9.1 Resource Optimization: Allocation, Smoothing, and Levelling

9.1 Resource Optimization: Allocation, Smoothing, and Levelling

Definition (APM BoK7 glossary): Resource management is the acquisition and deployment of the internal and external resources required to deliver the project, programme or portfolio. Resources themselves are all the labour and non-labour items required to undertake the scope of work to the required quality, and resource allocation is the process by which labour and non-labour resources are attributed to activities.

A project schedule developed solely on the basis of activity logic and duration estimates represents only a theoretical ideal. In the real world, activities cannot execute in a vacuum—they demand specific people, machinery, materials, software, and physical facilities. When these resources are assumed to be infinitely available, projects run directly into unmanageable bottlenecks, budget overruns, and severe schedule delays. Resource optimization bridges the critical gap between time-based dependency networks and real-world operational capacity.

To master this domain for the APM Project Fundamentals Qualification (PFQ), project professionals must understand the diverse categories of resources deployed across a project lifecycle, how resource demand is scheduled and visualized using resource histograms, and how to apply the two primary resource optimization techniques: resource smoothing and resource levelling.

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The Spectrum of Project Resources

Within the APM Body of Knowledge (BoK7), a resource is broadly defined as any person, asset, material, or service required to perform project activities and deliver agreed outputs. Resources are typically classified across five distinct categories:

1. Human Capital and Specialized Skills

Human resources represent the intellectual, managerial, and physical labor deployed on the project. This includes core project team members, technical subject matter experts (SMEs), project managers, business analysts, site engineers, software developers, and external contractors. Managing human resources requires careful consideration of:

• Skill Sets and Competency Levels: A junior technician cannot simply substitute for a certified structural engineer or lead architect.
• Availability and Working Calendars: Standard working hours, holidays, corporate shifts, and geographic time zones.
• Productivity and Working Capacity: Sustainable work rates; prolonged overtime rapidly leads to diminishing returns, fatigue, and mistakes.

2. Equipment and Machinery

Equipment encompasses the tools, vehicles, plant machinery, and diagnostic apparatus required to construct, test, or install deliverables. Examples include construction cranes, excavators, specialized drilling rigs, scientific spectrometers, and dedicated test servers. Equipment often carries high capital or hire costs and may be subject to strict maintenance cycles, transportation lead times, and operating site restrictions.

3. Physical Materials

Materials are the physical components, commodities, and consumable goods incorporated into the project outputs or consumed during delivery. Examples include concrete, structural steel, copper piping, electrical cabling, circuit boards, and chemical reagents. Materials require rigorous supply chain management, storage warehousing, batch quality inspections, and lead-time planning to avoid site stoppages.

4. Software, Tools, and Digital Environments

Digital resources include specialized software licenses (e.g., Building Information Modelling [BIM], Computer-Aided Design [CAD], enterprise database licenses), cloud computing infrastructure, development sandboxes, and automated testing tools. These resources may have concurrency constraints (e.g., a maximum of five simultaneous floating licenses) or access throttles that restrict parallel execution.

5. Facilities and Infrastructure

Physical environments and facilities provide the spatial foundation for project execution. Examples include wind tunnels, specialized cleanrooms, dry docks, aircraft hangars, acoustic test chambers, and dedicated fabrication yards. Facilities are typically fixed in capacity and must be booked well in advance, often creating major scheduling choke points across complex programmes.

+-----------------------------------------------------------------------------------+
|                            PROJECT RESOURCE TAXONOMY                              |
+-----------------------------------------------------------------------------------+
| 1. Human Capital:   Engineers, Developers, Specialists, Managers, Contractors     |
| 2. Equipment:       Cranes, Plant Machinery, Test Rigs, Fleet Vehicles           |
| 3. Materials:       Structural Steel, Concrete, Cabling, Consumable Reagents      |
| 4. Software/Tools:  CAD/BIM Licenses, Cloud Servers, Specialized Code Suites       |
| 5. Facilities:      Laboratories, Cleanrooms, Dry Docks, Staging Warehouses       |
+-----------------------------------------------------------------------------------+

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Resource Allocation, Aggregation, and Histograms

Translating the Work Breakdown Structure (WBS) and network schedule into an executable plan requires three sequential steps:

1. Resource Allocation (Assignment): Identifying which specific resources—and what quantity—are required for each individual schedule activity (e.g., Activity B requires two senior electrical engineers and one cherry picker for four consecutive days).
2. Resource Aggregation (Loading): Summing the total resource requirements period-by-period across the entire project schedule, initially assuming all activities commence on their Early Start (ES) dates.
3. Resource Profiling (Visualization via Histogram): Displaying the aggregated resource demand over time as a column chart, overlaid against a line representing the maximum available resource capacity.

The Resource Histogram

A Resource Histogram is a bar chart that displays the cumulative amount of a specific resource scheduled against calendar time (days, weeks, or months). A horizontal threshold line—known as the Resource Limit or Resource Availability Line—indicates the maximum sustainable capacity for that resource.

Analyzing a resource histogram immediately reveals two undesirable operational conditions:

1. Resource Overallocation (Peaks / Over-utilization)

An overallocation occurs whenever the demand bar exceeds the maximum resource limit line. For example, if a project requires eight senior system architects during Week 6, but only five exist within the organization (and no budget exists to hire contractors), the resource is overallocated by three units.

The Serious Hazards of Unchecked Overallocation:

• Burnout and Attrition: Requiring staff to sustain prolonged overtime leads to physical exhaustion, mental fatigue, and elevated turnover among key specialists.
• Compounded Quality Defects: Fatigued staff produce significantly higher error rates, necessitating expensive rework later in the lifecycle.
• Uncontrolled Schedule Slippage: When the required resources inevitably fail to materialize, tasks stall unpredictably, creating cascade delays across downstream dependent activities.

