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Fundamentals of Project Management Class Notes
Fundamentals of Project Management Class Notes
1 Overview of Project
1.1 Concepts and Definition of Project 1.2 Characteristics of a Project 1.3 Project Environment 1.4 Types of Project 1.5 Projects Life Cycle and Project Phases 1.6 Project Organizations
2 Project Management
2.1 2.2 Concept and Definition of Management Concept of Project Management 2.3 The Project Manager, His Roles and Responsibilities
1. Overview of Project
1.1 Concept and Definition of Project
Projects are the specific schemes or action units designated for the investment of given resources and skills with an aim of attaining some predetermined objectives. A project starts from the scratch. It has a specific objective. It has a well-defined life span divided into a life cycle. It involves a set of activities within a schedule and budget. It integrates human and non human resources. According to Harold Kerzner: A project is any series of activities and tasks that: have a specific objective to be completed within certain specifications have defined start and end dates have funding limits, and consume resources. A project is one-time job that has defined starting and ending dates, a clearly specified objective, or scope of work to be performed, a pre-defined budget, and usually a temporary organization that is dismantled once the project is complete ( The project Managers desk Reference, James Lewis) A group of multiple interdependent activities that require people and resources is the Project. Projects generally originate from plans. They serve as the building blocks for development planning. A Plan, Programme and Project are different concepts yet complementary to one another.
PLAN
A plan is an image, map or vision to represent the forms and/or features of desired situation(s). It is a process of setting future goals for country or organization and choosing the actions to achieve these goals. Plans may be Community Development Plan, District Development Plan or Regional Development Plan depending upon the area it serves and its magnitude. Similarly, depending upon different sectors (agriculture, education, Health and so on) there may be different sector-specific plans known as Sectoral Development Plan. And finally, we have the National Development Plan. In Plan document, we can find only the level or sector-specific Broad Decisions indicating what and how much is to be achieved with the investment of given resources. A plan itself is static. In other words, a plan representing only an imagination or vision will have no meaning unless it is put into operation to achieve its set objective/s. A Plan is a set of Programmes.
PROGRAMME
A Programme is the extensive and consistent set of action units stating the needs of interrelated activities to achieve the plans objectives and goal. There could be several programmes within a plan or development plan.
PROJECT
A project is a unique group of tasks designed to attain a specific objective within the constraints of time, cost and quality based on planning and control through the use of a variety of resources in a dynamic environment.
Agricultural Programme
Health Programme
Roads Programme
Other Programme
Wheat Project Potato Project Fertilizer Project Livestock Project Other Projects
Five-Year Plan Health Programme Hospital Construction Electrification Package Preparation of Drawing
Project Terminology
Goal: Goal is what exactly needs to be accomplished after completion of the project. Project Scope: Documented set of standards and criteria that the customer defines as successful completion. Objective: A combination of tasks that concern specific functional groups or structural areas. Tasks: A combination of activities that lead to the achievement of a definable result. Activity: A time consuming piece of work with a definite beginning and end. Duration: The elapsed time from the beginning to the end of an activity, task or objective.
Time
Quality
1.3
i
Project Environment
Internal Environment
Environment consists of forces that influence the projects ability to achieve its objective. Projects operate in a dynamic environment. Project environment can be classified into: Internal environment is located within the project. It is Controllable by the project. It provides strengths and weaknesses to the project. The forces in the internal environment consists of: o Project Objective o Constraints o Structure o Resources
ii
Task Environment
The task environment of a project is made up of stakeholders. They are either involved in the project or their interests are affected by the project. The elements of task environment are: o Customer o Contractor o Consultants o Suppliers o Government o Financiers o Competitors o Labour Unions
iii.
External Environment
It is located outside the project. It cannot be controlled by the project. The project can indirectly influence it. It provides opportunities and threats to the project. The forces in the external environment are: o Economic o Technological o Political-Legal o Socio-cultural (For detail Refer- Project Management in Nepal by Dr. Govinda Ram Agrawal page: 16-20)
1.4
Types of Project
Projects can be of many categories. Various ways of categorizing a project are as shown in the Table below.
Sponsorship
Nature
Orientation Speed
Funding Source
Technique Size
Customer Individual ProductNormal Indigenous Labor Mega Oriented Intensive Organization Staff Crash Foreign Major ProcessCapital Contractor Special Disaster -J/V Medium -Bilateral Intensive Government Complex Oriented Small -Multilateral INGO Donor (For detail Refer- Project Management in Nepal by Dr. Govinda Ram Agrawal page: 21-34) 5
Risk/Amount Formulation
Risk Amount of stake
Planning
Implementation
Termination
Time
o Definition
Firm identification of resources required Preparation of the detailed plans required to support the system Establishment of time, cost and performance parameters Standardization of efforts and completion of documents for operations Identification and management of the resources required facilitating the production process such as inventory, supplies, labor, funds etc. Project implementation Use of the system results by the intended customer Evaluation of the project and its integration into another organizations System phase down Reallocation of resources to other projects
o Production
o Operational
o Divestment
Termination Phase
Formulation Phase
The main tasks in the formulation phase are: Project Identification and Project Formulation
Project identification
A situation survey is done. The project idea is born. The project is conceptualized. The sources of project ideas are internal (Strategies, Plans, Programmes, R&D Dept., Quality Circle) or external (Customer needs, Donors, Experts, Politicians, Legal Provisions, Technological Development).
Project Formulation
Defines the parameters of the identified project. Broad statement defining the objective and outputs Preliminary statement of schedule and resources required. Preparation of Project Proposal based on prefeasibility study and preliminary design.
II
Planning Phase
The basic tasks in the planning phase of the project are: Feasibility study Appraisal Detailed design
Feasibility Study
Determines the implement ability of the projects. The areas for which analysis is done areo Technical analysis Studies the feasibility of meeting technical specifications and examines the availability of alternative technical solutions. o Financial analysis Studies the financial sustainability of the project in terms of capital requirements and capacity for meeting of financial obligations. o Management analysis Studies the adequacy of management system to direct and control the project. o Marketing analysis- Studies project capacity, market demand and sales forecast. o Economic analysis Studies net contribution of the project to the economy and to the society. Benefit/Cost analysis is done for this purpose. o Environmental analysis- Studies the impact of the project on the environment. Feasibility study should be based on accurate information.
Appraisal
It is the Evaluation of the projects ability to succeed. Appraisal is based on the findings of the feasibility analysis. It addresses - Ability of the project to achieve its objectives - Comparability of the project with other projects (in terms of investment, cost/benefits, job creation, profit etc.) The competent authorities appraise the project against a list of criteria (policy, technical, economic, financial, social, etc.) before giving approval and formally approve the project selected through appraisal. Approval involves finalization of funding proposals and agreements and allocation of resources to the project.
Detailed design
It is concerned with - Preparation of blueprints of engineering design and specifications for construction, facilities, equipments etc. - Preparation of detail implementation plans and work schedules. The design task establishes: Operating plans and performance standards Allocates responsibilities Determines activities and resources Sets down work schedules 8
III
Implementation Phase
Implementation
Implementation is concerned with mobilization. It involves Setting up of project organization, Allocation of tasks and responsibilities, Getting together project team Preparation of tender documents. Other pre-construction activities like land acquisition and coordination with other infrastructure, Tendering, Construction and/or installation of equipment Project management, quality assurance, progress reporting and the participation of target groups and project affected groups.
Control
It involves supervision and control of project performance to provide feedback. Monitoring of project performance is done. It is a means to improve implementation through the identification of problems and the possible corrective actions. Various techniques like CPM, PERT and other network analysis techniques are used for control purpose. The Control comprises the following activities: Setting of standards Measuring outputs Verifying the output with pre set standards Finding deviations, if any. Correcting the process/output to the pre set standards if required.
IV
Termination Phase
The basic tasks in this phase are: Project Evaluation Project Handover
Project Evaluation
Evaluation measures the effects and impacts of the project. It can be carried out during the project implementation to improve implementation or can also be carried out after project completion to improve future project planning and management.
Project Handover
Handover begins when the project work is finished. Resources are then reallocated to other projects.
I.
Concept and Feasibility Study Engineering and Design Procurement Construction Start Up and Implementation Operation and Utilization
Project Cycle
Project Appraisal
Funding
Donor Appraisal
1.6
Project Organizations
Concept of Organization:
An Organization is a network of structure and relationship. Commonly, the focus of the structure is the specialization of the human elements of the group.
Characteristics of Organization:
Goal-Oriented Collection of People Consists of Structure (division of labor) Consists of Technology Has Environment Has Feedback
Project Organization
When projects are initiated, two issues immediately arise. First, a decision must be made about how to tie the project to the parent firm. Second, a decision must be made about how to organize the project itself. Project Organization consists of: Designing a Structure Pulling together Project Team Establishing Authority and Responsibility relationship Establishing Project Office There are three major organizational forms commonly used to house the projects.
1 Functional Organization
Organization structure is broken into different functional units. The project tasks are performed through functional units. A project tends to be assigned to the functional unit that has most interest in ensuring its success or that can be most helpful in implementing it. Functional elements of the parent organization- Administrative home for a project.
General Manager
Finance Department
HR Department
Project A
Project B
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Advantages:
o There is maximum Flexibility in the use of staffs. o Individual experts can be utilized by many projects o Specialists in the division can be grouped to share knowledge and experience-Synergistic solutions to technical problems o Serves as a base of technological, procedural, administrative and overall policy continuity. Functional division contains the normal path of advancement for individuals whose Expertise is in the functional area.
Disadvantages:
o o o o o o Lack of Client/Project focus. Focus on unique area of interest. Decision delay No individual is given full responsibility- lack of co-ordination Tendency to sub optimize the project Weak motivation for people Does not facilitate a holistic approach to the project (e.g. Jet air craft/ emergency room in a hospital can not be well designed unless designed as a totality.)
Design
Construction
Administration
Production Department
Marketing Department
Other Departments
Advantages:
o o o o o o o The PM has full line authority over the project Project work force directly responsible to the PM Line of communication- shortened. Focus on project objective High motivation Unity of command Exists Flexible labor force
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Disadvantages:
o o o o Duplications of efforts/Inefficient use of resources Lack of job security Stock piling of equipments / Technical expertise Projectiles (A disease-that creates animosities between parent organization. staff and project staff)
3. Matrix Organization
o A combination of pure project organization and functional Organization o It is a pure project organization overlaid on the functional divisions of the parent firm. o Project team is assigned from the functional departments. o The PM has overall responsibility
General Manager
Production department
Project A Manager
Advantages:
o o o o o o o
Marketing department
Finance Department
HR Department
The project is the point of emphasis/ special focus Availability of entire reservoir of technical talents in the FD Team identity Less anxiety about job Rapid response to client needs Consistency of policies/ practices/procedures of parent firm Holistic approach/Balance of resources
Disadvantages:
o Power and Authority is balanced. Doubt exists who is in charge o Division of authority and responsibility is complex o Movement of resources from project to project- may foster political infighting among the several PMs. o Projectile is still a serious disease. o Violates the management principle of unity of command.
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Project Management
Characteristics of management
Management achieves goals Management gets the jobs done efficiently and effectively Management works through and with people Management is a process comprising planning, organizing, staffing, directing and controlling Management operates in an environment
Principles of management
Principles are fundamental truths and are essence of management theory. Henry Fayol propounded 14 Principles of Management, which are universally applicable. These are: Division of Work: Principles of specialization. An employee should be assigned only one type of work to increase output. Authority and Responsibility Authority Legitimate power, right to influence others and make decisions Responsibility Obligations to carry out assigned jobs. It cannot be delegated. Accountability Answerability for satisfactory performance Those who exercise authority must assume responsibility. Unity of command: One employee should have only one boss. Unity of direction: One head and one plan for a group of activities having the same objective. Span of management (Scalar chain of command): All employees should be linked with each other in superior- subordinate relationship. Subordination of individual interests to general interests Remuneration: Fair and equitable pay to employees. Discipline: Obedience and respect for agreement. Centralization: Highly centralized power structure; decentralization with centralized control. Order: A place for every thing and every thing in its proper place. Equity: Sense of kindliness and justice throughout all levels of scalar chain. Stability and tenure of personnel: The tenure should be stable. Initiative: Encourages subordinates initiative. Esprit de Crops: Union is strength; cohesiveness and team spirit. 14
Functions of Management
Management is what managers do. Management has certain functions. Various writers have classified management functions differently. Some of them are as listed below.
i.
ii.
iii.
Goal Setting Planning Assembling resources Organizing Implementing Controlling For our purpose, the functions of management are:
i.
Planning:
Predetermining future Selection of goals Discovering alternatives Choosing the best alternative Choosing future course of actions Estimating the cost and resources etc.
ii.
Organizing
Defining activities and tasks Grouping the activities in departments Designing a structure Assigning activities to the position and people Establishment of responsibility and authority Manpower planning Preparation of an inventory of people available Job analysis to determine job description Recruiting, selecting, placing developing, promoting, remunerating and retiring 15
iii.
