Lesson Plan for the most complicated phase of Project Management: Earned Value Management. Lesson plan guides students through the coordination of other phases through hypothetical examples. #PM #ProjectManagement #University #BusinessSchool

1. AGENDA for 12th Week (Sessions #23 & #24)
Project Management; Wednesdays & Thursdays
10th and 11th April 2019; 9:00-10:30 a.m. and 10:45-12:15. Office
Hours: Wednesdays 10:30- 12:30
TOPIC: Application of Earned Value Management
• Introduction to Key Performance Indicators
• Context of Risk in Earned Value Management
• Case Study on Earned Value Management
• Analytical Conclusions
• Data Interpretation

2. Week-12 Topic: 4th Phase of Project Management – Monitoring
& Review (risk management; E.V.M. interpretation)
Homework
Reviewed
 Earned Value Management Case Study
 “The use of Key Performance Indicators” https://www.ukessays.com/essays/business/the-use-of-key-performance-indicators-business-essay.php
 “Risk Response and the 4-Ts” https://youtu.be/XmNFvijxjKk
Objective
Session #23: I will apply E.V.M.
Session #24: I will deepen my interpretive skills
Homework
Assigned
 “Key Performance Indicators – Essay” https://www.ukessays.com/essays/business/key-performance-indicators-essay.php
 Watt: Chapter-18 (pages 165-169)
 Russell et al.: Chapter-12 (pages 250-256)
 “Lessons Learned: Taking it to the Next Level” https://www.pmi.org/learning/library/lessons-learned-next-level-communicating-7991

3. EARNED VALUE MANAGEMENT
(E.V.M.) CASE DRUDGERY

4. WORK BREAKDOWN STRUCTURE
WBS
Code
Element
Name
1 Airbus 350XB Prototype Programme
1A Tail Prototype Project; Project Manager for 10 hours per week
1.1 Initiation: Project Manager Presents Preliminary Numbers
1.1.1 Evaluation & Recommendations: Programme Manager Approves
1.1.2 Develop Project Charter: identify engineering personnel
1.1.4 Programme Manager Reviews Project Charter: proposed resources
1.1.5 Project Charter Signed / Approved
1.2 Planning
1.2.1 Create Preliminary Scope Statement: per programme specifications
1.2.2 Determine Project Team: approved by Programme Manager
1.2.3 Project Team Kickoff Meeting
1.2.4 Develop Project Plan
1.2.5 Submit Project Plan
1.2.6 Milestone: Project Plan Approval by Programme Manager
1.3 Execution
1.3.1 Project Kickoff Meeting
1.3.2 Verify & Validate Programme Requirements R.A.C.I. MATRIX
1.3.3 Design System
1.3.3a Design Engineer: 100 hours in stages 1 & 2; 180 hours in stages 3-6; and, 40 hours in stages 7 & 8.
1.3.3b Aerospace Engineer: 100 hours in stages 1 & 2; 180 hours in stages 3-6; and, 40 hours in stages 7 & 8.

5. R.A.C.I. Chart
Responsibility / Accountability / Consultation / Information
Airbus Tail
Prototype Project
Phase
Activity
PROG.
Manager
Proj.
MGR
Design
Eng.
Aerospace
Engineer
Mat’ls
Eng.
Q.A.
Eng. Welders Assemblers
Proposal 0 / Composition A R
Space Selection 0 / Negotiation A R I I I C C
Scope Statement 0 / Planning C A / R C C C I I I
Proposal and
Approval
1 / Initiation A R C C C C I I
Design of prototype
1 & 2 / elaborate
per specifications
I A R C C
Procurements
1 / pre-order Japan
and open market
for others
I A C I R C I C
Fabrication
2-4 / materials
integration and
moulding
C A C C C C C C
Quality Assurance
3-7 / inspection
and enforcement
I A I C C A I I
Reconfigurations
4-7 / specialty
manufacture
C A I I I C R R
Submission /
Acceptance
8 / acceptance
criteria checked
A R I I I C I I

