55r 09 Analysing s Curves

AACE International Recommended Practice No. 55R-09

ANALYZING S-CURVES TCM Framework: 10.1 – Project Performance Assessment

Acknowledgments: Jeff Goodman, PSP (Author) Timothy T. Calvey, PE PSP Christopher W. Carson, PSP Andrew Dick Anthony L. Jervis Dennis R. Hanks, PE CCE Donald F. McDonald, Jr. PE CCE PSP Vicente A. Ruiz Copyright 2010 AACE International, Inc.

Donald E. Parker, PE CCE Hannah E. Schumacher, PSP William James Simons, PSP Jerry L. Vogt, PSP Ronald M. Winter PSP David C. Wolfson James G. Zack, Jr., CFCC

AACE International Recommended Practices

AACE International Recommended Practice No. 55R-09

ANALYZING S-CURVES TCM Framework: 10.1 – Project Performance Assessment

November 10, 2010 PURPOSE This recommended practice (RP) for analyzing S-curves is intended to serve as a guideline, not to establish a standard. As a recommended practice of AACE International, analyzing S-curves provides guidelines for stakeholders of a project to evaluate the current status and trends of a project in a simple graphical format. S-curves are usually developed by a project scheduler or cost engineer and can be applied on a variety of project types. The product is generally used as a project management and/or total cost management (TCM) tool for graphic representation of project performance. The RP provides descriptions of S-curves with the intent to improve understanding and communication among project participants and stakeholders when preparing and analyzing graphics based upon project schedule information. The RP describes different types of S-curves that may be generated from a schedule provided the proper information is loaded into the schedule and the status of the information is maintained throughout the duration of the project.

OVERVIEW An S-curve is a graphic display of cumulative costs, labor hours, progress, or other quantities plotted against time. The term derives from S-like shape of the curve, flatter at the beginning and end and steeper in the middle, which is typical of most complex projects. Most projects start slowly, accelerate throughout the majority of the work and then slow down again near the end as productivity declines and work runs out. The term S-curve can also be used to indicate an S shaped chart resulting from a cumulative likelihood distribution. In this function, an S-curve is a tool of quantitative risk analysis which project management would use to determine the possible dangers of any given course of action. S-curves are also called, “cumulative distribution charts,” “velocity diagrams,” and “SPLOTS” (S-plots.)

RECOMMENDED PRACTICE AACE recommends that schedulers and other project team members develop and use S-curves to plan, monitor, analyze, forecast and control project progress. Project managers should request that project controls personnel produce and use this graphical technique as a tool for briefing stakeholders on project status and trends in a quick and intuitive manner.

DEVELOPING S-CURVES Prior to developing an S-curve, a project baseline schedule needs to be developed. The baseline schedule should employ best scheduling practices (i.e. documentation of scheduling basis, start, finish, no open ends, minimal constraints, a defined critical path, etc.). The baseline schedule should also contain cost and/or quantity data information if that type of S-curve is desired. The S-curve produced from the baseline early dates is often referred to as the “target S-curve” which reflects projected or planned progress on the project if all tasks are completed on their original early finish dates. This curve represents the “best” progress or productivity that can be expected. It is important that the cost and/or quantity information loaded into the activities represents the appropriate time-scaled values for those activities.

Copyright 2010 AACE International, Inc.


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November 10, 2010 For example, if electrical service equipment will be delivered in one large shipment and then installed over a three month time period, the large cost of the equipment will be earned when delivered, so that cost should be loaded into the delivery activity, and the balance of the costs can be loaded into the installation activity. When loading costs into activities, the activities should reflect a straight-line consumption of those costs (a ten day activity with a $10,000 cost should reflect installation of $1,000 per day). This methodology of loading costs into the schedule will result in reasonable and appropriate Scurves. S-curves were generated traditionally within the C/SCSC (Cost/Schedule Controls Systems Criteria) process that evolved into the present Earned Value Management System. 1. Common S-Curves:

