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Basics of Project Management
N.K.Agarwal
Project Management
• Project
– A temporary endeavor undertaken to create a unique
product or service
– A specific, finite ...
Nature of a Project

Resource
(Budget)

Quantity
(Planned Results)
Schedule (Time)

An Enterprise undertaken to
Achieve Pl...
Historical Overview-Old to New
• Mankind involved in project activities for a long time
– Designing and building the Pyram...
Historical Overview-Old to New
• Dupont trying to reduce the outage time during major
maintenance at their chemical plant
...
Historical Overview-Old to New
• Myth that Project Management covers only Planning
and Scheduling
• In reality, Project Ma...
Project Management
• All projects require a degree in planning ( no matter
what their size is) and this in turn requires f...
Project Management
• Project environment
– Before people become involved in a project, they must be
aware of the environme...
Project Phases
• Projects have to pass through 4 phases
–
–
–
–

Project Planning
Project Implementation
Project Monitorin...
Basic Five Part Management Model
Client Requirement
Planning

Reprogramming

Organising
& Staffing
Directing &
Leading
Con...
Project Phases-Planning
• Project Planning
– Comprises of a series of steps to be taken to convert an idea
into a feasible...
Project Phases-Planning
• Project planning
– Planning helps us to know how the project is progressing
– Lack of planning i...
Project Phases- Implementation
• Project Implementation
– Implies initiating the project , specifying and
scheduling the w...
Project Phases- Implementation
– Purpose is to ensure that the project activities are
completed with in the schedule and t...
Project Phases-Monitoring
• Project Monitoring
– Involves watching the progress, resources and
performance schedules durin...
Project Phases-Control
• Project control involves scheduling, estimating, cost
control and material control
• Scheduling
–...
Project Phases-Evaluation
• Project Evaluation
– Primary purpose is to provide objective,
systematic and comprehensive evi...
Contract Agreement
• Contract agreement is a one sheet document binding both the
contractor and the owner to execute the d...
Critical Path Analysis (CPA)
• Most commonly used tool to manage any project, and
bring about its completion in the shorte...
PERT / CPM Network
• Difference between PERT & CPM
– PERT
• Event oriented
• Interest is focused on the start , stop or co...
PERT / CPM Network
– The distinction between the two is fast diminishing
• With minor modifications, both have given rise ...
PERT / CPM Network
• Some basic terms
– Activity
• Time consuming part of a project
• Represents a job
• Shown by an arrow...
PERT / CPM Network
• Events
– Predecessor events
• Event/s that come immediately before another event
without any interven...
B

D

A

F
C

PERT NETWORKEVENT ORIENTED

E
C

A

E
CPM NETWORKACTIVITY ORIENTED

B

F

D
ACTIVITY

ACTIVITY A
EVENT

EVEN...
PERT NETWORK
Project Closure
• Project closure ensures and benefits as under
– Ensures completion of the project
– Work of the current ...
Project Closure
• Post Implementation Review
– Items that are still open should be closed or resolved
– All aspects of the...
Project Closure
• Close out
– A closing event to formally round off the project
– Project review and project report
– A no...
Project Management
• Project management tools offers the means of
implementing new or one-off scenarios with minimum
disru...
Thank You
References
• Project Management : Jack R. Meredith / Samuel J.
Mantel
• Projects – Planning, Analysis, Financing,
Implemen...
Project Management
– No matter what their size, all projects have defined starting
and finishing dates- and a pre-determin...
Project Management
• Various aspects of Project Management include
–
–
–
–
–
–

Linking project management with operations...
Project Management
• Project definition
– Running projects requires clarity
– Everyone must know precisely what tasks they...
Mode of representation
EVENT

EVENT

A
EE

B

TEXT OF ACTIVITY A-B
LE

D

EE

LE
PERT / CPM Network
• Activity duration
– Optimistic or shortest time (to OR ts)
• Time for completing an activity if every...
PERT / CPM Network
• Earliest start (Es)
– Earliest an activity can start from the beginning of the project

• Earliest fi...
Critical Path Analysis (CPA)
• Forward Pass
– The process of calculating the earliest time a project can
finish
• Beginnin...
Critical Path Analysis (CPA)
• Backward Pass
– Shows the latest time the activities arriving at a node can
finish without ...
B

