CPM Schedule Cost Loading: 10 Reasons it is Seldom Implemented

Cost loading in Primavera simply  doesn’t cut the mustard because it has so little operability to incorporate variances.

CPM Schedule Cost Loading has always been the bane of the scheduler’s existence. So much so  that schedulers – including this scheduler, routinely exclude cost loading requirements for their assignments. Exclusion of cost loading is so commonplace that GCs, CMs, and stakeholders accept it as a fact of life.

It’s no fault of experienced CPM schedulers that cost loading is not well mainstreamed, rather the fault lies with the industry and its parsimonious investment in training that makes us less productive than peer countries.

There are a number of reasons why a contractor or scheduler may exclude both resource and cost loading requirements

  1. Proper resource and cost loading go together – you can’t have one without the other. If you are missing data in either or both tables, your reports will not calculate properly.
  2. Contractors and estimators routinely estimate duration in standard units: months, weeks, days, and less frequently, fractions of days. Such estimates are not informed by calculated rates of production that can facilitate accurate resource and cost loading.
  3. Schedulers who can expeditiously draft proper cost and resource loading are the exception. All others struggle mightily, and require resources that few are willing to adequately finance.
  4. CPM training programs don’t focus on resource and cost loading, nor do they require working knowledge of one in order to become certified.
  5. Schedulers who have no construction or field experience are completely reliant on estimators’ labor and material rates and units to populate resource and cost loading data. Often, they are not privy to it, or more often: it may simply not exist. Even a scheduler with construction field experience can be quite challenged.
  6. The paucity of scheduling programs with adequate or better resource and cost loading modules is an inhibitor to adoption.
  7. P6 seems to be the go-to program for resource and cost loading; however, given the complexity and clunkiness of Primavera 6 resource and cost loading modules: they are difficult to learn and implement.Moreover, I see no development in these modules from Oracle. P6 is not the resource and cost loading I would choose Cobra, or Spider.
  8. Resource and cost loading efforts can easily be disrupted or scuttled when input data is variable or inconsistent (see comment re production rates).
  9. P6 resource and cost loading do not provide enough operability to drill down on critical aspects, such as variable production rates, and the complication between duration based and physical % based activities.
  10. The cost summaries generated by P6 are seldom  in lock-step with payment applications. Accordingly, a double-entry recording system is created (P6 and Accounting), where the P6 cost summary is manually entered so that it is consistent with payment applications.

Of course, there are public projects in which there is no option but to produce the resource and cost loading reports. In such circumstances there are two avenues from which to choose in order to achieve the same outcome. It will be self-evident which is the preferred choice of most schedulers

Proper CPM Resource and Cost Loading Requirements

A. Labor rates

B. Rates of production

C. Material unit cost

ABC, simple as it were, couldn’t be more elusive to most of us; especially those who toil with P6. To carry out the report, we must create and assign “Resources,” and “Resource Assignments.” Progress in the cost charts will be a factor of “physical %complete,” whereas in the GANTT chart, they are duration based. If there is a compendium of activities and resources that all must be manually researched and input, the outgo can be prohibitive.

This additional quandary of dealing with inconsistent progress % types is enough to induce anyone to resort to the manual, or “tweak,” method. The tweak method has the added benefit of aligning the cost tables with payment applications.

In tweaking resource and cost loading, we are no longer, in fact, implementing proper  resource and cost loading. Not to worry, the end product is the focus here. If we need the GANNT and cost summaries to align, me must:

  1. Calibrate resource assignments in days.
  2. Assign a rate of $1./hr to all activities
cost loading

3. -et voila!, you have your resources assigned to a cost-loaded schedule.

resource loading

However, you will note the discrepancy in the “physical % complete,” v. duration % complete,” v. Schedule % complete.

CPM scheduling NY

If you think this operation will bugger your EVM you’re spot on. These cost tables were merely jury-rigged to match the payment application. In other words, a scheduler and reviewer can work in consort to produce a document that resembles proper resource and cost loading, if it is in the service of mollifying stakeholders, no one is going to have a problem with that except for the most fastidious regulators. It is a wag-the-dog workaround that is often inevitable; however, a scheduler should never initiate unilaterally – only raise the issue.

 
Derek Graham

Derek Graham

CPM Scheduler | Defect & Delay Claim Specialist | Expert Witness, at RepOne

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Derek Graham is a Primavera 6 scheduler and schedule oversight consultant for public and private sector projects with four decades of construction industry experience. He has been an active construction expert witness in over 30 cases – both nationwide, and Federally, since 2006, when his book Managing Residential Construction Projects, was published by McGraw Hill