Getting started

PROJECT PLANNINGPROJECT PLANNING
Dr. Deepa VinayDr. Deepa Vinay
Prof. & HeadProf. & Head
Deptt. of Family Resource ManagementDeptt. of Family Resource Management
College of Home ScienceCollege of Home Science
G.B. Pant University of Agriculture &G.B. Pant University of Agriculture &
Technology, Pantnagar – 263 145Technology, Pantnagar – 263 145
(UTTARAKHAND)(UTTARAKHAND)
deepa cohs pantnagar

Story of My LifeStory of My Life
You have just been given a contract to write yourYou have just been given a contract to write your
autobiography for a major publishing company. Yourautobiography for a major publishing company. Your
agent Mr. Prasad is anxious to get to press. He hasagent Mr. Prasad is anxious to get to press. He has
decided to help you get started with a few probingdecided to help you get started with a few probing
questions.questions.
1)1) First, take a piece of paper and fold it in half and then in halfFirst, take a piece of paper and fold it in half and then in half
again to form a book.again to form a book.
2)2) Choose the title of a popular song for the name of your book.Choose the title of a popular song for the name of your book.
Write that title on the front cover.Write that title on the front cover.
3)3) On the inside of the front cover (page two), list a table ofOn the inside of the front cover (page two), list a table of
contents.contents.
4)4) On next page, Name of the place where you were bornOn next page, Name of the place where you were born
5)5) Description of your first jobDescription of your first job
6)6) Number of years you have been working for your organizationNumber of years you have been working for your organization
7)7) On page four, draw a picture of your family.On page four, draw a picture of your family.
8)8) On the back cover of the book, draw a picture of what you plan toOn the back cover of the book, draw a picture of what you plan to
do when you retire. Where will you go? Who will you go with?do when you retire. Where will you go? Who will you go with?
Etc.Etc.

From this presentationFrom this presentation
I will try to share . . .I will try to share . . .
What is Project Planning?What is Project Planning?
What is Project?What is Project?
Basic attributes of ProjectBasic attributes of Project
Identification of ProjectIdentification of Project
Project ManagementProject Managementdeepa cohs pantnagar

Project PlanningProject Planning
Project planning is
an integral part of
successful project
implementation. It’s
viewed as the
foundation on which
stable products are built
and valued for helping
companies.deepa cohs pantnagar

Any proposed activity whose cost
and benefit to some extent can be
isolated, where cost must be incurred
before benefits are known is known
as project.
Project can be major or minor.
Project can have urgent priority or
may be of simple in nature but
understanding the goal of a project is
must.
What is Project ?What is Project ?

The Goal of the Project may beThe Goal of the Project may be
To make profit irrespective of
benefit to many or most of the
community.
To employ many of the people of
community on the project
irrespective of profits.
To make some profit while bringing
benefit to many or most of thedeepa cohs pantnagar

There are three basic attributes of projectThere are three basic attributes of project
a. A course of action
b. Specific objectives
c. Definite time perspective
Every project has a starting point and an
end point with specific objectives.

Classification of ProjectClassification of Project
Classification of
Project
Quantifiable Non
Quantifiable
Concerned with
Industrial Development
eg. Power Generation,
Mineral Development
Health,
Education,
Defence etc.
Agricultural and
Allied Sector,
Irrigation, Transport,
Social Services
Sectoral
Project

Identification of ProjectIdentification of Project
“Well begun is half done”
Any project idea which have a
good market, can be identified as
best project.

Project selection process starts withProject selection process starts with
idea generationidea generation. Ideas can be discovered. Ideas can be discovered
from variousfrom various internal and externalinternal and external
sources. These may includesources. These may include
Knowledge of potential customer
needs.
Watching emerging trends in demands
for certain products.
Scope for producing substitute product.
Success stories of known entrepreneur.deepa cohs pantnagar

EXERCISEEXERCISE

What if we had seven fingers on each hand?What if we had seven fingers on each hand?
Question:
1) How would that change things?
2) What would be possible?
3) How would your profession or business change?
4) What new things would come into existence?deepa cohs pantnagar

Planning a project is a veryPlanning a project is a very
important task and should be takenimportant task and should be taken
up with great care, as the efficiencyup with great care, as the efficiency
of the whole project largely dependsof the whole project largely depends
upon its planning. While planning aupon its planning. While planning a
project,project, each and every detaileach and every detail shouldshould
be worked out in anticipationbe worked out in anticipation
considering all the relevant provisionconsidering all the relevant provision
in advance.in advance.
Planning