6. Code
1.3.4
Element
Purchases of Materials and Inputs
1.3.4a Carbon fiber reinforced polymer: 4,300 kilograms; 10% consumed in stage-1; 33% in stage-2; and, 57% in stage-3
1.3.4b Aluminium: 1,100 kilograms; consumption during first three stages
1.3.4c Titanium Screws: 4,300 units; 5% consumed in each of the first 3 stages; 10% consumed in stage-4; 15% consumed in stage-5; 25% consumed in stage-6;
20% consumed in stage-7; and, 15% consumed in stage-8.
1.3.4d Industrial Adhesive (i.e., glue): 150 kilograms; 5% consumed in each of stages 1 & 2; 10% consumed in stage-3; 30% consumed in each of stages 5 and 6;
5% consumed in stage-7.
1.3.5 Install Development System
1.3.5a Materials Engineer: 15 hours in weeks 1-3; 30 hours in week 4; 50 hours in weeks 5 & 6; 45 hours in week 7; and, 20 hours in week 8.
1.3.6 Testing Phase
1.3.6a Quality Assurance Engineer: 2 hours in weeks 1 & 2; 12 hours in weeks 3-5; 26 hours in weeks 6 & 7; and, 40 in week 8
1.3.7 Install Live System
1.3.7a Welder: 60 hours in weeks 1-3; 160 hours in weeks 4-7; 20 hours in week 8
1.3.7b Precision Assembler: 160 hours in weeks 1-4; 60 hours in weeks 5 & 6; and, 20 hours in week 8
1.3.8 User Training
1.3.9 Go Live
1.3.9a Miscellaneous support services unassigned: 280 hours in weeks 1-8
1.3.9b Untilities and Overhead: 10% of material costs as incurred
1.4 Control
1.4.1 Project Management: 10 hours per week.
1.4.2 Project Status Meetings Weekly
1.4.3 Risk Management
1.4.3a Decision Matrix on cost over-runs versus late delivery
1.4.4 Update Project Management
1.4.4a Review R.A.C.I. chart
1.5 Closeout.
1.5.1 Audit Procurement
1.5.2 Document Lessons Learned
1.5.3 Update Files/Records
1.5.4 Gain Formal Acceptance

7. Resource Breakdown Structure and Estimate
Human
Resource Unit
Price
Unit
Number
Units
Resource
Estimate
Project Manager Hour € 40 80 € 3,200
Design Engineer Hour € 50 320 € 16,000
Quality Assurance Engineer Hour € 35 80 € 2,800
Materials Engineer Hour € 60 160 € 9,600
Aerospace Engineer Hour € 60 160 € 9,600
Welder Hour € 30 240 € 7,200
Precision Assemblers Hour € 30 240 € 7,200
SUB-total € 44.44 € 55,600

8. A350XWB Programme; Tail Prototype; Phase-0; Vendor Decision

9. Resource Breakdown Structure and Estimate
Miscellaneous
Costs Unit
Price
Unit
Number
Units
Resource
Estimate
General Support Costs Hour € 20 280 € 5,600
Overhead Costs 10% Material
Costs
€ 10,500
SUB-total € 16,100
Material
Inputs Unit
Price
Unit
Number
Units
Resource
Estimate
C.R.F.P. kilo € 20 4,300 € 86,000
Aluminium kilo € 5 1,100 € 5,500
Titanium Screws unit € 3 4,300 € 12,900
Industrial Adhesive kilo € 2 150 € 300
SUB-total € 104,700

10. Project Budget Timing Entry Budget Item
CAPEX / Capitalised Expenses €106,800
C.R.F.P. Composites Purchasing € 86,000
Design Engineer Design € 16,000
Aerospace Eng. (50%) Elaboration € 4,800
Materials € 18,400
Titanium Screws Elaboration € 12,900
Aluminium Elaboration € 5,500
Human Resources € 34,800
Project Manager Oversight € 3,200
Q.A. Engineer Inspection € 2,800
Materials Engineer Procurement, € 9,600
Aerospace Engineer (50%) Reconfiguration € 4,800
Welder Elaboration € 7,200
Precision Assemblers Elaboration € 7,200
Miscellaneous Costs € 16,400
Staff Support Expenses Phases 1-8 € 5,600
Overhead Phases 1-8 € 10,500
Consumables (i.e., glue) Elab.-&-.Reconfig. € 300

