AI Project Post Mortem Analysis

Project Post-mortem Analysis

1. Executive Summary

Project PBA-087 concluded with significant schedule slippage and cost overruns, severely impacting its financial performance. Despite a healthy initial margin and steady work progress (SPI of 1.01), persistent external dependencies, specifically material constraints and delayed orders, led to a critical erosion of milestone slack (final -17 days) and a 28-day total project delay. The cost of these setbacks, coupled with underlying budget management issues, resulted in a 10.56% cost variance ($235,950 over budget) and a drastically reduced expected margin of just 1.22% ($30,464 profit) on a $2.5 million project. The key data-driven lesson is the profound impact of unmitigated external supply chain risks on both schedule and budget integrity.

2. Final Performance Metrics: Planned vs. Actual

Note: Final Cost includes BAC plus the remaining cost to complete (CTC) to reach EAC.

3. Analysis of Metric Trends

The project’s final state of schedule slippage and margin erosion is a direct result of critical metric trends that diverged over time. Initially, the project showed positive momentum, with a steady SPI around 1.01, indicating work was progressing at the planned rate. However, a significant disconnect emerged between schedule progress and milestone adherence. Milestone Slack began eroding in early July, turning negative and consistently decreasing, signifying that the schedule buffer was being consumed without key milestones being met. This was compounded by a concurrent increase in Total Project Delay, which climbed steadily from 22 days in early July to 28 days by September. This divergence implies that while activities were underway, they were not aligned with the critical path or key delivery milestones, likely due to external factors impeding the flow of work.

Cost performance, as reflected by the CPI, was a consistent concern, remaining below 1.0 (averaging 0.91-0.93) throughout most of the project. This chronic inefficiency led directly to the increasing Cost Variance and Cost Variance % as actual costs outpaced earned value. Consequently, the Expected Margin % plummeted from a healthy initial state (over 20%) to a precarious 1.22% by completion, turning a projected substantial profit into a nominal gain. The substantial $233,585 in revisions also contributed to the increased cost baseline (BAC), further shrinking the margin.

Crucially, the root causes of these schedule and cost issues are evident in the rising counts of Material Constraints, Delayed Purchase Orders, and Delayed Production Orders since early August. These external dependencies, combined with a high Milestone Risk Rating (66.61%) and overall Risk Exposure (49%), indicate a significant failure to proactively manage and mitigate supply chain-related risks. The project faced 7 Severe Issues and 16 Active Issues, many of which are likely linked to these material and procurement delays, directly contributing to the schedule erosion and cost overruns despite manageable resource utilization.

4. Data-Driven Lessons and Actionable Recommendations

Lesson 1: Uncontrolled External Dependencies Devastate Schedule and Margin. The consistent negative Milestone Slack and increasing Total Project Delay, directly linked to high counts of Material Constraints, Delayed Purchase Orders, and Delayed Production Orders, highlight a critical vulnerability to external supply chain disruptions. This also directly impacted Cost Performance and Margin.

• Recommendation 1: Implement Proactive Supply Chain Risk Management.
  • Metric Link: MATC, DPO, DPRD, SLK, PDLY, CPI, MARP.
  • Action: For all future projects, mandate a comprehensive supply chain risk assessment during the planning phase. Establish formal communication channels with key suppliers, including regular performance reviews and mandatory issue escalation protocols. For critical components, develop and fund contingency plans such as identifying alternative suppliers, maintaining strategic buffer stock, or securing long-term supply agreements.

Lesson 2: Insufficient Cost Control and Margin Protection Mechanisms. Despite a 20% quoted margin, the project concluded with a 1.22% margin due to persistent Cost Variance and a declining CPI. This indicates a failure to effectively manage costs, react to overruns, and protect the financial integrity of the project.

• Recommendation 2: Strengthen Dynamic Cost Forecasting and Control.
  • Metric Link: CPI, VARP, MARP, EAC, AC.
  • Action: Implement weekly cost performance reviews where AC vs BAC, CPI, and VARP are critically analyzed. Require project managers to generate updated EAC and MARP forecasts bi-weekly or whenever a significant variance occurs. Establish a formal “margin protection plan” template that outlines specific actions (e.g., value engineering, re-scoping, pausing non-critical work) to be triggered when MARP drops below a predefined threshold (e.g., 10%), ensuring proactive rather than reactive cost management.