Level: Intermediate
TCM Section(s)
7.6. Risk Management
7.2. Schedule Planning and Development
Venue: 2024 AACE International Conference & Expo

Abstract: Some complex programs are structured so that many separately managed projects must interact with each other to produce the final integrated deliverable. Constituent projects typically have large and detailed schedules and are often assigned to various entities under the same umbrella organization, company or government agency.The constituent projects are specialized entities, focusing on design, fabrication of various components, integration and/or production of multiple units for the ultimate customer. Each entity has their own deliverables that are used by another entity for their work, making downstream work dependent upon someone else’s upstream work, and so on.Each individual entities’ efforts are integrated in a development program to deliver the first production unit (FPU) of the final system to the customer (e.g., a major program milestone). The following steps describe the sequences and challenges faced by complex programs:

• Each entity’s project, within the integrated program has its own level of uncertainty and set of entity-level risk events.Due to the interdependencies between projects, a delay experienced by one entity, the “giver” of a deliverable (e.g., design, test results, OK to proceed, etc.), is transmitted to another entity, the “receiver” of that deliverable, the delay rippling through the rest of the entire program’s integrated schedule.
• There are risk events that affect only one of the entities and other risk events that affect several of the entities at once.The cumulative effect of a risk event impacting multiple entities could be much larger to the overall program success than the impact of any single-entity risks.
• A quantitative risk analysis, for a giver entity, can forecast a probabilistic delay, to the receiver entity, for the needed deliverable at a higher confidence level. If the receiver is informed about the delay in a timely manner, it can be included in the receiver’s risk-informed plans.
• It is not sufficient to just push the new commitment date changes from one entity to another for each giver-receiver combination.The work and schedule are not strictly sequential, having many parallel paths and feedback loops.A design will mature into a finished project eventually, but there are instances of the receiver entity returning the product (e.g., design, component, sub-assembly) to the giver for further re-work before it resumes its way toward the final integrated product. The quantitative analysis update process must be coordinated so that all the hand-offs (i.e., deliveries and receipts) are shared at the same time.The simultaneous sharing enables viewing of the knock-on or ripple effect when a delivery slips early in the schedule causing multiple delays later in the schedule.
• Once the coordinated hand-off commitment dates are updated, the receiver entities need to incorporate the giver’s delays in their own planning. The knock-on effects of the giver’s delay on the receivers’ plans need to be represented so the receivers’ output (e.g., maybe to other receivers such as the fabricating entities) will correctly reflect the complete set of compounded delays.This integration appropriately represents the work of, and interconnections between the entities, and is used to conduct a program-level quantitative risk analysis.

After trying several approaches NNSA’s current strategy develops a representative program schedule that includes the top-level projects’ deliverables, and giver/receiver hand-offs between entities.The key challenges with this strategy are maintaining the representative integrated program schedule, ensuring sufficient input data quality and consistent representation of the entities’ individual schedules and cross-entity dependencies.

Once the integrated program schedule is created, the potential consequence of risks and uncertainties to the program final delivery to the customer can be determined.Additionally, program level risks can be analyzed at a program level vs. having individual entities analyzing only their piece of the overall impact.Risks can be identified, determined if they are entity risks vs. program risks, evaluated, and understood appropriately so that plans for mitigation can be completed as early as possible.With early risk evaluation, other options can be considered and evaluated, including early planning/structural program changes, scope reduction, putting low-priority scope toward the punch list or carefully putting non-dependent activities in parallel rather than in series (and effective backup plans) at the start of a major program.

The integrated program schedule, informed by the individual entity quantitative risk analysis results, then becomes the basis for analyzing and optimizing the program.The focus must be on optimizing the program vs. optimizing any individual entity’s project. Since the risks that impact one entity are accounted for in their individual risk analysis, the program risk analysis prioritizes the risks that affect one entity, multiple entities, or the entire program. Program risk mitigations can then address the risks that are the biggest threat to the final program’s success in delivering the final product to the customer.

This paper uses a small representative model of the National Nuclear Security Administration (NNSA) modernization program to explore the issues above and address the following risk analysis activities:

• Building individual program entities’ schedule so they can be integrated.
• Linking the output of the sender entities to the inputs of the receiver entities.
• Evaluate integrated program schedules and quantitative results using alternative risk evaluation strategies.
• Risk impact prioritization for focused, cost-effective mitigation across all entities to optimize the spend for mitigation and the overall program.