1




ELG/SEG2911: Professional Engineering Practice: Winter
2007 (MI)

Project Management Process:
Designing the Initial ...
2



Project Management:
Project Management is concerned with meeting the one-time goal for a specific
activity (project) ...
3



Context of Project Management:


                             REQUIREMENTS
                               ANALYSIS


...
4


Components of Project Management Process:

  1. Project Human Resource Management
        • Task assignment

  2. Proj...
5




• Gantt Chart

   Is a two dimesional depiction of activties (tasks) with respect to time.
   Developed in Germany i...
6




          + CPM: Critical Path Method
          + PERT: Project Evaluation and Review Technique

5. Project Quality ...
7


PROJECT MANAGEMENT


REQUIREMENT    ARCHITECTURAL
ENGINEERING     & HIGH LEVEL
   PLAN         DESIGN PLAN




       ...
8



PROJECT MANAGEMENT:
TRADE-OFF PYRAMID:

This problem can be viewed as an optimization problem between the following
v...
9



PROJECT MANAGEMENT: Tracking Progress:
Example: Class Project, Implementation, Test & Documentation

An Activity Grap...
10



TOOLS:

MS Project: Graphing and Analysis Tool:
            See Example on web notes:
VISIO:      Graphing Tool

   ...
11


Gantt Chart:

Gant Chart is a bar chart in which the start and ending of each activity is shown
on a separate line al...
12



Determining Critical Nodes and Paths:
Draw the Activity graph for the project. (You can use MS Project package)

   ...
13


       Compute Ending node’s Latest Start Time by subtracting column 2 from
       column 6.


  5.   Using the formu...
14


Exercise 1:

Determine node slacks and the critical path for the following activity graph,


            B, 3        ...
15




Exercise 2: Using the algorithm, tabulate the PERT chart shown in
Figures 11, page 235. Determine the slacks for ev...
16



Analysis Methodologies:
The objective of analysing graphs and charts is to identify the critical path that
connects ...
17



Feasibility Considerations:

   -   Technical Feasibility
   -   Engineering Economics
   -   Economic Feasibility
 ...
18


Engineering Economics

  - What are the Capital Costs
  - What are the Operations and Maintenance Costs
  - What are ...
19



b.   Given that the returns are received in equal amount
     installments (A) spread over n years. Determine the
  ...
20




Perform Economic Feasibility:

The basic objective is that the :

            Benefit / Cost Ratio (in standardized...
21



Fiscal Feasibility
Once we have justified the Technical and Economic Feasibility of the
project, the question remain...
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Lecture 7a: Project Management

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Lecture 7a: Project Management

