Project Management Life Cycle

Operational Excellence
Project Management
Introduction
21 Sep 2017 Ronald Morgan Shewchuk 1
• The Project Management Institute (PMI) defines a project to be
“a temporary endeavor undertaken to accomplish a unique product or
service with a defined start and end point and specific objectives that,
when attained, signify completion”.
• Thus, any collection of tasks which have interdependencies, utilize multiple
resources and have a constrained timeline would benefit from the
principles of Project Management.
• It is a common misconception of organizations to simplify the objectives of
project management to “keeping things on track” and the role of the
project manager to be the “schedule keeper”.
• Project Management is a science unto itself and new project managers
must be educated and mentored in the application of project management
principles to avoid the pitfalls typically encountered by new managers.
• The Project Management Institute has published A Guide to the Project
Management Body of Knowledge (PMBOK Guide) that serves as an excellent
reference for project managers of all experience levels.

Project Management
Introduction
• Meredith and Mantel’s Project Management – A Managerial Approach is a
recommended complement to the PMBOK Guide.
• The process of managing projects is as old as civilization itself.
• The Egyptians practiced project management during the construction of the
pyramids.
• The Chinese practiced project management during the construction of the Great
Wall.
• They just didn’t call it project management.
• The marshalling of resources to supply, craft and install materials for these
projects, on-time and within cost expectations of the respective emperors fell to
the lead architect.
• If he didn’t deliver, he was promptly replaced.
• Modern day project management principles are generally considered to have
begun with the Manhattan Project in 1942.

Project Management
Introduction
• The advent of personal computers in the early 1980’s greatly facilitated project
scheduling, resource planning and cost tracking.
• Today there are many fine software packages available to assist the project
manager such as Microsoft Project1, Primavera Project Planner2, Enterprise PM3
and Micro Planner X-Pert4.
• We will utilize MS Project in our examples and case studies.
1© Microsoft Corp.
2© Oracle Corp.
3© Tenrox Corp.
4© Micro Planning International

Project Management
Project Life Cycle
• Most projects start out slowly.
• The objectives are defined, the project manager selected, the project team is
recruited and the team begins to learn how to work together effectively.
• Once resources are identified to complete tasks required to maintain the critical
path of the project the rate of real progress increases.
• Near the end of the project, a handful of tasks seem to drag on causing a painful
slowdown in project progress.
• These tasks are often related to documentation, training and audit functions.
• This slow-quick-slow progression of the project leads to an S-shaped curve for the
time series plot of % project completion as depicted in Figure 12.1.
• The curve is often referred to as a project’s life cycle; the term cycle being used
because there is an inherent understanding that as one project comes to closure
another one is initiated.

Project Management
Figure 12.1 Project Life Cycle – Typical Case
0%
100%
%ProjectCompletion
Time
Initiation
Closure
Critical Path
Management

Project Management
Project Life Cycle
• If we consider the level of effort that is expended over the course of a project’s
life cycle, typically measured in person-hours, the usual time distribution is shown
in Figure 12.2.
• Effort is minimal during the initiation phase of the project, rises to a peak during
the critical path management period and then tapers off to a minimum level near
the end of the project.
• It is common for the project to take on a life of its own.
• Team members become accustomed to the rigors of project management and the
demands thereof.
• Closing the project would be like saying goodbye to an old friend.
• Consequently, there is an extended tail at the end of the distribution as the last
tasks are completed.
• The Project Manager must be vigilant of the project objectives, critical path, key
performance indicators, and cognizant that there is a queue of projects waiting to
be initiated.

Project Management
Figure 12.2 Project Effort Distribution over Time
ProjectEffort(person-hrs)
Time
Max Level of
Effort

Project Management
Project Life Cycle
• If any task is in danger of jeopardizing the critical path of the project, resources
must be redirected or secured to bring the task to completion with the required
deliverables.
• This is the essence of the improvement process of Theory of Constraints as
popularized by Dr. Eliyahu Goldratt in 1990.
• The specific shapes of the project life cycle and project effort distribution curves
are highly dependent on the nature of the project.
• The curves associated with building an office complex will be very different from
those associated with the development of a new video game or with the
manufacture of a seasonal influenza vaccine.

Project Management
Project Management Life Cycle
• The project management life cycle describes the four phases of project
management common to all projects – initiation, planning, execution & control,
and closure.
• In the initiation phase project proposals are developed which solve a problem
and/or address a specific business need of the organization.
• These proposals are evaluated for their importance to the organization’s core
values based upon project selection models and prioritized by the project
prioritization matrix process we reviewed in chapter two.
• Once the top project is identified a project manager is selected.
• The project manager works closely with the project sponsor to select project team
members who define the preliminary project scope, schedule, cost and quality
requirements.
• Project risks are identified and the initial project plan is developed.

Project Management
• In the planning phase the project team develops the details of the project scope,
schedule, cost and quality requirements.
• A risk assessment is conducted by using failure mode and effect analysis (FMEA)
and the project plan is refined to include the change control process, acceptance
management process, communication plan, issue management process, and
project transition plan.
• The project transition plan describes how the responsibility for the
product/service will be transitioned from the project team to the operating
division which will sustain the product/service.
• The execution and control phase is where most of the project effort is expended.
• A significant number of new team members will join the project during this phase,
thus it is important to have a phase kick-off meeting to orient the new team
members.
• The project manager must ensure that tasks are being completed as per schedule
and the critical path remains on target.

