How to use Earned Value Management in Primavera P6

Primavera support you to control project performance by Earned Value Management technique.

I will show you how to use it in Primavera.

We have a simple project to finish casting 10 column.

  • 1 column / day.
  • 100 $ / column

Each activity is assigned resource A.

How to use Earned Value Management in Primavera P6 - 1

First we have to create baseline for this project.

Go to Project -> Maintain Baselines. Click on Add and OK to create a baseline.

How to use Earned Value Management in Primavera P6 - 2

We will assign this baseline for our project.

Go to Project -> Assign Baselines. Click on Project Baseline and select our baseline. Then click OK.

How to use Earned Value Management in Primavera P6 - 3

We can show columns as display in below picture to analyze Earned Value Management.

Right click on Activity Table -> Column. Select columns in Earned Value group.

How to use Earned Value Management in Primavera P6 - 11

How to use Earned Value Management in Primavera P6 - 4

At the end of day 5 of the project:

How many column should have been built? (This is the Planned Value)

The answer is 5 column

(This value is automatically calculated by using Baseline we assign previously. Baseline said that Project’s duration is 10 days, today is 5th day, so 5 column should be completed)

PV = 5 x 100 = 500 $

How to use Earned Value Management in Primavera P6 - 5

How many column have actually been built? (This is the Earned Value)

We receive report from construction site and it said only 3 columns finish.

(This is value based on the Performance % Complete which is equal to Activity % Complete by default)

EV = 3 x 100 = 300 $

How to use Earned Value Management in Primavera P6 - 6

How much did it cost to build those three column? (This is Actual Cost)

We receive report from Accountant department and it said 200 $ / column.

(This value is based on Actual Units)

AC = 3 x 200 = 600 $

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Then we can show “Schedule Variance” and “Cost Variance”.

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Schedule Variance SV = EV – PV = 300 – 500 = -200 $

A negative number indicates that the project is behind schedule.

1 day for 1 column for 100 $. So it means we are late 2 days.

Cost Variance CV = EV – AC = 300 – 600 = -300 $

A negative number indicates that the project is over budget.

It means we are currently over budget 300 $.

Then we can show “Estimate to Complete” and “Estimate at Completion”

How to use Earned Value Management in Primavera P6 - 9

ETC = BAC – EV = 1000 – 300 = 700 $

EAC = ETC + AC = 700 + 600 = 1300 $

According to PMI standard, we should take CPI into account to calculate these 2 values. So we can change the way Primavera calculate by :

Go to WBS window -> Earned Value tab. Check on PF = 1 / Cost Performance Index

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Now

ETC = \frac{BAC - EV}{CPI}\frac{700}{0.5} = 1400 $

( CPI = \frac{EV}{AC} = \frac{300}{600} = 0.5 )

EAC = ETC + AC = 1400 + 600 = 2000 $

However you have to configure this option at the beginning of project (before update anything). Otherwise it doesn’t affect.

We can also make diagram report

Click on Activity Usage Profile button.

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Right click on the diagram and select Activity Usage Profile Option

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Check in option as display in below picture

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Now you can see the Earned Value diagram. You will use the cost axis on the right side (not the left one).

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I also attach a theory diagram of Earned Value Management for your reference.

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With Earned Value Management in Primavera we can easily see our project performance and forecast the total cost at the end of project.

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Author: Khuong Do

Khuong Do is a Project Planner in Civil, Transportation and Oil & Gas Industry. He has worked as a Primavera Consultant Specialist since 2006 . He holds a Civil Engineering degree and a Bachelor of Information Management System. Now he is working in Petronas RAPID project, one of the biggest Refinery and Petrochemical complex, in Pengerang – Malaysia.

25 thoughts on “How to use Earned Value Management in Primavera P6”

  1. Dear,

    Very nice.

    Really i always wait for the post. Please post HOW TO PREPARE RECOVERY SCHEDULE
    (Actual cost = plan cost) after delay or EOT) in other words bring plan % or cost equal to Earned Value.

    Like

  2. Dear sir,
    Excellent.Refreshed with simple example yet covered all the core topics in earned value concepts.Thanks for sharing.

    Like

  3. Thanks for the nice article. I have a question regarding ETC:
    What formula is used to calculate the ETC for each unit of time and draw the curve? Is this formula based on the PV?

    Like

    1. Hi Evgeny,
      The value to draw the curve is also the value appear on the activity table (The Estimation At Complete column).
      The formula is based on what we choose in the Earned value tab. Do we consider CPI or not.

      Like

  4. Hi How to upload Cost in P6? I want to upload cost for Clients per tender value and for progress billing per month based on progress, not actual cost from Resources

    Like

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