Staffing
iv.
Directing (Leading)
Communicating, influencing and motivating people Concerned with interpersonal aspect of management. Establishing standards Measuring actual performance Finding and analyzing deviations
v.
Controlling
Managers need wide variety of skills. These skills can be categorized into: Technical Skills: Ability to perform a specialized task or function. Human Skills: Ability to go along and motivate people. Conceptual skills: Ability to think and analyze and to relate the organization to environmental forces.
Conceptual
Conceptual
Conceptual
Human Human
Human
Top Managers have the overall responsibility for the survival, growth and welfare of the organizations. They should have more conceptual skills. Middle managers subordinate to top managers. They implement and control plans and strategies developed by top managers. They are responsible for the activities of lower level managers. It will be better to have all three skills equally for them. Lower managers subordinate to middle managers. Operating personnel report to them. They should possess more technical skills than other two skills.
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Cost limits
Project Budget
Concerns/Constraints Definition of end product Form, fit and function Must complete by ----- Must start by---------- Cant start before ---------- We can only spend -------- Bring it under --------------Your minimum profit margin is ----- We understand the purpose Each persons role is clear Mutual respect and trust Self- motivated
17
What to Manage?
Time
Cost
Quality
Project
Manager
Project Team
18
Technical skills:
Understanding of the technology involved Evaluation of technical concepts and solutions Communication in technical terms Assessment of technical risks, trends and innovations
2.
Managerial Skills
Planning and control skills Organization skills Decision making skills Human Resource Management skills Leadership skills
3.
4. 5.
Conceptual Skills
They are ability to relate the project to environmental forces. The project manager should have vision, foresight, judgment and intuition.
2.Chief Executive:
3. Leader
20
3.
3.1
Historical Overview
Nepal is one of the least developed countries of the world. More than 38% of people live below the poverty line. The project concept in Nepal began in 1950/51 with a grant assistance of US $ 100,000 by USA. The planned development in Nepal began with the implementation of the First Five Year plan in 1956 (1956-1961). Since then, Nepal has implemented Nine Development Plans. The current Tenth plan (2002-2007) is mid-way in implementation. The financing of Nepals development plans has been heavily project based. Project management model appeared in Nepal during 1970. The project organization structure adopted was Development Committee. It was an autonomous pure project organization structure for the management of a specific project. The matrix project organization structure was also used. The first Engineering project in Nepal was an iron bridge over the Bagmati River in 1850. The first hydroelectric project at Pharping was completed in 1911. The Raxual-Amlekhgang railway line was constructed in 1927. Manakamana Cable Car is the marvel of project management in Nepal. Kali Gandaki A, Kulekhani, Marsyngdi Hydro-Power projects and International Conference Hall are the Mega projects in Nepal.
3.2
Most central level development projects in Nepal are planned by the donors. Most local level projects, however, are planned within the country by various agencies of the ministries or local authorities. National Planning Commission, NPC is responsible for preparation of five-year development plan. Projects are the primary means of translating development plans into action. Central level projects should have approval of NPC. Enactment of Local Self Governance Act, 1999 (LSGA) and Local Self Governance Rules, 2000 (LSGR) has made local bodies responsible for local level planning. According to the new decentralization concept, local bodies (e.g. DDCs, VDCs and Municipalities) are totally responsible for planning and implementing local level projects. These bodies, constituted of the directly elected local representatives, prepare Periodic Plans for the development of their jurisdiction by comprehensively taking into consideration of the situation, need and potential of their jurisdiction and the aspiration of the local people. Planning is Participatory and Bottom-Up. On the basis of this Periodic Plan, they prepare Annual Plans for development investment. There are sets of government guidelines for helping the local authorities undertake such planning exercises. In addition to the Annual Plans and Periodic plan, the districts are also encouraged to prepare a vision plan of the concerned district in a participatory manner. This vision plan, generally termed as the Strategic Development Plan basically defines 20-year development goals in different sectors for the district and is essentially a Perspective Development Plan. In that sense, the Annual Plan is extracted from Periodic Plan, which in turn, is extracted from Strategic Development Plan.
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3.4
Problems of project implementation are profound in Nepal. Poor implementation has been the key reason for project failure. Thus for successfully managing construction projects in Nepal, project implementation needs urgent improvement. The actions needed for this purpose are: Formulate proper policies and guidelines Ensure good project design Improve financial management Strengthen institutional capabilities Establish PMIS system Prepare implementation plan Streamline procedures Strengthen Co-ordination, Monitoring and evaluation Control corruption and politicization.
Thank You.
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To develop a project schedule, the successful Project Manager must break the project down into small work components. The concept is fairly intuitive. Most people understand that any job is easier to handle when broken into smaller pieces. A Work Break Down Structure is a tree showing the hierarchy of the required work to be performed to complete a project. It organizes, defines and displays the work to be accomplished. In planning a project, the project manager must structure the work into small elements that are: Manageable, in that specific authority and responsibility can be assigned. Independent, or with minimum interfacing with and dependence on other ongoing elements. Integratable so that the total package can be seen. Measurable in terms of progress. The WBS is the single most important element because it provides a common framework from which: The total program can be described as a summation of subdivided elements. Planning can be performed. Costs and budgets can be established. Time, cost and performance can be tracked. Objectives can be linked to company resources in a logical manner. Schedules and status-reporting procedures can be established. Network construction and control planning can be initiated. The responsibility assignments for each element can be established. The work breakdown structure acts as a vehicle for breaking the work down into smaller elements, thus providing a greater probability that every major and minor activity will be accounted for.
1. 2 Hierarchy of Work:
A job must be broken down into objectives, then into tasks, and finally into activities. Using this hierarchy of work simplifies the process of breaking down the project into its smallest components, called activities, and ensures that any of the components is not missed out. Objective: An objective is a combination of tasks that concern specific functional groups, major contractors, major subassemblies or some other logical division of the total project like major parts, skills or major resources etc.
Tasks: A task represents one of several major deliverables towards an objective. It is a combination of activities that lead to the achievement of a definable result. Activities: An activity is a time consuming piece of work with a definite beginning and end. Activities are the basic building blocks of a project, the individual actions that will be performed one at a time. To develop Work Break Down Structure: Develop the project goal. Define the objectives- the preliminary plan. Have teams refine the objectives. Have teams break down the objectives into tasks. Have doers break down the tasks into activities. Chart-1 shows a typical example of WBS with break down of the project into objectives, tasks and activities. There is a variety of WBSs. Alternatively a WBS can be developed as composed of three components: Work Items Levels & Work Packages Work Item: A work item is a manageable element at each level. Level: The level refers to the management scope, which divides a project into clearly defined elements. For example, level 0 is for end product of a project. Level 1 is for manageable elements of the project manager. Level 2 is for manageable elements of superintendent. Level 3 is for manageable elements of project engineer. Level 4 is for manageable elements of fore men. Work Packages: The units of WBS at the lowest developed level. The work package is to be performed by a single organization unit (crew), sub-contractors etc. and is the base for project element, short interval planning, and collection of expenditures. Chart-2 shows a typical example of WBS with break down of the project into work items, levels and work packages.
Precedence Relationships:
It is the relationship between activities based on where they occur in relation to each other. In other words, it is the sequencing of activities. There are four main logical categories that will influence the sequencing of activities. Technical Requirements o Write before editing o Test before repairing o Frame before pouring concrete Safety and efficiency considerations o Check preflight checklist o Disconnect power before making repairs Policy or preference decisions o A developer may insist that landscaping of the entrance must precede the opening of sales office. Though there is no technical reasons or may even be less efficient to do so. o Vendor certification prior to contract o Preference to minority contractors Availability of limited resources o One may not be able to commit major expenditures until revenue is realized or credit is obtained o One may not be able to hire outside experts in some fields, and have to do with in house teams.
3. Planning Tools
The Planning phase of any venture involves a listing of tasks or jobs that must be performed to bring about the ventures completion. Gross requirement for material, equipment and manpower are also determined in this phase, and estimate of costs and duration for the various jobs are made.
PLANNING
ESTIMATING
SCHEDULING
CONSTRUCTION
COST
TASKS Activity start & finish dates Project start & finish dates
Sequence of operations
Scheduling on the other hand, is laying out of the actual jobs of the project in the time order in which they have to be performed. Manpower and material requirements needed at each stage of construction are calculated, along with the expected completion time of each of the jobs. Control generally regarded as the underlying managerial function, begins with reviewing the difference between the schedule and actual performance once the project has begun. The analysis and correction of this difference forms the basic aspect of control. There are a number of planning, scheduling and controlling tools in use. Basically these tools are of two types- the bar chart and flow chart. The use of any particular type depends upon the situation and complexity. A separate description on each of these tools is given in following paragraphs.
Advantages:
Shortcomings:
The length of the bar indicates rough time estimate. Difficulties in seeing immediately and exactly overall project duration if changes occur in any particular activity. Not detail but gross planning
It does not show specifically which activities to control and expedite and how much. It does not depict the dependencies of activities upon each other. Updating means to redraw the entire chart again and again.
Type I: Reporting Bar Assumes that progress on an activity is a direct linear function of elapsed time. Therefore, in planning, no attempt is made to show the physical percentage completion at any point on the bar representing an activity. In order to report progress, a parallel bar is sometimes placed immediately below the plan bar and is initially open also. Then as the job progresses, it is shaded in direct proportion to physical work (not necessarily elapsed time) completed on the activity. In above example, 5 months were originally scheduled for the activity and that 60% of time has elapsed by the reporting period.. However, the shaded bar reports that only 50% of the physical work in the activity has been completed. It may seem that the activity is lagging behind by 10% or by 15 days. But it may not be true. It depends upon the volume of work and resources scheduled during different months. If resources scheduled are higher towards first half, it may be lagging behind the target and if the resources scheduled are higher towards later half, it may be on or ahead of scheduled target.
Feb
March
30 50
April
May
80 100
Feb
30
March
50
April
80
May
100
55
0 8 28 55
Feb
30
March
50
April
80
May
Jun
100
28
55
75
90
96
Type II differs from Type I in the sense that planned cumulative progress percentages (in terms of physical work, man hours expended etc.) are written at the end of each basic time interval (generally at the top). This progress need not be uniformly linear. In above example, 50% of the work is planned to be performed in last 2 months (40% time interval). As the activity gets underway, work completed is reported by a parallel shaded bar below the planned one. It is shaded to show the actual time worked on the activity up to the current date or to completion, whichever is earlier. Figures giving the actual percentage cumulative progress are written on the opposite side of the bar.
Type III: Time-scaled for Planning; Variable Progress-scaled for Reporting In this type of bar chart, work completed is reported by shading in alternating areas in the lower and upper portions of the bar, one for each basic time interval worked.. The segments are shaded in proportion to the physical work actually performed during the basic time interval compared with the scale for the basic time interval in the range being shaded. It is important to recognize that the scale of progress generally changes during each basic time interval considered unless progress is indeed a direct linear function of time.
Jan
0 10
Feb
30
Mar
50
April
80
May
100
June
July
28
55
75
90
96
100
The End
MR Gelal FPM
CPM/PERT Networks
CPM/PERT Networks are flow charts and are sometimes called network diagrams. Critical Path Method (CPM) is a graphical network- based scheduling technique that evolved in late 60s. US Government agencies insisted on their use by contractors on major government projects. Basic concepts of CPM such as activities, events and predecessors have become a regular part of the language of Project Managers. CPM enables planners and managers to thoroughly analyze the timing and sequential logic of all operations required to complete a project. In the 1950s, the US Navy developed the project management tool known as PERT (Project Evaluation and Review Technique). In the same decade (in 1956) CPM (Critical Path Method) was developed jointly by Engineers at DUPont and Remington Rand. Since the mechanics of the two approaches are so similar, they are now commonly referred to as CPM/PERT. The most obvious difference between the two is that PERT recognizes uncertainty in activity duration by the use of optimistic, pessimistic and most likely durations, whereas CPM makes only one time estimate for an activity- the most likely duration. In PERT, three duration estimates for each activity is developed. These are: The most Optimistic duration: duration of an activity if all went right, without any problem. The most pessimistic duration: duration of an activity if everything went wrong. The most likely duration: duration of an activity based on experience of what usually happens- something went wrong and some thing right. A probability is attached to each estimate, and the final duration is derived from a stochastic formula: Final Duration= D0P0 + Dp Pp + Dc Pc Where, D0 is the most optimistic duration P0 is the probability of D0 Dp is the most pessimistic duration Pp is the probability of Dp Dc is the most likely duration Pc is the probability of Dc CPM is most often used in commercial projects. It differs from PERT only in the duration estimating technique. As CPM requires only one duration estimate; it sure do save a lot of time and effort. In practice, however, both PERT and CPM are used synonymously.