Project Management
• Issues which have the potential to affect the critical path must be elevated and
resolved as part of the risk management process.
• The transition plan is executed to bring the operating division up to speed and
ensure a smooth hand-off from the project team to operations.
• In the project closure phase the team reflects on their performance compiling a
list of lessons learned which would aid future projects.
• Customer and stakeholder feedback is solicited and rationalized into the lessons
learned recommendations.
• Key performance indicators are audited and compared to the original project
goals.
• A project closure report is generated which summarizes the four phases of the
project management life cycle and the team has a wrap-up meeting. If the project
affects or is funded by the general public a town hall meeting is scheduled to
communicate project outcomes.
• Figure 12.3 summarizes the project management life cycle and the deliverables
thereof.

Project Management
Figure 12.3 Project Management Life Cycle
Initiation
• Develop project proposals
• Evaluate proposals
• Prioritize proposals
• Select project
• Identify project manager
• Select team members
• Define preliminary scope,
schedule, cost and quality
requirements
• Identify risks
• Develop initial project plan
Planning
• Develop detailed scope,
requirements
• Conduct risk assessment
• Define change control
process, acceptance
management process,
communication plan, issue
management process
• Develop project transition
plan
Execution & Control
• Implement tasks
• Monitor and control scope,
• Manage critical path
• Monitor and control risks
• Elevate and resolve issues
which jeopardize the critical
path
• Orient operating division
• Implement transition plan
Closure
• Solicit feedback from
customers and stakeholders
• Audit Key Performance
Indicators
• Document lessons learned
• Compile project closure
report
• Communicate project
outcomes to customers and
stakeholders

Project Management
Project Selection
• Project selection is the process of evaluating candidate projects and selecting
those for implementation which meet the strategic objectives of the business
unit.
• Numeric and non-numeric models are utilized to select projects.
• Non-numeric models include the sacred cow, operating necessity, competitive
necessity, product line extension and comparative benefit model.
• The sacred cow model includes projects deemed by an executive to be important
to the company.
• Often, projects identified in this manner have not been rationalized for return on
investment or risk.
• Nevertheless, they continue through the project management life cycle until the
executive who initiated the project recognizes the deficiencies of the project and
pulls the plug.
• Operating necessity projects are those required to keep an existing system in
operation.

Project Management
Project Selection
• For example, the building of a sea wall to protect a nuclear power generating
facility from a Tsunami would be classified as an operating necessity project.
• Competitive necessity projects arise from a recognized threat in the marketplace
such as the need to modernize domestic manufacturing plants to compete with
foreign suppliers.
• Product line extension projects similarly address market pressures in order to
capture a larger share of the market.
• Comparative benefit models are used when an organization has no formal
method for selecting projects but instead, compares the relative benefits of
project candidates to achieving the strategic objectives of the business unit.
• It is common for project proposals to be nucleated through non-numeric models
and then vetted through numeric models such as payback period, average rate of
return, discounted cash flow, internal rate of return or profitability index.
• Payback period is calculated by dividing the initial fixed investment of the project
by the average annual cash inflows generated from the project.

Project Management
Project Selection
• For example, if the capital investment of a project is $1MM with average forecast
cash inflows of $275,000/year the payback period is calculated as follows.
Payback period = $1,000,000/$275,000 = 3.6 years
• This model assumes that cash inflows will continue long enough to recover the
initial investment but ignores any cash inflows beyond the payback period.
• Average rate of return is determined by dividing the forecast average annual profit
to be generated from the project by the average annual capital investment of the
project.
• Let’s say a $3MM project takes two years to implement and generates an average
annual profit of $500,000.
• The average rate of return is calculated as follows.
Average rate of return = $500,000/($3,000,000/2) = 0.33

Project Management
Project Selection
• Notice that both of these evaluation models neglect interest rates and the time-
value of money.
• Unless interest rates and inflation rates are very low the above models can lead to
project evaluation errors.
• The discounted cash flow model (also known as the net present value method)
compensates for these deficiencies as shown in equation 12.1.
Equation 12.1 Net Present Value
NPV = -A0 +
(1 + k + pt)t
Ft
where NPV = Net Present Value
Ft = net cash inflow in period t
k = required rate of return
A0 = initial cash investment
pt = predicted rate of inflation during period t
Eqn 12.1
t = 1
n

Project Management
Project Selection
• Let’s say a company made an initial capital investment of $1MM in a project which
is expected to have a net cash inflow of $250,000 per year over 10 years with a
required rate of return of 15% and an average inflation rate of 2.5%.
• The net present value of the project is calculated as follows.
NPV = -$1,000,000 +
(1 + 0.15 + 0.025)t
$250,000

t = 1
10
= $143,782
• A positive value for NPV indicates that the present value of cash inflows is greater
than the present value of cash outflows – a desirable attribute of a project.
• Internal rate of return is determined by finding the rate of return, k which will
equate the present value of cash inflows and cash outflows according to
equation 12.2

Project Management
Project Selection
Equation 12.2 Internal Rate of Return
where A0 = initial cash investment
An = cash outflow for period n
Rn = cash inflow for period n
k = internal rate of return
pn = predicted rate of inflation during period n
Eqn 12.2A0 + =
(1 + k + pn)n
An
+
(1 + k + p2)2
A2
+
(1 + k + p1)
A1
(1 + k + pn)n
Rn
+
(1 + k + p2)2
R2
+
(1 + k + p1)
R1
• The value of k may be found by using the goal seek function of Excel as
demonstrated in Figure 12.4.
• Companies typically establish a hurdle rate for capital investments.
• As long as the internal rate of return exceeds the hurdle rate the project is
considered an acceptable investment.

