LINE OF BALANCE (LOB) AND PLANNING PROGRAMMING BUDGETING SYSTEM (PPBS )

LINE OF BALANCE (LOB)

Hi!

Are you sitting at upper level of management of a business, program or projects ?

Are you interested for obtaining six sigma vision?

If you definitely want it to be done in right manner, then the knowledge of LOB would be fruitful for you.

Actually, 'Line of balance' commonly referred as 'LOB', is a graphical technique which is used in project planning in order to show the relationships between time and quality. This technique was developed by US Navy for its own purposes around 1940s.



LOB is very simple technique which is used for making schedule as well as tracking the progresses. It is based on the concept of management by exception. It is directed to take attention only to critical point in the project. Therefore, we can say that LOB is extremely used for monitoring and control of production - oriented project. 

The application of LOB are commonly found in following types of the projects:

• Construction projects where, the house is to be built in colony area. 

• A mega project where, a large volume of materials are used in multiple works. For example, huge collections of materials and electrical fittings are required for multiple works. 

• A project consisting of several units with repetitive sequential operations like, marking, cutting, rolling, welding, assembling and testing. 

However, the concept of LOB is spreading globally as per the passage of time. The top level managements are applying the concepts for achieving their control mechanism in respect of production through LOB.

Line of balance helps to measure and compare the actual performance with the organizational future targets. It helps to find out the deviations and determines the correct actions. It provides red alert on troubled activities. in order to ascertain the actual progress of project activities, LOB reports are prepared.

you can use various Line of balance techniques as a control tools. Some of the commonly used LOB diagrams are as follows:

• Objective charts 

• Unit plan diagram 

• Lead time chart and 

• Progress chart 

This can be briefly explained as follows:

• Objective charts :The objective chart shows cumulative performances of the project as a function of time and compared with the planned performances.

• Unit plan diagram : Unit plan diagram shows plans for each unit.

• Lead time chart : Lead time chart shows lead time in starting position.

• Progress chart :Progress chart shows the actual performances and status at a given time period.

Thus, 

LOB is a graphical method or tool that is used by the management in order to control their production activities. Generally, all LOB uses the standard symbols for the analysis. However, the basic design of forms and reports are quite uniform throughout the industry (a collection of group of firms).

PLANNING PROGRAMMING BUDGETING SYSTEM (PPBS)

The word 'PPBS' is an abbreviated form of 'Planning Programming Budgeting System'. It is also known as ‘programming budgeting’. In economics, it is commonly known as ‘output budgeting’.

Actually, the concept of PPBS was developed in late 1960s through the consistent effort of Robert Strange McNamara (June 9, 1916 – July 6, 2009) , an American business executive and the eighth Secretary of Defense.

PPBS is basically a program budgeting system oriented for :

• Identifying, 
• Planning 
• Reviewing 
• Selecting and 
• Controlling projects or program 

-that helps to maximize the achievements of organizations to achieve its long run goals.

PPBS has a definite set of predetermined objectives. This system mainly focuses upon the ways to minimize costs. The decision making through the use of PPBS is uniform. PPBS can be used an underlying base for cost control of the projects or program, for governmental and non-governmental organizations. Therefore, PPBS helps to take the decisions regarding whether the projects or program is to be continued or stopped.

Planning programming budgeting system is based on system analysis. It consists of four steps which is summarized below:

• Step 1. First, Identify the project or program goal and set the priorities for each program or project. This implies planning portion of PPBS. 

• Step 2. Then, Review the success of each program or project in relation to the predetermined goal. This implies analysis of the programming part of PPBS. 

• Step 3. Then, Cost estimation of each program or project till the end of its life cycle is done. This implies time phasing cost part of PPBS. 

• Step 4. Finally, Selection or rejection and controlling of each program or project is made on the basis of effectiveness in achieving its objectives and controlling . This is final analysis part of PPBS. 

Thus, in conclusion we can say that, PPBS approach is very useful approach in project management. This system is mainly required for allocating various resources (financial and non-financial resources) to the projects. Therefore, it is regarded as an important tool for decision making process. PPBS can be used as cost control tool for different programs or projects of governmental and non-governmental organizations.









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