  1. 1. 1 ELG/SEG2911: Professional Engineering Practice: Winter 2007 (MI) Project Management Process: Designing the Initial Project Management Plan Reference Chapters (Textbook): - Chapter 10: Project Management - Chapter 11: Feasibility & Project Management Agenda: - What is Project Management - Context of Project Management - Tradeoffs in Project Management - Project Management Techniques Gantt Charts, PERT/CPM - Feasibility and Project Management + Technical Feasibility + Economic Feasibility + Fiscal Feasibility + Compliance to Standards Feasibility + Social and Environmental Feasibility -
  2. 2. 2 Project Management: Project Management is concerned with meeting the one-time goal for a specific activity (project) of an organization. It involves the following tasks: - Planning - Project Scheduling - Project Execution Planning involves - Analysis of the Requirements: Size and Complexity - Situational Analysis: (What is available) + Budget and costs + Timeline + Resources + Tools + Technical Constraints + Quality and Standard constraints + Available Skill Set + Project review and auditing requirements - Encapsulation of activities into Tasks - Sequencing relationship between tasks + Functional sequencing + Resource related sequencing - Development of Task activity graph - Development of Resource assignement graph Scheduling involves - Timing of tasks - Quanititative analysis of the graphs to determine the optimum schedule. Using techniques such as PERT/CPM - Resource Balancing Execution involves - Assignment to tasks to implementation agents - Tracking progress - Reallocating resources to meet the budget, timing, functionality and quality constraints.
  3. 3. 3 Context of Project Management: REQUIREMENTS ANALYSIS Resources Constraints PEOPLE TIME WORK BREAKDOWN SOFTWARE STRUCTURE (WBS) QUALITY TOOLS HARDWARE OTHERS PROJECT MANAGEMENT PLAN A Project Management Plan is a living document that needs constant updating according to the current status of the product in its lifecycle.
  4. 4. 4 Components of Project Management Process: 1. Project Human Resource Management • Task assignment 2. Project Life-Cycle Management Project Execution using one or more of the following: • Waterfall Model • V Model • Spiral Model • Prototyping Model 3. Project Scope Management • Work Breakdown Structure 4. Project Time/Resource Specification and Analysis Methods • Checklist Is a list of activities/tasks to be completed - Can be arranged into logical categories - Need not be time sorted Examples: - Shopping List, sorted according to store (sales offerings) - Preparing for the Exams - Car winterization check list - Pilot’s Pre-Flight check list, sorted according to systems and subsystems, e.g, Structure, Loading, Fuel, Avionics, Hydraulics.. - Test cases: Hardware and Software • Time Line Is a one diemensional time ordered list of milestones: - Activities that are needed for achieving a milestone are not specified - Sequencing of activities is also not specified Examples: - Semester schedule: Assignments, Midterms, Reports, Finals - Milestones and checkpoints in Project development - Time ordered Test case list
  5. 5. 5 • Gantt Chart Is a two dimesional depiction of activties (tasks) with respect to time. Developed in Germany in 1930s. Activity 01 02 03 04 05 06 07 08 09 10 11 Requirements Analysis Info Capture HLD Design HW Design & Assembly   Software Design SW Debug & Redesign HW/SW Integration Test Documentation    Document Review Release for Beta Test - The activities are shown vertically while the time line is shown horizontally. - Time dependency between tasks can be shown. - Functional dependency is not specified. - Activities that can be done in parallel can be shown. This allows for better project management and earlier completion. - Progress can be shown by marking with a different colour the completed activities. - After analysis tasks on a Critical Path can be identified. These tasks are important and the project cannot afford any delay on their completion without paying the penalty of delaying the whole project. • Graph based Methods: Developed for managing the development of military equipment, e.g. Polaris missile in 1950s. Features: - Functional Sequencing can be specified - Timing sequencing (schedule) can be derived thtough analysis - Parallellism - Identifying critical and non-critical tasks - Determining time slacks - Allocating resources to tasks - Load Balancing