Project Management
Figure 12.4 Steps for Determining Internal Rate of Return
Load the file IRR Template.xls*. Start with a nominal internal rate of return of 10%. Enter the expected cash outflows and inflows by year in
columns B and C respectively. You may delete rows to reduce the useful life of the project. If you add rows to extend the project life, be sure
to copy down the adjoining formulas. Enter the predicted inflation rate by year in column D. The template allows you to select different
inflation rates by year.

Project Management
Click on the cell displaying the total for NPV Net Cash Flow (G19 in our example above).
Click on Tools  Goal Seek on the top menu.

Project Management
Enter 0 for the “To value” field in the Goal Seek dialogue box. Enter $B$3 (the value of k) for the “By changing cell” field. Click OK.

Project Management
The internal rate of return, k has been recalculated to 14.8% in order to drive the NPV Net Cash Flow total to zero.
Click OK to close the dialogue box.

Project Management
Project Selection
• Profitability index, also known as benefit to cost ratio, is the net present value of
all future cash inflows divided by the net present value of all cash outflows.
• If the ratio is greater than one, the project is considered favorable.
• Let us apply these numeric project evaluation models in Case Study XX.
Case Study XX: Profitability Models for Project Selection
Precision Motor Co. has come under intense pricing pressure from Southeast Asian competitors. Sherrie Jackson, the lead project
manager for Precision Motor Co., has an idea to reduce manufacturing costs through a capital expansion at Precision’s upstate
New York facility which would modernize equipment and increase automated assembly. The project would take two years to
implement at a cost of $3.15MM. Equipment upgrades are expected to have a useful life of 20 years with a salvage value of
$315,000. Precision has a hurdle rate of 12% for capital expenditure justifications. This covers the cost of borrowing money and
includes a healthy margin for return to shareholders. Precision’s corporate tax rate is 40%, inflation rate is estimated to be 2.5%
and the equipment will be depreciated over a seven year period using double declining balance. Sherrie has worked closely with
the sales group and the finance department to arrive at the projected cash flows and profitability analysis captured in Figure 12.5.
The profitability models are calculated as follows.
Payback Period =
($8,690,000/20 yrs + $2,835,000/8 yrs)
$3,150,000
= 4.0 years
Average Rate of Return =
$5,214,000/20 yrs
$3,150,000/2 yrs
= 16.6%

Project Management
Figure 12.5 Profitability Model Determination
The four year payback period of the project is rather long, with no cash inflows occurring until year two. If the forecast cash inflows for year
two and three do not come in as predicted, payback period will be further extended. The average rate of return of 16.6% and the internal
rate of return of 13.4% exceed the company’s hurdle rate of 12%. Net present value of the project is positive at $203,604 and the
profitability index is greater than one. There are no red flags to indicate this project is not viable, the management team at Precision Motor
endorses Sherrie’s project proposal.

Project Management
Case Study XX: Profitability Models for Project Selection
Net Present Value = $203,604 (cell H28 from Figure 12.5)
Internal Rate of Return = 13.4%
(by using Excel goal seek function to recalculate the value of k which will drive cell H28, NPV Net Cash Flow to zero in Figure 12.5)
Profitability Index =
$2,809,848
$3,013,452
= 1.1
• Notice that the above numeric project selection models do not address risk.
• Project risk can be analyzed using multiple scenario analyses of cash outflows and
inflows.
• This will allow the project proposal to be evaluated in optimistic, expected and
pessimistic cash flow scenarios.
• The importance of cash flow analysis and including representatives from the Sales
& Marketing function of the business unit in the project evaluation stage cannot
be overstated.

Project Management
The Project Manager
• The project manager (PM) is responsible for building the project team, planning
tasks, implementing tasks, and completing the project on time and within budget.
• The PM is like an orchestra conductor with a twist.
• The conductor must begin the performance on time.
• The quality of the music must be flawless – one false note can draw unfavorable
reactions from the audience (as Luciano Pavarotti experienced in Vienna).
• The performance must end on time and the expenses for the performance,
including salaries of the performers may not exceed ticket sales.
• The difference between the orchestra conductor and the PM lies in the reporting
structure of the personnel.
• In the case of the conductor, all the performers report directly to the conductor.
• This is not typically the case for the PM.
• Project team members are recruited (borrowed) from their functional
departments and they maintain their reporting and reviewing structure to their
respective functional manager.