11. REFERENCE SLIDES

12. “RiskX: What is risk response and the 4Ts”;
John Sing; University of Adelaide; 24th August 2017https://www.youtube.com/watch?v=XmNFvijxjKk&feature=youtu.be
If tied to timeliness and facts, brain-stormed project risk
assessment can yield meaningful (i.e., scenario-based and tested)
responses to reduce threats and realise opportunities:
• TAKE = unavoidable, no response, within risk appetite, and informed;
• TREAT = unavoidable but manageable (e.g., with stake-holders) and
mitigated through actions or controls (i.e., structural);
• TRANSFER = avoidable, assigning risk to another party, but often
seductive due to eventual costs or mis-communication; as well as,
• TERMINATE = avoidable through elimination, done by de-scoping or
changing procedures to absorb costs up front; as well as,
• ALIGNMENT = among sponsor priorities, end-value and, project
outcomes.

13. “The use of Key Performance Indicators”;
U.K. Essays; 5th May 2017 https://www.ukessays.com/essays/business/the-use-of-key-performance-indicators-business-essay.php
There is more with K.P.I.s than meets the eye:
1. “Key result indicators (K.R.I.s) inform you how you
have done in a viewpoint or critical success feature.
2. “Result indicators (R.I.s) tell you what you have done.
3. “Performance indicators (P.I.s) tell you what to do.
4. “Key Performance Indicators (K.P.I.s) tell you what to
do to increase performance dramatically.”

14. “The use of Key Performance Indicators”
KEY (quantitative) RESULTS INDICATORS often mistaken for K.P.I.s:
• integrated multi-level results including P.B.T. and customer satisfaction;
• indicating direction over time to senior management as a governance
brief (i.e., ten data or less); and,
• not measuring progress (i.e., K.P.I.s) as a quotidian prescription for
middle management.
EIGHTY PERFORMANCE and RESULTS INDICATORS.
1. P.I.s aim to keep organisational sub-groups and people in line.
2. P.I.s tend to be non-financial and inform K.P.I.s. (e.g., complaints,
sales growth or shrinkage with key accounts).
3. R.I.s (i.e., operating margin in the last month) tend to be quantitative
to drive K.R.I.s).
KEY PERFORMANCE INDICATORS focus on value-drivers. Seven key
characteristics: non-financial; timely; targeted to the C-Suite;
prescriptive for middle management / teams; substantial; and, actionable.

15. “The use of Key Performance Indicators”
Performance measurement already integrates four perspectives:
Financial, Customer, Internal Process, and Learning and Growth.
K.P.I.s should capture two other perspectives: employee satisfaction (i.e.,
knowledge / talent management); and, communal environment variables
(e.g., triple bottom line).
Thoughts on K.P.I.s & K.R.I.s:
• non-financial dashboards;
• focused on critical success
factors;
• briefing to senior management;
• mid-management action points;
• trended and timely data;
• communicated digitally;
• addressed personally; as well as,
• influences value-drivers.
Thoughts on R.I.s & P.I.s:
• not tied to company activities;
• tied to team activities;
• clearly and universally
comprehensible;
• integration of several activities;
• focused on one activity;
• dashboard or score-card format;
• daily to quarterly reporting; plus,
• prescriptive versus descriptive.

16. Just when you thought you were
‘bien liberés’…
Here they come: the McBrats and their dysfunctional
Christmas Tree!!!
https://twitter.com/meg_simpson/status/463084208202596352 https://www.picswe.com/pics/animation-crazy-family-bb.htmlhttp://robertiulo.com/2017/12/merry-christmas-from-charlie-brown-and-friends/

17. Class of Expenditure BUDGET
Capital Expenditures 290 TND
Stand 40
Shawl 20
Lights 140
Ornaments 90
Human Resources 235
Mom 135
Dad 100
Inputs 103
Tree 100
Water 3
Consumables / Overhead 24
Cookie Crap 10
Milk 10
Petrol 3
Cocoa 1
TOTAL BUDGET: 652
Capital Expenditures 44.4%
Human Resources 36.1%
Inputs 15.8%
Consumables 3.7%
The cynic knows
the price of every-
thing and the
value of nothing…

