How to Reduce Project Cycle Time and Save Money

Project cycle time is the time it takes to complete a project from start to finish. It is important to reduce project cycle time in order to save time and money. The concept of project cycle time is important in project management for cost engineering professionals. It refers to the time it takes for a project to go from team formation to facilities in production. To reduce cycle time, it is crucial to identify the root causes of rework and problems that affect project performance. Poor definition of project requirements and failure to recognize invalid assumptions are two common causes of delays.

To address these root causes, a true win-win relationship must be established among the owner, contractor, and supplier. They must work together as a team and recognize that relationship and resultant cycle time reductions can only be developed when all parties have the opportunity to enhance their performance and profitability. Which includes:

• Poor planning and communication: If the project is not properly planned and communicated, it can lead to delays and rework.
• Unrealistic expectations: If the project scope is too ambitious or the deadlines are too tight, it can also lead to delays.
• Unforeseen challenges: Unexpected challenges, such as weather delays or changes in regulations, can also contribute to project cycle time.

Delayed starts are another cause of protracted cycle times. Product research and development, business planning and forecasting, external financing, joint-venture agreements, and internal competition for capital can all affect capital availability and may create pressure to delay the project start. Successful project startup uses the optimal amount of time and resources to ensure that a facility is brought on-stream as quickly as possible without compromising worker safety.

There are a number of things that can be done to reduce project cycle time, including:

• Clearly define the project scope: The project scope should be clearly defined and agreed upon by all stakeholders. This will help to avoid scope creep and ensure that the project stays on track.
• Use a project management tool: A project management tool can help to track the progress of the project and identify potential problems early on.
• Regularly communicate with stakeholders: Regular communication with stakeholders will help to keep everyone updated on the progress of the project and identify any potential issues.
• Be flexible: It is important to be flexible and adaptable to changes that may occur during the course of the project.
• Use a phased approach: A phased approach can help to break the project down into smaller, more manageable tasks. This can make it easier to track the progress of the project and identify potential problems early on.

In conclusion, cost engineering professionals must carefully plan and effectively execute commissioning and startup activities to reduce the project’s overall cycle time. They must also be willing to take risks, welcome the destruction of outdated procedures, and always go for best-in-class performance and total quality. By doing so, they can successfully manage project cycle time and deliver projects faster, better, and in the most cost-effective manner.

The Bermuda Triangle of Projects

The mismanagement of large-scale projects has been a consistent challenge for over 180 years. Recent examples of project failures include the reconstruction of Wembley Stadium, the oil pipeline from Azerbaijan's Caspian wells to the Turkish Mediterranean port of Ceyhan, and the £6 billion project to put the medical records of 50m Britons online. Despite the well-established international association, the Project Management Institute (PMI), that specializes in project management and sets standards and professional exams, projects still go wrong.

One of the main reasons for project failures is that the initial estimates of costs and time are often unrealistic. This can be due to a number of factors, such as underestimating the complexity of the project, failing to account for unforeseen challenges, or simply being too optimistic.

The PMI outlines five distinct phases of a project: initiation, planning, execution, control, and closure. Self-serving bias and overly optimistic assumptions about costs and revenues are common issues during the initiation phase when bidders are competing for projects. This may be more pronounced in prestigious projects where bidders are chasing glory almost as much as commercial gain. After-the-event accountability to the project's paymaster may be less rigorous in the public sector, leading to bad forecasts.

Another common problem is that projects are often poorly managed. This can include a lack of communication between team members, poor planning and coordination, or a failure to properly track progress.

A study published this year in the Journal of the American Planning Association reveals the wildly optimistic forecasts of future passengers on rail and road projects, with some projections being out by more than 400%. The authors argue that these forecasts haven't improved over the past 30 years and are prone to inaccuracies.

Improve project management by:

• More accurate and realistic estimates
• Better planning and coordination
• More effective communication
• A contingency plan to deal with unforeseen challenges
• Regular monitoring and tracking of progress

In conclusion

Finally, projects can also be derailed by external factors, such as changes in regulations, weather delays, or financial constraints. The history of project mismanagement indicates that improvements in project management methodologies and tools alone may not lead to successful outcomes. The problems lie in the initiation phase, where self-serving biases and overly optimistic forecasts are common. Therefore, it is essential to mitigate these risks in the initiation phase by identifying potential biases and assumptions and promoting objective decision-making frameworks.