D

A

F
C

PERT NETWORKEVENT ORIENTED

E
C

A

E
CPM NETWORKACTIVITY ORIENTED

B

F

D
ACTIVITY

ACTIVITY A
EVENT

EVEN...
Project Management
• All projects must go through the following stages if
they are to be successful
–
–
–
–
–

Stage 1: Pr...
Project Phases
• Projects have to pass through 4 phases
–
–
–
–

Project Planning
Project Implementation
Project Monitorin...
Project Phases
• Project Planning
– A cyclic process
– Comprises of a series of steps to be taken to convert an idea
into ...
Project Phases
• Project Implementation
– Involves allocation of tasks to groups within the
project organisation
– Deficie...
Project Phases
– Implies initiating the project , specifying and
scheduling the work, clarifying authority
responsibility ...
Project Phases
• Project Monitoring
– Enables a continuing critique of the project
implementation
– Involves watching the ...
Project Phases
• Project Evaluation
– Designed to examine the worth, significance,
degree or condition of any given projec...
Project Management
• Project control
– Projects are relatively short lived and require control- without
it they overrun fr...
Project Management
– Cost control
• Calculate ongoing costs associated with a particular
project, and ensure expenditure i...
Time & Cost Control
• First major task in time and cost control is the preparation of
master schedule and master budget fo...
Time & Cost Control
– Labour, equipment and other resources schedules with
individual budgeted cost
– All other project-sp...
Time & Cost Control
– Reports on
• Progress status
• Cost status
• Bottlenecks and constraints
• Cost trends
• Change cont...
Om lect 07 (r3-jul 11)_basics of project management_mms-bharti_sies
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  1. 1. Basics of Project Management N.K.Agarwal
  2. 2. Project Management • Project – A temporary endeavor undertaken to create a unique product or service – A specific, finite task to be accomplished • Large or small is immaterial but to be seen as a unit is relevant • Modern project management said to have begun with the Manhattan project.
  3. 3. Nature of a Project Resource (Budget) Quantity (Planned Results) Schedule (Time) An Enterprise undertaken to Achieve Planned Results within a Time Limit, and a Budgeted Resource
  4. 4. Historical Overview-Old to New • Mankind involved in project activities for a long time – Designing and building the Pyramids in 2100 B.C. – Building the seven wonders of the world • Modern Project Management(MPM) supposed to have its origin in the U.S.A. in the mid-to late 1950s with the Manhattan project – Two organisations working hard with the development of solution systems to reduce risks in the undertaking of certain projects • US Navy engaged in Polaris nuclear submarine programme – Engaged the help of Booze Allen Hamilton, a management consultant, and the outcome was PERT in 1958
  5. 5. Historical Overview-Old to New • Dupont trying to reduce the outage time during major maintenance at their chemical plant – A mathematical technique CPM was developed using network diagrams to analyse the integration of activities and overall duration of the project
  6. 6. Historical Overview-Old to New • Myth that Project Management covers only Planning and Scheduling • In reality, Project Management covers, in addition, a wide range of management areas – Project scope,time, cost, quality, human resources, communications, risk, procurement, etc.
  7. 7. Project Management • All projects require a degree in planning ( no matter what their size is) and this in turn requires forward thinking by the Project Manager • No matter how well a project is planned, there are bound to be problems • Successful projects need certain pre-requisites – – – – – – – – Explicit goals A skilled and knowledgeable project manager Senior management support Effective project team Adequate resources Effective means of communication Feedback mechanism Close liaison with clients
  8. 8. Project Management • Project environment – Before people become involved in a project, they must be aware of the environment in which it will operate – They will need to know and understand factors such as • Location • Who the customers are and their individual expectations? • End user requirements, and • The resources available – A true project environment is unique to each project and cannot be highlighted in a few lines
  9. 9. Project Phases • Projects have to pass through 4 phases – – – – Project Planning Project Implementation Project Monitoring Project Evaluation
  10. 10. Basic Five Part Management Model Client Requirement Planning Reprogramming Organising & Staffing Directing & Leading Controlling Reporting
  11. 11. Project Phases-Planning • Project Planning – Comprises of a series of steps to be taken to convert an idea into a feasible plan of action – Aims at a systematic analysis of project potential with the ultimate objective of arriving at an investment decision – An objective assessment from all possible angles starting from identification of investment options up to its appraisal stage – Includes identification, technical analysis, financial analysis and project appraisal – A cyclic process
  12. 12. Project Phases-Planning • Project planning – Planning helps us to know how the project is progressing – Lack of planning in projects can result in expensive errors being made, particularly when there are huge funds are at stake – Effective project planning will look at costing, non-financial resources, work allocation and possible changes that may have to be made later on – All major projects need the services of a contractor to complete the project • For getting the project executed through a contractor, the company has to sign a contract with the contractor