18. Extract
Resource
Requirements
from Work
Break-down
Structure

19. Resource Break-down Structure
Item Unit Type Unit
Cost
Quantity Projected
Cost
Type of Expenditure
Dad Hour 25 TND 4 100 Human Resource
Mom Hour 30 4½ 135 Human Resource
Tree Metre height 50 2 100 Raw Material / Material
Input
Stand Stand 40 1 40 Capital Expenditure
(CAPEX)
Shawl Shawl 20 1 20 CAPEX
Lights Strand of twelve lights 35 4 140 CAPEX
Ornaments Ornament 2.5 36 90 CAPEX
Petrol Litre 2 1½ 3 Raw Material /
Consumable
Water Litre 1 3 3 R.M. / Raw Material
Cocoa Kilo 10 0.1 1 R.M. / Consumable
Milk Litre 5 2 10 R.M. / Consumable
Cookie
Crap
Kilo 10 1 10 R.M. / Consumable
The cynic knows the price of every-
thing and the value of nothing…

20. With Christmas, as with the Eyds, timing is everything!
Questions leading to
Assumptions:
1. Break down by half hour or
whole hour?
2. On the hour or in between?
3. What about costs that straddle
periods of measurement?

21. Oh scheiße. . .REALITY!
Too close to X-mas:
1. Dad needs another hour to find a tree
2. Few trees left; Dad pays up big time!
3. Mom has to pay up for ornaments; cheap ones – McBrat
preference – gonnamundo!
4. Need more gas in driving around in search.
5. Add one hour (25 TND) to Dad
6. Add 45 minutes (23 TND) to Mom; 15 minutes down-time

22. Monitoring and Control
Monitoring: data to be disseminated to key stake-holders.
Controlling: responding to emerging problems.
Monitoring and control use intelligence intelligently.
Gathering / responding to intelligence in a timely manner requires
flexibility and wide ranging communications. Dashboards with K.P.I.s can
focus attention away from information over-load.
Active control entails these key ingredients:
• understanding when to gather intelligence during the Project;
• what information to look for and knowing where to get it;
• distributing findings to key players to make it actionable;
• formatting information to be presented in a manner to enable
immediate understanding of its implications;
• focusing on quality and contractual / legal compliance; as well as,
• collecting the feed-back to assure the right outcome is achieved.
Russell et al., pages 226-229

23. GARAGE PROJECT: EXECUTION SCHEDULE
Requirements approval
• material inputs and labour assignments okayed by customer?
• output requirements agreed to by the customer?
Protocol for inspection by, and testing for, customer:
• first unit test / inspection…WHEN??? ¿After 1st brick, 1st day?
• frequency of testing for integration…the garage we want?
• criteria for passing intermediate and final inspection…¡specific!
• testing for intermediate defects…¿HOW?
Agreed procedure for curing defects of changing design?
• managing divergence between output and outcomes?
• stage-by-stage acceptance and remuneration by installments?
Who signs off on final acceptance and how will garage transfer?
Maintenance requirements transferred to customer? How?

24. EARNED VALUE MANAGEMENT
Garage Project; Situation:
1. At the end of Day-15 and halfway through setting the base
2. A catastrophe has collapsed many old buildings around Tunis:
• bricks now 0.75 TND each and steel round at 13 TND per unit;
• cement, sand and gravel now at 12 TND and 100 TND per
unit;
• brick-layers, painter and carpenter now 50, 30, 40 TND per
day; and,
• Service providers now 125 TND for architect and 30 for
electrician.
3. Other materials on stock and costs remain the same.
4. Only half of the first foundation completed.
5. Foundation to have been completed by now.

25. HEALTH BAR PROTOTYPE: EXECUTION SCHEDULE
Design / Material Input Requirements: okayed by company or by
marketing management? In writing?
Output Requirements: how clear is the guidance from marketing
department? Agreement to terms in specifications? In writing?
Inspection by Customer – company or marketing management?
1. When is first unit test / inspection? Who specifies the timing?
2. Who tests: the project manager or the marketing department?
3. Separate tests for the health bars and the packaging?
4. Protocol for other intermediate tests if first test fails?
Production and delivery:
1. Criteria for inspections agreed in writing among all stake-holders?
2. Management of difference between output and outcomes?
3. Who signs off on final acceptance test to deliver prototypes?

