Planned Value (PV) is the budgeted cost for work scheduled for a specific period and specified in the budget, also known as the Budgeted Cost of Work Scheduled (BCWS). It is obtained by multiplying the percentage of planned progress in the time schedule by the project implementation costs listed in the Bill of Quantities (RAB). PV or BCWS = (% of planned progress) x (Budget) Calculation of PV or BCWS in Week 1. PV or BCWS = (% of plan) x (total project budget) PV or BCWS = (0.07%) x (Rp. 2,270,000,000) PV or BCWS = Rp. 1,589,000. Earned Value (EV) or BCWP is the budgeted cost for completed work, obtained by multiplying the percentage of progress by the budget. EV or BCWP = (% actual progress) x (Budget) Calculation of EV or BCWP in Week 1. EV or BCWP = (% actual progress) x (total project budget) EV or BCWP = (0.07%) x (Rp. 2,270,000,000). EV or BCWP = Rp. 1,589,000. From the analysis carried out, the work time was 7 days faster than the planned schedule of 133 days. The analysis found that the final cost was less than the contract cost of Rp. 2,189,355,000, thus achieving cost savings.
Construction projects are complex activities involving various resources, such as labor, materials, equipment, as well as costs and time, which must be managed effectively. The success of a project is determined not only by the quality of the final result, but also by the ability to complete the work within the planned budget and time schedule. Therefore, cost and time control are crucial aspects of construction project management. During project implementation, deviations often occur between plans and actual implementation. These deviations can take the form of work delays, cost overruns, or even both. This can be caused by various factors, such as inadequate planning, design changes, material procurement delays, and low labor productivity. If not properly managed, these deviations can negatively impact the overall success of the project.
One approach that can be used to control project costs and time in an integrated manner is the Earned Value method. This method allows project managers to evaluate project performance by comparing plans and actual implementation, both in terms of cost and time. This method can provide a more accurate picture of the project's condition over a given period. The Earned Value method integrates three main parameters: Planned Value (PV), Earned Value (EV), and Actual Cost (AC). These three parameters can calculate various performance indicators, such as Cost Variance (CV), Schedule Variance (SV), Cost Performance Index (CPI), and Schedule Performance Index (SPI). These indicators are helpful in identifying whether a project is on track, ahead of schedule, or experiencing delays and cost overruns. The application of the Earned Value method in construction projects is becoming increasingly important as project complexity increases. One type of project that requires strict controls is the construction of industrial facilities, such as Warehouse MCC (Motor Control Center) Rooms. These projects carry a relatively high level of risk due to their involvement with electrical systems and industrial operations, which require precision and timely completion.
The Warehouse MCC Room is a crucial component of the electrical distribution system in an industrial facility. This room serves as the control center for electric motors used for various operational processes. Therefore, the construction of the Warehouse MCC Room must be carried out to high quality standards and with optimal cost and time management to avoid disrupting the company's operational continuity. In practice, Warehouse MCC Room construction projects often encounter various obstacles, such as changes in technical specifications, resource constraints, and field conditions that do not align with the initial plan. These obstacles can lead to deviations from the established cost and time plans. Therefore, a method is needed that can provide accurate and real-time project performance information. The Earned Value method is the right solution to address these issues because it integrates cost and time aspects into one comprehensive analysis. Using this method, project management can conduct regular performance evaluations and take necessary corrective actions to keep the project on track.
Based on this description, it can be concluded that cost and time control are key factors in the success of construction projects, particularly the MCC Warehouse Room construction project. Therefore, this study was conducted to analyze the project's cost and time performance using the Earned Value method. This is expected to provide a clear picture of the project's condition and serve as a basis for more effective decision-making. Project management is a systematic approach used to plan, organize, implement, and control all project activities to achieve predetermined objectives effectively and efficiently. According to recent research, project management is defined as the application of knowledge, skills, tools, and techniques to project activities to meet project requirements (Yogasara, 2024). Furthermore, project management is also understood as the process of organizing and controlling all stages of a project from start to finish, optimally utilizing resources (Merliawati Meta S., 2024). Thus, project management focuses not only on the final result but also on how the process is executed in a structured and planned manner. In its implementation, project management encompasses several key functions: planning, implementation, and control. Planning includes determining objectives, developing a schedule, and estimating costs and required resources. The implementation phase is the process of implementing the plan, while the control phase ensures that the project is running according to plan and takes corrective action if deviations occur (M. Dwi Akbar, 2024). Therefore, implementing good project management is very important to minimize the risk of project failure and ensure that the set cost, time and quality targets are achieved.
Furthermore, there are additional significant issues that impact schedule, time, and quality, namely high-cost economic analysis efforts and workforce training programs. These three factors are intertwined. This means that if you want to improve performance as agreed in the contract, you generally have to increase quality, which in turn results in costs exceeding the budget. Conversely, if you want to reduce costs, you usually have to compromise on quality and schedule. Planning is a process that attempts to lay the foundation for goals and objectives, including preparing all resources to achieve them. Planning provides a guideline for implementation regarding the allocation of resources to carry out activities. Broadly speaking, planning serves to lay the foundation for project objectives, namely scheduling, budget, and quality. (Imam Soeharto, 1997).