A variety of S-curves exist, the most common being man hours versus time, and costs versus time. While the S-curves generated using any quantities versus time that are useful for comparison, such as volume of concrete or linear footage of pipe, the S-curves generated using cost versus time may be helpful in developing the projects overall cash flow. The time unit used is typically monthly to coincide with normal monthly project status updates. Weekly and even daily time units are also used. The smaller the time unit between readings, the “smoother” the S-curve will be and easier to use for forecasting trends. The shape of the S-curve may yield significant information about the nature of the project. Curves that start up steeply and then flatten out may indicate front-loading, which could be projects that require little or no planning time, repair of disaster damage, or they could indicate a schedule that has been accelerated from the beginning. Curves that start out with a lower slope and then run steeply to completion could indicate a large planning or design time in the beginning and a reduced construction time. If the project is primarily labor, generally those curves are typically back-loaded, initially flat and increasingly steep towards the end of the project. Projects where the costs are mostly installed materials and labor tend to show a fairly linear distribution of costs over time. Mobilization costs and deposits will cause more front-loading of the curve. 1.1. Progress S-Curves:

After creating a baseline schedule, a baseline S-curve should be generated. Baseline S-curves provide the basis on which to compare a project's actual status to its planned progress. There are two types of comparisons that can be developed (for simplicity’s sake Figure 1 and 2 below reference hours but, just as easily could be replaced with costs):

Figure 1 – Target Plan Man Hours vs. Actual Man Hours Expenditure Copyright 2010 AACE International, Inc.


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Figure 2 – Target Plan Man Hours vs. Earned Man Hours (Based on Plan)

The two comparisons can be combined with a target or earned vs. actual comparison which can provide insight as to manpower and financial resources required to complete the project. Schedules with status applied to them are called updated schedules. One can produce the same type of S-curves as produced with the baseline schedule to track actual progress and to forecast upcoming progress. S-curves produced from update schedules are typically similar but different than those produced from the baseline schedule in that they also display curves derived from earned and actual data. The baseline schedule provides target progress, typically in costs or man hours. The update schedule may provide three basic metrics; the value of the work that was planned to be achieved at the time of the update, the actual value of the work achieved at the time of the update and the earned progress typically shows earned costs or earned man hours at the time of the update. Payrolls or other man hour reports provide actual man hours expenditures. Updated project schedules and payrolls/timecards provide the actual data that is then compared to the baseline S-curves. This allows the progress of a project to be monitored and quickly reveals any divergence from the baseline schedule. S-curves may also be used to depict project growth, slippage, and progress. The two values that are generated in updated schedules are different in that the earned value is derived from the accumulation of the percent complete of the individual activities times their planned quantities or costs, and the actual value is derived from either manual entry of actual job costs or the calculations of the completed activities’ values along with the calculation based on the estimates of remaining durations of those activities. Obviously, if the project management team can provide actual job values or quantities to be entered into the system, the actual curves will be accurate and valuable. Without actual real-time job data, the software used generally defaults to its own algorithms for the calculations of completion in the schedule. If the remaining duration and the percent complete components of the schedule are linked such that one calculates from the other, then the two available curves will be identical and offer no separate analysis ability. For this reason, it is important that the schedule software is set to calculate percent complete and remaining duration separately, allowing time and values to be represented in the curves. When discussing cost loaded schedules, the actual costs curves are generated from percent complete of activities (hopefully based on quantities or costs) and the earned value curves are generated from remaining duration calculations based on time.



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November 10, 2010 1.2. S-Curves with Early and Late Dates:

Most scheduling software can provide the information that calculates the cost, hours, and/or quantity data in the schedule over the both the early dates (forward pass of the schedule) and the late dates (backward pass of the schedule). These are sometimes referred to as “banana curves”. The two curves will typically only overlap at the beginning and end of the project. The envelope produced by these two curves represents the range of possibilities that the project can expect if it is to be delivered on time. It is important to note that the lower range of the banana curve, the late date curve, is the prediction of progress where every single activity is performed on the last available day and all work is on the critical path. This means that if any single activity on the late date curve slips, the project slips. Stakeholders should be concerned about performance risk when a project planned or actual curve is tracking close to the late date curve. This information can then easily be put in a graphical format as shown in figure 3 below:

Figure 3 – Typical S-Curve with Early and Late Dates 1.3. Quantity S-Curve:

Another common useful type of S-curve found in the manufacturing and construction industries is the quantity S-curve. It uses the production schedule and graphs the quantity versus schedule time. Here the quantity information loaded into the baseline schedule which is tracked along with actual quantities. This allows the progress of a project to be monitored, and quickly reveal any divergence from the baseline schedule. These production S-curves may also be used to depict project growth, slippage, and progress to date. For comparative purposes one could plot planned versus actual quantities.