26. EARNED VALUE MANAGEMENT
Health bar prototype project
Situation:
1. It is noon and the rented machine had to be replaced.
2. Two hour delivery of machine from outside vendor for machine for
700 TND for rental and 50 TND for delivery.
3. The supplier had an electric stoppage that rotted the nuts and
honey; now input costs are 0.04 for honey and 0.07 for nuts.
4. Only half of the first batch produced thus far; 50 bars produced.
Actual costs for ingredients:
0.48 honey + 0.032 oats + 1.4 nuts + 0.21 chocolate / sugar = 2.122
Actual Machinery Cost of 750 TND
Time and a half for labour costs after 2 p.m.
• 100 bars at 1.03 TND scheduled to have been produced by now

27. MODEL U.N.: EXECUTION SCHEDULE
Design / Material Input Requirements:
Are personnel hired to be approved by the customer (i.e., AUNA)?
Output Requirements:
• Who determines meeting schedules? Is AUNA included?
• Pre-approval in writing of social media strategy by customer?
• Criteria for model U.N. group leaders, etc. approved by customer?
Testing and inspection by customer or reported to customer?
• When is the first test to assess social media penetration and interest?
• Criteria set in writing for acceptable participants?
• Marketing tactics approved by customer (e.g., early-bird discount)?
• Contingency plans if interest is less than expected (failed test)?
Production and delivery:
• Inspection and sign off by customer for venue, banners, etc.?
• Protocol for running model U.N. – stand-by plans if things change?

28. EARNED VALUE MANAGEMENT
Model United Nations
Situation:
1. Two weeks before the event and the team is finishing stage-3.
2. The social media promotion has not executed to plan; little interest
shown.
3. Digital marketing agency hired to optimise web-site and up its
rankings in search engines, costing 7,500 TND per month.
4. The hotel for the venue has cancelled due to a catastrophe that
wiped out half of Lac II.
5. New site selected but charging 125 TND per day; plan includes
three meals per day and two work-shop venues.
6. All other costs for badges, etc. expected to remain the same.
Should have completed pre-registration and training by now.

29. COMMUNITY CENTRE: EXECUTION SCHEDULE
Design / Material Input Requirements:
1. Qualifications of each member and role cleared with sponsor in
writing? Are key skills levels compliant in writing with G.o.T. specs?
2. Procedures of contracting for reconstruction, plumbing, etc. cleared in
writing with the sponsoring agency and in compliance with G.o.T.?
Output Requirements:
1.Pre-approval of design plans before construction? By whom?
2.Bidding / purchasing requirements and procedures for R.F.P.s for
public projects satisfied in writing to demonstrate G.O.T. compliance?
Testing and inspection by customer or reported to customer?
1. Signature protocol for completion and customer acceptance of each
stage (i.e., reconstruction, purchases, hiring, etc.)?
Delivery and Acceptance of the completed centre
1. Incumbency for sign-off established?
2. Transfer per procedures of the G.O.T. for purchases?

30. EARNED VALUE MANAGEMENT
Community Centre
Situation:
1. The team is on day #75 and only half-way through the
simultaneous stages of Youssef and Tarek.
2. Mould, considered likely to be toxic, has been found and must be
removed first, delaying the start by three weeks.
3. Accelerating professional work but must pay architect time-and-a
half for overtime; works out to 125% of original costs.
4. Contractually obligated to meet other payroll / labour costs.
5. Government regulations mandate additional 1,000 TND for disabled
toilets.
Should have completed the retrofitting, electrical and plumbing
work by now for 58,270 TND labour and 67,212 TND materials.

31. Earned Value Management (from 2012 paper)
1.Earned Value Management came into use during the 1960s
when U.S. government computers could now keep track of
vast amounts of data.
2.Secretary of Defence Robert McNamara, under Presidents
Kennedy and Johnson, sought to impose an accounting
discipline on the development of weapons systems and,
later, pursuit of the war in Viêt Nam.
3.The idea is to track how closely to budgeted estimates and
scheduled times a certain large and complex project is being
executed.
4.That is ask: ¿how close is the actual value to the planned
value? If there is a divergence, ¿why and what can we do?
https://drive.google.com/drive/folders/1jVI3W3peOujgfe4aRRUq6bdsZNmA9TiY