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MR Gelal FPM
PERT is used more in research and development projects and CPM is used more in projects such as construction, where there has been some experience in handling similar endeavors. Project characteristics that are essential for analysis by CPM are: The project consists of a well-defined collection of jobs, or activities which when completed mark the end of the project. The jobs are ordered, that is they must be performed in technological sequence. PERT/CPM charts can be drawn in one of two ways: Activity on Node (AON Diagram): Each activity is represented by a node/box. Example: Activity A precedes activities B and C. E cannot start until both B and C are finished. B precedes D. D and E must finish before F can start. G must wait for F to finish. B
A
D F G
Activity on Arrow (AOA Diagram): Each activity is represented by an arrow Example: In the above example, the AOA diagram will be as shown below. A B D F G
Sometimes dummy activity (which requires neither time nor resources) is introduced. It is required to properly show the logic of an arrow network to provide unique labeling. The nature of the relationships conveyed by the dummy activities is not readily clear. For example, the dotted arrow on the far left representing finish to start between A and C could also mean start to start between B and C, which is not true in this case. For these and other reasons, the AON technique is generally used and for our purpose also we will describe PERT/CPM networks in AON only in this chapter.
MR Gelal FPM
The calculation procedure called the forward pass establishes the earliest start and finish times for each activity in the network. The following nomenclature and relationship is used in the discussion of the forward pass: Early Start (ES): The early start of a job in a project is the earliest possible time that the job can begin. Early Finish (EF): The early finish of a job is its early start time plus the time needed to complete the job. The Forward Pass yields an ES and EF for each activity, and the earliest finish date, T for the project. S= Start time of project (usually =0) ES (a)= S for all beginning jobs, or ES (a)= Max {EF (all predecessors of a)} EF (a)= ES (a) + t (a) T= Max {EF (all jobs)}= Earliest finish time for project The set of rules that defines the procedure for the forward pass calculations is called an algorithm. iii. Backward Pass:
The calculation procedure called the backward pass establishes the latest allowable start and finish times for each activity that will still permit the overall project to be completed without delaying beyond the scheduled completion date. The following nomenclature and relationship is used in the discussion of the backward pass: Late Start (LS): It is the latest time the job can begin without pushing the finish date of the project further into the future. Late Finish (EF): The late finish of a job is its late start time plus its duration. The Backward Pass yields LS and LF for each activity, and the finish times for all jobs.
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MR Gelal FPM
LF (a)= T for all ending jobs, or LF (a)= Min {LS (all successors of a)} LS (a)= LF (a)-t (a) iv. Total Float/Slack
The total float or total slack for an activity is the maximum amount of time that the activity can be delayed without extending the complete time of the overall project. However, such a delay might postpone the early start of one or more of its following activities. Total slack of a job activity is the difference between its late start and early start times (or equivalently, as the difference between its late finish and early finish times). TS= LS- ES or LF-EF v. Free Float/Slack
Free float is the maximum amount of time an activity can be delayed without delaying the early start of any of its followers. For calculation purpose, the free slack of a job is the difference between its early finish time and the earliest of the early start times of all its immediate successors. Free slack, of course, can never exceed total slack; moreover, all jobs that have total slack do not necessarily have free slack. In general, a job has free slack if it has more total slack than one of its immediate successors. FS (a)= Min {ES (immediate successors of a)} EF (a) vi. Critical Path
A critical path is a continuous chain of activities from the beginning to the end of a network with the minimum float value. In the case where the target project completion time is set equal to the early project completion time, a critical path will have Zero Float. In other words the longest path through the network is called the critical path.
MR Gelal FPM
Example: Draw AON diagram indicating ES, EF, LS, LF and earliest finish time of the project having the activities, durations and precedence relationship as shown in the table below. Activity Duration Predecessors A 6 B 3 A C 4 A D 9 A E 12 F 8 G 3 B, D H 6 C, D I 4 C J 4 E K 3 E L 1 E M 6 G, H N 7 H O 4 N, I, J P 2 K, L
Activity
A B C D E F G H K L M
Duration
3 2 1 4 4 3 5 3 3 1 2
Predecessors
A A C B, E B, E B, F D, G, H G, H
Followers
D, E G, H, K F L G, H K L, M L, M -
D A E G
Start End B H M
AON Diagram
D A E Start B
Start S=0
L G H
End
Finish Time T= 14
AOA Diagram 2 7 9
10
Forward Pass
D (x) = Estimated duration for activity x ES (x)= Earliest start (expected) time for activity x EF (x)= Earliest finish (expected) time for activity x S= Project start time ES (Initial Activities) =S ES (x) = Maximum (EF (all predecessors of x)) EF (x) = ES (x)+ D (x)
Backward Pass
D (x)= Estimated duration for activity x LS (x) = Latest allowable start time for activity x LF (x) = Latest allowable finish time for activity x T = Target project completion time LF (End Activities) =T LF (x)= Minimum (LS (all followers of x)) LS (x) = LF (x)- D (x)
Total Float
The Total Float for an activity is the maximum amount of time that the activity can be delayed without extending the completion time of the overall project. However, such a delay might postpone the early start of one or more of its following activities.
Free Float
Free Float is the maximum amount of time an activity can be delayed without delaying the early start of any of its followers.
Free Float for Activity x, FF (x) = Minimum (ES (all immediate followers of x))-EF (x)
All activities on the critical path have zero float- Total or Free. Free float for any activity is always less than or equal to the total float.
THE S-CURVE
S-Curve is one of the popular planning tools. S-Curve graphically plots some measure of cumulative progress on the vertical axis against time on the horizontal axis. Progress can be measured in terms of money expended, quantity surveys of work in place, man-hours expended, or any other measure which makes sense. Any of these can be expressed either in terms of actual units (Rupees, Cubic meter, etc.) or as a percentage of the estimated total quantity to be measured.
S- Curve
Cumulative Cost
Time
Traditionally, the curve was being used to plan the budget and cash flow only. It was drawn for cumulative schedule of cost on vertical scale and time duration on horizontal scale. But now, we have started using it not only to plan overall cost of the project, but also to plan man-hours, physical percentage completion, individual items of work and so on. In that case
MR Gelal FPM, Class Note VI the vertical scale represents man- hours, physical percentage of work completed etc. and horizontal scale always represents the time.
Example:
An airport construction project has to move 10,000 cubic meter of earth within 10 days. The daily excavation quantities are as shown in figure 1 below. Summing all the daily excavation quantities through any particular day gives the cumulative quantity by that day. For example, by the end of day 5, the cumulative quantity is the sum of excavation on days 1, 2, 3, 4 and 5. That is = 200 + 600 + 1000 + 1400 + 1800 = 5000 The shape of S- Curve can be seen by connecting the points at the end of each days cumulative production as shown in figure 2.
Figure 1
Figure 2
LINE OF BALANCE
Line of Balance is a graphic technique used for project planning and control to depict timequantity relationships. They apply best to linear and repetitive operations such as tunnels, pipelines, highways and building projects. The vertical axis typically plots cumulative progress or percentage completed for different systems of a project, such as the structural, electrical, mechanical and other trade sub contractors on a high-rise building. The horizontal axis plots time. An example may be, clearing, excavation, stringing, welding, pipe laying, and backfill operations on a pipeline. As long as the slopes are either equal or decreasing as one moves to the right, the project should proceed satisfactorily. However, if early scheduling shows one operation proceeding too rapidly, with a high slope compared with those preceding it, the time and location of the first conflicts become rapidly apparent. To illustrate this, figure 3 shows the eighth operation starting to conflict with the seventh, when each is about 70% complete. 100%
Time
MR Gelal FPM
Activity
A B C D E F G H
Duration
4 3 2 2 7 3 8 8
Predecessors
A A B B C D E, F
Followers
B D F G H H -
D B E Start
A
End C F H
MR Gelal FPM
Milestone Chart
A Milestone Chart is an improved version of a bar chart in which some of the limitations of bar chart are eliminated. As Henry Gantt invented it, it is called Gantt Milestone Chart. Combined activity bar charts can be converted to milestone bar charts by placing small triangles at strategic locations in the bars to indicate completion of certain milestones within each activity or group of activities as shown in figure below. A milestone implies some specific stage or point where major activity either begins or ends, or cost data become critical. Figure (a) shows a bar chart of a project, which involves four tasks or activities or jobs viz. Task I, Task J, task K and Task L and figure (b) shows the corresponding Milestone Chart. It may be seen that in a milestone chart the long time activities or jobs or tasks are identified in terms of specific events or milestones which are plotted against the time scaled indicating their accomplishments by specified times. Each bar in a milestone chart again represents an activity or job or task and all the bars taken together represent the entire project. A milestone chart shows relationship between the milestones within the same activity or job or task. It may be seen from fig. (b) that Milestone 2 can not be started until milestone 1 has been accomplished. Thus as compared to bar chart better control can be achieved with the help of a milestone chart, but it still possesses the same deficiency that it does not depict the interdependencies between the various tasks or the relationship between the milestones of different tasks.
MR Gelal FPM
MR Gelal FPM
Cost variance CV
Cost Variance CV, is the difference of Budgeted Value of Work performed (Earned Value) and Actual Cost of Work Performed. It can be expressed as:
CV= EV-ACWP
Negative value of CV indicates Cost Overrun. In the above example, CV is, = NRs. 750, 000- NRs. 900, 000 = NRs. (-) 150, 000 The project is NRs. 150, 000 over budget!
Cost Performance
Cost Performance can be obtained by dividing Earned Value EV by Actual cost of Work Performed ACWP. It can be expressed as:
Schedule Variance SV
Schedule Variance SV (In cost terms), is the difference of Budgeted Value of Work performed (Earned Value) and Budgeted Cost of Work Schedule (BCWS). It can be expressed as:
SV= EV-BCWS
Negative Value of SV indicates time overrun. In the above example, SV is, SV (In cost terms)= NRs. 750,000- NRs. 850, 000 SV (In cost terms)= NRs. (-) 100, 000 The Project is equivalent of NRs. 100,000 behind schedule.
Schedule Performance
Schedule Performance can be obtained by dividing Earned Value EV by Budgeted Cost of Work Schedule BCWS. It can be expressed as:
MR Gelal FPM
Resource Aggregation
Resource aggregation is a method of calculating needed resources at the project or multi project level for each time unit to enable implementation of the plan. During this process, no limitation on available resources is considered. Most CPM oriented software on the market is capable of performing aggregation or finding daily (time unit) project requirements for all resources estimated as needed to implement the plan.
Resource Allocation
Resource allocation is the distribution of available resources to different activities on different dates and in different quantities is. It is usual in planning a project; a planner has to consider not only the activity precedence relationships but also the availability of the resources. While allocating resources, the planner tries to distribute (allocate) the resources from non-critical activities to critical activities so that important activities (having no floats) can be continued without affecting the project completion date. 1
MR Gelal FPM
Resource Leveling
Resource Leveling is the method of scheduling activities within their available float so as to minimize fluctuations in day- to- day resource requirements. By resource leveling, we try to optimize the use of resources required to complete a project. Resource leveling helps in obtaining uniformity (so far as possible) in resource requirement throughout the life of a project. The benefit of resource leveling is to ease resource management so that cost involved in managing resources can be minimized.
MR Gelal FPM,
Example:
Consider the small project plotted as a schedule graph with a horizontal time scale. The horizontal length of each activity arrow represents its duration and the number above the arrow represents its manpower resource requirement. Assume that there are only 10 men available on any day. In modified schedule, the completion time has increased from 6 to 7 days. The resource limit has resulted in a delayed completion date. (See graph in next page)
MR Gelal FPM,
MR Gelal FPM,
3. If the early schedule resource requirements can be satisfied using the resource Premium -price level (if economical).
The planner may choose this solution, targeting early completion. 4. If project resource requirements can not be satisfied at the premium- price level
by implementing an activity early start schedule but it will be possible to complete the project by contractual due date.
There is no alternative.
Monitoring:
Monitoring refers to timely gathering of information to review project implementation. It is usually an ongoing activity throughout the life of the project. It is management review of project implementation to ensure that project inputs, schedules, outputs and other actions are proceeding according to the plan. It is done during the project implementation phase. Some definitions: Meredith and Mentel Monitoring is collecting, recording and reporting information concerning any and all aspects of project performance that the project manager or others in the Organization wish to know. David I. Cleland Monitoring means to keep track of and to check systematically all project activities. Monitoring is a feedback mechanism.
Evaluation:
Evaluation is an objective and systematic process for determining relevance, efficiency, effectiveness and impact of project in the light of its objective. Evaluation can be on- going, terminal or ex-post. Evaluation is used to improve project implementation or to improve future project planning and decision-making.
Inputs to Outputs
Outputs resulting from inputs. For example, construction of Cold Storage facility for Apple Promotion Project.
Outputs to Effects
Effects resulting from project outputs. For example, ability of storing apple for a long time with out damage is an effect of cold storage facility.
