Dynamic Simulation Model for Project Change-Management Policies: Engineering Project Case

Abstract

The management and control of megaprojects are incredibly complex. Difficulties occur due to unexpected changes and errors. To effectively manage disruptive changes, reworks, and errors, project managers are required to consider the dynamic behavior of feedback loops that cause delays and disturbances. The system dynamics (SD) modeling approach has been used in the past few decades to address this need for the analysis and improvement of project performance. This paper discusses how changes in dynamics can influence the performance of a project. The SD model was utilized to improve project planning and simulate change-management policies for an Iranian project in the petrochemical industry. This study contributes by developing a dynamic simulation model for effective formulation of project change-management policies by taking into account the time, cost, quality, resource, and financial indicators. The model enables the decision maker to compare alternative change-management policies, e.g., funding, outsourcing activities, schedule adjustment, and labor control in terms of project performance indicators. Aided by a case study and an SD methodology, a comparative analysis of change-management policies was provided. Results indicated that resource planning has an essential role in the project performance improvement.