  13. 13. Project Phases- Implementation • Project Implementation – Implies initiating the project , specifying and scheduling the work, clarifying authority responsibility relationship, obtaining resources, establishing control system, directing and controlling – Involves allocation of tasks to groups within the project organisation – Deficiencies in implementation also found due to inadequate planning of projects at the initial stage
  14. 14. Project Phases- Implementation – Purpose is to ensure that the project activities are completed with in the schedule and the budgeted provision • Leading to satisfactory quantum of benefits flowing there from
  15. 15. Project Phases-Monitoring • Project Monitoring – Involves watching the progress, resources and performance schedules during the execution of the project and identifying lagging areas requiring timely attention and action – Enables a continuing critique of the project implementation – Also facilitates imparting constructive suggestions like rescheduling the project, rebudgeting or reassessing the staff – Projects are relatively short lives and require control in order to minimise, if not eliminate, time as well as cost overruns
  16. 16. Project Phases-Control • Project control involves scheduling, estimating, cost control and material control • Scheduling – Design and develop timetables that highlight times at which different aspects of the project can be started and when they must be completed • Estimating – Predict volumes of materials, numbers of employees and costs that will be associated with a specific project • Cost control – Calculates ongoing costs associated with a particular project, and ensure expenditure is in line with estimates • Material control – Issue orders for materials and track their whereabouts and usage throughout the life of the project – Ideally, materials are delivered only when needed
  17. 17. Project Phases-Evaluation • Project Evaluation – Primary purpose is to provide objective, systematic and comprehensive evidence on the degree to which the project achieves its intended objectives, plus – The degree to which it produces unanticipated consequences – Designed to examine the worth, significance, degree or condition of any given project – An integrated objective assessment of progress and its overall impact
  18. 18. Contract Agreement • Contract agreement is a one sheet document binding both the contractor and the owner to execute the defined work at the agreed upon price in the manner stipulated in the contract as per details given in various annexure as under – – – – – – – – – The tender invitation Instruction to tenderes The tender The tender drawings and specifications Bills of quantities and schedule of rates General contract conditions Special conditions of contract Letter of acceptance/intent Contractor’s acceptance of letter of intent/allotment
  19. 19. Critical Path Analysis (CPA) • Most commonly used tool to manage any project, and bring about its completion in the shortest possible time and most economical way • CPA breaks a job into its component tasks, sequencing and allocating completion times for each of them • This sequence is drawn up as a network that highlights the critical tasks that could delay the project as a whole • The string of critical tasks is known as the Critical Path • The duration of the project on the Critical Path is calculated through what is known and Forward pass and Backward pass
  20. 20. PERT / CPM Network • Difference between PERT & CPM – PERT • Event oriented • Interest is focused on the start , stop or completion of events rather than activities themselves – CPM • Activity oriented • No allowance is made for the uncertainties in the duration of time involved • Times are related to costs
  21. 21. PERT / CPM Network – The distinction between the two is fast diminishing • With minor modifications, both have given rise to various programmes – PEP: Programme Evaluation Procedure – LESS: Least Cost Estimating & Scheduling – SCANS: Scheduling & Control by Automated Network Systems
  22. 22. PERT / CPM Network • Some basic terms – Activity • Time consuming part of a project • Represents a job • Shown by an arrow – Event • Also called node is either the beginning or end of a job • Represented by a circle or rectangle • Does not consume time or resources – Events and activities connected logically and sequentially to form a network
  23. 23. PERT / CPM Network • Events – Predecessor events • Event/s that come immediately before another event without any intervening event – Successor event • Event/s that follows immediately another event without any intervening event • Dummies – Activities that connects events showing their interdependencies but do not take any real time or resources for themselves – Shown in dotted lines • Activity duration – In CPM, this means the best estimated time to complete an activity – In PERT, the expected time or average time to complete an activity
  24. 24. B D A F C PERT NETWORKEVENT ORIENTED E C A E CPM NETWORKACTIVITY ORIENTED B F D ACTIVITY ACTIVITY A EVENT EVENT C EVENT E EVENT DUMMY ACTIVITY B EVENT D EVENT F BASIC NETWORKEVENTS CONNECTED BY ACTIVITIES
  25. 25. PERT NETWORK