Effects to Impacts
Impacts resulting from project effects. For example, higher income to farmers due to higher price of apple in the market during off-season is the impact of apple storage. The assumptions and risks are evaluated as to their validity. They cannot be controlled by the project. Performance Benchmarks serve as the standards for monitoring and evaluation purposes. A logical framework matrix for each project is prepared for planning, monitoring and evaluation purposes as shown in the box below. Narrative Summary Objectively Verifiable Indicators Per Capita Income Objective (Increased by 2010 will be economic growth NRs. 25000 through economic (PCI now is NRs. reform) 11000) Means of Verification Assumptions and Risks
Nepal Human If assistance from Development donors continues Report published after If the present 2010 situation of Sample Surveying insurgency improves. Reports of CBS If the present Agriculture/Irrigation/Subsidies Policies of HMG/N and the norms and programs continues If assistance from donors continues
Effect/Purpose (Increased Production and productivity through modernization and professionalism in agriculture and livestock) Outputs (Area irrigated by X Irrigation Project) Activities
Rice Production Reports of DADO by 2010 shall be Records of DIC 50,000 MT (Present Production 36,000MT)
3000 Hectors
donors
Inputs
Key Concepts in Logical Framework o Objective: Desired outcome of the project o Purpose: Effect or impact of the project. o Outputs: Deliverables of the project o Activities: Tasks that must be undertaken to accomplish outputs. o Objectively Verifiable Indicators (OVIs): Targets in terms of quantity, quality and
time (QQT) to measure actual performance. o Means of Verification (MOV): Sources of information that provide the basis for monitoring and evaluation of the project. o Assumptions and Risks: External factors beyond the control of the project.
4. Concept of Control:
Control, generally regarded as the underlying managerial function begins with reviewing the difference between the schedule and actual performance once the project has begun. The analysis and correction of this difference forms the basic aspect of control. It ensures that the right things are done in the right manner and at the right time. Control is measuring, evaluating and correcting actual performance to achieve planned targets. Some definitions:
Types of Control:
I. Pre- Control (Feed-Forward Control):
It is inputs- based. It is initiated before the start of the activity. It anticipates problems in advance and takes preventive corrective actions. Example: Specification for Quality Control, Acquisition of right human resources.
II.
III.
i.
ii.
iii.
iv.
6.
Planning: Control is not possible with out planning. Information System: Control is based on feedback of performance information. Organization Structure: Control requires a structure with people and clearly defined
authority-responsibility relationship to collect performance information and analyzing. Flexibility: Should be flexible and capable of adjusting to environmental changes. Participation: Control should be based on participatory approach. Timeliness: The reporting and feedback for control should have timeliness. There is no point in bringing a doctor after death.
1.1
Progress information can be displayed on a project network or bar chart as shown in figure 1 below. A thick line can be used above an activity line to show extent to which the activity has been completed. Since the bars are drawn to scale, the length can shoe the status of activities on a certain day. Notice in figure 1 above that activities 1-3, 3-4 and 2-4 are behind schedule. Activity 6-7, on the other hand, is 50% complete and two days ahead of schedule. On the day of update, a vertical line is drawn through the bar chart to indicate how far the project should have progressed. The use of such control information in a format that enables easy visualization of the activity status enables all members of the project team to predict future events more accurately, weather favorably or unfavorably.
1.2
Updating
When the progress report has been received from the site, it is necessary to compare it with the original schedule. Although the duration of each activity can be compared with its planned duration, this does not give an accurate picture of actual performance. For a clear understanding of what a delay on an activity means to the complete project plan, it is necessary to perform an update. In effect this involves entering the progress information into the network plan and analyzing the network with this added information. Updating is carried out to accommodate configuration changes, to assign a new target date instead of a previously planned target date, and to reflect remedial actions designed to correct deviations in order to predict their effect.
MR Gelal FPM, Class Note 11 Updating CPM Network: Process The CPM networks previously developed in planning can be used to aid planners and managers in decision making during controlling process. When the project is partially completed and is at an intermediate stage, it may be possible that: the time durations originally assigned for some activities were erroneous and the planner may himself feel it desirable as a result of experience or he may be enriched with additional information, or compelled by some changes in original schedule due to various reasons, to reconsider and re-estimate duration times of activities not yet being performed. Now, new information and considerations can be placed on the original network and fresh calculations are made for controlling the project. The process of replanning and rescheduling based on the results which serve as a guidance for decision by performing calculations made by taking into consideration the new knowledge and latest information at an intermediate stage of the project thus modifying the original network, is known as the process of Updating.
Issue Directions
Report Progress
Project Completed
Figure 2: Updating Cycle
Illustrative Example: The network of a project shown below is to be updated at the end of 12 days. The following conditions exist at the time of updating. Activity 1-4 was completed as originally planned. Activity 1-3 was executed more rapidly than originally scheduled, and it took 8 days for its completion. Activity 3-4 commenced following the completion of activity 1-3 and was finished at the end of 11th day. Activity 4-5 was commenced following the completion of activity 13 (i.e., at the end of 11th day), and still requires 6 more days for its completion. Completion of activity 1-2 was delayed drastically, and it still requires 10 more days for its completion. Activity 2-7 will commence following the completion of activity 1-2 and will require 9 days for its completion instead of 6 days originally estimated. The time required to perform activity 5-8 has been revised based on the experience on the project gained to this point. It now requires 10 days in the place of 6 days originally planned. No other activities have been started, and the original time estimates for these activities still appear to be accurate. Update the network, and determine the revised critical path. TE =8 TE =23 2 7 TL =24 TL=18 TE =20 TE =13 TL =13 TL =20 TE =29 1
TE =0 TL =0
TL=29
3
TE =10 TL= 10
4
TE =24 TL =24
Solution:
Figure above shows the original network, with TE and TL marked. The critical path, shown by dark lines is along activities 1-3, 3-4, 4-5 and 6-8.Table below gives the details of execution of the various activities at the end of 12 days. The updated network can now be drawn on the basis of data of columns (1), (2), (4) and (5) of the above table. For those activities, which have already been completed, completion time t is taken to be zero, since they require zero time after the 12th day. Also the earliest event time (TE) and latest occurrence time (TL) of each event is computed with reference to the original date of the project. This can be best achieved by taking TE for event 1 as equal to 12.
(1) 1-2 1-3 1-4 2-7 3-4 4-5 5-6 5-7 5-8 6-8 7-8
(3) 8 5 3 -
9 6 4 3 10 5 5
After having determined the updated TE for each event, corresponding TL can be computed by the backward pass. The updated network is shown in figure below. The critical path of the updated network has now changed; it is along activities 1-2, 2-7, 7-8, shown by dark lines. According to the updated network, the project will take a total time of 36 days, instead of 29 days originally planned. On the day of updating, the remaining duration of the project is = 36-13 =24 days.
Updated Network:
TE =22 TL =22
TE =31 TL =31
1
TE =12 TL =12
TE =12
TE =18
TE =36 TL =36
TL =20
TL =26
TE =12 TL =20
TE =22 TL =31
COST CONTROL
Every project has its own way of controlling cost with a wide variety of record keeping, terminology and approaches. Project cost control systems should be designed to highlight potential problem areas. If you anticipate that some functions or contractors may have cost overruns, then track cost by function or contractor. Conversely, if you anticipate certain tasks or objectives to be the source of cost problems, then design the system to track cost by task. Other possibilities include tracking cost by resource type, by work category, and by activity. All costs must be managed and most costs can be controlled. An important question is which costs are controllable and by whom? Some costs are not directly controllable and yet a project manager must manage within a given environment, such as the state of the general and local economy. There are three cost categories:
a. Direct Cost
Direct costs are those that can be related to the production, such as the cost of labor and material inputs that remain as part of the permanent facility. Direct costs include the following: Labor wages Overtime premium Materials Sub contractors Freight Sales tax
b. Indirect Cost
Indirect costs include labor, material, and expenses that are incurred but cannot be readily apportioned to a particular part of the project. They are usually applied as a percentage of direct costs, and include items such as General supervision, Daily subsistence allowances, Temporary roads and facilities, Snow removal, Licenses and permits Insurance and First aid facilities etc.
1.
Labor Cost
On all projects it is necessary to obtain the number of hours spent on each part of the job by each employee. The man-hour distribution sheet is usually prepared by the foreman, except for costing, which is done by the office. The information on this sheet is summarized from the daily time check report in which the foreman records each workers time against the work items on which the individual works. The activity code column on the daily time sheet, as shown in figure 1 below and the man-hour distribution sheet have this function. Daily time sheets and man-hour distribution records are totaled weekly, as well as the costs for each activity and each work item. Full use of man- hour information cannot be made without knowing the interim quantity of work. It is of little value to know the man- hours expended on an incomplete work item if the quantities of work done are not known. The quantity report, as shown in figure 2, is used to measure the work done on different work items in the preceding period. It provides space for noting the budgeted and actual quantities of work done. The forecast quantity is normally estimated, taking into account any changes. A labor report as shown in figure 3 enables management to keep track of man-hours worked. Such reports generally give a comparison of work item in terms of estimated hours for each activity with the actual hours to date and indicate any overrun or under run. Total estimated and actual man- hours within each work item are listed. The difference between the forecast to complete and the original estimate is computed and listed as the projected overrun and under run, depending on whether the balance is positive or negative.
DAILY TIME SHEET AND WORKER HOUR DISTRIBUTION Report No: Page No:
Occupatio n
Employee Name No 32 75 80 96
Activity Code
Perf. Agncy
X Y Z P
OT h 2 5 r 18 23
Amount
144 220
00 00
MR Gelal FPM, Class Note 12 CHARGE NO AS OF DATE WORK ITEM BA 03 200 WORK UNIT m3 ACTIVITY 15-32 BUDGET ACTUAL LATEST REVISED 750 400 800 SHEET WORK ITEM BA 03 300 WORK UNIT m3 BUDGET ACTUAL LATEST REVISED 200 125 220
CONTRACT RESPONSIBLE CONTRACT NO DESCRIPTION ORGANIZATION XXXX YYYYY NNN WORK IDENTIFICATION CURRENT PERION WORKER-HOURS
RESOURCE AGENCY WORK ITEM A E ( OVR) UNDR
A/TO DATE
Crew Supervisor XX Str. Steel work Welders Crane Oprt. Light Equip. Oprt.
205 200
(5)
875
2000
2500
(500)
2.
Material Cost
Material cost feedback is generated mainly through a purchase requisition control procedure. All materials used on a project are requisitioned by the home office (Project Manager) or the field office (Construction superintendent). A good definitive estimate and a bill of materials provide excellent control documents by which the material cost can be kept in check on a project. For control to be exercised at the appropriate time, it is essential that a record of purchases be maintained by the organization. If the quantity and cost of materials for a particular work item do not match its estimate, the cost engineer must determine the reasons for the discrepancy and report to the Project Manager. The materials received on the site must be recorded on a material receiving report or in a similar manner. The materials receiving report is useful for inventory control and for keeping track of the status of purchase orders received at the site. Materials are charged to work items by means of the costing code, and every order, invoice, and delivery ticket should bear both a job name and number and a costing code for the work item. For the materials, that can not be charged to a particular work item ( for example, ready mixed concrete which are used in many items and sometimes as indirect cost items also), an inventory of materials on site is taken at the end of week. After deducting these quantities from the materials received, the materials used can be determined. These are distributed over the volume of work performed in each work item, as shown in figure 4. Such materials are costed at the average purchase price for the period. To check on the use of a certain material on a project, it is useful to generate a material consumption report separated by work items using a format similar to the man-hours report. PERFORMING AGENCY MATERIALS XXX Concrete QUANTITY USED 600
UNITS m3
RATE 1000
AMOUNT 600000
3.
Equipment Cost
Equipment cost must also be charged to work items just like man- hours and materials cost. To do this, a record of number of hours per work item and the hourly rate for each piece of equipment is required. The number of days that equipment is assigned to a project can be derived from checking- in and checking- out procedures. Hours of operation can be accumulated from equipment time cards, as shown in figure 5. Idle time should be distributed to items of work or captured in a separate idle time account. When use of equipment is not heavy on a project, the equipment costs can be applied to all work items as well as to all activities as an indirect cost. In such cases, operators and operation costs are charged directly to work items, along with the manpower costs. PERFORMING WORK MON. TUE. WED.---- TOTAL AGENCY ACTIVITY ITEM (hrs) (hrs) (hrs) (hrs) RATE XXX 4-5 AA02200 4 3 5 12 100 Total:
AMOUNT 1200
Control of Spending
Even though the project manager is responsible for the total project budget, this budget is made up of a collection of items, assigned to various team members to spend. These team members do not have visibility of the total budget and are usually spending in isolation. In addition, the timing and the amount actually spent on a budgeted item will vary from the budget, causing item variances. The sum total of these variances needs to cancel out or be within the budgeted tolerances. This never happens by itself. In order to exercise effective control on spending, you need insight into the behavior of spending. Most items are spent over a period of time. Each time another expenditure towards this item is needed, turning an increasing portion of the Budgeted Cost into Contracted Cost. This portion is called Cumulative cost- to- date. What is left is called item balance.
