Product breakdown structure

Latest revision as of 12:09, 12 June 2017

The overall definition of a project is something which creates a unique product, result or service. Furthermore a project is something temporary, which is granted with a beginning and an end, so it is basically meant to die. However a operation is something which continuously gives support and can be foreseen as something not intended to die.

Managing projects is something which requires structure in order to have the best rate of success. By not having any structure there is a severe risk of achieving projects where the different tasks will start to work against each other, which could result in the requirements from the stakeholders not being meet, bad communication and collaboration among the involved parties and the time schedule and budget might have to be extended. Therefore lacking or missing structure is a project managers worst nightmare and must be avoided. The best way to achieve such order from the very start is to apply some kind of management process to assure that the project is steered and kept in the right direction. Among the many tools available the project scope management could be chosen. When working through a management process like this, the covered areas will be: Plane scope management, Collect Requirements, Define Scope, Create WBS "Work breakdown structure", Validate Scope and Control Scope. Within the project scope management process the creating WBS "Work breakdown structure", is a tool which has some large benefits in order to obtain a good cost-, time planning and execution of the project. There are different types of "Breakdown structures", determined on the given approach and though out this article the focus will primarily be on the PBS "Product breakdown management" and the pros and cons by using this tool in project management.

[edit] Product breakdown structure "PBS"

[edit] History

The historical creation of the PBS is unknown. However it is known that PBS is a tool which contributes to the Work breakdown structure, which were invented by The United States Department of Defense (DOD) back in 1960's, but the tool were finally implemented in the PMI "Project Management Institute" PMBOK in the 1987 as a standardized tool. The Product breakdown structure tool is wisely applied when having some kind of production line with many sub products. Thinking of a car, this is a final product assembled from a lot of sub products. The product breakdown structure can be used to create an organized hierarchic illustration of the car.

[edit] Why is Product Breakdown Structure important in construction

Due to the innovative world we seek new ways to make things more effectively and efficiently. Research has proved that implementing of new technology within the last 50 years has caused the value added pr. work hour has increased by 250% in manufacturing, but in construction the value added pr. work hour has been maintained. Many fingers can be pointed when making a statement like this and many organizations has tried to figure out what has been caussing this problem of stagnation, and some of the issue so far has been pointed out to be that all projects are unique, which causes a need of e.g. unique technical, solutions and production methods. However it would seem that there is room for improvement in the profession of construction. One of the suggested solutions is the concept of continuity and mass production combined with as much flexibility as possible, which has been known to benefit the business of manufacturing.

The currently state of the art when it comes to construction is the industrialized construction e.g. prefabricated elements, meaning a possibility of continuity and mass production. The elements is a sub product and the many element are assembled on site. The industrialized construction approach makes it possible to reduce the human factor which tends to be a significant contributor to the uncertainty. With this approach the benefit of making a product breakdown structure in a construction process, can now take its place. At the figure below it is illustrated how the "old" well known construction trend to be consisting of a lot of "sub sub" products, which relay an human resources in order to be assembled. A rule of thumb in construction is that the ratio between human labor and the material are approximately 2/3, so the human factor plays a big part of the whole project. When moving towards the future it is illustrated that the assembly will depend less on human resources and more on prefabricated sub products. However the products will still need production e.g. the concrete wall. The main focus upon the approach is that the e.g. concrete wall could be produced externally under known conditions, which minimizes the cost deviation, because new this sub product is part of a well planned production line. As previously mentioned the PBS is a tool which contributes to the WBS. However in the future it is estimated that the PBS would play an increasingly role of the WBS, because of the possibilities of making the prefabrications.

Please note that the cost is only focusing upon the expense for the human labor on site. Even if the whole project would end up with the same project prize, then the industrialized construction technology would still be the one with the smallest uncertainty, because according to the product breakdown structure it easy to predict and illustrate the cost for each sub product, because a fabricator can give a specific price for each sub product.

