MANAGING PROJECT PERFORMANCE

IN OPEN CUT MINING

USING EARNED VALUE MANAGEMENT

SINGAPORE 2012

Prepared by :
Adi Prasetyo
Principal Consultant – PMIT Consulting
Table of Content

1 About Mining Project Management

2 The Importance of Project Performance Tracking Systems

3 Benefit of Using Earned Value Management

Triple Goals
Objective of Project Management
Project Management :
The application of knowledge, skills, tools, and techniques to project activities
to meet the project requirements (PMBOK 4th Edition)

People

Stakeholder
Satisfaction

Processes

Cost
Project Management Standard Setting Process
Mining Project Life-Cycle
Mining Project Groups
Core Process Supporting Process
Recommended Phase of
Mine Development Project

*) D J Noort and C Adams - International Mine Management Conference 2006

Table of Content

1 About Mining Project Management

2 The Importance of Project Performance Tracking Systems

3 Benefit of Using Earned Value Management

The Earned Value Systems
Portfolio-level Metrics
Analysis and Decision

Executives
Support

Analysis Across
Projects

Project Managers
Project Metrics
Reviewed by PM

Task Level Metrics

Collected

EV metrics are automatically calculated at the lowest level

and rolled up from Task to Project to Portfolio levels
Control & Monitoring Flow
EVM Metric
• Project Managers:

Project-
level
metrics
Summary
Task
metrics

Task-
level
metrics
Table of Content

1 About Mining Project Management

2 The Importance of Project Performance Tracking Systems

3 Benefit of Using Earned Value Management

Earned Value Management
Earned Value Management provides proven metrics to
measure divergence from initial project expectations. The
divergence is used to increase cost and schedule forecast
accuracy.

EVM Helps :
Identify performance issues
for earlier analysis by the PM
Improve project cost
forecasting very early in the
project lifecycle
Improve project schedule
forecasting
Reinforce project
management discipline
The Earned Value Concept
 Uses two separate measures for prediction:
 Work Scheduling Efficiency
 Work Cost Efficiency
 Scheduling Efficiency of comparing the actual duration the
work is completed in to the planned duration the work is
completed in
 Cost Efficiency is the result of comparing the actual cost of the
completed work to the planned cost of the completed works

 “Work” must be tightly associated with a well decomposed set

of project products (work packages) – the products represent the
value units that are “earned”
EVM Definitions

Metric Full Name Definition Calculation

The time-phased budget plan

Planned Value (Budgeted
PV (BCWS) for work currently scheduled EV – SV
Cost of Work Scheduled)
(your baseline)

Costs actually incurred and

Actual Cost (Actual Cost
AC (ACWP) recorded in accomplishing EV – CV
of Work Performed)
work performed (actuals)

The value of the completed

Earned Value (Budgeted work expressed in terms of AC + CV
EV (BCWP)
Cost of Work Performed) the budget assigned to that PV + SV
work

These metrics (together) represent a better way to show actual

project status against planned project status. They are used to
forecast more accurate cost at completion.
EVM Metric

– The Planned Value (PV)

• The sum of approved cost estimates for activities
scheduled to be performed
– The Earned Value (EV)
• The sum of the approved cost estimates for activities
completed
– The Actual Cost (AC)
• Total cost incurred in accomplishing work
EVM S-Curve
EVM S-Curve

100

PV - CURVE
PROGRESS

50 EV
CASE-2
AC
PV
AC CASE-1
EV

0 1 2 3 4 5 6 7 8 9 10 11 12
(MONTHS)
Thank You
Adi Prasetyo
Email : adi@pmit.co.id
Phone : +62-817 9101 057