32. Earned Value Management (from 2012 paper)
Like any complex system, it is best to start with key terms.
The first evaluation is that of meeting budgetary
requirements; project timing is handled separately.
We look at the budgeted costs tied to project milestones:
• B.A.C. = budgeted costs at completion, or the total budget
NOTE: B.A.C. is also tied to a schedule to be measured separately
• A.C. = actual costs incurred, or what we are spending in real time.
• B.C.W.P. = budgeted costs of work performed, or what we expect to
spend on that same task, activity or work package.
• B.C.W.S. or P.V. = budgeted costs of work scheduled or planned
value (i.e., the costs expected to be incurred under budget timeline).
• C.V. = B.C.W.P. minus A.C. = the cost variance
• C.P.I. = cost performance index, or the ratio of B.C.W.P. to A.C.
NOTE: these measures calculate deviations from budget only
https://drive.google.com/drive/folders/1jVI3W3peOujgfe4aRRUq6bdsZNmA9TiY

33. Earned Value Management (from 2012 paper)
Next, come terms related to the evaluation of timing.
That is to say: ¿where are we supposed to be right now and
how much are we supposed to have spent to get here?
We look at the scheduled values tied to project milestones:
• The P.V. = planned value; cost expected to be incurred by this date in
the project; this is the budgeted cost of work scheduled (B.C.W.S.).
NOTE: In assessing performance against a schedule, the P.V. is
calculated as a percentage of the project expected to be completed;
the challenge here is whether to apply a percentage of the
scheduled time elapsed in a project or a percentage of the costs
to have been expended by the measurement date.
• S.V. = B.C.W.P. minus P.V. / B.C.W.S. = the schedule variance
• S.P.I. = schedule performance index, or the ratio of B.C.W.P. to P.V.
NOTE: like the C.P.I., a value below 1.0x indicates a problem.
https://drive.google.com/drive/folders/1jVI3W3peOujgfe4aRRUq6bdsZNmA9TiY

34. EXAMPLE TO RUN THROUGH THE NUMBERS
Product prototype being developed. ASSUMPTIONS
1. Time-line of one year
2. Budget of one million dinars
3. First three months spent developing prototype
4. Last nine months testing and tweaking
https://drive.google.com/drive/folders/1jVI3W3peOujgfe4aRRUq6bdsZNmA9TiY
Month (‘000) Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec Σ
Actual
Costs
250 200 100 50 50 50 50 50 50 50 50 50 1,000
Budgeted
Cost Class
Equipment
Development
Improvements
Maintenance
Cumula-
tive Cost
250 450 550 600 650 700 750 800 850 900 950 1,000
Linear
Path
83 166 250 333 416 500 583 666 750 833 916 1,000
WHERE WE ARE AFTER THE FIRST QUARTER:
20% of the prototype is complete at costs incurred of 150,000 TND
Actual Cost 30 40 80 with 20% of prototype completed

35. EXAMPLE of Earned Value Management
We calculate our values as of 31st March:
• The B.A.C. = the budget = 1,000,000 TND
• Costs expected to date (P.V. or B.C.W.S.) = 550,000 TND
• The Actual Costs = 150,000 TND
Is the project performing more efficiently than expected?
NO!!! The key is the budgeted cost of the work performed…
•B.C.W.P. = 20% of the prototype completed X 550,000 =
110,000 TND (i.e., the P.V. or B.C.W.S.)
•Cost variance (C.V.) equals B.C.W.P. minus A.C.; alors…
•110,000 TND minus 150,000 TND = (40,000) negative cost
variance
•The cost performance index (C.P.I.) = 110 / 150 = 0.73
https://drive.google.com/drive/folders/1jVI3W3peOujgfe4aRRUq6bdsZNmA9TiY

36. EXAMPLE of Earned Value Management
IMPLICATIONS OF A (40,000 TND) COST VARIANCE
1. The E.T.C. (estimate to complete) = [B.A.C. minus B.C.W.P.] / C.P.I.
2. 1,000,000 TND (B.A.C.) minus 110,000 TND (B.C.W.P.)
3. The E.T.C. = 890,000 TND / .73 = 1,219,178 TND
4. Required Efficiency Ratio (to Meet Budget) = (B.A.C. - B.C.W.P.) /
B.A.C. - A.C.) = 105%; almost impossible to meet.
5. The resources on hand total 850,000 TND (i.e., one million dinars
under the original budget LESS 150,000 TND spent to date).
6. Therefore, the budget for the remaining project activities will need to
increase by 43% if current cost parameters do not improve.
7. This revised budget does not guarantee on-time delivery!
https://drive.google.com/drive/folders/1jVI3W3peOujgfe4aRRUq6bdsZNmA9TiY

