AAOM Handbook

The timing, frequency and cost of every work activity will exhibit some degree of variation. An effective management system must therefore develop an Expenditure Budget that reflects the variation in timing and frequency of work, and also the variation in cost that occurs at each execution. The results will be represented in a probability distribution of the likely cost outcomes. This distribution can be compared to the specification and confidence level required for the cost target for the Process to validate whether the chosen Production and Service strategies, Operating Master Schedule and resourcing can meet the performance targets. Within the Business Process Framework these activities are incorporated in the elements for Setting the Expenditure Budget. The Operating Master Schedule and Budget together define our ‘best estimate’ of the Production and Service work that we will execute in the future, developed from our understanding of performance expectations and our selected Production and Service strategies. This ‘best estimate’ is typically developed many months ahead of when we will actually execute the work. It should not be surprising then that there is likely to be some variation between what we thought would be required when we set up the schedule and budget, and what is optimally required when we arrive at a point in time on the schedule. If we blindly execute work from the original Operating Master Schedule then the work may not produce performance that meets specifications, in fact the wrong work, or the wrong timing, may increase the variation between the actual and expected output. Work Approval allows us to confirm, before we commit to the execution of work, that all Production and Service work entering into Work Management is necessary and appropriate for delivering the performance required of the Process, and that the work is funded within the approved expenditure budget. The consistency and efficiency of implementing the Production and Service strategies will be enhanced if the Work Management process ensures that work is well planned (fully specified), and that resources are appropriate, flexible and scheduled to complete work at the Right Time, while optimising productivity. Comparative measures of performing work in a re-active manner and in a well organised and prepared manner, consistently indicate that; • 80% of safety incidents can be avoided, • 60% of environmental incidents can be avoided • labour productivity can improve by 30%, • the direct cost of work can reduce by 50%, and • Process output can increase by 30%. Some observations that can be drawn from the first element of the Business Process Framework theory are that there is a Right Time for the execution of every Production and Service work activity, and that if work is not completed at the right Time there will be a negative impact on Process output performance. The logical conclusion from this is that the purpose of Scheduling is to allocate resources so that all work is completed by the Right Time. The Right Time drives scheduling, and scheduling is the hub of the work management process – that is, everything else revolves around it. Consequently the purpose of planning is to specify everything that is necessary to complete the work when it is scheduled, the purpose of resourcing is