2. Resource Under-allocation (Troughs / Idle Capacity)

A trough occurs when resource demand dips substantially below the availability line. While less catastrophic than a peak, pronounced troughs represent:

• Direct Commercial Waste: Retaining salaried staff or paying rental fees on leased plant machinery that sits idle represents unrecoverable overhead.
• Demotivation and Inefficiency: Sporadic, feast-or-famine workloads undermine team rhythm and operational momentum.

Because of these consequences, project managers must optimize resource profiles using two distinct techniques: Resource Smoothing and Resource Levelling.

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Resource Smoothing (Time-Constrained Optimization)

Core Principle of Smoothing: The project completion date is strictly fixed. The schedule must be smoothed without violating the critical path.

Definition (APM BoK7 glossary): Resource smoothing is an approach used as part of resource optimisation that involves utilising float, or increasing or decreasing the resources required for specific activities, such that any peaks and troughs of resource usage are smoothed out avoiding extension of the duration where possible. Also known as time limited resource scheduling.

BoK7 (4.2.7) adds the decision rule: smoothing "is used when scope and quality are not negotiable, and time is relatively more important than cost", and it explicitly permits adding resources — "more people, the same number of people working longer hours, or additional equipment" — as well as using float. It may also require redefining the order of work where the original logic was discretionary rather than mandatory.

Resource smoothing (also called time-limited scheduling) is applied when the project finish date cannot be compromised. Examples include regulatory compliance deadlines, fixed sporting events (such as the Olympic Games), commercial product launches tied to major trade fairs, or contractual milestones with severe delay damages.

How Resource Smoothing Operates

1. The project manager examines activities that possess float (Total Float or Free Float)—which by definition are non-critical activities.
2. Overallocated resource peaks are dampened by delaying, splitting, or staggering these non-critical activities into subsequent time periods where spare resource capacity exists.
3. Crucial Rule: An activity can only be delayed by an amount of time that does not exceed its available float.
4. Where float alone is not enough, BoK7 allows the resource profile itself to be changed — increasing or decreasing the resources on specific activities, or resequencing work whose original logic was discretionary rather than mandatory (for example running two tasks in parallel instead of in sequence).
5. Because critical path activities possess zero total float, they cannot be delayed. As a result, the critical path remains untouched and the overall scheduled project end date is preserved.

The Inherent Limitation of Smoothing

Because resource smoothing operates strictly within the boundaries of available float, it cannot resolve all overallocations. If a resource overallocation occurs on a critical path activity, or if the resource deficit on a non-critical activity exceeds the available float, smoothing cannot eliminate the peak. In such cases, the project manager must seek alternative interventions, such as approving paid overtime, hiring external sub-contractors, or adjusting deliverable scope.

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Resource Levelling (Resource-Constrained Optimization)

Core Principle of Levelling: Resource limits are absolute and inviolable. The project completion date is flexible and allowed to slip.

Definition (APM BoK7 glossary): Resource levelling is an approach used during resource optimisation that delays activities such that resource usage is kept below specified limits. Also known as resource limited scheduling.

BoK7 (4.2.7) frames it as a question: levelling answers "with the resources available, when will the work be finished?" It is used "when projects are dependent upon limited resources, for example test pilots or specialist testing equipment". Fitting the scope of work into a resource cap while holding quality "results in delay to planned completion dates of activities and an overall increased duration". BoK7 also defines the collective term — resource optimisation is "a collective term used to describe the methods for ensuring that labour and non-labour resources are matched to the schedule".

Resource levelling (also called resource-limited scheduling) is applied when the availability of certain critical resources is strictly capped. Examples include an organization operating under strict hiring freezes, access to a single proprietary testing chamber, or projects with a fixed internal workforce where hiring external sub-contractors is prohibited.

How Resource Levelling Operates

1. The primary objective is to eliminate all instances of demand exceeding the resource availability threshold.
2. The project manager reschedules activities based on resource availability. Non-critical tasks are delayed first, exhausting their float.
3. When an overallocation occurs on critical activities, or when available float is completely exhausted, activities must be delayed until the required resources become available.
4. Activities that were originally scheduled to occur in parallel must now be sequenced sequentially due to resource constraints.
5. Impact on Project End Date: Because critical activities are pushed out in time, resource levelling establishes a new, elongated critical path (sometimes termed the resource-critical path). The overall project completion date is delayed.

Key Trade-Off

Resource levelling provides complete operational feasibility and ensures the project team and equipment operate within sustainable limits. However, the client and project sponsor must accept a revised, later delivery date and the associated commercial implications.

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Comparison: Resource Smoothing vs. Resource Levelling

The following table synthesizes the fundamental distinctions between the two resource optimization techniques aligned with the APM BoK7 framework:

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APM Exam Tips for PFQ Candidates

When sitting the APM PFQ examination, candidates frequently encounter questions asking them to differentiate between smoothing and levelling. Keep these two golden rules in mind:

1. Remember the End Date: If the question states that the completion date cannot be moved or must be strictly protected, the technique is Resource Smoothing (time-limited resource scheduling).
2. Remember the Resource Ceiling: If the question says resources are limited — for example "which technique could be used by a project manager when resources are limited?" — the answer is Resource Levelling (resource-limited scheduling). Resource aggregation (simply summing demand) and resource estimation are not optimisation techniques, and "resource expansion" is not an APM term at all.
3. Note what BoK7 lets smoothing do: smoothing is not restricted to shuffling float. APM explicitly allows increasing or decreasing the resources on specific activities as part of smoothing, provided the duration is not extended.