  6. 6. 6 + CPM: Critical Path Method + PERT: Project Evaluation and Review Technique 5. Project Quality Management For ensuring quality targets are acheived , e.g. Sigma-1 quality = 68.27% ~ 317 defects / 1000 Sigma-2 quality = 95.45% ~ 45 defects / 1000 Sigma-4 quality = 99.9937% ~ 6.3 defects / 1000 Sigma-6 quality = 99.9999998% ~ 2 defects / Billion • Quality Assurance (Rules, Processes, Job Aids,Tools & Training) • Quality Control (Monitoring and Corrective Action) • Tools: Pareto Charts ( identifies high runners), • Sampling Plan • Defect Cause Analysis: - Root Cause Documentation: Ishikawa’s Fishbone diagram - Logical Relationship between faults: Fault Tree Diagram. • Fault Prediction: Fault Tree Analysis. To determine the probability of overall failure given the probability of faults at the leaf nodes. 6. Project Risk Management • Types of Risks: Technical, Quality, Cost, Time, People • Risk avoidance • Risk acceptance • Risk effect mitigation (reduction of impact) 7. Project Cost Management - Budget Control - Burn Rate Control - Trade-Offs: Costs vs Time, Functionality, Quality 8. Project Non-Human Resource Management Machinery, Infrastructure, HW and SW Tools: Scheduling, Purchasing, Procurement, Rentals, Licensing, Disposal, etc.
  7. 7. 7 PROJECT MANAGEMENT REQUIREMENT ARCHITECTURAL ENGINEERING & HIGH LEVEL PLAN DESIGN PLAN IMPLEMENTATION LIFE-CYCLE DETAILED DESIGN PLAN MANAGEMENT PLAN ARCHITECTURAL UNIT TEST & HIGH LEVEL HUMAN RES PLAN DESIGN PLAN MANAGEMENT V & V and SCOPE TIME DEMONSTRATION MANAGEMENT MANAGEMENT PLAN COST RISK MANAGEMENT PRODUCT MANAGEMENT DEPLOYMENT PLAN QUALITY RESOURCE MANAGEMENT MANAGEMENT
  8. 8. 8 PROJECT MANAGEMENT: TRADE-OFF PYRAMID: This problem can be viewed as an optimization problem between the following variables. The interaction between these variables may be nonlinear. 1. CONTENT  Functionality 2. PRODUCT QUALITY  (Non-functional requirements) - Performance and Reliability - Standards compliance 3. SCHEDULE  Time needed to complete the project 4. RESOURCES  - Capital and Recurring budgets - Number of Personnel - Personnel Skill sets QUALITY Specs Sub-Pyramid that is actually Desired Implemented (Not to Scale) Pyramid RESOURCE Availability CONTENTS SCHEDULE Functionality Specs
  9. 9. 9 PROJECT MANAGEMENT: Tracking Progress: Example: Class Project, Implementation, Test & Documentation An Activity Graph Start Requirements Analysis (1wk) Info Capture (1wk) HLD Design Documenta- (1wk) tion 2wk SW Design 3wk HW Design & Assembly 2wk SW Debug 2wk Integration Document Testing 2wk Review 1wk Release Beta Testing
  10. 10. 10 TOOLS: MS Project: Graphing and Analysis Tool: See Example on web notes: VISIO: Graphing Tool Visio Node Formats Early Early Duration Task Name Start Finish Scheduled Scheduled Task Name Start Finish Late Late Actual Actual Slack Start Finish Start Finish
  11. 11. 11 Gantt Chart: Gant Chart is a bar chart in which the start and ending of each activity is shown on a separate line along a horizontal time axis. The start of the line represents activity start and its length of the line its duration. Dependencies between activities are not specifically shown but these can be deduced. Activity 01 02 03 04 05 06 07 08 09 10 11 Requirements Analysis Info Capture Sens, Acts HLD Design HW Design & Assembly   Software Design SW Debug & Redesign HW/SW Integration Test Documentation   Document Review Release for Beta Test
  12. 12. 12 Determining Critical Nodes and Paths: Draw the Activity graph for the project. (You can use MS Project package) Earliest Earliest Latest Latest Critical Activity Dura- Start Completion Start Completion Slack Nodes tion (1) (3) (4)=(3)+(2) (5) =(6) – (2) (6) (7)= (6) – (4) (8) (2) Start Node 0 0 0 0 0 0 Y Req Analys 1 0 1 0 1 0 Y Info Capture 1 1 2 1 2 0 Y HL Design 1 2 3 2 3 0 Y HW Design 2 3 5 6 8 3 N SW Design 3 3 6 3 6 0 Y SW Debug 2 6 8 6 8 0 Y HW/SW Int 2 8 10 8 10 0 Y Document 2 1 3 8 10 7 N Doc Review 1 10 11 10 11 0 Y End Node 0 11 11 11 11 0 Y Algorithm: 1. For each activity, unless already given, estimate completion time (most likely, optimistic, pessimistic values) Use Simpson’s Rule. Fill in columns 1 and 2 of the following table. 2. While observing the sequencing constraints specified in the PERT/CPM Graph and using the following formulae • Earliest Start Time of a Node = MAX (Earliest Completion time of its Predecessors) • Latest Completion Time of a Node = MIN (Latest Start time of its Successors) Compute all the times in the table, columns, 3, 4, 5 and 6. 3. Starting from the begin node and using the formula, calculate the Earliest Start Times of each node and enter this in column 3. Add column 2 to 3 to get column 4. Proceed downwards in the table. 4. The Latest completion of the Ending node will be the same as its Earliest Completion Time. Enter this value in the Ending node’s cell in Column 6.
