Proj Mgmt Pmcs


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Chartered Accountant, Ex MBA (IBS,Hyderabad)

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Proj Mgmt Pmcs

  1. 1. Project Management control system for Capex Projects <ul><li>Prabhash Jha </li></ul><ul><li>IBS, Hyderabad </li></ul><ul><li> </li></ul>
  2. 2. Snap shot : Capex to t <ul><li>Company introduction. </li></ul><ul><li>Problems at the company. </li></ul><ul><li>Implementation of PMCS. </li></ul><ul><li>SWOT analysis. </li></ul><ul><li>Strategic Relevance. </li></ul>
  3. 3. Introduction : ….contd Capex to t <ul><li>Develops, Manufactures & market consumer foods and beverages products, domestically & internationally. </li></ul>
  4. 4. Introduction : Capex to t <ul><li>The amount of spending and support varies greatly among the group. </li></ul><ul><li>Engineering departments of the groups have responsibility for operational planning & control of capital projects. </li></ul><ul><li>Size of the engineering departments and their support services for the group are different. </li></ul><ul><li>Financial tracking support varies from full external support to self maintained records. </li></ul>
  5. 5. Problems at the company : Capex to t <ul><li>Focus on cost benefit analysis only. </li></ul><ul><li>Minimal emphasis on execution of the projects. </li></ul><ul><li>No mechanism to ensure that non-financial results were achieved. </li></ul><ul><li>Need for optimal utilization of capital funds utilized. </li></ul><ul><li>Depreciation legislation was not keeping pace with the inflationary rise in costs. </li></ul><ul><li>Responding to these factors, Heublin’s corporate management called for a program to improve execution of capital projects by implementing Project Management & Control (PM&C). </li></ul>
  6. 6. Implementation of PMCS: Capex to t <ul><li>Selection of Consultants. </li></ul><ul><li>Program Design </li></ul><ul><ul><ul><li>Educational Overview for engineering department managers. </li></ul></ul></ul><ul><ul><ul><li>PMCS design. </li></ul></ul></ul><ul><ul><ul><li>Project plan development </li></ul></ul></ul><ul><ul><ul><li>Implementation. </li></ul></ul></ul>
  7. 7. Educational Overview for engineering department managers Capex to t <ul><ul><ul><li>Objectives: </li></ul></ul></ul><ul><ul><ul><ul><li>Comprehension by participant of a maximal set of project management principles . </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Explanation of corporate objectives and recommended approach for any PM&C system. </li></ul></ul></ul></ul>
  8. 8. PMCS design : Capex to t <ul><ul><ul><li>A gestation period of three weeks was allowed between phase one and two to allow absorption, discussion and review of the project management principles and objectives by engineering dept. Managers . </li></ul></ul></ul><ul><ul><ul><li>It was agreed that a consensus would be sought to the greatest possible extent. </li></ul></ul></ul><ul><ul><ul><li>If the consensus could not be achieved then issue would be side stepped to be deferred for later consideration ;if important then a joint solution could be developed outside the session without the pressure of a fixed closing time. </li></ul></ul></ul>
  9. 9. Project Plan Development : Capex to t <ul><ul><ul><li>Recognizing the PM&C program as a model project for any future project plan. </li></ul></ul></ul><ul><ul><ul><li>How to introduce a PM&C system. </li></ul></ul></ul><ul><ul><ul><li>How to make a project plan </li></ul></ul></ul>
  10. 10. Implementation. : Capex to t <ul><ul><ul><li>If approved in phase three- move ahead. </li></ul></ul></ul><ul><ul><ul><li>Evaluation of the result was the part of implementation phase. </li></ul></ul></ul>
  11. 11. Implementation of PMCS: Project Plan Control & Milestone Organisation & Accountablity Resources Allocations Schedule Network Project structure Project Objective Introduction
  12. 12. Implementation of PMCS: Capex to t <ul><li>Introduction </li></ul><ul><ul><ul><li>what types of projects are involved. </li></ul></ul></ul><ul><ul><ul><li>What is the cost benefit relationship. </li></ul></ul></ul><ul><ul><ul><li>what are the contingency plans. </li></ul></ul></ul><ul><ul><ul><li>why is it being done this way. </li></ul></ul></ul><ul><ul><ul><li>why are the alternatives rejected. </li></ul></ul></ul>
  13. 13. Implementation of PMCS: Capex to t <ul><li>General Objectives </li></ul><ul><li>Specific Objectives </li></ul><ul><ul><ul><li>Reporting and control system. </li></ul></ul></ul><ul><ul><ul><li>Procedural Manual. </li></ul></ul></ul><ul><ul><ul><li>Computer support system. </li></ul></ul></ul><ul><ul><ul><li>General education package. </li></ul></ul></ul>
