Earned Value Management of Commercial Project: A Case Study Of An LPG Bottling Plant
Abstract
Earned Value Management (EVM) is an important project management tool that integrates cost and schedule for effective assessment of the project performance. The comprehensive literature review indicated that EVM is a widespread tool in traditional residential projects with straightforward budgets and schedules. However, commercial implementation is still underestimated. The lack of well-documented success stories and case studies of the application of EVM in commercial projects is another contribution to the hesitation of the stakeholders. Therefore, one of the primary goals of the current research is to illustrate how the EVM contributes to the accuracy of the forecast, preventive decision-making, and successful project implementation in commercial construction ventures. This research paper represents EVM analysis applied to the commercial construction project, a case study of the Liquified Petroleum Gas (LPG) bottling plant in Rasayani, Maharashtra, India. The initially planned budget was ₹87,478,725 and be implemented in 10 months. However, due to design errors, torrential rains, and inflation-induced cost increases, the project lasted for 14 months, consuming ₹101,822,725. The project was divided into 4 phases for EVM analysis: April – June 2023, July-September 2023, October 2023 – January 2024, and February – May 2024. Cost Performance Index (CPI), Schedule Performance Index (SPI), Cost Variance (CV), Schedule Variance (SV) are used to measure performance. The performed analysis identified that CPI and SPI ranged from 0.60 to 0.91 and 0.41 to 1.00, respectively, indicating cost and schedule overruns in all phases. The findings favor the wider use of EVM within commercial projects since they confirm its high effectiveness in project control and successful completion.
References
2. Maria Teresa B., Boffoli, N., Danilo, C., & Giuseppe, V. (2015). Tracking project progress with earned value management metrics. Proceedings of the 17th International Conference on Enterprise Information Systems (ICEIS 2015), 502-508.
3. Vyas, A. B., & Birajdar, B. V. (2016). Tracking of construction projects by earned value management. International Journal of Engineering Research & Technology (IJERT), 5(3), 970-973.
4. Khan, K. M., & Reza, M. (2018). Earned value management for design and construction project. International Journal of Trend in Scientific Research and Development (IJTSRD), 2(5), 1482-1502.
5. Sunarti, N., Mastan, Z. P., & Cin, L. S. (2018). The application and challenges of earned value management as a cost monitoring tool in the construction industry. International Journal of Engineering and Technology, 7(4), 96-100.
6. Devanshu, V., Rajgor, M., & Pitroda, J. K. (2018). A critical literature review on implementation of earned value management. International Journal of Constructive Research in Civil Engineering, 4(1), 39-43.
7. Oktrianto, D., & Susetyo, B. (2020). Productivity analysis for performance measurement by earned value management in high-level building projects. International Journal of Engineering Research and Advanced Technology (IJERAT), 6(7), 1-10.
8. Barikder, H., & Paul, V. K. (2020). Application of earned value management in Indian construction projects. International Journal of Creative Research Thoughts (IJCRT), 8(6), 212-220.
9. Vaibhava, S., Rao, B. P., Shetty, D. V., & Prakash, C. (2020). Application of earned value management and earned schedule method for a residential apartment. Journal of Physics: Conference Series, 1706, 012051.
10. Netto, J. T., Oliveira, N. L. F., Freitas, A. P. A., et al. (2020). Critical factors and benefits in the use of earned value management in construction. Brazilian Journal of Operations and Production Management, 17(1), 1-14.
11. Xu, W. (2021). Application of earned value method in project cost management and schedule management. Bio-Byword, 4(4), 45-52.
12. Ippakayal, P. D., & Kumthekar, M. B. (2021). A time cost optimization through earned value management analysis. International Research Journal of Engineering & Technology (IRJET), 8(8), 5115-5121.
13. Gaddam, G. A., & Landage, A. B. (2022). A review on earned value management and earned schedule method for construction projects. International Research Journal of Engineering & Technology (IRJET), 9(6), 1207-1214.
14. Proano Narvaez, M., Flores Vazquez, C., Vasquez Quiroz, P., & Avila Calle, M. (2022). Earned value method for construction projects: Current application & future projection. Buildings, 12, 301. https://doi.org/10.3390/buildings12020301
15. K C, N., & Chethan, K. (2023). Tracking a typical apartment construction using earned value management. International Research Journal of Engineering & Technology (IRJET), 10(7), 3551-3558.
16. Aramali, V., Gibson, G. E. Jr., El Asmar, M., & Sanboskani, H. (2023). Novel earned value management system maturity framework and its relation to project performance. Journal of Construction Engineering and Management, 149(6), 04023029. https://doi.org/10.1061/(ASCE)CO.1943-7862.0002376
17. Stone, C. (2023). Challenges and opportunities of completing successful projects using earned value management. Open Journal of Business and Management, 11, 464-493. https://doi.org/10.4236/ojbm.2023.113031
18. Koskela, L. (1992). Application of the New Production Philosophy to Construction. Technical Report No. 72. Centre for Integrated Facility Engineering, Department of Civil Engineering, Stanford University.