PLANNING TOOLS-CPM AND PERT

The importance of completing the plant design, construction, and startup on time has been noted many times in the previous chapters. Every delay means a loss of money. This is true if for no other reason than that some of the money for design, construction, and startup has been spent, and the rest has been committed. No return can be obtained on what has been spent, and a subnormal return will be received on the remainder until after the plant is producing a product. As stated in Chapter 10, time is money. 

Delays can also escalate the cost of the plant. If the construction phase is behind schedule, expensive rented equipment and men may be sitting idle while they wait for something to be completed. The company, of course, receives no benefits from the idle labor and equipment, but it still must pay wages and rent for them. 

Delays may also mean inability to meet sales commitments. The salesmen, working under the assumption that the new plant will be in operation, may sell greater quantities of the product than the company can produce in its other facilities. If the plant does not start as scheduled, the company may be forced to purchase a competitor s product at a premium price to meet the commitment. The result often is a net loss on each pound (kilogram) that must be purchased under these circumstances. 

The PERT technique was developed in connection with the Navy s crash project to produce the Polaris submarine. It is given much of the credit for the completion of that program 18 months ahead of schedule. In another spectacular success, the turnaround time (the time necessary to shut down, repair, maintain, inspect, and start up the unit) for a methanol unit was cut from 12 to 9 days, with no increase in personnel, by using CPM. This is especially impressive since a similar turnaround had been done annually for 25 years,2 and using the best methods available the turnaround time had never been less than 12 days. 

To prove to himself the importance of using a scheduling technique, the reader should attempt to determine the shortest time necessary to install a scrubber in an existing process. The normal time it takes to perform each task connected with this project is given in Table 13-2. He should get 136 hours. 

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