37. EXAMPLE of Earned Value Management
The Schedule Variance, based on scheduled costs (i.e.,
completing the prototype or 55% of costs), is worse:
1. S.V. = B.C.W.P. - P.V. = 110,000 TND - 550,000 TND (completed
prototype) = (440,000 TND) negative variance for an S.P.I. = 0.2.
2. As a percentage of time completed (i.e., a linear realisation of
cost), the schedule variance is distorted in this case.
3. S.V. = 110,000 TND (B.W.C.P.) - 250,000 TND B.C.W.S. (25% of year
completed) = (140,000 TND) negative variance for an S.P.I. = 0.4.
Project will take twice as long to complete, if this pace does not change.
If the project manager can not realise efficiencies, speed
the timing or persuade senior management of a revised
budget time-line, the project will likely be cancelled.
https://drive.google.com/drive/folders/1jVI3W3peOujgfe4aRRUq6bdsZNmA9TiY

38. EXAMPLE of Earned Value Management
“The budgeted cost of work scheduled (B.C.W.S.)
comprises the detailed cost estimates for each activity in
the project. The amount of work that should have been
done by a particular date is the planned value (PV).”
The final piece of the example is re-estimating the total
budget using the B.A.C. as a point-of-departure.
• 1,000,000 TND (i.e., B.A.C.) minus 150,000 TND spent (i.e., A.C.) =
850,000 TND
• 1,000,000 TND (i.e., B.A.C.) minus 110,000 TND of B.C.W.P. =
890,000 TND
• Estimated To Complete (i.e., E.T.C.) = 890,000 TND / .73 =
1,219,178 TND
• Revised budget = E.T.C. + A.C. = 1,369,178 TND
Watt, pages 122 and 123

39. Key Performance Indicators
Financial and non-quantitative benchmarks to indicate progress
toward long-term goals
1. K.P.I.s can include balanced score-cards for strategy assessment
and quality management systems for technical pursuits.
2. K.P.I. are used in process organisations that embody:
• multi-function production focused on doing only the necessary;
• value streams to customers as a focused process delivery; and,
• suppliers and customers intermediated by company.
3. Case study in paper for K.P.I. use is that of Toyota car dealers,
through the Toyota Customer-Oriented Process (T.C.O.P.):
• operations process within each dealership to perfect T.C.O.P.;
• organisational process and accountability; as well as,
• continual monitoring to improve results under T.C.O.P.
“Role and Importance of Key Performance Indicators Measurement”;
Dragana Velimirović, Milan Velimirović and Rade Stanković;
Serbian Journal of Management; 2010 http://www.sjm06.com/SJM%20ISSN1452-4864/6_1_2011_May_1-121/6_1_63-72.pdf

40. Requirements Types
They can be divided into six basic categories:
1. Functional requirement: what you want the deliverable to do, in a
language the customer understands and participates to create. Note
what is wanted per specifications and not how it will be delivered.
2. Non functional: specify criteria used to judge the final product or
service delivered; these are restrictions or constraints to be placed
on the deliverable and how to build it.
There are three general types of non-functional development
constraints:
• Time: When a deliverable should be delivered
• Resource: How much money is available to develop the deliverable
• Quality: Any standards that are used to develop the deliverable,
development methods, etc.

41. REQUIREMENT TYPES (continued)
3. Technical: from functional requirements to answer how to solve
problems (procedurally or technologically); specify system design
and implementation to provide required operational functionality.
4. Business: needs of sponsoring organisation, from MGT view.
5. User: describe what the users do with the system or product.
6. Regulatory: internal or external and usually non-negotiable;
restrictions, licenses, and laws applicable to a product or business.
Documenting requirements: much more than writing down the user
requirements; recording not only decisions made, but their reasons
as well.
Understanding the rationale that was used to arrive at a decision is
critical in avoiding repetition.