  14. 14. Implementation of PMCS: Capex to t <ul><li>Project Structure </li></ul><ul><ul><ul><li>Relate the specific objective to general </li></ul></ul></ul><ul><ul><ul><li>Define the element which comprises the deliverables.(WBS). </li></ul></ul></ul><ul><ul><ul><li>Define the activities which yields the elements and deliverables as their output. </li></ul></ul></ul><ul><ul><ul><li>Showing hierarchy relationship among objectives, elements and activities. </li></ul></ul></ul>
  15. 15. Implementation of PMCS: Capex to t <ul><li>Network </li></ul><ul><ul><ul><li>Application of network principles to the extent it facilitates planning, implementation and control. </li></ul></ul></ul><ul><ul><ul><li>No network should exceed 50 nodes. </li></ul></ul></ul><ul><ul><ul><li>Should reflect the interdependence of activities. </li></ul></ul></ul><ul><ul><ul><li>Denial of putting all the activities on one path and successful utilization of parallel activities. </li></ul></ul></ul>
  16. 16. Implementation of PMCS: Capex to t <ul><li>Schedule and Resources Allocation </li></ul><ul><ul><ul><li>When the task has to be done? </li></ul></ul></ul><ul><ul><ul><li>Schedule must reflect calendar limitation as well as resources allocation. </li></ul></ul></ul><ul><li>Organization and Accountablity </li></ul><ul><ul><ul><li>Who is responsible for what?? </li></ul></ul></ul><ul><ul><ul><li>Accountablity matrix as a tool which reflects considerable thought about the strategy of the program. </li></ul></ul></ul>
  17. 17. Implementation of PMCS: Capex to t <ul><li>Control System </li></ul><ul><ul><ul><li>Periodic status checking will be performed monthly </li></ul></ul></ul><ul><ul><ul><li>Labor cost will be collected manually and estimated where necessary for discussion with group engineering management </li></ul></ul></ul><ul><ul><ul><li>Out of pocket cost will be collected through commitment </li></ul></ul></ul><ul><ul><ul><li>Monthly status reports will be issued by the PM&C program project manger </li></ul></ul></ul><ul><ul><ul><li>Informal control will be exercised through milestone anticipation by the PM&C program </li></ul></ul></ul><ul><ul><ul><li>Mile stones and schedule subdivision are part of control system </li></ul></ul></ul>
  18. 18. SWOT Analysis: Capex to t Strengths: Opportunities: Weakness: Threats: <ul><li>Emphasis on project planning. </li></ul><ul><li>Vision & Mission oriented. </li></ul><ul><li>Employee Involvement </li></ul><ul><li>Unity in Diversity </li></ul><ul><li>WBS, cost estimation etc through logical steps </li></ul><ul><li>Space for Innovation. </li></ul>
  19. 19. SWOT Analysis: Capex to t Strengths: Opportunities: Weakness: Threats: <ul><li>Less emphasis on risk management </li></ul><ul><li>Impact evaluation in line with General and specific Objectives </li></ul>
  20. 20. SWOT Analysis: Capex to t Strengths: Opportunities: Weakness: Threats: <ul><li>Growing Market for spirits & Beverages </li></ul><ul><li>Growing Franchising Business </li></ul>
  21. 21. SWOT Analysis: Strengths: Opportunities: Weakness: Threats: <ul><li>Behavioural Issues </li></ul><ul><li>Establishment of strong Competititors </li></ul>
  22. 22. Project Planning, Scheduling, and Controlling…Contd Strategic Relevance : Before Start of project During project Timeline project
  23. 23. Project Planning, Scheduling, and Controlling….Contd Before Start of project During project Timeline project
  24. 24. Project Planning, Scheduling, and Controlling…Contd. Figure 3.1 Before Start of project During project Timeline project
  25. 25. Project Planning, Scheduling, and Controlling….Contd. Figure 3.1 Before Start of project During project Timeline project
  26. 26. Project Planning, Scheduling, and Controlling Figure 3.1 Before Start of project During project Timeline project Budgets & Variance Reporting Delayed activities report Slack activities report Time/cost estimates Budgets WBS diagrams Cash flow charts Material availability details CPM/PERT Gantt charts Milestone charts Cash flow schedules
  27. 27. <ul><li>Operational effectiveness – Competitive </li></ul><ul><li>convergence. </li></ul><ul><li>Strategic Positioning through product </li></ul><ul><li>product differentiation and innovations. </li></ul>Cost Quality L,H L,L H,L H,H Strategic Relevance: Cost Quality Grid
  28. 28. Questions????
  29. 29. Thank you for your patience