Importance of Proper Allocation

of Resources in Project
UNIT 2 RAVI
 Resource

An economic or productive
factor required to accomplish an
activity, or as means to undertake
an enterprise and achieve desired
outcome.
 The Three Most Basic Resources

Land
Includes all natural resources (“gifts of nature”) used in the
production process, such as arable land, forests, mineral and
oil deposits, and water resources.

Labor
Consists of the physical and mental talents of individuals
used in producing goods and services.

Capital
Refers not to money but to tools, machinery, and
other productive equipment.
 Other Resources

1. Energy
2. Technology
3. Entrepreneurship
4. Information
5. Expertise
6. Management
7. Time
 Resources in Project Management

Anything used up to execute the project

1. Budget
2. People
3. Technology
4. Time
5. Space
6. Tools
7. Equipment and etc.
 Resource Allocation

Resource allocation is used to assign the available

resources in an economic way.

In project management, resource allocation is the

scheduling of activities and the resources required by
those activities while taking into consideration both
the resource availability and the project time.
 Resource Allocation Plan

1. Basic Allocation Decision

2. Contingency mechanisms
 Basic allocation decision

1. The choice of which items to fund in the plan

2. What level of funding it should receive
3. Which to leave unfunded
4. The resources are allocated to some items, not
to others
 2. Contingency mechanisms

1. There is a priority ranking of items excluded from the

plan, showing which items to fund if more resources
should become available.

2. There is a priority ranking of some items included in the

plan, showing which items should be sacrificed if total
funding must be reduced.
Example of Resource Allocation for Jobs

Assume that the active resource

plan is called “Night Plan”.

3 Job classes:
DW Consumer Group
OLTP Consumer Group
Other Consumer Group
 Resource leveling

A project management technique used to examine

unbalanced use of resources (usually people or
equipment) over time, and for resolving over-
allocations or conflicts.
Leveling resources involves redistributing an
imbalance of allocated work.
It assists project team members by keeping them from
becoming overwhelmed, working overtime, or running
into project burnout.
Resource leveling

If DW Consumer Group do not fully

use the allocated 60%, the unused
portion is available for use by jobs
in OLTP and Other Consumer
Group.
 Resource leveling

The Two Key Elements of Resource Leveling:

1. As the main aim of resource leveling is to allocate

resource efficiently, so that the project can be
completed in the given time period. Hence,
resource leveling can be broken down into two
main areas;
projects that can be completed by using up
all resources which are available and
projects that can be completed with limited
resources.
 Resource leveling

The Two Key Elements of Resource Leveling:

2. Projects which use limited resources can be

extended for over a period of time until the
resources required are available.
• If then again, the number of projects that an
organization undertakes exceeds the resources
available.
• Then it's wiser to postpone the project for a later
date.
 Resource Over-allocation

• Over-allocation of a resource is when a resource

has been assigned more work than can be
completed during normal work hours.
• Resource allocation often leads to overtime and
overspending on financial resources.
 Techniques for Avoiding Resource
Overload
1. Resource Leveling
2. Prioritize Projects
3. Linking Tasks
4. Leaving Breathing Room
5. Avoid the “Putting out fires” approach to project
management
 Techniques for Avoiding Resource
Overload

1. Resource Leveling
In this method, the project manager
can either level resources by hand
(complicated, but perhaps more
sound) or use a software program
such as Microsoft Project to level
resources for you.
 What is Resource Levelling?
• Resource levelling is defined as,
• “A technique in which start and finish dates
are adjusted based on
resource constraints with the goal of
balancing demand of the resources with
available supply.”
• ... Shared or critical resources are
available at certain times;
or. Resources are over-allocated
 RESOURCE LEVELLING

Resource Limited:
 The project must be finished as
soon as possible, but without
exceeding some specific level of
resource usage or some general
resource constraint

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LEVELING THE WORK FORCE
1. When the schedule demands more
workers per day than are available or if
we have workers standing around without
jobs, we have a problem.
2. When a new hire is trained, there is loss
of productivity. So, if we can keep the
trained people and reduce the number of
new hires, we should be better off.