  13. 13. 13 Compute Ending node’s Latest Start Time by subtracting column 2 from column 6. 5. Using the formula compute the Latest Completion times of the predecessor(s) of the Ending node. Compute their Latest Start Times. Proceeding upwards in the table complete columns 6 and 5. 6. For each node determine Slack = Latest Start Time – Earliest Start Time = Latest Completion Time – Earliest Completion Time 7. Identify the tasks that have non-zero slack. This means that these tasks can be DELAYED by the amount of the slack without impacting the total completion time of the project. 8. Identify tasks that have zero slack. These are the CRITICAL tasks. No delay is permissible on these tasks, otherwise the project will be delayed. 9. Identify path(s) that connect the Critical tasks. Such path(s) are termed the Critical Paths. (In an ideal situation all paths of PERT/CPM chart wll be Critical, but this is seldom possible) Notes: • Slack is defined as (Latest Start - Earliest Start) = (Latest Completion – Earliest Completion) • The tasks with 0 slack are on the critical path (s) • There can be more than one critical path in the graph
  14. 14. 14 Exercise 1: Determine node slacks and the critical path for the following activity graph, B, 3 E, 5 K, L, 3 F, 3 A, 2 C, 4 G, M, P, 1 D, 2 H, J, 6 N, 4 Q, Activity, Notation: AvgTim e Activity Duration Earliest Earliest Latest Latest Slack Critical (1) (2) Start Completion Start Completion (7) = (6) – (4) Nodes (3) (4) =(3)+(2) (5) =(6) – (2) (6) (8) Start A B C D E F G H J K L M N P Q Finish
  15. 15. 15 Exercise 2: Using the algorithm, tabulate the PERT chart shown in Figures 11, page 235. Determine the slacks for every node and identify the Critical path. Exercise 3: Repeat the same for Figure 12, page 236. Exercise 4: Solve question 24, Figure 22, page 255.
  16. 16. 16 Analysis Methodologies: The objective of analysing graphs and charts is to identify the critical path that connects activities that must be started and completed at the specified timings. Any delay will result in schedule lengthening or schedule slippage that can impact the overall costs and also the business viability of the project (missing the market window). The critical path may change as the project progresses. Therefore there is a constant need for re-evaluations. The project manager must ensure that all activities on the critical path are completed on time. Activities on the non-critical paths can be delayed in accordance with the free period available, called slack. Activities on the critical path have zero slack and on the non-critical path(s) the slack > 0. Graphs can be analyzed using two techniques including • Project Evaluation and Review Technique (PERT) (used for Polaris project) • Critical Path Method (CPM) In the case of PERT, the project manager has to estimate the average duration of each activity. He may have the data for similar activities that have been completed in the past. It is assumed that these numbers follow normal distribution or a bell curve. Another simpler averaging algorithm is based on most optimistic, most pessimistic and most likely durations. Average Duration = (Most_Optimistic + 4* Most_Likely + Most_Pessimistic) / 6 Example: Estimate the average duration of an activity for which Most_Optimistic = 3 weeks Most_Pessimistic = 10 weeks Most_Likely = 8 weeks Average Duration = (3 + 4*8 + 10) / 6 = 7.5 weeks
