DURHAM, UK – November 23, 2020 – Accurate and consistent forecasting of the time duration and cost of maintenance work order activities remains a challenging task for planners – despite being something they need to do every day.
Recently in one of IAMTech’s courses for iPlan software, which is designed to increase forecasting accuracy using norms-based estimation, it was demonstrated how a cognitive bias called ‘anchoring’ influences our estimating skills.
‘Anchoring’ basically means an individual depends too much on an initial piece of information to form a decision.
Attendees at the course were all planners or STO (Shutdown, Turnaround, Outage) managers, each with decades of experience, and were split into two groups, and each given the same question, with one important difference…
Group 1 were asked, ‘Was Gandhi older or younger than 35 when he died? Guess his age.’
Group 2 were asked the same question, only this time raising the age from 35 to a somewhat improbable 114!
The variation in results were astounding, with Group 1 having an average estimate of 50 years, whilst group 2 guessed 81 years.
The attendees were shown the results and asked why they thought their answers were so different and concluded that it was because the question included one piece of varying information. The age.
That was the right answer.
“It turns out that our brains are very lazy and take shortcuts whenever possible, relying too much on an initial piece of information offered (called the “anchor”) to base future decisions and judgments on,” explains Jon Swift from IAMTech.
In this case, few of the attendees were likely to have much knowledge about Gandhi, so relied on the one piece of information they were given, the age. This heavily anchored the guesstimate, and whilst the age of 35 was too low, and 114 was too high, both significantly skewed the estimates.
“This cognitive bias happens also happens in professional situations, where we are influenced by useful and perhaps not so useful information, even if we have a lot of experience,” he says.
The experiment was repeated this time using a more familiar topic for the group; estimating the time it would take to put up and dismantle a scaffold. Again, there were a range of estimates, even amongst these industry veterans.
“The trainers concluded that we must be more data-driven when it comes to estimation. Our iPlan software removes anchoring & triggering the brains lazy response – which in turn brings standardisation and consistent estimation. It does this by storing historical estimates and the actual activity duration, even after project closure, which can be reviewed and used for new work orders. This saves planning effort and makes the whole process more efficient and cost effective,” concludes Jon Swift.
When using iPlan software, standard estimates can be saved as norms, meaning all staff can benefit from shared knowledge and practices.
The myriad of benefits includes accurate forecasting, ability to compare work orders, ability to compare STO’s, and the confidence to reuse historical work orders, which ultimately results in a saving of planning effort.
You can find out more about IAMTech and the innovative solutions they offer at www.IAMTech.com.
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