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Figure 4 – Quantity Output S-Curve

1.4. Cash Flow S-Curves:

Cash flow is the movement and timing of cash with respect to the events in a project. Depending on the ultimate purpose, constructing the cash flow curve has various requirements. The stakeholders of the project have various interests in the curve. One primary use of developing the cash flow curve is to see need for cash, and the timing of the payment obligations. It is significant to clearly understand that without good financial health there would not be a project. On a fixed price contract, stakeholders are concerned with the most complex timing considerations; the work actually performed or earned as well as related expenditures and revenue payments. Each of these may have multiple timing considerations. Other contract types have some, but not all of these considerations. Thus, in order to produce a realistic useful cash flow curve must consider the timing of each cost element. If the estimate classified cost by cost type (labor, material, equipment, subcontracts, etc.] and the cost is loaded into schedule as resources in the same categories, then the early/late curves can be graphed by cost type. Obviously, the S-curve on which all these calculations are based should be the optimal resource-based curve, on the median of the early and late curves. 1.5. Other Specific S-Curves:

Depending on the data and information loaded into schedule activities there are numerous types of Scurves the can be developed. The following is a brief list of common types of S-curves:  • • •

Resources Manpower Installed quantities WBS



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November 10, 2010 PROGRESSING S-CURVES

Once the baseline S-curve is graphed and actual progress status information is obtained for the project, the actual progress can be graphed along with the baseline or target S-curve. The progress S-curve with the baseline/target S-curve provides stakeholders with information on variances and trends. Earned value and performance information may also be generated and displayed on the common S-curve graph. The variances in cost/quantity and schedule can readily be seen and by analyzing the results relative to the baseline/target S-curve, forecasts can be made of anticipated variations at completion. S- CURVE ANALYSIS

S-curves based upon actual data can be used to monitor the project as it progresses and comparison of actual progress to the projected S-curve helps to determine whether the project will be completed within the time and budget limitations. There are several methods of analyzing the S-curve. The methods will be discussed in this RP are applying actual data, applying earned value, applying earned schedule and applying common shapes of early and late dates to the S-curve. The analysis method used may depend on the complexity of the project and contractual requirements. 1. S-Curve Analysis – Applying Actual data:

The easiest S-curve analysis method to use is applying actual data to the S-curve. This provides an easily understood view of project status. Below are two examples of actual data applied to S-curves along with a brief analysis for the curve.

Figure 5 – Quantity Output S-Curve



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November 10, 2010 The above S-Curve suggests that since the actual data is below the planned value the project is behind schedule. Any given actual quantity figure is only reached later than it was planned to be. Conversely, if the actual data line was above the planned line, the graphic would indicate the project is currently tracking ahead of schedule.

Figure 6 – Early/Late Date S-Curve with Actual Progress

In the above example, the actual data is plotted along with the early and late date information from the schedule. The analysis of this graph indicates that as long as the actual data falls between the early and late dates and the forecasted completion is on or before the end date, the project is in good standing. This plot does not guarantee project success; it only indicates that the actual work appears to be within planned boundaries. Again, note that the closer that actual data conforms to the late dates, the higher the risk of project delay, especially with resource limitations compared to the resource logic used in the schedule. A project that is tracking along the late dates in the first 85% of the project has a high likelihood of slipping past the predicted completion and should be analyzed carefully for the resource requirements to complete the project. 2. S-Curve Analysis – Earned Value:

Another common method of analysis of the S-curve for a project is with earned value. Earned value management is a method of integrating scope, schedule, and resources into a discrete set of numbers and then objectively measuring the project performance and progress using these values. Below are two examples of applying actual and earned data to S-curves along with a brief analysis of the curve.



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Figure 7 – Earned Value S-Curve In figure 7 above, the “planned” line is the performance baseline from the schedule and is considered the benchmark S-curve against which actual performance is analyzed. The figure above shows the project currently anticipates an early finish but with additional costs or quantities from the performance baseline. This information should be evaluated with the project stakeholders to determine if this is the best course for the project. Figure 8 depicts a hypothetical situation where a known problem and its projected impact are being considered.



55r 09 Analysing s Curves

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