Calling the WBS the cornerstone of a project would certainly not be an understatement; on the contrary, it is an entirely accurate and essential approach.The more robustly the WBS structure is established during the project creation and planning phase, the more seamless the tracking, control, and management of the project will be.
rWhen developing a WBS, it is of paramount importance to first reach a consensus with all stakeholders and upper management regarding the main headings. It must be remembered that this structure will be read and utilized by everyone from procurement to production on the field, not just by the planning engineer or the project manager.
Before diving into the details, it is worth noting that every organization's approach to the WBS breakdown structure varies based on its internal organization and corporate culture. In other words, the WBS is structured in a way that the company can manage and track most efficiently. Now, let us go through these breakdown levels one by one and examine the critical considerations when creating a WBS.
LEVEL 1: Creating the Core Structure
Determining the Level 1 headings in our WBS tree is the first and most visionary step of the process. Thanks to this section, not only the progress of the schedule but also the budgeting can be accurately tracked from the very top.
A standard Newbuild Level 1 WBS breakdown will typically look as follows:
- 1.0 Project Management
- 2.0 Engineering & Design
- 3.0 Procurement
- 4.0 Production
- 5.0 Testing, Commissioning & Trials
- 6.0 Delivery & Project Closeout
This core structure dictates how the Man-Hours (Mhrs) spent on the project and the overall budget will be monitored from a high-level framework.
LEVEL 2: Discipline and System-Based Breakdown
After establishing our Level 1 structure, we move one step down to Level 2. The additions made here represent the sub-work disciplines under the main headings. With the descent to Level 2, the detailed tracking process officially begins.
The most critical aspect to consider here is that the breakdown must be executed very carefully based on trade groups and disciplines. This is because making retrospective corrections to the foundational structure in later stages is highly challenging and risky. The ultimate convenience provided by the Level 2 breakdown is that it offers immediate and clear answers to critical questions such as: "How much budget did I spend on piping works?", "How many total man-hours were expended?", or "What is my average unit cost in steel works?"
- 1.0 Project Management
- 2.0 Engineering & Design
- 3.0 Procurement
- 4.0 Production
- 4.1 Steel Works
- 4.2 Piping Works
- 4.3 Electrical & Automation
- 4.4 Equipment Installation
- 4.5 Painting Works
- 4.6 Accommodation & Insulation
- 4.7 Logistics & Transfer
- 5.0 Testing, Commissioning & Trials
- 6.0 Delivery & Project Closeout
LEVEL 3: Workstation and Production Line Breakdown
The Level 3 breakdown is where our trade headings begin to detail out and transition into the field, specifically into workstation production lines. The breakdown is shaped according to the workstation setup, depending on which fabrication will be carried out with which production methodology and line. Consequently, the efficiency, capacity utilization, and unit cost tracking of the respective production line can be managed with much higher precision.
- 4.0 Production
- 4.1 Steel Works
- 4.1.1 CNC Cutting
- 4.1.2 Prefabrication
- 4.1.3 Panel Fabrication
- 4.1.4 Block Fabrication
- 4.1.5 Slipway Erection
- 4.1.6 Tank Testing
- 4.2 Piping Works
- ...
- 4.5 Painting Works
- 4.5.1 Hall Painting
- 4.5.2 Tank Painting
- ...
Activities (Level 4 and Below)
Once our Level 3 breakdown structure is complete, we can descend directly to the activity level. The Level 4 activity level is the lowest work package that can be actively managed on the field. Depending on project requirements, this breakdown can be further detailed downwards (Level 5, Level 6); however, it must always be kept in mind that over-detailing can make project control and tracking cumbersome and hunder flexibility.
- 4.0 Production
- 4.1 Steel Works
- 4.1.1 CNC Cutting
- 4.1.1.1 CNC - UNIT BLOCK 101
- 4.1.1.2 CNC - UNIT BLOCK 102
- ...
- 4.1.2 Prefabrication
- 4.1.2.1 PRE.FAB.- UNIT BLOCK 101
- 4.1.2.2 PRE.FAB.- UNIT BLOCK 102
- ...
- 4.1.3 Panel Fabrication
- 4.1.3.1 PNL FAB. - UNIT BLOCK 101
- 4.1.3.2 PNL FAB. - UNIT BLOCK 102
- ...
- 4.1.4 Block Fabrication
- 4.1.4.1 BLK FAB. - UNIT BLOCK 101
- 4.1.4.2 BLK FAB. - UNIT BLOCK 102
- ...
- 4.1.5 Slipway Erection
- 4.1.5.1 SLPWY ERC. - UNIT BLOCK 101
- 4.1.5.2 SLPWY ERC. - UNIT BLOCK 102
- ...
- 4.1.6 Tank Testing
- 4.2 Piping Works
- ...
- 4.5 Painting Works
- 4.5.1 Hall Painting
- 4.5.2 Tank Painting
When we reach the Level 4 breakdown structure, we finally arrive at the activities. At this point, activity = product for us.
Descending to Level 4 in a structured manner ensures accurate evaluation of both budget management and schedule-tracking performance. A key point to remember here is that once this stage is reached, the list must be shared and agreed upon with all project stakeholders. Stakeholders may request more or less detail in the structure based on operational needs.
The definitions used while creating the breakdown structure must also be logged into the WBS Dictionary. This ensures that the exact scope of work encompassed by the defined activities can be tracked transparently.