Project Management FrameworksProject Management Frameworks
Idea/need for
project
Determine project:
“WHAT”
Project
Charter
Project
Charter
Determine project:
“HOW” Project Plan
Project Plan Final
Deliverable
Final
Deliverable
•Evaluation by customer
•Evaluation by stakeholder
•Lessons learned
Close-out
Report
•Do the work
•Monitor against plan
•Report progress
•Manage change
PHASE IPHASE I
InitiationInitiation
PHASE IIPHASE II
PlanningPlanning
PHASE IIIPHASE III
ExecutionExecution
PHASE IVPHASE IV
Close – outClose – out
ININ OUTOUT

Functions in Project PlanningFunctions in Project Planning
– Market Survey
– Project Capacity
– Selection of Site
– Plant Layout
– Design and Drawing
– Material Requirement
– Operation Planning (Method and Time Study)
– Machine Loading
– Sub-contract Consideration
– Equipment Requirement
– Organisation Layout and Staff Requirement
– Material Handling
– Budgeting
– Cost Calculation
– Break Even Point
– Critical Report on Feasibility

Market SurveyMarket Survey
Market survey, in a board sense is a
commercial survey for the suitability of
business.
It provides necessary statistics helpful for
forecasting and planning a project.
It is essential to know about what must be
produced, how much be produced, who are
the purchasers and where they are located,
margin of profit etc.
Preliminary survey is done by some
experienced analyst.deepa cohs pantnagar

Project CapacityProject Capacity
1) Demand of the product in the market
2) Whether the demand is regular or fluctuating
3) Quantity of power, water, land and raw
material available
4) Type of business organization
5) Nature of the product
6) Investment capacity
Capacity of the project must be decided
considering the amount of money which can be
invested for the particular type of product.
Following are the factors which should be
considered

Selection of SiteSelection of Site
When it has been decided to start a
manufacturing a particular product, it is most
important to select a suitable site for it.
While selecting the site technical, commercial
and financial aspects should thoroughly be
considered.
Site should be selected in two stages -
 first stage general location for factory should be
decided
 second stage exact site should be selected in this
location

What is a Plant Layout?What is a Plant Layout?
Physical arrangement of equipment
and facilities within a Plant.
Optimizing the Layout of a Plant can
improve productivity, safety and
quality of Products.
Unnecessary efforts of materials
handling can be avoided when the
Plant Layout is optimized.deepa cohs pantnagar

Plant LayoutPlant Layout
1. Whether single storey building will be more
useful or a multistory building
2. Provisions for future expansion
3. Material movement be kept to the minimum
4. Flow of material should be along straight line
to minimise the production delays
5. Flexibility for future changes
6. Easy to supervise
7. Proper lighting and ventilationdeepa cohs pantnagar

Design and DrawingDesign and Drawing
Having been decided about the product to be
manufactured, it must be designed.
After designing the product, its detailed
drawings are prepared so that no doubt is left
for future.
Detailed specifications for raw material and
finished product should be decided carefully
along with the specification of the machines
required for their manufacture.

Material RequirementMaterial Requirement
The list of material required for manufacture
is prepared from the drawings. This list is
known as ‘Bill of Material’.
This bill passes through the store-keeper,
who makes the entries of the material available
in the store, but in the starting of the project, it
directly passes to the purchase department for
the procurement of material.deepa cohs pantnagar

Operation PlanningOperation Planning
The work of planning department is to select the
best method of manufacturing, so that the wastage of
material, labour, machine and time can be eliminated,
to have more production with least fatigue.
(a)Method Study: Method study is conducted to eliminate the
wastage due to ill-directed and inefficient motions. In this study
work is divided into fundamental elements and then these
elements and studied separately and in relation to one another,
and then develop a method of least wastage.
(b)Time Study: Exact estimation of time is very essential for
correct pricing. Hence time study is required to be performed to
find out the correct manufacturing time for the product. Time
study is performed on average workers and on average machines
for the method finalized on the basis of method study.