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LEVELING THE WORK FORCE
. As we know, every project suffers from
start-up problems of some sort.
Superintendents and project managers
are very busy trying to get everybody
working in a productivity manner.
Therefore, if we can start with a small
crew and increase its size gradually, we
will eliminate some of the start-up
problems.

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LEVELING THE WORK FORCE
. Most projects suffer from congestion
around project completion time because
of reduced work areas.
Thus, if we can gradually reduce the crew
size as we approach project completion,
we can improve productivity by reducing
congestion.

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THE LEVELING PROCEDURE
• The leveling procedure are as follows:
1. Scheduling all the critical jobs first.
2. Starting the non-critical jobs whenever
there is a drop in scheduled man power
upto the point where the peak is reached.
3. Starting the non-critical jobs whenever
there is a drop so that no ups and downs
occur in the resource profile.

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RESOURCE SMOOTHING
• Time Limited: The project must be
finished by a certain time, using as
few resources as possible.
• But it is time, not resource usage,
that is critical

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 RESOURCE SMOOTHING
Resource Histograms:
• A bar chart showing the amount of time
assigned to a resource for the time
interval.
• Resource availability is depicted as a line
for comparison purposes.
• Resources assigned more work than
available hours are considered “over-
allocated”.
25
Illustration of Resource
Histogram
 Techniques for Avoiding Resource
Overload
2. Prioritize Projects
By prioritizing projects, when a
resource allocation overload is
apparent or a task conflict exists, it can
be resolved without piling pressure on
the individual or team (or requiring the
individual or team to put in a couple
twelve-hour days).
 Techniques for Avoiding Resource
Overload
3. Linking Tasks
• Linking tasks is more of a logistical solution.
• If the resource has been assigned to research the
markets for project A and project B, these tasks
could be linked.
• In this manner, when it appears that a resource has
been over-allocated, really the tasks are similar
enough to count for two projects.
• By linking these tasks from the different projects,
the problem can be resolved.
 Techniques for Avoiding Resource
Overload
4. Leaving Breathing Room
When scheduling the project, it is
vital to leave breathing room between tasks.
However, it is important to not under-
allocate resources as this could lead to a
loss of budget monies meaning resource
allocations problems will affect your
project's health. A fine balance must be
achieved between breathing room and not
moving forward quickly enough.
 Techniques for Avoiding Resource
Overload
5. Avoid the “Putting out fires” approach to project
management
• If your team is consistently putting out fires, it
makes it difficult to focus on the project. Moreover,
by putting out fires, the team becomes knee-deep
in ash, while project tasks pile up.
 Resource Smoothing

• A technique that adjusts the

activities of a schedule model
such that the requirements for
resources on the project do not
exceed certain predefined
resource limits.”
 Resource levelling
• “A technique in which start and finish dates
are adjusted based on resource constraints
with the goal of balancing demand for
resources with the available supply.”
 Resource Smoothing &
Resource Levelling
• both of these techniques are resource
optimization techniques so their primary
focus is to allocate resources in such a
way to bring maximum output effectively.
Illustration
Using MS Project
• When we apply resource levelling, we
apply resource constraints (like we do not
have more than 45 hours in a week) to our
schedule, applying this resource constraint
may result in change of project schedule
dependencies and it may result in change
in project duration. In the image above
when we applied 45 hours constraint to 7
week project, then it became 9 week
project schedule.
• Resource Smoothing you try to adjust
activities in such a way that you achieve
this desired level of resource allocation.
• You may not be able to do it for all the
weeks since you do not think of changing
the project duration while applying this
smoothing, so you do it only wherever
slack is available.
Resource Levelling Resource Smoothing
It applies the resource constraints to the project and We apply resource smoothing after doing resource
may result in change in project duration. levelling and we make use of slack, and will not result in
change of project duration.

Resource Levelling is primarily driven by resource Resource smoothing is more to do with desired limits,
constraints, like you do not have more than 45 hours of like we do have 45 hours available for given resource
the given resource for a week. but we wish that we allocate 38 hours per week so we
have some breathing space.

The allocation limits identified in resource levelling The desired limit identified in resource smoothing may
must be applied. not be applied in some cases, if we do not have slack

The resource levelling is done first and then we do the We apply resource smoothing after applying resource
resource smoothing. Since we need to first levelling.
accommodate the resource constraints before we can
optimize it.