MR Gelal FPM, Class Note 12 By comparing this projected total cost with the budgeted cost, we can anticipate the ultimate variance for this item, known as Projected Variance. Projected Variance= Budgeted Cost- Projected Total Cost Keeping this projected variance at zero or positive becomes the responsibility of the item Owner.
Example:
Given the following data for an important project item, calculate (a) the item balance, (b) the projected total cost, and (c) the projected variance. Cumulative Cost- to- date = Rs. 5,40,000.00 Budgeted Cost= Rs. 7,50,000.00 Projected Cost to Complete= Rs. 2,50,000.000 Solution: (a) Item Balance = Budgeted Cost- Cumulative Cost- to- date = Rs. 7,50,000- Rs 5,40,000 = Rs. 2,10,000.00 (b) Projected total cost= Cumulative Cost- to- date + Projected Cost to complete = Rs. 5,40,000 + Rs. 2,50,000 = Rs. 7,90,000.00 (c ) Projected Variance= Budgeted Cost- Projected total Cost = Rs. 7,50,000- Rs. 7, 90,000 = Rs. (40,000) It is obvious that this item will overrun the budget if action is not taken to get it back in budget.
The End
Quality Control
1. What is Quality?
According to Advanced Learner Dictionary, Quality is degree of goodness. Similarly Crossby defines Quality as conformance to requirements. According to Juran, Quality is fitness for purpose. Others define Quality as: Zero defects Consistent conformance to expectation Doing things right the first time Quality is the totality of characteristics of an entity that bears on its ability to satisfy stated and implied needs.
Be Careful:
2.
Quality Management
Quality management includes Quality Assurance (QA) and Quality Control (QC) as well as other concepts of quality planning, quality policy and quality improvement. Total Quality Management (TQM) develops these concepts as a long-term global management strategy and the participation of all members of the organization for the benefit of the organization itself, its members, its customers and society as a whole.
QUALITY MANAGEMENT
QUALITY CONTROL
What to do? How to do?
QUALITY ASSURANCE
TOTAL QUALITY
Improvement
Inspections
Sample or 100%
Inspectors
Audit
QA
Samples
Quality Circles
All
Organization
Employees
Quality System
The provision made by management to ensure that quality is protected and promoted throughout all an organizations activities is referred to as the Quality system or Quality Management system
Quality control
Quality Control is the operational techniques and activities that are used to fulfill requirements for quality. Quality Inspection is done first for quality control. Activities such as measuring, examining, testing, gauging one or more characteristics of a product or service and comparing these with specified requirements to determine conformity is quality inspection. Inspection is concerned with sentencing the product as good or bad, by comparison with the standard. On the other hand, quality control is concerned with feedback of the comparative 2
MR Gelal FPM, Class Note 13 information in order to regulate the process. In quality control, the limits are set so that the process can be adjusted before product from the process reaches the limit where it has to be rejected.
Quality Assurance
All those planned and systematic actions necessary to provide adequate confidence that a product or service will satisfy given requirements or quality both within the organization and externally to customers and authorities. Quality assurance: is a systematic way of ensuring those organized activities happen in a way that they are planned. is concerned with anticipating problems and with creating the attitudes and control that prevent problems from arising. firstly, aims to impart confidence to the client assuring that his needs will be consistently met (external quality assurance). Secondly, it aims to achieve quality through systematic and planned actions avoiding fire-fighting or crisis management (internal quality). Elements of Quality assurance system Assessment of the projects requirements Development of technical specifications and acceptance criteria Choice of quality materials and design Choice of construction method; Equipment/ Plant Field supervision and quality control Assessment of quality of completed project Periodic Inspection and Maintenance measures Preparation of Quality Assurance Plan Clearly defining the objectives Enumerating the activities involved Incorporating the requirements of quality in each activity and providing far a fail- proof safeguard, if any, and Laying down the surveillance plan, checks and penalties for each apprehended lapse and omission
TQ (Improvement)
QA (Prevention)
QC (Detection)
Effect
Cause
Sub-Causes
Concreting Work
Cement
Sand
Aggregate
Water
Dry Mixing
Addition of Water
Mixing
Compaction/Finishing
4. Quality circle
Quality circle is a small group of employees in the same work area or doing a similar type of work who voluntarily meet regularly for about an hour every week to identify, analyze and resolve work related problems, leading to improvement in their total performance and enrichment of their work life. QC is a technique of participative management for continuously improving quality, quantity, efficiency and safety. QC is a work group of employees, who meet regularly to discuss their quality problems, investigate causes, recommend solutions and take corrective actions.
5.
Quality Costs
2. Failure Cost
Cost involved in the activities which result from not confirming to right first time and includes: Internal Failure Cost (Scrap, Rework, Failure Analysis, Re- inspection, Scrap and rework from suppliers etc.} External Failure Cost (Warranty charge, Returned material etc.) Intangible Quality Cost (Loss of goodwill of the company) Quality costs more but lack of quality costs even more. 7
Quality Level
Cost of Quality
The Fundamentals of Quality System ISO 9000
International quality system standard The ISO 9000 series actually consists of Five Documents
1. ISO 9000: Principal Concepts and Applications (Definitions) 2. ISO 9001: Quality Systems- Model for Quality Assurance in Design/Dev./Prod./Installation/Servicing 3. ISO 9002: Quality Systems- Model for Quality Assurance in Production / Installation 4. ISO 9003: Quality Systems- Model for Quality Assurance in Final Inspection and Testing 5. ISO 9004: Quality Management and Quality System Elements Guidelines ISO 9000- 9003 issue orders. Use the word shall. ISO 9004 offers advice, using the word should. It is an advisory or guidance document. Needed for international trade. For selling the products of developing countries to the developed countries and to compete with International market, one has to be attached to ISO 9000 and produce its goods or services as per the attached standard. 8
MR Gelal FPM
Time Estimates
Time is the most essential and basic variable in PERT system of planning and control. PERT is mostly used for research and developmental projects, which are referred to as once- through. In these projects, there is uncertainty about the times required for the completion of various activities. Thus, to take the uncertainties into account, PERT planners make three kinds of time estimates: The Optimistic Time Estimate: duration of an activity if all went right, without any problem. This time estimate is denoted by t0. The Pessimistic Time Estimate: duration of an activity if everything went wrong. This time estimate is denoted by tp. The Most Likely Time Estimate: duration of an activity based on experience of what usually happens- something went wrong and some thing right. This time estimate is denoted by tL.
Frequency Distribution
These three time estimates, though look simple, are very difficult to prepare, unless some guidance is available. The planner should base the estimations on available information and past experience. For example, consider a certain activity A under diverse conditions. The time required for the completion of this activity under each condition is known. Naturally, the time of completion will be short (optimistic time) if better than normal conditions exist. The number of cases when such conditions exist for completion of an activity A will be naturally small. Similarly, time of completion will be long (pessimistic time) if adverse conditions are there, and such cases will also be small in number. If a curve is now plotted between the time of completion and the number of jobs completed in that time, a frequency distribution curve, such as the one shown in Fig. 1 below will be obtained. From the curve, it is clear that there are large numbers of cases of the activity that are completed in the most likely time. Such a curve is also called unimodal curve, since it has single hump.
MR Gelal FPM
No. Of Activities
Time Figure 1 The curve shown in figure 1 is symmetrical on either side of point Q; such a curve is known as the normal curve. It is not necessary that a frequency distribution curve may be normal; it may have skew due to which it is not symmetrical about the peak Q. Figure 2 below shows few frequency distribution curves.
Figure 2 (a)
Figure 2 (a)
Figure 2 (a)
Figure 2 (a)
MR Gelal FPM Figure 2 (a) Frequency distribution curve having skew to the left The difference between tL and to is 1 while difference between tP and tL is 3 days. Figure 2 (b) Frequency distribution curve having skew to the right The difference between tL and to is 3 while difference between tP and tL is 1 day. Figure 2 (c) Frequency distribution curve symmetrical about the peak (Normal Curve) Wider variation between tP and to (Greater Uncertainty) Figure 2 (d) Frequency distribution curve symmetrical about the peak (Normal Curve) Smaller variation between tP and to (More reliable time estimation) The method of preparing a frequency distribution curve will be explained with the help of an example.
Example 1
In a certain project, the times required for digging 54 trenches of fixed dimensions are recorded below. The trenches were excavated by different parties, each consisting of the same number of persons. Plot the frequency distribution curve.
8 10 12 6 9 11 10 13 15 12
11 9 8 10 14 16 12 16 15 10
14 12 7 9 13 10 8 11 17 13
9 11 13 10 14 9 12 15 14 9
10 9 11 10 7 13 11 8 12 11
8 10 9 11
MR Gelal FPM
Solution: Days Completion of No. of trenches Days completed during Completion these days of No. of trenches completed during these days
6 7 8 9 10 11
1 2 5 8 9 8
12 13 14 15 16 17
6 5 4 3 2 1
MR Gelal FPM
Mean
Mean of distribution may be defined by the algebraic sum of time durations taken by various jobs divided by the number of the jobs.
tm = t / n
Deviation
Deviation is the difference between the time under consideration and the mean time. This difference may be either positive or negative.
= t- tm
Variance
Variance is the mean of the squared deviations. It is expressed by 2 . 2 = (t- tm ) / n Variance is commonly used in statistics as measure of variability of the distribution.
2
Standard Deviation
It is simply the square root of the variance. Standard deviation is denoted by symbol .
=
In the above example, tm = t / n
2
(t- tm )2 / n
= 597/ 54 = 11.06 = 338. 834 2 Variance 2 = / n = 338. 834 / 54 = 6.275 Standard Deviation = 6.275 = 2.50
In the above example, we observed that the most likely time ( tL ) was 10 days, while the mean time tm is 11.06. The tallest peak of the distribution curve is called the mode, corresponding to the most likely time, tL . Both mean and mode do not coincide because the distribution curve is not symmetrical curve about its peak. In the case of a symmetrical curve ( i.e., normal distribution curve) the mean coincides with the mode.
Deviation = t - tm
-3.06 -1.06 0.94 -5.06 -2.06 -0.06 -1.06 1.94 3.94 0.94
2
9.364 1.124 0.884 25.604 4.244 0.004 1.124 3.764 15.524 0.884
11 9 8 10 14 16 12 16 15 10 14 12 7 9 13 10 8 11 17 13 9 11 13 10 14 9 12 15 14 9 10 9 11 10 7 13 11 8 12 11 8 10 9 11
-0.06 -2.06 -3.06 -1.06 2.94 4.94 0.94 4.94 3.94 -1.06 2.94 0.94 -4.06 -2.06 1.94 -1.06 -3.06 -0.06 5.94 1.94 -2.06 -0.06 1.94 -1.06 2.94 -2.06 0.94 3.94 2.94 -2.06 -1.06 -2.06 -0.06 -1.06 -4.06 1.94 -0.06 -3.06 0.94 -0.06 -3.06 -1.06 -2.06 -0.06
0.004 4.244 9.364 1.124 8.644 24.404 0.884 24.404 15.524 1.124 8.644 0.884 16.484 4.244 3.764 1.124 9.364 0.004 35.284 3.764 4.244 0.004 3.764 1.124 8.644 4.244 0.884 15.524 8.644 4.244 1.124 4.244 0.004 1.124 16.484 3.764 0.004 9.364 0.884 0.004 9.364 1.124 4.244 0.004
597 6
338.834
MR Gelal FPM
Probability Distribution
Probability is connected with chance and Uncertainty. The probability measures are always between 0 and 1. If an event has probability of 1, it is certain to occur, while if the probability is 0, it will not occur. Closer the probability value is to 1, more certain is the occurrence of the event. y= f(x) Probability function
x No. of days
Probability number can always be assigned to the estimated time, if sufficient data is available. Generally, the available data (frequency distribution) is used to plot probability distribution. Probability distribution is the curve, with its height so standardized that the area under the curve is equal to unity. The height or the ordinate of the curve at any point x, is denoted by function f(x), usually called the probability density function. + Thus
f (x) dx = 1
MR Gelal FPM (a) Approximately 68% of the values of the normal distribution lie within + from the average, where is the standard deviation. This means that the shaded area of the curve between x= - to x= + is 68% of the total area. (b) Approximately 95% of all the values lie within + 2 from the average. This means that the shaded area of the curve between x= - 2 to x= +2 is 95% of the total area. (c) Approximately 99.7% of all the values lie within + 3 from the average. This means that the shaded area of the curve between x= - 3 to x= +3 is 99.7 % of the total area. The last property (c ) can be used to calculate the Standard Deviation directly if the minimum time t0 and maximum time tp are known. Let us say that the minimum time is 6 days and maximum time is 18 days for the completion of a job. If 99.7 % of all the values (I.e., possible completion times) are assumed to lie between 6 and 18 days then the distance between the extreme left value (6) and extreme right value (18) should be equal to + 3 or 6 in total. The standard deviation = (18-6)/6 = 2 days. Hence we conclude, in general, that standard deviation is given by = (tp t0 ) / 6 or Variance 2 = {(tp t0 ) / 6}2 The above method of calculating standard deviation is approximate. A more exact method is by frequency distribution. However, in PERT problems, the emphasis is one- time, non-repetitive projects for which there are no history of the activity. Hence we must base computations for on the given time estimates of the estimator.