Machine LoadingMachine Loading
Number of machines to be installed in a
plant should be decided very carefully, as
excess machines will lead to machine idleness,
and shortage of machine means difficulty in
achieving the target of production. While
planning, proper care should be taken to find
out the machines time for each operation as
correct as possible, so that arrangement for
full utilization of machines can be made and
machine loading programmer is prepared
accordingly. deepa cohs pantnagar

Sub-contract ConsiderationSub-contract Consideration
In the past (few decades ago), each and
every component of the product was manufactured
in the factory. But with the development of
technology and specialization, it is difficulty to
manufacture all the components in the same
factory, because specialized machines, plant and
skilled workers for each component cannot be
afforded by a single-concern. The decision about a
particular item, whether to purchase or to
manufacture, is taken by planning department after
making a thorough study of the relative merits and
demerits. deepa cohs pantnagar

Equipment RequirementEquipment Requirement
Results obtained from the ‘Time and
Method Study’ and the ‘Machine Loading’ helps
in calculation the equipment requirement.
Specification of equipment should be laid down
by considering the drawings. Drawings will
help in deciding the necessary requirement of
the tools and accessories. After knowing the
number of equipments, their accessories and
tools required, cost data can be collected to
give an idea of capital requirement.deepa cohs pantnagar

Organisation Layout and Staff RequirementOrganisation Layout and Staff Requirement
Now with all the available information layout of
organization is decided by considering the nature
of work, type of industry, size of industry etc.
organizational set up should be able to provide
the co-ordination among men, material and
machine in such a way so as to have the
maximum output easily and efficiently under
minimum total cost.
Total number of persons required to be
employed in the organization and their wages are
calculated, which will help in deciding the cost of
production. deepa cohs pantnagar

Material HandlingMaterial Handling
Material handing is a prime
consideration in designing the new
plant building. This problem becomes
more important in large scale industries.
By improper layout, material handling
cost may increases and reduces the
efficiency.

BudgetingBudgeting
Budgeting is a forecasting and
preplanning for a particular future
period using past experience and
market trends. Planning department
prepares the budget i.e. a programme
for future operation and expected
results about working capital, material,
labour, production etc.deepa cohs pantnagar

Cost CalculationCost Calculation
Total cost of a product can be calculated
by adding the following expenses incurred
during a particular period on a product
Material Expenses
Labour Expenses
Factory Expenses
Administrative Expenses
Selling Expenses
Distribution Expensesdeepa cohs pantnagar

After calculating the total cost of a product nextAfter calculating the total cost of a product next
step is to decide thestep is to decide the profitprofit to be taken on eachto be taken on each
product, which when added to the total cost givesproduct, which when added to the total cost gives
the selling price of a product. Total cost for athe selling price of a product. Total cost for a
product is fixedproduct is fixed, as this is the expenditure actually, as this is the expenditure actually
made on the manufacture of a product, hence onlymade on the manufacture of a product, hence only
profit is aprofit is a variable factorvariable factor which affects the sellingwhich affects the selling
price While deciding the profit following factorsprice While deciding the profit following factors
should be kept in mindshould be kept in mind
1) Whether the business has monopoly?
2) Whether to determine on the cost of production or
to change what the customers can pay.
3) Whether the substitution are available in the
market.
4) What is the price of competitive product in the
market.

Break Even PointBreak Even Point
Break-even point is the level of the
production/sales where the industrial enterprise shall
earn neither profit nor incur loss. In fact, it will just
break even. Break-even level indicates the gestation
period and likely moratorium required for repayment of
loans.
100
VS
F
BEP ×
−
=
Where
F = Fixed cost
S = Sales Projected
V= Variable Costs
Thus, the break-even point so calculated will
indicate at what percentage of sales, the enterprise will
break-even.

Project ImplementationProject Implementation
Emphasis should be on action as
per planning.
For this purpose, organization set
up and sound project
management system should be
established so as to manage the
projects in a rational and
scientific manner.deepa cohs pantnagar

Project Monitoring & ControlProject Monitoring & Control
 The monitoring provided timely information and
feedback to the management regarding vital stage
in project implementation.
 Periodic feedback on the progress of the project
helps the management to know the achievement of
the project and compare it with the targets in order
to take appropriate steps for proper
implementation of project.
 As a corrective step, management can correct the
lagging time-schedule, synchronize with other
related activities and identify other slippages and
take remedial measures.