  26. 26. Project Closure • Project closure ensures and benefits as under – Ensures completion of the project – Work of the current project team is acknowledged and that the lessons to be learned from the project are formally investigated and recorded for use on the next project – Establishes mechanism for the continued development or improvement of the final product of the project – Improves the standard process and estimating model for this type of future projects – Facilitates resources redeployment
  27. 27. Project Closure • Post Implementation Review – Items that are still open should be closed or resolved – All aspects of the project reviewed and lessons learned documented for future use • Objectives, review, performance criteria, financial criteria, resource utilisation, slips and gains of time, quality of work, adherence to the project definition and plans – Methods used for review • Meetings, • Quality reviews, • Project closure meetings, • Group discussions – Risk management plan to be updated
  28. 28. Project Closure • Close out – A closing event to formally round off the project – Project review and project report – A note is sent to the finance department to ensure that they are aware that the project is closed
  29. 29. Project Management • Project management tools offers the means of implementing new or one-off scenarios with minimum disruption – An organisation moving offices will want to complete the task as quickly as possible – By breaking the office move down into component tasks and using critical path analysis, delays can be minimised • Project management tools help in achieving efficiency and economy in business operations
  30. 30. Thank You
  31. 31. References • Project Management : Jack R. Meredith / Samuel J. Mantel • Projects – Planning, Analysis, Financing, Implementation & Review : Prasanna Chandra • Project Management – A Comprehensive Handbook : R. Turner & S. Simister • Operations Management : Sean Naughton • Project Management: Kerzner
  32. 32. Project Management – No matter what their size, all projects have defined starting and finishing dates- and a pre-determined end condition of course • Construction of Channel Tunnel, • Construction of Worli-Bandra sea link • Organising a college-day event , etc • While they may seem different, the above examples have many things in common – – – – – – An objective A degree of complexity Each is a one-off A degree of uncertainty They are short-term Each has a finite life cycle
  33. 33. Project Management • Various aspects of Project Management include – – – – – – Linking project management with operations management Project environment Project definition Project planning Project implementation Project control • Linking project management with operations management – Many projects are run within Operations Management environments – Projects are usually but not always concerned with complicated and often large scale activities
  34. 34. Project Management • Project definition – Running projects requires clarity – Everyone must know precisely what tasks they are to perform and when – Prior to issuing the workforce with such details, the project manager must clarify what objectives and range the project will have – Extra details may also be added including specified deadlines, any budgets and costs involved, and factors such as quality standards that must be met
  35. 35. Mode of representation EVENT EVENT A EE B TEXT OF ACTIVITY A-B LE D EE LE
  36. 36. PERT / CPM Network • Activity duration – Optimistic or shortest time (to OR ts) • Time for completing an activity if everything goes well – used in PERT – Pessimistic or longest time (tp OR tl) • Time for completing an activity if everything goes wrongused in PERT – Most likely time (tm) • Time for completing an activity that is the consensus best estimate- used in PERT – Expected time (te) • Average time for completing an activity –used in PERT • For β- Distribution, this is taken as te = (ts+4tm+tl) / 6 OR = (to+4tm+tp)/6
  37. 37. PERT / CPM Network • Earliest start (Es) – Earliest an activity can start from the beginning of the project • Earliest finish (EF) – Earliest an activity can finish from the beginning of the project • Latest start (Ls) – Latest an activity can start from the beginning of the project, without causing a delay in the completion of the project • Latest finish (LF) – Latest an activity can finish from the beginning of the project, without causing a delay in the completion of the project
  38. 38. Critical Path Analysis (CPA) • Forward Pass – The process of calculating the earliest time a project can finish • Beginning with the first event- zero time- the earliest starting time of each activity is added to its duration • This provides the earliest finish time – When a single activity arrives at a node (an event), this is taken as the earliest start time for that event – When more than one activity arrives at a node, the last of the earliest finish times is used • This is because all activities arriving at the node must be complete before any activities leaving it can begin – Once complete, the forward pass indicates the earliest completion time for the entire project which is then used for calculating the backward pass