Project Management
The Project Manager
• This can result in conflicting priorities if roles and responsibilities are not made
crystal clear by the PM and endorsed by senior management.
• The PM is normally selected by the project sponsor, a senior manager within the
company who has a vested interest in the favorable outcome of the project and
has the authority to designate resources and allocate funding.
• Characteristics of a superior PM may be summarized as follows:
 Detail oriented
 Strong technical background
 Excellent interpersonal skills
 High level of ethics
 High level of credibility
 Ability to motivate team members
 Conflict management experience
 Ability to prioritize and manage the critical path
 Ability to influence without authority
 Clear communicator (both upward and downward in reporting hierarchy)
 Contractor/Subcontractor management experience
 Budget management and expense validation experience
 Proven track record of project management successes

Project Management
The Project Manager
• The project sponsor must choose the PM wisely and then step back, and allow the
PM to do his job in the absence of micromanagement.
• Theodore Roosevelt learned this lesson the hard way during the construction of
the Panama Canal (1904 – 1914) when he commanded Chief Engineer John
Findlay Wallace to “Make the dirt fly” in his earnest to get the canal excavation to
begin immediately.
• Wallace, eager to please his boss, began excavation but the project was plagued
with delays, equipment setbacks and bureaucratic obstacles.
• Wallace resigned from the project after only one year with little progress.
• In July, 1905 John Frank Stevens took over as Chief Engineer and quickly realized
that making the dirt fly was not the constraint of the project’s critical path.
• He first needed to build the railway infrastructure to take the dirt away from the
excavation site.
• In parallel, Chief Medical Officer William Gorgas needed to address the swarming
mosquito population which was spreading malaria and yellow fever among canal
workers, the suffering for which was exacerbated by unsanitary living conditions.

Project Management
The Project Manager
• Before the project’s end, three different project managers would be assigned to
lead the canal construction.
• As we have discussed earlier, projects are unique, but project management is a
standardized work process.
• Larger companies will have a department dedicated to project management
sometimes referred to as the project management office (PMO).
• This office will have a team of seasoned project management professionals from
which to draw resources to lead projects in the areas of design, engineering,
construction, equipment, utilities, control systems, information systems,
distribution networks, etc.
• Smaller companies, with correspondingly smaller project scopes, will typically
assign the role of project manager to a technical professional who has been
intimately involved with the genesis of the project.

Project Management
The Project Team
• Team members are typically Subject Matter Experts (SMEs) drawn from functional
departments.
• For example, a construction project would include experts drawn from design,
engineering, facilities, general contractor, production management, maintenance,
contractor trades, safety and environmental departments.
• The quality of team members has a big impact on project outcome.
• Attributes of effective team members are as follows:
 Technical specialist in their field
 Driven by goals and objectives
 Problem solution oriented
 Effective communication skills
 Positive attitude
 Excellent interpersonal skills
 Ability to transform plans into executable tasks
 Keen understanding of how their work product affects other team members

Project Management
The Project Team
• It is critical that team members bring obstacles to the attention of the group with
solution alternatives to surmount the obstacle.
• This dynamic candor among team members will prevent small problems from
turning into big problems which can affect the critical path of the project.
• There can be no surprises among project team members and similarly there can
be no surprises delivered to senior management as part of routine
communications.
• Problems are a way of life in project management.
• The effectiveness of the team in dealing with problems as they arise distinguishes
a cohesive team from an underperforming team.
• The size and composition of the project team will change over the project life
cycle.
• During team transition phases, the PM must ensure that there is high level of
communication between team members who are closing their tasks and new
team members who are just beginning their tasks.

Project Management
Work Breakdown Structure
• A work breakdown structure (WBS) is a hierarchy of major tasks and subtasks
required for project completion.
• The concept was originally developed by the US Department of Defense in 1975
for the control of defense materiel under MIL-STD-881A.
• The WBS may be visualized as a high level process map, an example of which is
shown in Figure 12.6 for the Precision Motor Facility Upgrade.

Project Management
Figure 12.6 Work Breakdown Structure
Level 1
Level 2 Design
Engineering
Construction
Engineering
Mechanical
Equipment
Fabrication
Inspection
Equipment
Fabrication
Control
System
Installation Integration Commissioning
Level 3 Equipment
Superstructure
Environmental
Permit
Ultrasonic
Cleaning
System
Machine
Vision
System
DCS
Fabrication
Equipment
Superstructure
DCS
Programming
Yield Ramp
Mechanical
Equipment
Site
Preparation
Stamping
Presses
MCSA
Diagnostic
System
SCADA
System
Mechanical
Equipment
Machine
Vision System
Programming
Quality
Management
System
Inspection
Equipment
Utility
Upgrade
Conveyor
Belts
Metrology
Equipment
Data
Historian
Inspection
Equipment
Robotics
Programming
Product
Validation
Testing
Control
System
HVAC System
Upgrade
Vibratory
Feeders
Control
System
Customer
Validation
Automatic
Motor
Winder
Customer
Acceptance
Pick &
Place Robot
Robotic TIG
Welder
Rochester Assembly
Upgrade

Project Management
Scheduling
• Scheduling is the mechanism by which a project plan is converted into an
operating timetable.
• The most common radar screen which the project manager uses to keep track of
the project schedule is the Gantt chart developed by Henry L. Gantt in 1917.
• A Gantt chart shows actual versus planned progress for assigned tasks displayed
against a horizontal time scale and shows the interdependency of related tasks.
• Project managers who are proficient in the use of MS Project can enter task
information directly into a MS Project Gantt chart.
• Alternatively, the project manager can begin with a data entry worksheet in MS
Excel to collect his or her thoughts.
• Columns in the spreadsheet should be labeled as ID, WBS, Task Name, Duration,
Start, Finish, Predecessors, Resource Names and Cost.
• Predecessors are the ID numbers of the task(s) which must be completed prior to
beginning a given task.
• Figure 12.7 captures the screen shots for generating a Gantt chart.