A previous study, entitled "Cost and Schedule Control Using Earned Value (Building X Gresik Rehabilitation Project)," found that the final week's results were above plan. The final week's results showed a SV of Rp185,792,583.94 and a CV of Rp348,089,626.99. The SPI was 1.06 and the CPI was 1.12. The study estimated the project's completion time at 89 days and the final cost at Rp4,254,837,523.80, resulting in a project profit of Rp368,781,573.68. (Agatha & Dani, 2018) Meanwhile, the study, entitled "Cost and Time Review of the South City Square Lot 2 Project Using the Earned Value Method," also revealed a project completion time of Rp185,792,583.94. The results of the study showed that the project experienced work delays until the 26th week because the SPI value was less than 1 and the SV was negative, in terms of costs, it showed that management had been carried out well because the estimated difference between the planned cost and the actual cost was Rp 2,526,376,097. (Sobari & Lutfi, 2018)
The project control method used is the Integrated Cost and Schedule Control Method (Earned Value). This method examines the trends in Schedule Variance and Cost Variance over a period of time during the project (Ir. Iman Soeharto, 1999). The Earned Value concept is a tool used in project management that integrates cost and time. The Earned Value concept presents three dimensions: the physical completion of the project (the percent complete), which reflects the planned cost absorption (budgeted cost), the actual costs incurred (Actual Cost), and the benefits derived from the costs incurred (Earned Value). Based on these three dimensions, the Earned Value concept can link cost performance with time, derived from calculating cost and time variances (Fleming & Koppelman, 1994). Based on this cost and time performance, a project manager can identify the overall performance of the project and its work packages and then predict the project's cost performance and completion time. The results of this project performance evaluation can serve as an early warning of performance inefficiencies in project completion, allowing management policies and changes in implementation methods to prevent cost overruns and delays in project completion.
As project complexity increases, delays in project completion and cost overruns often occur. The management system used typically separates the cost accounting system from the construction project scheduling system. A cost accounting system can generate performance reports and project cost predictions, while a scheduling system can generate project completion status reports. While the project management information from these two systems complements each other, it can yield different information regarding project status. Therefore, a system capable of integrating time and cost information is needed. To this end, the Earned Value concept can be used as a performance measurement tool that integrates cost and time aspects. The Variance Analysis method is a method for controlling the costs and schedule of a construction project. In this method, identification is carried out by comparing the actual costs incurred against the budget. Variance analysis is carried out by collecting information on the latest status of project progress at the time of reporting by calculating the number of completed work units, then comparing it with the plan or reviewing resource usage records. This method will show the difference between implementation costs and the budget and implementation time against the schedule (Ir. Iman Soeharto, 1999).
This is the cost allocated for each work item. The RAB is contained in the contract between the owner and the implementing contractor. The contract also includes unit price analysis, wage schedule, and material prices. The RAB data is used in calculating planned value and earned value.
a. Project Plan Time Schedule This is a measure of project implementation. The time schedule includes a description of the work, work volume, and unit weight (%). b. Actual Project Time Schedule This is similar to the project plan time schedule, but includes the progress of the work that has been implemented, along with information about the weight of work that has been completed and that has not been completed. 3. Weekly Project Report This is a record of project achievement data achieved each week. This weekly report is used as work realization/earned value data.
Planned Value (PV) is the budgeted cost for work scheduled for a specific period and specified in the budget, also known as the Budgeted Cost of Work Scheduled (BCWS). It is obtained by multiplying the percentage of planned progress in the time schedule by the project implementation costs listed in the Bill of Quantities (RAB).
Reviewing the cost variance (CV) calculation for week 1, obtained by subtracting the Earned Value and Actual Cost for week 1. CV = EV – AC CV = Rp 1,589,000 – Rp 2,065,000 = -Rp 476,000 A negative value indicates that costs exceeded the planned budget. These SV and CV values indicate that the project is delayed or running ahead of schedule, and that costs are greater than or less than the planned budget. Calculations for subsequent weeks can be performed using the same method as above, as shown in the following table.
Making a cost estimate or project completion schedule based on the indicators obtained during reporting will provide an indication of the total costs at the end of the project (estimate at completion = EAC) and an estimate of the project completion time (estimate all schedule = EAS).
Cost or schedule forecasts are extremely useful because they provide early warning of future events, if trends at the time of reporting remain unchanged. At the end of the review, in week 18, the estimated remaining work time, the Estimate Temporary Schedule (ETS), is as follows: ETS = (remaining time) / SPI ETS = (133 days – 126 days) / 1.003 ETS = 7 / 1.003 = 6.97 ≈ 7 days Meanwhile, the estimated completion time for all work, the Estimate All Schedule (EAS), is: EAS = completion time + ETS = 126 + 7 EAS = 133 days From the above calculation, the completion time is 7 days faster than the planned schedule of 133 days.
At the end of the review, in week 18, the estimated remaining work time, Estimate Temporary Cost (ETC), is as follows: ETC = (Total Budget – BCWP) / CPI ETC = (Rp 2,270,000,000 – Rp 2,270,000,000) / 28,148 ETC = (Rp 0) / 28,148 ETC = Rp 0 EAC = ACWP + ETC EAC = Rp 80,645,000 + Rp 0 EAC = Rp 80,645,000 Result = Rp 2,270,000 - Rp 80,645,000 = Rp 2,189,355,000 From the calculation above, the final cost is less than the contract cost by Rp. 2,189,355,000 so it can be said to be cost-effective.