Efficiency of the monitoring andEfficiency of the monitoring and
control depends upon the efficiency of thecontrol depends upon the efficiency of the
information systeminformation system
Monitoring is basically done for
parameters, namely
project cost originally approved
latest approved estimated cost
project completion dates by way of
optimum utilization of resources.deepa cohs pantnagar

Cost ControlCost Control
Efficiency of monitoring and control of cost
also depends upon the proper reporting format
and quality of information supplied. Generally
these format are the cost status, which enable the
monitoring manager to know as to how much work
has been done, with what cost, and how much
cost should have been incurred for this work as
per plan (estimate). The frequency of this report is
decided according to the requirement of
effectiveness of monitoring. This also enables the
management to know shortfalls and surpluses in
funds position. deepa cohs pantnagar

Project EvaluationProject Evaluation
Projects are evaluated and their
performance audit is done with idea of
gaining experience for subsequent project in
their identification, preparation and appraisal.
This ex-post evaluation is very useful in
providing experience for future work, since
during execution process, the attention is
more towards the problems being faced at
that time. deepa cohs pantnagar

Preparation of Project ReportPreparation of Project Report
Webster New 20th
Century Dictionary
defines a project as a scheme, design, a
proposal of something intended or devised. In
simple words, project report or business plan
is a written statement of what an entrepreneur
proposes to take up. It is a kind of guide frost
or course of action.
“It is a well evolved course of action devised
to achieve the specified objective with in a
specified period of time. It is an operating
document.” deepa cohs pantnagar

Significance of Project ReportSignificance of Project Report
1. Project report is liked road map.
2. It attract lenders and investors.

Contents of a Project ReportContents of a Project Report
I.General Information:
1. Biodata of promoter
2. Industry profile
3. Plant & machinery
4. Product details

Cont…..Cont…..
II. Project Description:
1. Site 12. Research and development
2. Physical infrastructure 13. Raw material
3. Utilities 14. Man power
4. Pollution control 15. Product
5. Communication system 16. Market
6. Transport facilities 17. Requirement of working capital
7. Other common facilities 18. Requirement of funds
8. Production process 19. Cost of production
9. Machinery and equipment 20. Break even analysis
10. Capacity of the plant 21. Schedule of implementation
11. Technology selecteddeepa cohs pantnagar

Project AppraisalProject Appraisal
Project appraisal means assessment of a
project. It is also a cost and benefit analysis of
different aspects of proposed project with an
objective to adjudge its viability.
Appraisal of proposed project includes the
following:
– Economic analysis
– Financial analysis
– Market analysis
– Technical feasibility
– Management competencedeepa cohs pantnagar

Economic AnalysisEconomic Analysis
Requirement of raw material, level of
capacity, utilization, anticipation sales,
anticipated expenses and probable profits.

Financial AnalysisFinancial Analysis
A. Fixed Assets
Tangible and material facilities which purchased once are used
again and again. E.g. land, building, plant, machinery.
B. Working Capital
Means excess of current assessors current liabilities. “Working
capital is that amount of funds which is needed in day today’s
business operation. Working capital works as a lubricant for any
enterprise.”
C. Current Assets
Current assets are those assets which can be converted in cash
with a period of one week.
D. Current Liabilities
Current liabilities are those obligations which can be payable
within a period of one week.deepa cohs pantnagar

Technical FeasibilityTechnical Feasibility
While assessing the technical feasibility of the
project the following inputs covered in the project
should be taken into consideration.
1. Availability of the land site
2. Availability of other inputs like water, electricity
3. Availability of servicing facilitator like machine
shop, electric shop
4. Coping with anti-pollution law
5. Availability of work force-skilled, unskilled
6. Availability of required raw materialdeepa cohs pantnagar

Common Errors in Project FormulationCommon Errors in Project Formulation
We are highlighting the errors widely
noticed in project formulation
1. Product Selection
2. Capacity Utilization Estimates
3. Market Study
4. Technology Selection
5. Location Selection
6. Selection of Ownership From

Step in Setting
up a Small
Industrial
Enterprise
Finance
Power
connection
Project
report
Machinery
and
equipment
Location
Form
of
ownership
Market
survey
Product
selection
Analysing
strengths/
weaknessesDeciding
to go into
business
Recruitment
of
manpower
Installation
of
machinery

Go back To first exercise and askGo back To first exercise and ask
the following questions:the following questions:
 What is my motivation to start a Project? Is itWhat is my motivation to start a Project? Is it
wealth, security, self-esteem or some thingwealth, security, self-esteem or some thing
else?else?
 How much risk am I willing to take upon me?How much risk am I willing to take upon me?
 How long and hard am I willing to work?How long and hard am I willing to work?
 What is a reasonable timetable for myWhat is a reasonable timetable for my
objectives?objectives?
 When shall my personal objectives be reached?When shall my personal objectives be reached?
 Will I be able to “survive” if my objectives doWill I be able to “survive” if my objectives do
not get fulfilled?not get fulfilled? deepa cohs pantnagar

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