Project Management
Figure 12.7 Steps for Gantt Chart Generation
Open a new Excel spreadsheet. Enter column titles for ID, WBS, Task Name, Duration, Start, Finish, Predecessors, Resource Names and Cost.
Enter individual task information into the spreadsheet. Notice that the WBS column utilizes the Dewey Decimal System to group related tasks.
Duration is the number of working hours required to complete the task. Do not assign a duration to level one or level two rolled-up tasks of the
Work Breakdown Structure. These will be calculated by MS project. Similarly, leave the Start and Finish dates blank for individual tasks as these
will also be calculated by MS Project. Include the task ID numbers which are required to be completed before the task can be started in the
Predecessor column. For example, task number 9, Site Preparation cannot be started until task number 3, Equipment Superstructure has been
designed.

Project Management
Open an new MS Project file. Click on Set a date to schedule from in the task wizard sidepane.

Project Management
Enter the start date of the project. Click Done.

Project Management
Right click on the Task Name column. Select Insert Column. Click on the drop down menu for Field name in the dialogue box and select
WBS. Click OK.

Project Management
The Work Breakdown Structure (WBS) column is added to the left of Task Name. Our objective is to match the columns of the MS Project file
with those of the Excel file.

Project Management
Click on Add columns of custom information in the task wizard sidepane. Add a column for Cost. Column locations may be rearranged by
clicking on the column header and dragging. Now our MS Project file matches our Excel file.

Project Management
Highlight the Excel file project planning entry screen information excluding the ID column. Press Ctrl-C.

Project Management
Place your cursor in the top left cell of WBS. Press Ctrl-V.

Project Management
We now have to clean up the formatting of the Gantt Chart.

Project Management
Close the task wizard sidepane. Double click on the right hand side of the Predecessors and Cost column.

Project Management
Highlight the subtasks under Design Engineering. Click the green right arrow on the top menu to indent the subtasks. Do this for all level 3
tasks.

Project Management
Level 3 tasks are now properly indented under their associated level two tasks.

Project Management
Highlight all level two tasks and level three tasks under the level one task for the overall project. Click the green right arrow on the top menu
to indent the subtasks.

Project Management
Correct the duration of each level three subtask.

Project Management
Highlight all level two and level three tasks. Right click and select Task Information. Select the Advanced tab in the dialogue box. Select the
Constraint type to begin As Soon As Possible. Click OK.

Project Management
Finished Gantt Chart entry screen with constraints removed and durations corrected. We can now proceed to print or export the Gantt Chart
as shown in Figure 12.8.

Project Management
Figure 12.8 Gantt Chart – Rochester Assembly Upgrade

Project Management
Scheduling
• The Gantt chart allows the project manager to keep track of critical task
information such as % complete, cost variance to budget, actual finish date,
hyperlinks to source data files, etc.
• The effect on the overall timeline of the project due to task delays or inserting
new task requirements is easily visualized.
• Consequently, the Gantt chart becomes a central part of each project review
meeting.
• Team members can see the impact that a delay can have on the target completion
date of the project and thus take action to either prevent the delay through the
technique of “project crashing” or catch up the schedule by shortening the
duration of another task which lies upon the critical path of the project schedule.
• Project crashing refers to task expedition through the application of additional
resources such as people, material, outside contractors, specialized equipment
and/or overtime.

Project Management
Scheduling
• If the task in question is constrained by a supplier, you may be pleasantly
surprised to see that your machine shop can shave off four weeks of the sixteen
week lead time for a machined part if you provide a $20K early completion bonus.
• The astute project manager will recognize that machine shops operate on a shoe-
string budget with limited cash reserves.
• Customers who are willing to pay a premium for accelerated delivery will be
brought to the front of the job queue.

Project Management
Resource Identification and Allocation
• Most manufacturing plants do not have a group of technical specialists warming-
up in the bull pen, waiting to be called into service to accomplish tasks within a
given project.
• They have a full-time job with full-time accountabilities and objectives.
• Consequently, they must be “borrowed” from their functional area on either a
part-time or full-time, temporary basis.
• In order to prevent future priority conflicts, it is essential that the Project Manager
obtain written approval from the Project Sponsor and General Manager to borrow
the resources he or she requires to complete the project.
• Resources inherently become part of the Project Team and thus must
demonstrate the attributes previously cited for effective team members.
• They must have a keen understanding of the overall project timeline and their role
in controlling the Cost, Scope, Schedule and Quality (CSSQ) of the project.
• Resources cannot say “Gee – I have a full plate of other tasks which will tie me up
for six months.”

Project Management
Resource Identification and Allocation
• If that is indeed the case, the Project Manager must identify alternative resources
or have the constrained resource re-allocated from his or her current
responsibilities.
• Resources also include physical entities such as machines, instrumentation,
fabrication shops, contract laboratories, test equipment, etc.
• Physical resources can be assigned tasks just like Human Resources.
• Project Managers can link their respective projects within MS Project to avoid
conflict/competition for resources and to level demand for specific resources.