Time Duration It can be shown that for beta distribution, Standard Deviation = (tp t0 ) / 6 or Variance 2 = {(tp t0 ) / 6}2 Greater the variance, greater will be the uncertainty. 8
Time Duration
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Expected Time
The three time estimates t0 (optimistic time), tp (pessimistic time) and tL (most likely time) are identified on the beta distribution. The variance and standard deviation can be computed by using t0 and tp . However, one must combine the three time estimates into one single time the average time taken for the completion of the activity or job. This average time or single workable time is commonly called the expected time and is denoted by tE . In computing the expected time, a weightage of 1 is given to the optimistic time and weightage of 4 to the most likely time and weightage of 1to the most pessimistic time. Thus, tE = (t0 +4 tL + tp) / 6
Example 2
Let us take the examples of estimated times of completion of three jobs A, B and C as under.
Jobs
t0
tL
6 10 6
tP
11 12 8
Solution
The expected times for these jobs are (tE)A = (t0 +4 tL + tp) / 6 = (4+4*6+11)/ 6 = 6.5 days (tE)B = (t0 +4 tL + tp) / 6 = (5+4*10+12)/ 6 = 9.5 days (tE)C = (t0 +4 tL + tp) / 6 = (4+4*6+8)/ 6 = 6 days For job A The expected time, tE, falls to the right of the most likely time, though the curve has skew to the left. For job B The expected time, tE falls to the left of the most likely time, though the curve has skew to the right. One important point should be noted about the expected time, tE. The expected time tE represents the average value while the most likely time tL represents the mode of the - distribution. Naturally, the vertical ordinate through tE will divide the probability curve into two equal areas. If the estimated time (to , tL and tP ) are such that the expected time tE computed with these comes out to be equal to tL the distribution curve will be symmetrical about the mode (tL), as in job C. Job A B C Standard Deviation A = (tP tO ) /6 = (11-4)/6 =1.167 B = (tP tO ) /6 = (12-5)/6 =1.167 C = (tP tO ) /6 = (8-4)/6 =0.667 A2 B2 A2 Variance = (1.167)2= 1.36 = (1.167)2= 1.36 = (0.667)2= 0.444
Time Duration
Probability Function
4-6-8
11 12
5-7-11
13
4-10-12
14
to 4 5 4
tL 6 7 10
tP 8 11 12
tE 6 7.333 9.3333
tE = 22.666
10
MR Gelal FPM Alternatively, = 4+5+4 =13 = 6+7 +10 = 23 = 8+11+12 = 31 = ( t0 + 4 tL + tP ) / 6 = (13+4*23+31) / 6 = 22.67 The standard deviation for the last event (network ending event) in a series of activity, is given by, t0 tL t0 tE
tE = 12 +22+32+..+n2
Example 3
The network for a certain project is shown in figure below. Determine the expected time for each of the path. Which path is critical?
Solution:
Path
Activity 1_2 2_7 7_8 1_2 2_6 6_8 1_3 3_6 6_8 1_4 4_5 5_6 6_8
t 6 8 5 6 4 7 3 8 7 5 4 3 7
t 8 10 8 8 8 10 7 10 10 7 6 5 10
11
t 11 12 12 11 14 15 9 12 15 10 8 6 15
t 8.1667 10.00 8.1667 8.1667 8.3333 10.33 6.6667 10.00 10.33 7.1667 6.00 4.8333 10.33
26.34
26.83
27.00
28.33
Path
Activity 1_2 2_7 7_8 1_2 2_6 6_8 1_3 3_6 6_8 1_4 4_5 5_6 6_8
t 6 8 5 6 4 7 3 8 7 5 4 3 7
t 8 10 8 8 8 10 7 10 10 7 6 5 10
t 11 12 12 11 14 15 9 12 15 10 8 6 15
t 8.1667 10.00 8.1667 8.1667 8.3333 10.33 6.6667 10.00 10.33 7.1667 6.00 4.8333 10.33
26.34
26.83
27.00
28.33
FPM MR Gelal
Accident An event
that happens all of a sudden unexpectedly which may cause injury, death or damage to men/equipment/material and affects the life of individuals and his family as well as ultimately entire society.
Physical
Improper equipments High speed of operation Unauthorized operation Machine related (Working space, Obstruction etc.) Tools related (Breakage etc.) Materials (Inflammable, explosives etc.) Uniform Working environment
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Physiological
Poor eye sight Poor health Old age Intoxication ( alcohol, drugs etc.) Physical disability Anxiety Worries Fear Over consciousness
Psychological
2. Software Causes
Inadequate plan and program Lack of training Negligence Mistakes
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Humanitarian Concerns
On a purely humanitarian level, the purpose of improved occupational safety and health is to reduce the human pain and suffering, to workers families as well as to themselves, that result from accidents and work- induced illness. Even the strongest human beings are frail creatures when subjected to the forces of nature and the industrial hazards associated with the moving machinery, dust, explosives, heat, electricity, noise, potential for falling, and toxic substances that form the everyday environment of construction. The resulting injuries are often cruelly disfiguring and result in lifetime handicaps and disabilities.
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FPM MR Gelal
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Preparation of a standard list of physical demands applicable to the entire task to be included in the selection procedure. Square peg into a square hole and circular peg into a circular hole should be the guiding principle. Preparation of job description and job specification including listing the requirement the holder of the job should have is the responsibility of personnel manager. Personnel Manager should seek expert advice of the safety in charge or safety expert.
Medical Examination
Thorough medical examination is necessary for some specific jobs. Care should be taken for patient of epilepsy, poor vision and poor hearing condition.
Alcoholism
Alcoholism and drug abuse worsen the problem of control of injuries and therefore are matter of concern. Alcoholism in job situation can be defined as a disease in which an employees consumption of any alcoholic beverage definitely and repeatedly interferes with his job performance and/ or his health. Alcoholism is a complicated disease and not easy to cure as culture and values are associated with it.
Training
Employee should be trained for the safety procedure and practice to be followed.
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c.
d.
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Risk Identification
Before you can manage something, you must first know about it. Thus, risk management begins with identifying the risks and predicting their consequences. If a risk and its consequences are significant, ways must be found to avoid the risk or reduce it to an acceptable level. Acceptable risk depends on the risk tolerance of project stakeholders and managers. Experienced managers are more careful (and risk averse), where as less experienced stakeholders tend to be greater risk-takers (more risk tolerant) because they dont know of the risks or are ignorant of the consequences. o Risk of failure: project might fall short of schedule, budget or technical goals. o Risk of opportunity: events leading to rewards, savings or benefits. One method to identify project risks is to proceed according to project chronology; that is risks associated with each phase of project life cycle that may ruin the project immediately or lead to a later failure are separately identified. High risks in projects typically stem from: o Using an unusual approach. o Attempting to further technology. o Training for new tasks or applying new skills. o Developing and testing of new equipment, systems or procedures. Any factor with an uncertain probability of occurring, that can influence the outcome of a project, is considered a risk source or risk hazard. The most difficult part of risk identification is discovering things you dont already know! Project risk can be classified as internal risks and external risks. Internal risks originate inside the project and project managers and stakeholders usually have a measure of control over these. Two main categories of internal risks are market risk and technical risk. Market risk is the risk of not fulfilling either market needs or the requirements of particular customers. The sources of market risk include: Incompletely/ inadequately defined market or customer needs. Failure to identify changing needs Failure to identify newly introduced products by competitors. Technical risk is the risk of not meeting time, cost or performance requirements due to technical problems with the end-item or project activities. These risks are high in projects involving activities that are unfamiliar or require new ways of integration and especially high in projects with untried technical applications. One approach to expressing technical risk is to rate the risk of the project end-item or primary process as being high, medium or low according to the following features.
Sources of Risk:
Internal Risks:
Market Risk
Technical Risk
MR Gelal Class Notes 17 & 18 o Maturity: An End-item or process that is pre-existing, installed and operational or based on experience and preexisting knowledge entails less risk than that in the early stage of development or new. o Complexity: An End-item or process with numerous interrelated steps or components is more risky than one with few steps and components having simple relationship. o Quality: An end- item or process that is known to be completely producible, reliable or testable is less risky than one that has not yet been produced or has low reliability or testability. o Concurrency or Dependency: In general risk increases the more that activities overlap one another. Sequential, dependent activities with no overlap are much less risky than those with much overlap.
External Risks:
External risks include only risks that stem from sources outside the project. Project managers and stakeholders usually have little or no control over these. External risk hazards include changes in: Market conditions Competitors actions Government regulations Interest rates Decisions made by senior management/ customers regarding project priorities, staffing or budgets Customer needs and behavior Weather (adverse) Labor availability (strikes/walkouts) Material/labor resources (shortages) etc. Project risks are identified from analysis of the numerous documents reviewed or prepared during project conception and definition. These documents include: Reports from past projects Lists of user needs and requirements WBSs Cost estimates Schedules Models of end-items. The various techniques for pin pointing risks are: o Analogy Technique: looking at records, post completion summaries and project team members notes and recollections from previous similar projects. o Checklists: lists of factors that can affect the risk in a project o WBS Analysis: Every work package is scrutinized for potential problems with management, customers, suppliers, equipment and resource availability and technical hurdles. o Process Flow Charts: A flow chart illustrates the steps, procedures and flows between tasks and activities in a process.
MR Gelal Class Notes 17 & 18 o Cause- and- effect Diagram: Potential outcome or end-item (effect) due to potential causes (hazards) or risk hazards (cause) that might ensue (effect). o Brainstorming: share opinions and generate ideas about possible problems or hazards in the project.
Risk Assessment
Risks are commonplace, but it is only the notable ones that require attention. What is considered notable depends on three things: Risk likelihood Risk impact, and Risk consequences
Risk Likelihood
Risk likelihood is the probability that a hazard or risk factor will actually materialize. It can be expressed as a numerical value between 1.0 (certain to happen) and 0 (impossible) or as a qualitative rating such as high, medium or low. Table 1 below shows an example of qualitative ratings and the associated numerical percent values for each. The table is for illustration only. The association between qualitative ratings and particular values is subjective and depends on the experience of the project team and risk tolerance of stakeholders. Risk Likelihood: Qualitative Ratings for Quantitive Values NUMERICAL 0- 0.20 0.21- 0.50 0.51- 1.00
Table 1
QUALITATIVE Low Medium High
Table 2 is a checklist that gives numerical likelihood for five potential sources of failure in computer systems projects. Table 2: Sources of Failure and Likelihood. MS CS MH CH D Likelihood
0.1 (low) 0.3 (minor)
failure likelihood due to immaturity of software failure likelihood due to complexity of software failure likelihood due to immaturity of hardware failure likelihood due to complexity of hardware failure likelihood due to dependency on external factors MS
Existing Minor redesign
MH
Existing Minor redesign
CH
Simple Design Minor complexity
CS
Simple Design Minor complexity Moderate Signif.complex Extreme complx.
D
Independent Sch. Depnt.on ES Perf.depnt. on ES Sch.Depnt.on NS Perf.depnt. on NS
0.5 (moderate) Major change feasible Maj.Change feas. Moderate complexity 0.7 (significant) Complex design 0.9 (high) New but similar to exist. Signif.complex. Extreme complx.
MR Gelal Class Notes 17 & 18 When a project has multiple, independent risk sources, they can be combined and expressed as a single Composite likelihood factor, or CLF. For example, using the sources listed in Table 2 the CLF can be computed as a weighted average, CLF= W1 MH + W2 CH + W3 MS + W4 CS + W5 D Where W1, W2, W3, W4 and W5 each have values 0 through 1 and together total 1.
Example 1:
The ROSEBUD project involves development of hardware and software with characteristics as follows: The hardware is existing and of minor complexity; the moderately complex software involves a minor redesign of current software; the performance of the overall system depends on how well it can be integrated into another, larger system. Calculate the CLF for the probable risk. Solution: From Table 2 above, we have; MH = 0.1, CH = 0.3, MS = 0.3, CS = 0.5 and D= 0.9. Assuming all sources are rated equally at 0.2, then, CLF = 0.2*0.1 + 0.2* 0.3 +0.2* 0.3 + 0.2*0.5+ 0.2* 0.9 = 0.31 Ans.
