Product breakdown structure in construction
The overall definition of a project is something that 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 an operation is something that continuously gives support and can be foreseen as something not intended to die [1].
Managing projects is something that 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 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 manager's 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. In this article the focus will be on the PBS "Product breakdown structure", which implies: history, description, application and limitations in relation to project management. The outcome of a project can be referred to as a product. The PBS is a decomposition tool, applied to make large and complex products more simple two handle.
Contents |
Product breakdown structure "PBS"
History
PBS
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 a 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.
Construction
Due to the innovative world we seek new ways to make things more effectively and efficiently. Research has proved that implementation of new technology within the last 50 years has caused the value added pr. work hour to increase 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. Many organizations has tried to figure out what has been causing this problem of stagnation, and some of the issue so far has been pointed out to be, that all projects are unique. This 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.
Why is Product Breakdown Structure important in construction
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 are a sub product and the many elements 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 cost related uncertainty. With this approach the benefit of making a product breakdown structure in a construction process, can now take its place. At figure 1 below, the "old" well known construction trend is illustrated. It is consisting of a lot of "sub sub" products, which depend on human resources in order to be assembled. Notice that each square is illustrated by one or several lines. The reason were to give an illustration of the futures reduction of elements in construction. 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 "steady" 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 increased 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 price, the industrialized construction technology would still be the one with the smallest uncertainty. The reason is that the product breakdown structure makes it easy to predict and illustrate the cost for each sub product, because a manufacture can give a specific price for each sub product.
Moving 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 on 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.
Application Method and results
Performing the breakdown structure
The technique applied for dividing and subdividing the delivered product into smaller bits is decomposition. It is advised that the decomposition are 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 product "box" makes sense. When it comes to prefabricated elements, it would make sense at least not to breakdown any more than the delivered product. Based on the desired complexity of the PBS the product decomposition can also be made in relation to the deliverables. 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.
Making the PBS diagram
The figure below illustrates the hierarchicy of the PBS diagram. 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) Define the product and the related technical requirements.
2) The top box should always represent the final product.
3) When making the decomposition "top down or bottom up", do not make more boxes than needed in order to sustain a suitable overview.
4) Consider assigning each box with logical name or/and a number.
5) Remember that the PBS only focuses on the product, not the work related to the project (WBS).
6) The product description be a beneficial reference point, when making the diagram.
Example
The figure below illustrates how the diagram can be applied when making a PBS for a one family house. Also note that the different boxes have 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 been proven to be delivered as one whole product "module" on site, which has been taken into consideration when making the PBS example.
Dictionary
For large product trees there can be hundreds or thousands of unique sub products. Therefore it is important to consider how the different boxes is referred to. When having small logical products, it might be sufficient by using the logical sub products names for the given boxes. Considering the large products, it is hard to name each box without matching some existing names. Therefore it is advised to use a numbering system instead. In this way it is still possible to name the different boxes, but the uniqueness of the given product is linked to its number. When using a system like this it is beneficial two have a description/dictionary of each product box in a separate document. 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.
Applying the PBS diagram to cost overview
Under the assumption that the future is industrialized construction the PBS is foreseen to be a large part of the cost analyze. Because of construction similarities each new site would more or less have the same PBS template, therefore a cost estimation can easily be made. Among the many different techniques for this process the "Three-point estimating" process can be applied.
The three-point estimation is about gathering three different prices form the PBS example. This could be e.g. a kitchen module. The three prices are based on three approaches being: P=Pessimistic, M=Most likely and O=optimistic.
According to the three prices the following equations can be applied in order to calculate a "simple average" and a "weighted average".
Triangular distribution "Simple average"
Beta distribution "Weighted average"
If desired the standard deviation of the Beta distribution is calculated by using the following equation.
The obtained prices can now be added to give a estimation of the percentage applied to each product and sub product.
Limitations
Even though the PBS is a very powerful tool it still has its limitations. The PBS is focusing on the product and the WBS is focusing on the product and the work related with it. Therefore the PBS is, at an 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 inputs are likely to change during the lifetime of the project.
Annotated bibliography
When gathering information about the subject "product breakdown structure", the information seems limited compared to the available information related to the work breakdown structure. The reason is that the work breakdown structure is the "mother" to the other breakdown structures. However the overall approach is more or less the same, and the product breakdown structure is a matter of turning the focus into primarily focusing on, the decomposition of the product. The chosen literatures have been educational books combined with relevant webpages. The choice of the used material is now elaborated.
The first reference is a book by Graham M. Winch[2]. The book provides the reader a broad understanding of project management, including some case studies, were the given approach has been applied. Graham M. Winch book ”Managing construction projects” is a acknowledged book, and therefore useful when writing a article.
The next references is the PMBOK Guide ”A Guide to the project management body of knowledge”[3] and a book by Rita Mulcahy ”Rita Mulcahy’s PMP exam prep”[1]. The PMBOK Guide [3] is written and published by the Project management institute "PMI", whereas the other book ”Rita Mulcahy’s PMP exam prep” has been made to understand the PMBOK Guide, in order to pass the PMI project manager exam. These two books are therefore foreseen as acknowledged teaching material for advanced project management and have been very useful, when digging into a specific subject, such as breakdown structure.
The webpages [4], [5] and [6] has also contributed to the article. Reference [4] has granted the knowledge of how to undertake the approach of industrialized construction. The references [5] and [6] have primarily provided the knowledge about how to distinguish the work breakdown structure from the product breakdown structure.
References
[1] Graham M. Winch (2010) ”Managing construction projects”, Wiley-Blackwell, Second Edition.
[2] Project Management Institute (2013) ”A Guide to the project management body of knowledge (PMBOK Guide)”, Project Management Institute, Inc., Fifth Edition.
[3] Rita Mulcahy, PMP, et al. (2013) ”Rita Mulcahy’s PMP exam prep”, RMC publications,Inc., Eigth Edition.
[4] Industrilized construction forum [1], visited 12-06-2017
[5] www.productbreakdownstructure.com [2], visited 12-06-2017
[6] www.smartsheet.com [3], visited 12-06-2017
- ↑ 1.0 1.1 1.2 Mulcahy, Rita. (2013), Rita Mulcahy’s PMP exam prep, RMC publications,Inc., Eigth Edition.
- ↑ 2.0 2.1 Winch, Graham M. (2015), Managing Construction Projects, Wiley-Blackwell.
- ↑ 3.0 3.1 3.2 Project Management Institute, Inc., A Guide to the project management body of knowledge (PMBOK Guide), Project Management Institute, Inc., Fifth Edition.