Comming further to exactly why the PBS is such a great tool to be applied to construction projects. As mentioned it can be hard to predict costs, divide and organize the many products on a construction site. The PBS is an available tool that can be applied to organize the future construction site, which according to the industrialized construction would be based on prefabricated sub products. When having a construction project the exact cost of the deliveries is often not known at the initial phase of the project. However it would still before the bidding rounds be possible to make the breakdown structure based on experience and judgement. After the bidding rounds the cost if the delivered products can be known and can be applied to the PBS. This approach is known as the rolling wave planning. Furthermore a well organized PBS can also help the project manager as an "assembly manual" to organize the logistics of the construction site, so the deliveries and the site matches process of assembly.

However the WBS will still be needed in order to make the time schedule since this is not included within the PBS.

[edit] Application Method and results

[edit] Performing the breakdown structure

The technique applied for dividing and subdividing the delivered product into smaller bits is decomposition. The decomposition advised to be made by setting up a group of competent people, since this often requires multiple insight perspectives. The main reason for the breakdown structure is to take something largely complex and break in down into smaller bits in order to take in more simple to handle. The breakdown process should be made in a way such as the size of the current products package makes sense. When it comes to prefabricated elements, it would make sense at least not to breakdown any more than the delivered product. Also based on the desired complexity of the PBS the decomposition can also be made in relation to the deliverables, meaning if the project is supposed to be inspected in milestones, then it would be preferable that the PBS would be divided into matching the project milestones. The making of the PBS can either be done by the top-down or bottom-up approach, according to what the project manager finds to be the most convenient.

[edit] Making the PBS diagram

The figure below illustrates the hierarchicy of the PBS system. In order to create even more overview of the product it is also possible to colorize the different boxes so they could refer to a e.g. a project milestone.

Furthermore there are invented some checkmarks, which can be beneficial to keep in mind when making the PBS.

1) The top box should always represent the final product.

2) When making the decomposition "top down or bottom up", do not make more boxes than needed in order to sustain a suitable overview.

3) Remember that the PBS only focuses on the product, not the work related to the project (WBS).

4) The product description be a beneficial reference point, when making the diagram.

[edit] Example

The figure below illustrates how the diagram can be applied when making af PBS of a one family house. Also note that the different boxes has been applied with a percentage, which refers to how much the given product poses of the end product "The house". Colorization has been added to the percentage indication. This has been done to create an illustration of the product and sub product structure. In industrialized construction of hospitals and hotels and larger compartments, a bathroom has even been proven to be delivered as one whole product on site, which has been taken into consideration when making the PBS example.

[edit] Dictionary

When making WBS a dictionary is typically made to describe the different boxes in detail. Because the PBS is contributing to the WBS then it makes no sense to make a specific dictionary for the PBS, however it is advised to include a detailed description of the many products e.g. the wall elements will not all be the same due to placement of door and window openings. The dictionary can also include a document where the project managers approval is needed when starting up with a new task. In this way the constructors can get the knowledge of which boxes, that has to be initiated before others, so these will not conflict with each other.

[edit] Applying the PBS diagram to cost overview

Under to assumption that the future is industrialized construction the PBS is foreseen to be a large part of the cost analyze. Given that a construction site would more or less have the same PBS template, a quick cost estimation can easily be made. Among the many different techniques for this process the Three-point estimating process can be applied.

According to the PBS the three point estimation is about gathering three different prizes for e.g. a kitchen module based on the three approaches being: P=Pessimistic, M=Most likely and O=optimistic.

Based on the three prizes the following equations can be applied in order to calculate a "simple average" and a "weighted average".

Triangular distribution "Simple average"

Beta distribution "Weigthed average"

If desired the standard deviation of the Beta distribution is calculated by using the following equation.

The obtained prizes can now be added to give a estimation of the percentage applied to each product and sub product.

[edit] Limitation

Even though the PBS is a very powerful tool it still have its limitations. The PBS is focusing on the product and the WBS is focusing on the product and the work related with it, and therefore the PBS are at a isolated point of view not complete. Furthermore the PBS is depended on its inputs, which from a "project scope management plan" point of view is the: Plane scope management, Collect Requirements, Define Scope. Furthermore its is known that these input is likely to change during the lifetime of the project.

[edit] References