Risk Impact
What would happen if a risk hazard materialized? The result would be called risk impact. A poorly marked highway intersection is a risk hazard; the risk posed is that of collision with the impact of injury or death. Risk impact in projects is specified in terms of time, cost and performance measures. For example, Risk hazard: insufficient numbers of skilled labor Risk impact: extending the schedule of the project Risk impact can be expressed as a qualitative rating such as high, medium or low. The rating is subjective and depends upon the opinion of managers about the importance of the risk. For example, a risk leading to a schedule delay of 1 month or less might be considered low impact, whereas a delay of 3 months or more might be deemed high impact. Risk impact also can be expressed as a numerical measure between 0 and 1, where 0 is not serious and 1 is catastrophic. Again the rating is subjective and depends upon the opinion. Just as the likelihood for multiple risks can be combined, so can the impacts from multiple risk sources. If technical, cost and schedule impacts are TI, CI and SI, then Composite Impact Factor CIF, can be computed using a simple weighted average, CIF = W1 *TI + W2 * CI + W3 * SI Where W1, W2, and W3 are valued from 0 to 1 and together sum to 1. If CIF is 0, it means no impact whereas CIF equal to 1 means the most severe impact.
MR Gelal Class Notes 17 & 18 Table 3: Impact Values for Different Technical, Cost and Time Situations. Impact Value Technical Impact (TI) Cost Impact (CI) Schedule Impact (SI) 0.1 (low) Minimal Within budget Negligible 0.3 (minor) Small reduction in Cost increase 1- 10% Minor slip <1month performance 0.5 (moderate) Moderate reduction in Cost increase 10- 25% Moderate slip performance (1-3 month) 0.7 (significant) Significant reduction in Cost increase 25- 50% Significant slip performance > 3 month 0.9 (high) Technical goals might not Cost increase in Large slip be achievable excess of 50% (unacceptable) Above equation assumes that risk impacts are independent. If they are not, then they must be treated jointly as, for example, the impact of both a 20% increase in cost and a 3- month schedule slip.
Risk Consequences
The risk is a function of risk likelihood and risk impact. This notion is referred to as the risk consequence. Risk consequence can be expressed in two ways. First, it can be expressed as a simple numerical rating with a value ranging between 0 and 1. In that case, the risk consequence rating, RCR, is RCR= CLF+CIF- (CLF)* (CIF) Small value represents unimportant risk that might be ignored; large values represent important risk worth attending to. The consequence rating value is interpreted subjectively. In general, Value over 0.7: high risk project Value under 0.2: low risk project Value of 0.48: moderate level risk Another way to express risk consequence is an Expected value. The risk consequence expected value is computed as Risk Consequence= (Impact)* (Likelihood) The risk consequence on project duration is called the Risk Time, RT. RT= (Corrective time)* (Likelihood) The risk consequence on project cost is called the Risk Cost, RC. RC= (Corrective cost)* (Likelihood)
Example 2
Suppose the baseline time estimate (BTE) for project completion is 26 weeks and the baseline cost estimate (BCE) is NRs. 500,000. Assume that the risk likelihood for the project as a whole is 0.3, and, should the risk materialize, it would delay the project by 5 weeks and increase the cost by NRs. 80,000. Calculate the expected project completion time ET and expected project completion cost Ec, considering risk into account.
MR Gelal Class Notes 17 & 18 Solution: As the probability of the risk materializing is 0.3, the probability of not materializing is 0.7. If the risk does not materialize, no corrective measures will be necessary, so the corrective time and cost will be nil. Hence RT= 5*0.3 + 0* 0.7 = 1.5 Weeks RC= 80,000* 0.3 +0* 0.7 = NRs. 24,000 These figures RT and RC would be included as reserve or buffer amounts in the project schedule and budget to account for risk. RT and RC are the schedule reserve and project contingency (budget reserve) respectively. Thus, Expected Project Completion Time, ET = BTE+ RT = 26 + 1.5 = 27.5 Weeks Expected Project Completion Cost, EC = BCE+ RC = 500,000 + 24,000 = NRs. 524,000 When the corrective time and cost cannot be estimated, then ET and EC are computed as ET= BTE (1+likelihood) = 26* 1.3 = 33.8 Weeks EC= BCE (1+likelihood) = NRs. 500,000* 1.3 = NRs. 650,000
Risk response planning addresses the matter of how to deal with risk. The response to, or the allocation of, risk can take any of four forms:
Risk Response
Risk Transfer
Risk Transfer
Risk Reduction
Risk Avoidance
Risk Acceptance
Transferring risk does not reduce the criticality of the source of risk; it just removes it to another party. The commonest form of risk transfer is by means of insurance, which changes an uncertain exposure to a certain cost. Risk can be transferred partly or fully from the customer to the contractor, or vice versa, using contractual incentives, warranties, or penalties attached to project performance, cost or schedule measures. The contractor and customer may decide to split the risk through a contractual agreement in which each manages the risks they can handle the best. Of course it is impossible to entirely transfer the risk to one party or another. Even with a fixed price contract, where the contractor takes all the risk, the customer still incurs damages or hardship should the project exceed the target schedule or the contractor declares bankruptcy. Transfer of one kind of risk often means inheriting another kind of risk.
Risk Reduction
One of the ways of reducing the risk exposure is to share risks with other parties. For instance, the international banks syndicated loans to third world governments or the stock market investor spreads his risks over many securities. The general contractor will attempt to reduce his risk exposure to pay liquidated damages for late completion by imposing liquidated damages clauses in domestic sub contractor agreements. Among the many ways to reduce risk associated with technical performance are to: Employ the best technical team. Base decisions on models and simulations of key technical parameters. Use mature, computer aided system-engineering tools. Provide the technical team with adequate incentives for success. Hire outside specialists for critical review and assessment of work. Perform extensive tests and evaluations. Minimize system complexity (By decoupling activities and subsystems, that is, making them independent of one another, the failure of any one activity or subsystem is contained and will not spread to others).
MR Gelal Class Notes 17 & 18 Use design margins (A design margin is quantified value that serves as a safety buffer to be held in reserve and allocated by management. By aiming for the target value, any design error can miss by as much as the design margin amount and still satisfy the requirement).
Risk Avoidance
Risk avoidance is synonymous with refusal to accept risks. The refusal to contract is a simple example to risk avoidance. However, it is more relevant to consider the specific risks, which can be avoided. The basic rational of risk aversion is that it is more unpleasant to lose a given sum than pleasant to gain the same amount; for a loss may cause a reduction in the standard of living to which one has become accustomed. In an extreme case, a risky venture may be shunned because it puts basic necessities at risk. Also, avoiding risk can diminish the payoff opportunities. Research projects and innovative, new-product development projects are inherently risky, but they offer potential for huge benefits later on. Because the potential benefit of such a project is proportionate to the size of the risk, it is better to reduce risk to an acceptable level rather than completely avoid risk.
Risk Acceptance
Not all impacts are severe or fatal, and if the cost of avoiding, reducing or transferring the risk exceeds the benefit, then do nothing might be advisable. Of course, this response would not be chosen for risks where the impacts or consequences are potentially severe. Not all risk can be transferred, but even if they were capable of being transferred it may not prove to be economical to do so. The risk will then have to be retained. The gamble is between paying premium and the probability of the event occurring and the consequential loss that would result. The risk retention is based on the probability of a claim for damages and what the practice can afford to pay if the claim is successful.
MR Gelal FPM
THE S-CURVE
S-Curve is one of the popular planning tools. S-Curve graphically plots some measure of cumulative progress on the vertical axis against time on the horizontal axis. Progress can be measured in terms of money expended, quantity surveys of work in place, man-hours expended, or any other measure which makes sense. Any of these can be expressed either in terms of actual units (Rupees, Cubic meter, etc.) or as a percentage of the estimated total quantity to be measured.
S- Curve
Cumulative Cost
Time
Traditionally, the curve was being used to plan the budget and cash flow only. It was drawn for cumulative schedule of cost on vertical scale and time duration on horizontal scale. But now, we have started using it not only to plan overall cost of the project, but also to plan man-hours, physical percentage completion, individual items of work and so on. In that case
MR Gelal FPM the vertical scale represents man- hours, physical percentage of work completed etc. and horizontal scale always represents the time.
Example:
An airport construction project has to move 10,000 cubic meter of earth within 10 days. The daily excavation quantities are as shown in figure 1 below. Summing all the daily excavation quantities through any particular day gives the cumulative quantity by that day. For example, by the end of day 5, the cumulative quantity is the sum of excavation on days 1, 2, 3, 4 and 5. That is = 200 + 600 + 1000 + 1400 + 1800 = 5000 The shape of S- Curve can be seen by connecting the points at the end of each days cumulative production as shown in figure 2.
Figure 1
Figure 2
MR Gelal FPM
LINE OF BALANCE
Line of Balance is a graphic technique used for project planning and control to depict timequantity relationships. They apply best to linear and repetitive operations such as tunnels, pipelines, highways and building projects. The vertical axis typically plots cumulative progress or percentage completed for different systems of a project, such as the structural, electrical, mechanical and other trade sub contractors on a high-rise building. The horizontal axis plots time. An example may be, clearing, excavation, stringing, welding, pipe laying, and backfill operations on a pipeline. As long as the slopes are either equal or decreasing as one moves to the right, the project should proceed satisfactorily. However, if early scheduling shows one operation proceeding too rapidly, with a high slope compared with those preceding it, the time and location of the first conflicts become rapidly apparent. To illustrate this, figure 3 shows the eighth operation starting to conflict with the seventh, when each is about 70% complete. 100%
Time
MR Gelal FPM
Activity
A B C D E F G H
Duration
4 3 2 2 7 3 8 8
Predecessors
A A B B C D E, F
Followers
B D F G H H -
D B E Start
A
End C F H
MR Gelal FPM
Milestone Chart
A Milestone Chart is an improved version of a bar chart in which some of the limitations of bar chart are eliminated. As Henry Gantt invented it, it is called Gantt Milestone Chart. Combined activity bar charts can be converted to milestone bar charts by placing small triangles at strategic locations in the bars to indicate completion of certain milestones within each activity or group of activities as shown in figure below. A milestone implies some specific stage or point where major activity either begins or ends, or cost data become critical. Figure (a) shows a bar chart of a project, which involves four tasks or activities or jobs viz. Task I, Task J, task K and Task L and figure (b) shows the corresponding Milestone Chart. It may be seen that in a milestone chart the long time activities or jobs or tasks are identified in terms of specific events or milestones which are plotted against the time scaled indicating their accomplishments by specified times. Each bar in a milestone chart again represents an activity or job or task and all the bars taken together represent the entire project. A milestone chart shows relationship between the milestones within the same activity or job or task. It may be seen from fig. (b) that Milestone 2 cannot be started until milestone 1 has been accomplished. Thus as compared to bar chart better control can be achieved with the help of a milestone chart, but it still possesses the same deficiency that it does not depict the interdependencies between the various tasks or the relationship between the milestones of different tasks.
MR Gelal FPM
MR Gelal FPM
Cost variance CV
Cost Variance CV, is the difference of Budgeted Value of Work performed (Earned Value) and Actual Cost of Work Performed. It can be expressed as:
CV= EV-ACWP
Negative value of CV indicates Cost Overrun. In the above example, CV is, = NRs. 750, 000- NRs. 900, 000 = NRs. (-) 150, 000 The project is NRs. 150, 000 over budget!
Cost Performance
Cost Performance can be obtained by dividing Earned Value EV by Actual cost of Work Performed ACWP. It can be expressed as:
Schedule Variance SV
Schedule Variance SV (In cost terms), is the difference of Budgeted Value of Work performed (Earned Value) and Budgeted Cost of Work Schedule (BCWS). It can be expressed as:
SV= EV-BCWS
Negative Value of SV indicates time overrun. In the above example, SV is, SV (In cost terms)= NRs. 750,000- NRs. 850, 000 SV (In cost terms)= NRs. (-) 100, 000 The Project is equivalent of NRs. 100,000 behind schedule.
Schedule Performance
Schedule Performance can be obtained by dividing Earned Value EV by Budgeted Cost of Work Schedule BCWS. It can be expressed as:
Contact us
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INFORMATION TECHNOLOGY
INFORMATION TECHNOLOGY
Flow Diagram
PMIS supports information sharing and cooperative work among various business entities (headquarter/field, customer/architect/supervisor/constructor/affiliates) and provides management information to managers during projects. The knowledge management system is supported by managing results after the completion.
Conceptual Design
The PMIS server resides at headquarter office while each site accesses the server to process the tasks of each site. The various outputs or reports are stored in the server, and these will be used for management information. Employees at each site can download the drawings from the server for immediate use, so that information sharing is available among headquarter/site/affiliate/customer.
ERP
ERP
ERP Information HR/Payroll ERP manager Business Management Rentals Finance/ Accounting Material Management Construstion Management
Strategy
Site manager Integrated UI
Site information Drawings/ documents Drawing management Specification management Received/ Sent document management Conference Records
PMIS(Construction)
Construstion management Process photos Schedule management Quality management Constructio status Headquarter processes Construction status report Business performance report Bill collection report Withdrawal project reports
Integrated DB
Headquarters
PMIS is ideal system for all companies which intend to implement business management system prior to introduction of ERP as well as the construction company who needs comprehensive management of information and outputs within the entire lifecycle from beginning to end of the construction site and a business management system enabled by IT prior to ERP implementation.