42. Work breakdown structure (W.B.S.)
Who does what in what sequence
1. Used to divvy up project work into bite-size pieces, so one can
plan, track and manage the project effectively.
2. By using W.B.S., it is easier to:
• estimate time-&-cost for smaller work chunks (i.e., work parcels);
• assign work to team members; as well as,
• measure progress by building check-points / milestones into project.
http://www.free-management-ebooks.com/faqpm/schedule-02.htm
Gracias, Srta.
Yasmine Bouzid

43. Advantages of Critical path
• Visualize dependencies: CPM Helps managers identify and visualize
interdependent & critical tasks and prioritize them accordingly.
• Reduce delays: By identifying the most crucial sequence of tasks in a
project. Managers can use this information to reduce delays by
optimizing the work along the critical path.
• Optimize efficiency: managers can use CPM to allocate resources
more efficiently, adding/removing resources depending on the task's
importance. Thus, eliminating waste and cost reduction.
• Float calculation: Calculating the float can help managers delay some
tasks without impacting the project schedule and distribute resources
more effectively. CPM Allows for adjustments during process of project,
i.e. flexibility.
Gracias, Srta. Yasmine Bouzid

44. “7 Tips to Create a Budget for Your Project” https://www.liquidplanner.com/blog/7-ways-create-budget-project/
Tim Clark, LiquidPlanner, 10th September 2013.
Before one gets to tips, keep in mind that planning for the worst, to
the extent that competitive conditions permit, is advisable.
1. The first budget is one’s toughest: ask for resources and ask for help.
2. Learn from other budgets for tricks of the trade (e.g., where to cut).
3. Establish the absolute must-haves to complete the project and
estimate costs conservatively; re-define pre-project scope definition.
4. Prepare for change of budget estimates – both cost and duration.
5. Track resource expenditures constantly and carefully to make sure
people are working on the most important things for acceptance
criteria of, or outcome sought by, the customer and / or end-user.
6. Be transparent in all communications even if it drives people to drink.
7. Manage scope prudently through change orders as a warning.
Russell et al, pages 196-197

45. ROLES of SUPPLY CHAIN STAKE-HOLDERS
The Suppliers provide the inputs needed to create the product,
whether such inputs are raw materials or manufactured parts to a
finished product.
The Manufacturers bring together all of the parts provided by
suppliers to integrate them into a newly created finished product.
The Distributors store and sell the finished product though a
physical storefront, through a warehouse for vendors, or through
an online store.
The Customers create the demand for products and ultimately
influence the quantity of products actually produced; the nature
and stability or volatility of demand influences the overall supply
chain structure. Merci bien, Mlle Nour Dass

46. First, a few key concepts:
1. A supply chain is a network of partners who collectively
convert a basic commodity (upstream) into a finished product
(downstream) that is valued by end-customers.
2. Each Partner, working with the producing company, is
responsible directly for a process that adds value to a product
3. A analogy of a flowing river describes organisations near the
production source as upstream, and those near the end-
customer as downstream.
4. Supply chain management involves planning and controlling
all of the processes from raw material production to purchase
by the end-user and, possible, to re-use of recyclable materials.
Merci, Mlle Dass

47. No man, nor project, is an island…teams are here to stay
Times when one (wo)man beats a team involve expertise, speed above
all else, tasks spelled out clearly, and / or documentation being compiled.
Types of Teams
The nature of the project or activity defines the team:
1. Functional Team: relates to specific expertise specialising in and
focusing on separate phases or activities (e.g., engineering for
materials testing, purchasing for materials purchasing, etc.)
2. Cross-Functional Team: akin to matrix management pulling in and
coördinating multiple functions to work together for a hybrid objective
3. Problem Solving Team: brought in for trouble-shooting
Innovative or problem solving projects lend themselves to
team endeavours to permit cross-indexing of knowledge and
skills as well as to generate ideas. A little stress through
constraints can spice things up!
Watt, pages 112-113 & 116-117

48. Too many dimensions to leadership to consider, at
least for now; perhaps later.
Four criticial skills for the project leaders:
1. Communications
• get team buy-in (e.g., team engagement in long-term goal-setting)
• clarify who does what, when, and with whom
2. Conflict Resolution
• critical path reducing role confusion qnd ambiguity for team
• avoiding, accommodating, compro,ising, enforcing, etc.
3. Negotiation
• setting group performance measurements
• placing mission ahead of personalities
• mapping out the way ahead based on common interests
4. Flexibility in knowing what to do (negotiate, build the team,
enforce), how to do it, and when to do it (i.e., situational leadership)
Watt, pages 112-113 & 116-117