levels exist, then unproductive time will be made to have the same number of levels for all projects, tasks, and so on. Each major work element should be considered by itself. Remember, the WBS establishes the number of required networks for cost control.

For many programs, the work breakdown structure is established by the customer. If the contractor is required to develop a WBS, then certain guidelines must be considered. A partial list is as follows:

• The complexity and technical requirements of the program (i.e., the statement of work)

• The program cost

• The time span of the program

• The contractor's resource requirements

• The contractor's and customer's internal structure for management control and reporting

• The number of subcontracts

Applying these guidelines serves only to identify the complexity of the program. These data must then be subdivided and released, together with detailed information, to the different levels of the organization. The WBS should follow specified criteria because, although preparation of the WBS is performed by the program office, the actual work is performed by the doers, not the planners. Both the doers and the planners must be in agreement as to what is expected. A sample listing of criteria for developing a work breakdown structure is shown below:

• The WBS and work description should be easy to understand.

• All schedules should follow the WBS.

• No attempt should be made to subdivide work arbitrarily to the lowest possible level. The lowest level of work should not end up having a ridiculous cost in comparison to other efforts.

• Since scope of effort can change during a program, every effort should be made to maintain flexibility in the WBS.

• The WBS can act as a list of discrete and tangible milestones so that everyone will know when the milestones were achieved.

• The level of the WBS can reflect the "trust" you have in certain line groups.

• The WBS can be used to segregate recurring from nonrecurring costs.

• Most WBS elements (at the lowest control level) range from 0.5 to 2.5 percent of the total project budget.

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Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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