AAOM Handbook

Specified date and calendar interval trigger parameters will have no, or low, variability in their timing in the schedule. However, there may be significant variability in the rate of progress towards the other operating and condition parameters, and hence in the potential forecast of events in the schedule that are based on these. This variability will be reflected in the output and expenditure forecasts derived from the schedule, and hence could have significant impact on the confidence of reaching performance targets for a specified reporting interval. However, even if there is variation in the timing or output of individual Work Packages for an activity, the more times that an activity is repeated in a time period the closer the resulting event count moves to the total time divided by the average time between events, and the closer the total output and total cost moves to the sum of the averages of the individual events (in statistics this is characteristic referred to as the Central Limit Theorem). Hence, for any activity with a high repetition rate within a reporting interval, and moderate variability in outcomes or costs, we can use the average trigger interval, activity output and activity cost. Where activities have a low repetition rate, and/or very high variability in the individual event output or cost within a reporting interval, we must use a probability distribution of the potential variables, and Monte Carlo simulation, in order to determine the confidence level of the schedule meeting the Performance Targets. A manageable schedule needs to provide sufficient detail to enable confirmation of progress to schedule without providing so much detail that it becomes difficult and slow to track progress. The Pareto principle suggests that 20% of the activities in the schedule will contribute 80% towards reaching the performance targets. These are the activities that should stand out in the Operating Master Schedule, while the minor activities should be easily identified (in summary form) without confusing the overall picture. Appropriate grouping of these minor activities will result in high repetition rate within a reporting interval and hence will allow us to use average values in forecasting intervals, output and costs. As the Work Packages related to a schedule activity are initiated they can be checked against the Operating Master Schedule to identify that the outcome, method and timing of the work is consistent with the strategies and schedule. If it is, then the output and cost results should meet expectations. If not, then some corrective action must be taken. Over time the Production and Service Strategies for a process can be altered by changes to; • regulatory requirements, • output required from the process, • cost targets, • design of elements of the process,

• other production strategies and practices, • other service strategies and practices, and • relative location in the process life cycle.

Consequently the Operating Master Schedule is a document that requires regular revision.

© McAlear Management Consultants 2006

Operational Planning: Set Operating Master Schedule

Updated: August 2018

Page 3