Monday, November 28, 2016

WBS (Work Breakdown Structure)



1.1. Scopes

The Work Breakdown Structure (WBS) organizes and defines the total project work scope into a hierarchy of smaller and more manageable objects, down to the actual work task level, that can be scheduled, cost estimated, monitored, and controlled.

The WBS allows a hierarchical summation of costs, schedule and progress to allow Project Management practices to be applied consistently across the project.

The WBS allows work to be controlled at execution level while also providing consistent cost and schedule “roll up” to the sub projects and overall project. This “roll up” lets management understand the overall status of the project and provides information that supports decisions made to ensure that overall project objectives are achieved.

The WBS Key Procedure ensures consistent application and updating of the WBS as the project progresses.



1.1. WBS Development Process



  1. The Company Project Manager shall approve Basis of Design Documentation and develop Project Execution Plan as basis for developing WBS and assigning Codes of Accounts (COA).
  2. Based on approved Basis of Design and PEP Project Control Manager/Project Service Manager shall coordinate with Project Cost Control and Scheduler to develop WBS  and assign Codes of Account (COA)
  3. Project Cost Control shall validate and formalize SAP/Oracle COA interface.
  4. Project Manager shall approve WBS coding.
  5. Project Cost Control shall re-classify the Approved Budget into the WBS structure at the summary level.
  6. Project Control Manager and Project Cost Control will further breakdown the summary WBS/budget into the detailed project budget for Sub-Projects.
  7. Project Control Manager and Project Manager shall approve WBS/budget breakdown
 In case of potential WBS Deviation (Contract Strategy Changes, Execution Plan Changes, and Scope Adjustment) is recognized, Project Cost Specialist shall propose changes of WBS to the Project Control Manager. The Project Control Manager shall seek approval from the Project Manager.

1.2. Preparing a WBS

The Work Breakdown Structure (WBS) can be created new, or it can reuse components from other WBSs. When reusing existing components, WBS elements may be drawn from previous similar projects or from standard project templates that has been determined support accepted best practices.

The WBS evolves through an iterative consideration of the project’s purpose and objectives, functional/performance design criteria, project scope, technical performance requirements and other technical attributes. A high-level WBS can often be developed early in the conceptual stage of the project. Once the project is defined and specification are prepared, a more detailed WBS can be developed.

The following steps describe the general process for developing a WBS:
·       Step 1: Identify the final product(s) of the project – what must be delivered to achieve project success. A thorough review of high-level project scope documents (inputs such as statement of requirement (SOR), technical requirements documents, and so on) is recommended to ensure consistency between the WBS and the project requirements
·       Step 2: Define the product’s major deliverables, which are often predecessor deliverables necessary for the project, but that in themselves do not satisfy a business need (e.g. design specification)
·       Step 3: Decompose major deliverables to a level of detail appropriate for management and integrated control. These WBS elements normally tie to clear and discrete identification of stand-alone deliverable products.
·       Step 4: Review and refine the WBS until project stakeholders agree that project planning can be successfully completed and that execution and control will successfully produce the desired outcomes.

1.3. Establish Work Breakdown Structure

           1.3.1. General

a.   The overall WBS is split into two major components:
1)   The first component is to be used by the Company Project Management Team (PMT) and is used to roll up the work to the overall project, phase level and sub project level.
2)   The second component is to be used by the contractor(s) and breaks down the contractors’ work.
b.   The Contract Level (lowest level for the Company PMT and highest level for contractor(s)) is the level where the two intersect. This is the level where Company PMT will import the contractor’s work into Company PMT cost and schedule structures. TheProject shall ensure the overall project WBS is established for the project based on the following sections.
a.   Each WBS level is coded to obtain the WBS Oracle COA. The WBS Oracle COA should be defined by each Business Unit. The system allows 24 digits, and the mandated level of Standard Activity Breakdown shall be part of the WBS Oracle COA.
b.   If PMT decides to track the Component level, the WBS Oracle COA Mask may be required to have one digit for certain levels and/or dots.

1.3.2. WBS – First Component (to be used by the Company’s PMT)

This WBS is required through Level 4 (Work Type) with the Level 3 (Delivery Package) being optional.
(1.) Level 1 (Project Definition) – This is the highest level of the structure and shall be the level at which all project cost and schedule summaries shall be reported.
(2.) Level 2 (Delivery Area) - This shows the total project (delivery area) in more detail. Detail must be sufficient to distinguish between the concept and the options under consideration and describe the main interface and milestones. It shows management activities, such as old equipment procurement and permitting, in addition to the general scope. Example for this are:
§  Offshore / onshore
§  Local / abroad
§  Wells
§  Infrastructure
§  Owners
§  UAP
(3.) Level 3 (Delivery Package) – Sub-object is a further breakdown of Level 2 into more specific elements. Example for this are:
§  Topsides,
§  Substructure
§  Subsea /
§  Piles / Moorings
§  Submarine pipeline
§  Field production facility
(4.) Level 4 (Work Type) - further breakdowns of Level 3 are:
§  Engineering
§  Procurement
§  Fabrication
§  Construction
§  Transportation & Installation
§  Hook up & Commissioning
§  Surveying
§  General Support

1.3.3. Work – Second Component (to be used by the Contractors)

It is important to remember that Contractor participation in the project is not only during the EPCI execution, but also prior to that.

The Work Breakdown Structure developed for use by SINGLE CONTRACTOR consists of 5 levels as follows:
(1.) Level 0 (Contract) – This is the highest level of the structure that the Contractor(s) will roll up to. It will match either level 2 (Object Level) used by Company project teams depending on how the project was broken down.
(2.) Level 1 (Delivery Package) – This is a further breakdown of Level into more specific elements like the type of structure or facilities.
(3.) Level 2 (Work Type) – Engineering, Procurement, Fabrication, Construction, Installation, Commissioning, etc.
(4.) Level 3 (Discipline/Craft) - A further breakdown of Level 2 into engineering disciplines, construction, installation, and Hook Up & Commissioning crafts. Procurement is also broken down into major equipment groups and bulk material groups.
(5.) Level 4 (Deliverables) – Engineering deliverables, construction packages and a further breakdown of procurement. Further levels of the WBS are left up to the contractor(s) discretion and are the levels that the contractor shall use to control the project.
Levels 0, 1 and 2 are required; levels 3 & 4 are optional levels to be agreed between the Contractor(s) and the Company PMT.

The Work Breakdown Structure Developed for Use by MULTIPLE Contractors consists of Four (4) Levels as follows;

    •   Level 0 (Contract) – this is the highest level of the structure the contractor will roll up to. It will match either Level 3 (Sub Object) used by Company project teams depending on how the project was broken down.
    •   Level 1 (Work Type) – Engineering, Procurement, Fabrication, Construction, Installation, Commissioning, etc.
    •    Level 2 (Discipline/Craft) – A further breakdown of Level 1 into engineering disciplines, construction, installation, and Hook Up & Commissioning crafts. Procurement is also broken down into major equipment groups and bulk material groups.
    • Level 3 (Deliverables) – Engineering deliverables, construction packages and a further breakdown of procurement. Further levels of the WBS are left up to the contractor(s) discretion and are the levels that the contractor will use to control the project.

1 comment:

  1. please provide info on significance of wbs in project planning

    ReplyDelete