Project Management
Resource Loading and Leveling
• Resource loading refers to the amount of working hours individual resources are
committed to expend within a given time frame.
• A resource usage calendar is a useful tool to identify over-allocated resources.
• In MS Project click on view → Resource Usage on the top ribbon to see the
resource usage calendar for our example project Rochester Assembly Upgrade as
shown in Figure 12.9.
• Note that some resources have a yellow diamond with exclamation point in the
indicator column.
• This is a warning that these resources are over-allocated during the time period
highlighted in red font.
• What MS Project doesn’t know is that S. Limbach and J. Toray have legions of
qualified Craftsmen at their disposal.
• The usage calendar is an easy way for project team members to see who will be
working in what area at what time.

Project Management
Figure 12.9 Resource Usage Calendar

Project Management
Resource Loading and Leveling
• In the case where a single resource is scheduled to work a 36hr day we can see
that load leveling is required.
• Leveling reduces resource loading by shifting individual tasks within their slack
allowances without affecting the overall project timeline.
• This provides for a more even workflow, avoids panic periods and resource burn-
out.
• MS Project has a resource leveling function as shown in Figure 12.10.
• Caution must be used when applying this function.
• The project timeline will be affected.
• It is better for the Project Manager to perform resource leveling by manually
moving tasks.

Project Management
Figure 12.10 Resource Leveling Function

Project Management
Critical Path Management (PERT/CPM)
• Gantt charts contain a tremendous amount of information, but they do not
display the constraints of a project which drive the timeline.
• For this purpose, we need a network diagram.
• There are two common types of network diagrams – activity on node (AON) as
shown in Figure 12.11 and activity on arrow (AOA) as shown in Figure 12.12.
Figure 12.11 Activity on Node Network Diagram
1.1 3.1 2.1
1.2 3.2 2.2
1.4 2.4
3.3Start End
1.3 2.3
3.4

Project Management
Figure 12.12 Activity on Arrow Network Diagram
Start End
1.1
1.2
1.3
1.4
2.1
2.2
2.3
2.4
3.1
3.2
3.3
3.4
• Activity on node diagrams show the required tasks that must be performed as
rectangles with predecessors described by input arrows.
• For example, in Figure 12.11, task 2.2 cannot begin until both tasks 3.2 and 3.3 are
complete.
• In activity on arrow diagrams, the required tasks are shown as arrows with the
circular nodes representing events.
• The more common network convention is activity on node which we will utilize
for the remainder of this chapter.

Project Management
Critical Path Management (PERT/CPM)
• Network diagrams highlight the critical path of a project, that is, the key tasks that
cannot be delayed without lengthening the overall project completion time.
• They can also be used to identify activities with slack or float time that can incur
some delay without affecting the overall project timeline.
• This is important for resource leveling and keeping the project within budget.
• Evaluation of network diagrams is conducted using the Program Evaluation and
Review Technique (PERT) developed by the US Navy in conjunction with Booz-
Allen Hamilton during the Polaris missile project of 1958 or the Critical Path
Method (CPM) as developed by the DuPont Company and Remington Rand Univac
for managing plant maintenance and construction work during this same time
period.
• In practice, the two evaluation techniques are similar and often abbreviated as
PERT/CPM.
• We can generate the activity on node diagram for the Rochester assembly
upgrade by the steps shown in Figure 12.13.

Project Management
Figure 12.13 Steps for Generating Activity on Node Network Diagram
Click View → Network Diagram on the top menu.

Project Management
The network diagram is displayed with level one and two tasks indicated by parallelograms and level three tasks indicated by rectangles. The
critical path of the project is highlighted by tasks shown in red. You can roll-up level two tasks which do not lie upon the critical path of the
project by clicking the “-“ sign at the top left corner of the task to improve the readability of the network diagram.

Project Management
Click File → Page Setup on the top menu.

Project Management
Configure the Page Setup to optimize the print output of the network diagram as shown in Figure 12.14.

Project Management
Figure 12.14 Network Diagram - Rochester Assembly Upgrade

Project Management
Project Execution & Control
• Project Execution and Control are the meat and potatoes of the project
management life cycle.
• This is where the detailed work performed within the project initiation and
planning phases pays dividends.
• The project team decides the required frequency of meetings.
• This could be daily or weekly.
• The time period between team meetings should in general, not exceed one week.
• You would not want to wait one month to discover a problem which affects the
critical path without taking countermeasures.
• Inevitably there will be scope creep due to unforeseen circumstances.
• The project team must manage these scope changes, with their associated effect
on schedule, cost and quality.

Project Management
• Typically, the project manager will review Key Performance Indicators of progress
and the current areas of focus.
• He or she will then go around the table and ask team members who have open
tasks to provide status updates.
• It is useful to set up a shared documents folder to store supporting files which
prove that tasks have been successfully completed.
• Hyperlinks can be added to tasks within MS Project to facilitate status review.
• Tasks which are lagging or have uncovered some gremlin will require revision to
project scope, resources and potentially, project cost.
• The team must brainstorm solution alternatives to the scope change and select
the best alternative which has been vetted for risk by an FMEA.
• New tasks will be incorporated within the project schedule.

