PPC Data Surprises Leads to Creation of New Index
July 27th, 2006 by HalThe Last Planner System® (LPS) has been used in Brazil since early 1990s. The researchers have data on over 130 projects representing many aspects of the construction industry.
Quantitative Analysis of Data Collected from LPS in Brazil
Rodrigo Bortolazza and Carlos Formoso
The researchers examined PPC results, recorded causes for variances, and
"Lengthening the look-ahead planning horizon improves plan reliability."
They had three surprising conclusions:
- Projects which didn't conduct constraints analysis had better performance than those that did constraints analysis.
- Standardized process control in quality management contributed to plan reliability
- When researchers were on site PPC was lower.
Based on those surprises they developed a constraints removal index: constraints removed divided by constraints identified. When this index was applied retrospectively for one company the index was about 35%. When the firm started using the index for measuring the effectiveness of the team the index jumped to about 70%. PPC consequently rose.
A good look-ahead process with constraints analysis and removal makes a large contribution to the reliability of project. There was a high correlation between a high number of "unknown" causes of plan variance and low PPC. Also, the largest proportion of reasons for plan variance had to do factors in the control of the people on the project.
I'll come back to this paper in a future posting to share more of the conclusions and implications of their investigations.
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July 27th, 2006 at 4:57 pm
I was asked if the first surprise result was true. I checked again. It came directly from their statistics.