  39. 39. Critical Path Analysis (CPA) • Backward Pass – Shows the latest time the activities arriving at a node can finish without delaying the project – The backward pass starts at the last event in the network, and deducts each activity’s time away from the latest finishing time – When only one activity leaves a node, this is the latest time for that particular event – If there is more than one activity, the earliest of the latest start times is used • If any other latest time were used, the project would get delayed – This gives us the latest time the project can start
  40. 40. B D A F C PERT NETWORKEVENT ORIENTED E C A E CPM NETWORKACTIVITY ORIENTED B F D ACTIVITY ACTIVITY A EVENT EVENT C EVENT E EVENT DUMMY ACTIVITY B EVENT D EVENT F BASIC NETWORKEVENTS CONNECTED BY ACTIVITIES
  41. 41. Project Management • All projects must go through the following stages if they are to be successful – – – – – Stage 1: Project environment Stage 2: Project definition Stage 3: Project planning Stage 4: Implementation Stage 5: Project control
  42. 42. Project Phases • Projects have to pass through 4 phases – – – – Project Planning Project Implementation Project Monitoring Project Evaluation
  43. 43. Project Phases • Project Planning – A cyclic process – Comprises of a series of steps to be taken to convert an idea into a feasible plan of action – Aims at a systematic analysis of project potential with the ultimate objective of arriving at an investment decision – An objective assessment from all possible angles starting from identification of investment options up to its appraisal stage – Includes identification, technical analysis, financial analysis and project appraisal
  44. 44. Project Phases • Project Implementation – Involves allocation of tasks to groups within the project organisation – Deficiencies in implementation also found due to inadequate planning of projects at the initial stage – Purpose is to ensure that the project activities are completed with in the schedule and the budgeted provision • Leading to satisfactory quantum of benefits flowing there from
  45. 45. Project Phases – Implies initiating the project , specifying and scheduling the work, clarifying authority responsibility relationship, obtaining resources, establishing control system, directing and controlling
  46. 46. Project Phases • Project Monitoring – Enables a continuing critique of the project implementation – Involves watching the progress, resources and performance schedules during the execution of the project and identifying lagging areas requiring timely attention and action – Also facilitates imparting constructive suggestions like rescheduling the project, rebudgeting or reassessing the staff
  47. 47. Project Phases • Project Evaluation – Designed to examine the worth, significance, degree or condition of any given project – Primary purpose is to provide objective, systematic and comprehensive evidence on the degree to which the project achieves its intended objectives plus the degree to which it produces unanticipated consequences – An integrated objective assessment of progress and its overall impact
  48. 48. Project Management • Project control – Projects are relatively short lived and require control- without it they overrun from a time and cost perspective • Some projects could even be left incomplete – Project control incorporates scheduling, estimating, cost control and material control – Scheduling • Design and develop timetables that highlight times at which different aspects of the project can be started and when they must be completed – Estimating • Predict volumes of materials, numbers of employees and costs that will be associated with a specific project
  49. 49. Project Management – Cost control • Calculate ongoing costs associated with a particular project, and ensure expenditure is in line with estimates – Material control • Issue orders for materials and track their whereabouts and usage throughout the life of the project • Ideally,materials are delivered only when needed on a JIT basis • Various reports are generated to monitor and control the progress ( time and cost) of the project
  50. 50. Time & Cost Control • First major task in time and cost control is the preparation of master schedule and master budget for the project • From these, detailed schedules of time and resources are prepared • Some of the important schedules used for the time and cost control are – Master time schedule – Engineering / Procurement / Fabrication / Construction / commissioning time schedules – Schedule of contracting – Integrated schedule of critical equipment with time phased budgeted cost – Integrated schedule of all other materials with time phased budgeted cost
  51. 51. Time & Cost Control – Labour, equipment and other resources schedules with individual budgeted cost – All other project-specific schedules and budgets, both integrated and independent, and time phased – Crashing economy analysis • Some of the important reports generated – Progress reports – Total project cost till the achievement of every important milestone – Progress and Cost build up curves for • Total project implementation • Engineering, design and drafting • Purchase ordering • Construction – Fund flow curve
  52. 52. Time & Cost Control – Reports on • Progress status • Cost status • Bottlenecks and constraints • Cost trends • Change control and contingency rundown • Overall performance • Review of progress on the construction activities made periodically at various levels of authorities • Period of review for the progress by various authorities can be based on practical convenience ranging from weekly at the GM level to Six monthly or annually at the Board level

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