Project Management
• All tasks must conform to your company’s Management of Change (MOC) protocol
and adhere to local, state and federal regulations.
• Revisions to permits, drawings, schematics, electronic bill of materials (EBOMs),
work instructions, training, training validation, process hazard analyses, pre-start
up safety reviews, etc. must be completed as defined in the task MOC.
• Toward the end of the execution and control phase, representatives from the
Operations Group are added to the project team as part of the transition and
hand-off plan.
• The hand-off is not complete until the Operations Group is satisfied with required
procedures, training, troubleshooting guides, critical spares are established in
maintenance stores and preventive maintenance tasks are defined.

Project Management
Auditing – Stage Gate Review
• Auditing is an integral part of the project management lifecycle.
• It ensures that cost, scope, schedule and quality are controlled; preventing the
project from turning into a three-headed beast.
• Remember, the Project Team controls the project, not the other way around!
• The Stage Gate Process (sometimes referred to as Phase Gate Process), originally
developed by Cooper and Kleinschmidt in 1993, is a convenient methodology to
ensure that the project is meeting objectives and providing required deliverables.
• Stage Gate reviews allow the team, sponsor and stake holders to reflect on
progress to date, evaluate deliverables and decide by go/no-go consensus
whether or not the project is approved to proceed to the next phase.
• Refer to Figure 12.15 for a typical stage gate review process.
• Aaron, Bratta and Smith doubled-down on stage gate methodology in 1993 with
their ten stage model for Information Technology (IT) software products. Refer to
Figure 12.16.

Project Management
Figure 12.15 Stage Gate Process - Non IT Project
Stage Gate Process – Non IT Project
Gate 0
Origination
Gate 1
Initiation
Gate 2
Planning
Gate 3
Execution & Control
Gate 4
Closure
DeliverablesStageGateReviewPurposeOutput
0 1 2 3 4
 Identify project manager
 Select team members
 Define preliminary scope,
requirements
 Identify risks
 Develop initial project plan
 Develop project proposals
 Evaluate proposals
 Prioritize proposals
 Select project
 Project proposals
 Evaluation criteria
 Evaluation ratings
 Selection criteria
 Project selection
 Sponsor notification
 Project charter
 Scope statement
 High level schedule
 Quality management plan
 Preliminary budget estimate
 List of risks
 Stakeholder analysis
 Communication plan
 Go/No Go stage gate
decision
 Review project candidates
 Select best project
 Ensure business case sound
 Approve project initiation
 Allocate resources
 Develop detailed scope,
requirements
 Conduct risk assessment
 Define change control
process, acceptance
management process, issue
management process
 Develop project transition
plan
 Implement tasks
 Monitor and control scope,
 Manage critical path
 Monitor and control risks
 Elevate and resolve issues
which jeopardize the critical
path
 Orient operating division
 Implement transition plan
 Solicit feedback from
customers and stakeholders
 Audit key performance
indicators
 Document lessons learned
 Compile project closure
report
 Communicate project
outcomes to customers and
stakeholders
 Project scope
 Work breakdown structure
 Project schedule
 Quality management plan
 Project budget
 Risk management worksheet
 Project plan
decision
 Safety report
 Environmental impact report
 Gantt chart
 Network diagram
 Scope revision report
 Budget report
 Quality report
 Risk management report
decision
 Project closure report
 Town Hall meeting
 Customer and stakeholder
concern summary
 Actions required to address
customer and stakeholder
concerns
 Go/No Go project closure
decision
 Ensure project plan sound
 Ensure voice of the customer
has been heard
 Approve budget
 Approve resources
 Approve timeline
 Ensure project executed
safely
 Ensure environmental
impact minimized
 Ensure scope, schedule, cost
and quality controlled
 Ensure risk managed
 Ensure successful hand off
to operations
 Ensure customers and
stakeholders satisfied
 Ensure all project closure
documentation complete

Project Management
Figure 12.16 Stage Gate Process - IT Project
Stage Gate Process – IT Project
Gate 0
Concept
Gate 1
Initiation
Gate 2
Planning
Gate 3
Requirements Analysis
Gate 4
Design
0 1 2 3 4
 Identify project manager
 Select team members
 Define preliminary scope,
requirements
 Identify risks
 Develop initial project plan
 Develop project proposals
 Evaluate proposals
 Prioritize proposals
 Select project
 Concept document
 Project selection decision
 Business needs statement
 Project charter
decision
 Review project candidates
 Select best project
 Ensure business case sound
 Approve project initiation
 Allocate resources
 Develop detailed scope,
requirements
 Conduct risk assessment
 Define change control
process, acceptance
management process, issue
management process
 Develop project
management plan
 Define functional
requirements
 Define non-functional
requirements
 Generate procurement plan
 Develop detailed product
design and interfaces
 Conduct design reviews
 Develop release strategy
 Develop test plan
 Generate Contingency/
Disaster recovery plan
 Business case
 Project management plan
 Project assessment plan
 Project assurance agreement
decision
 Requirements statement
 Requirements traceability
matrix
 Procurement plan
decision
 Design document
 Test plan
 Contingency/Disaster
recovery plan
decision
 Ensure project plan sound
 Ensure voice of the customer
has been heard
 Approve budget
 Approve resources
 Approve timeline
 Develop detailed functional
and non-functional
requirements
 Complete business product
design
 Conduct detailed design
reviews