  17. 17. 17 Feasibility Considerations: - Technical Feasibility - Engineering Economics - Economic Feasibility - Fiscal Feasibility - Compliance to Standards Feasibility - Social and Environmental Feasibility Technical Feasibility It basically tries to answer the question, “ Will it Work”? - Is it mathematically justifiable? - Are your assumptions justifiable? - Have you selected proper material and technology? - Has modelling and/or simulation been done? - Is it doable with the existing skill set and tool set? - Does the solution comply with relevant technical standards - Can the product stand up to the worst case scenarios? Economic Feasibility In order to prove that the project is economically feasible we have to determine the Capital costs, the Running (Operations and Maintenance) costs and the expected Return on investment (ROI). The basic problem is that value of money, or its buying power decays (depreciates) with time. $100, ten year down the road, are not the same as $100 here and now. All future dollars must be standardized (amortized) to the present time. We have use basic mathematics in order to answer this question.
  18. 18. 18 Engineering Economics - What are the Capital Costs - What are the Operations and Maintenance Costs - What are the expected returns (Income)? - Is the Income in the form of a lump sum, periodic or a combination? - When does the income start to come in? - If the Income is periodic, what is the amount and what is the frequency? - How to standardize these to the present dollars? + Operations and Maintenance Costs + Income (Lump Sum, Periodic or combination) Basic Formulae: a. Given the Future dollars n years from now, what is their Present worth, if the annual depreciation rate is r. P = F [1+ r] – n This is an approximation of the ideal Compound Interest Law. If you want to to be very precise use the following formula: P = F e (– r * n) e (– r * n) = Lt (1+ r/n) (– r *n) as n  inf This means we are charging and compounding interest at miniscule intervals that approach zero, in other works we ask for interest to be paid every ‘picosecond’.
  19. 19. 19 b. Given that the returns are received in equal amount installments (A) spread over n years. Determine the cumulative present worth. P = A [ 1 / r – (1 / (r * (1 + r)n ) ) ] Example: Which is preferable? 1. $ 180 per year for 6 years 2. $ 265 per year for 4 years Assume r = 2.5% In the 1st case the nominal value is 180 * 6 = $ 1080 In the 2nd case the nominal value is 265 * 4 = $ 1040 Prima facae, the first case id better, but this does not take into consideration the depreciation of the buying power. Using depreciation into account the the present worth is as follows: 1st Case: $ 991 2nd Case: $ 997 c. Capital Recovery Factor (CRF) = A/P 1st Case: 180/991 = 0.1816 2nd Case: 265/997 = 0.2658 d. Sinking Fund Factor (SFF) = A/F SFF = CRF / (1+r)n This factor is useful when we have come up with a fixed amount after n years (say $1 Million in 10 years) and we decide to put aside A dollars every year. The annual amount is calculated by multiplying $1 Million with the SFF available from the tables. With r of 4% the SFF is 0.08329. This means that $832, 900 must be set aside yearly for 10 years in order to accumulate $1 Million.
  20. 20. 20 Perform Economic Feasibility: The basic objective is that the : Benefit / Cost Ratio (in standardized dollars) > 1 Example: A semiconductor factory is considering to upgrade its production line. - The capital cost is $1.5 Million, (current dollars). - The line will produce + $0.6 Million in year 3 (only once) + $1.0 Million is year 6 (only once) (After that the line will be obsolete) Is the proposal to buy the new production line economically feasible? Present Value Analysis: PV of $0.6 Million = $ 557,200 PV of $1.0 Million = $ 862,300 Total = $ 1,419,500 Comparing it with $1.5 Million. Loss = $ 80,500 Benefit/Cost Ratio = $1.419 / $1.50 = 0.95 < 1  No way !!
  21. 21. 21 Fiscal Feasibility Once we have justified the Technical and Economic Feasibility of the project, the question remains as to how to raise the necessary capital for the project? This is specially true where the capital amount is significant and beyond the reach of an ‘average’ engineer. There are many ways for raising the capital. - Venture Capital - Joint Venture - Bank Loans - Bonds Or a combination thereof. Details analysis requires the services of qualified accountant(s) and economist(s). Example: Is setting up a franchise fiscally feasible? (Subway, McDonalds, Mailboxes etc, Edward Jones, Fibre Cable Network Maintenance, Cable TV, Cellular Phone etc.) Feasibility of Miscellaneous Issues: - Legal and Intellectual Property - Environmental - Social (Public Hearings) - Political (Lobby groups)

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