Project Management
Figure 12.16 Stage Gate Process - IT Project
Stage Gate Process – IT Project
Gate 5
Development
Gate 6
Test
Gate 7
Transition
Gate 8
Operations
Gate 9
Disposition
5 6 7 8 9
 Conduct testing
 Compare actual results to
expected results
 Identify actions required to
address deficiencies in test
results
 Implement corrective actions
to code, interface, hardware
and/or security systems
 Develop test plan
 Generate operation and
maintenance manuals
 Conduct security risk
assessment
 Complete system security
plan
 Compile training materials
 Finalize training plan
 Generate user manual
 Finalize business product
 Training plan
 Operations, maintenance and
user manuals
decision
 Operational readiness
assessment
 Organizational readiness
assessment
 Implementation plan
 Test reports
decision
 Develop code and
deliverables required to
build business product
 Conduct independent
verification and validation
assessment
 Testing and performance
audit of business product
design, coding and
documentation
 Generate service level
agreements
 Generate memorandums of
understanding
 Deploy business product to
operations group
 Generate project completion
report including lessons
learned
 Conduct operational
assessments
 Deploy help desk support
 Deploy technical support
 Monitor security risks and
issue patches as required
 Generate disposition plan
including records
management
 Finalize project completion
report
 Conduct annual reviews of
business product
performance vs current
expectations
 Compile customer feedback
and recommendations
 Electronically archive
project files
 Service level agreements
 Memorandums of
understanding
 Project completion report
 Security risk assessment
decision
 Annual operational
assessment
 Disposition plan
 Privacy impact assessment
decision
 Project completion report
 Archive project files
decision
 Conduct user and operator
training
 Assess readiness to deploy
business product
 Execute implementation
plan
 Operate and maintain
business product
 Build real-time key
performance indicators into
business product
 Conduct performance audits
 Ensure risk managed
 Define requirements for
business product retirement
 Ensure all project closure
documentation complete

Project Management
Project Closure
• By this time the project will have achieved self-awareness and become a living
and breathing entity.
• The project team has witnessed the birth, growing-pains and metamorphosis of
the project into an essential part of the Operations Group.
• The team is beaming with pride at the accomplishment!
• Nevertheless, all good things must come to an end, and it is up to the Project
Manager to tap on his music stand and bring the project to closure.
• The project manager and the rest of the team must go on to the next project in
the prioritization matrix.
• Project closure is indicated when the objectives as stated in the project charter
have been accomplished and performance metrics have demonstrated sustained
control and process capability.
• Remember, any project will also follow the DMAIC process (Define, Measure,
Analyze, Improve and Control) of Operational Excellence.

Project Management
Project Closure
• The Operations Group must not concede to release the project team without
demonstrated proof of sustained control.
• A project closed too early will leave customers and stakeholders with a bad taste in
their mouth and a feeling of being left “holding the bag”.
• This is why it is essential for the project team to meet with key stakeholders and
customers face to face so they can ensure satisfaction with project execution and
control.
• It is common for some action items to be incomplete at the time of project closure.
• These remaining actions may or may not have been derived from issues raised by
customers and stakeholders during the project closure phase.
• Assuming the transition plan has been effectively executed, the project team will
have established a good rapport with the Operations Group.
• Remaining action items should be transitioned to Operations Group ownership with
their consent. These action items will be captured in the project closure report
with deliverables defined in Figure 12.17.

Project Management
Figure 12.17 Project Closure Report
Project Closure Report
1. Project Proposal
2. Business Case
3. Project Prioritization Matrix
4. Project Charter
5. Project Scope Statement
6. Project Schedule
7. Quality Management Plan
8. Budget Estimate
9. Risk Management Plan
10. Stakeholder Analysis
11. Communication Plan
12. Project Plan
13. Work Breakdown Structure
14. Gantt Chart
15. Critical Path Network Diagram
16. Safety Results
17. Environmental Impact
18. Scope Revision Summary
19. Change Control Summary
20. Budget Actual
21. Quality Results
22. Risk Management Assessment
23. Key Performance Indicator Audit
24. Post-Implementation Survey
25. Customer and Stakeholder Concern Summary
26. Post-Implementation Actions Required
27. Lessons Learned
28. Stage Gate Review Meeting Minutes

Project Management
References
Aaron, J.M., Bratta, C.P., and Smith, D.P., Achieving Total Project Control Using the
Quality Gate Method, Proceedings of the Annual Symposium of the Project
Management Institute, San Diego, CA, 1993
Cooper, R.G., and Kleinschmidt, E.J., Stage-Gate Systems for New Product Success,
Marketing Management, Vol. 1, No. 4, 1993
Enterprise Program Management Office, Performance Life Cycle Management
Guideline, Georgia Technology Authority, Atlanta, GA, 2009
Meredith, Jack R., Mantel, Samuel J. Jr., Project Management – A Managerial
Approach, 5th edition, John Wiley & Sons, New York, NY, 2003
Mulholland, Nancy, New York State Project Management Guidebook, Release 2, New
York State Office for Technology, New York, NY, 2003
Project Management Institute, A Guide to the Project Management Body of
Knowledge (PMBOK Guide), Fourth Edition, Project Management Institute,
Newtown Square, PA, 2008

Project Management Life Cycle

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (11)

Similar to Project Management Life Cycle

Similar to Project Management Life Cycle (20)

Recently uploaded

Recently uploaded (20)

Project Management Life Cycle