Site report, Project management information such as Site status, problems, profit/loss Administrators of Business division EKP Project monitoring & control
HR Cost
Community Board Headquarter mail Site mail Electronic approval Site Data management with integrated DB
PMIS(Construction related)
Site information Drawing/document Management Construction management Headquarter Work management Resource management Quality/Safety/Environment Community
Architect
Site
Construction Status Report - Work report - Safety/Quality management - Process management - Construction Drawing/Specification - Video conferencing, cctv - Test running
Internet
Supervisor
EKP
Affiliates
Electronic Approval E-mail Knowledge management Provide optimized function for each site: - Personalization of site tasks
Headquarters
PMIS
Affiliates
Additional functions Options
e - Contracting Electronic tax invoices Work personnel management Web camera,CCTV Videoconferencing
Construction site
Architecture site
Machine site
Electricity site
Overseas site
Management Information
Site Information
Site Overview Organization Chart Report Issues Construction status Shortcoming Reasong Overcome plans
Contract Information
Contract status Subcontracting status Affiliates information
Sales/Profit Status
Sales summary Profit / Loss summary
Resource Status
HR status Outsourcing status Material status
Drawing/Document Management
By project File Search
Site Information
Business Overview Organization Chart - Headquarter, Site - Customer - Affliates Birds eye view Real-time site monitoring Emergency Communication netwoork
Drawing/Document Management
Architectural drawings Construction drawings Specifications Received documents Sent documents Conference records management Document folder
Construction Management
Site photograph management Schedule management Process status Shortcomings and remedies Schedule management Process management Process photographs
Headquarter
Site status - Contract details - Achievements - Plan / Performance Business performance Bill Collection report Cancellations estimation (within 3 months) Business report data
Resource Management
HR management - Plan/Status Material management - Plan/status Equipment management - Plan/status
Quality/Safety /Environment
Quality training/inspection Safety training/inspection Environmental training/inspection Safety cost management Safety organizations Disaster status
System Management
WBS management OBS management Material code management Equipment code management Job code management Position code management Graphs Hardcopies
Lotfi K. Gaafar
Based on Introduction to work study. 3rd ed. International Labor Office, Geneva, 1992. October 03 Lotfi K. Gaafar 1
Work Study
Work Study is the systematic examination of the methods of carrying on activities so as to improve the effective use of resources and to set up standards of performance for the activities being carried out.
October 03 Lotfi K. Gaafar 2
Method Study
Method study examines the way a task (changing the clutch on a car, preparing a flower bed for planting, cleaning a hotel room) is done. The industrial engineer has an eye on operational efficiencies and costs, quality of processes, service reliability, staff safety etc. Method study techniques are applicable from factory/workshop manufacturing to cabin crew activities on an international flight and office clerical work.
A collection of techniques used to examine work - what is done and how it is done - so that there is systematic analysis of all the elements, factors, resources and relationships affecting the efficiency and effectiveness of the work being studied.
October 03 Lotfi K. Gaafar 3
Supervisor
Workers
October 03
Lotfi K. Gaafar
October 03
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Make them feel that it is not their fault. Make them understand the purpose and techniques of work study.
October 03
Lotfi K. Gaafar
Mostly affected by work study. A personal challenge. Responsibilities are taken away.
October 03
Lotfi K. Gaafar
Never give a direct order to a worker. Always refer workers questions to the supervisor. Never express opinions to workers. Dont allow workers to get you to alter decisions made by the supervisor.
Seek the supervisor advice whenever possible. Always be introduced to workers by the supervisor.
October 03
Lotfi K. Gaafar
l l
Workers feel that the management cares for them. Workers discover that there are managers who highly understand their job. Improving the feeling of confidence. Workers are more able to carry out their jobs.
October 03
Lotfi K. Gaafar
It will change their familiar work methods. Many workers resent being timed. Fear of being fired.
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10
Problem Solving
Problem definition
l l l l
statement of purpose, goal, objective criteria of judging successful solution output requirements completion date constraints or specifications description of the present method review problem definition and criteria
Lotfi K. Gaafar 11
Analysis of problem
l l l
October 03
Problem Solving
Search for possible solutions
l l l l l
identify the basic cause that creates problem; eliminate all unnecessary work combine operations or elements change sequence of operations simplify the necessary operations in terms of criteria and original specification
Evaluation of alternatives
l
October 03
Lotfi K. Gaafar
12
Problem Solving
Recommendation for action
l l
written reports to senior managers presentations to senior managers and shop floor employees development of soft skills, listening, negotiating, target relevant groups
Lotfi K. Gaafar 13
Marketing recommendations
l
October 03
October 03
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14
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15
Method Study
To Simplify the job and develop more economical methods of doing it
by collecting data or by direct observation by Challenging purpose, place, sequence, and method of work new methods drawing on contributions of those concerned results of different alternative solutions
new method and present it new method and train persons in applying it and establish control procedures
16
October 03
Lotfi K. Gaafar
Poor use of resources Bad layout Bottlenecks Inconsistent quality High fatiguing work Excessive overtime Employees complaints
Lotfi K. Gaafar
17
October 03
Key profit- generating operations Key costly operations Repetitive work Long travels Excessive overtime
Lotfi K. Gaafar
18
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10
One operation or a sequence The whole operation or part Which aspect: worker, materials, equipment, etc.
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Increased production rate Reduced cost Less labor, materials, or equipment Improved quality Improved safety Reduced scrap Improved standards of cleanliness
Lotfi K. Gaafar
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11
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Record- Symbols
Operation (Make ready, Do, Put away)
Select
24
12
Record- Symbols
Operation (Make ready, Do, Put away)
Select Record Examine Develop Evaluate Define Install Maintain
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25
Record- Symbols
Select Record Examine Develop Evaluate Define Install Maintain
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26
13
Record- Symbols
Select Record Examine Develop Evaluate Define Install Maintain
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Record- Symbols
Select Record Examine Develop Evaluate Define Install Maintain
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14
Record- Symbols
Select Record Examine Develop Evaluate Define Install Maintain
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30
15
Switch Rotor
Lotfi K. Gaafar 31
October 03
Record- Example
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16
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17
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18
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19
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20
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21
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22
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23
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24
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Develop
New Designs Multidisciplinary Teams Worker Involvement Quality Circles
Examine Select Record
October 03
Lotfi K. Gaafar
50
25
Evaluate
Multiple Improvement Ideas Consider costs, benefits, and drawbacks Report (ABC, Accurate, Brief, and Clear) Example
Examine Develop Evaluate Define Install Maintain Select Record
October 03
Lotfi K. Gaafar
51
Define
The written standard practice Prepare a written standard practice, also known as an "operative instruction sheet". This serves several purposes
Select
1. It records the improved method for future reference. 2. It can be used to explain the new method to management, supervisors and operatives. It also advises all concerned, including the works engineers, of any new equipment required or of changes needed in the layout of machines or workplaces. 3. It is an aid to training or retraining operatives. 4. It forms the basis on which time studies.
October 03 Lotfi K. Gaafar
52
26
Define
The written standard practice outlines in simple terms the methods to be used by the operative. Three sorts of information will normally be required: (1) The tools and equipment to be used and the general operating conditions. (2) A description of the method. The amount of detail required will depend on the nature of the job and the probable volume of production. For a job which will occupy several operatives for several months, the written standard practice may have to be very detailed, going into finger movements. (3) A diagram of the workplace layout and, possibly, sketches of special tools, jigs or fixtures.
October 03 Lotfi K. Gaafar
Select Record Examine Develop Evaluate Define Install Maintain
53
Define
October 03
Lotfi K. Gaafar
54
27
Install
Installation can be divided into five stages, namely: (1) Gaining acceptance of the change by management. (2) Gaining acceptance of departmental supervision. the change by the
Select Record Examine Develop Evaluate Define
There is no point in trying to go any further if this approval and acceptance have not been obtained. (3) Gaining acceptance of the change by the workers and their representatives. (4) Preparing to make the changes. (5) Controlling the changeover.
October 03 Lotfi K. Gaafar
Install Maintain
55
Install
Training May use films to demonstrate the old and the new methods. Films are particularly valuable when retraining. Develop the habit of doing the job in the correct way. Train to follow a numbered sequence illustrated on a chart. Learning curves In the first stages of learning, rests between periods of practice should be longer than the periods of practice themselves. When the operative has begun to grasp the new method and to pick up speed, rest periods can be very much shorter. Nursing the new method.
October 03 Lotfi K. Gaafar 56
Select Record Examine Develop Evaluate Define Install Maintain
28
Install
October 03
Lotfi K. Gaafar
57
Maintain
workers should not be permitted to slip back into old methods, or introduce elements not allowed for, unless there is very good reason for doing so. To be maintained, a method must first be very clearly defined and specified. Assign a specialists permanently. Formal review.
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29
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30
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31
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32
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33
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Office Layout
Office layout study should consist of the following steps:
Record details of the major systems in use in the office. Record details of the clerical procedures that support those systems. Examine the working methods of those procedures and carry out a basic method study of each one. Carry out a capacity assessment of each part of the procedure Analyze volumes of output and question the senior managers to discover likely future trends. Identify communication and contact paths and frequencies. Design individual workstations ( ergonomics) From volume and capacity data, calculate total workstation requirements. Decide on basic type of layout. Identify any "external" constraints. Draw up a schematic layout Investigate available hardware solutions Discuss the provisional layout with both the users Modify the layout in accordance with the results of discussions and prepare the proposed layout.
October 03 Lotfi K. Gaafar 68
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Events Services
Project Management
I don't like the sound of all those lists he's making - it's like taking too many notes at school; you feel you've achieved something when you haven't. -Dodie Smith, I Capture the Castle, 1948 Discuss Critical Chain An email-based discussion group Frequently Asked Questions about Critical Chain-based project Management Related links: Check Out the Following Links for More About the TOC Approach to Project Management: Critical Chain and Risk Management Protecting Project Value from Uncertainty -- Project management is the practice of turning uncertain events into certain promises. If so, then project management is an extended excersie in risk management. The core concepts underlying Critical Chain-based project management directly support risk management and are described in this paper, expanded from one presented at PMI's 2001 National Symposium. Getting Out From Between Parkinson's Rock and Murphy's Hard Place -This first link will bring up a paper based on a poster presentation originally given at the 1998 New Jersey PMI Chapter's annual symposium, honored with a "best of the show" award by attendees, and later turned into an article published in PMI's PM Network magazine.
http://www.focusedperformance.com/toptenpm.html
27/07/2009
Page 2 of 3
3) Irrational promises made due to a failure to take into account the statistical nature of project networks. (More...) 4) Insufficient identification of dependencies necessary to deliver the project. (More...) 5) Focus on (and active management of) only a portion of what should be the full project -- a true bottom-line value adding outcome for the sponsoring organization. (More coming...) 6) Reliance on due-date, train-schedule, and actualagainst-budget-to-date performance to drive project performance, resulting in the wasting of any safety included in the project (to account for 2 and 3 above) and in the effects of Parkinson's Law -- Work will expand to fill (and exceed) the time allowed. The whole concept of "time allowed" is a major culprit. (More...) 7) Wasting of resources through underutilization because they aren't the "best resource" for the job. (More coming...) 8) Wasting of the "best" resources through overutilization, multi-tasking, and burn-out. (More coming...) 9) Delivering original scope when conditions/needs change. Flip-side: accepting changes to scope without sufficient analysis of impact on the project (or on other projects). (More coming...) 10) Multi-tasking, multi-tasking, multi-tasking, multitasking, and multi-tasking. Commonly thought of as a key problem in multi-project environments, where resources are expected to address tasks from different projects in a coincident time-frame, multi-tasking also impacts single project durations (and wastes safety) when dedicated resources are expected to wear several hats. (More... and more... and more...)
Program Management -Turning Many Projects into Few Priorities with TOC -This link will lead to a paper on the key attributes of a TOC MultiProject Management environment. (Most projects are performed by resources shared with other projects. It can be deadly to ignore the resulting interactions, no matter how well you manage single projects.) This paper was originally presented at PMI's Global Symposium in Philadelphia in October of 1999 and is included in the proceedings of that conference. Audio tapes of the presentation are also available from PMI. Project Portfolio Management - The First Cut is the Kindest Cut One of the common problems faced by projectoriented organizations is having too many projects relative to their capacity. Therefore, one of the first things that needs to be done is to determine what can be done is to determine what should be done . . . and what should not be done . . . Consumption of Effort and Conservation of Energy for Project Success -- This link will lead to an essay on the necessity for managing protective capacity in multi-project environments to get the most organizational throughput from the efforts of project resources.
"Quick and Dirty" Commentary . . . Critical Chain Basics A Critical Chain Schedule The Sooner You Start, The Later You Finish Multitasking Multiplies Lead Time
http://www.focusedperformance.com/toptenpm.html
27/07/2009
Page 3 of 3
Who is FP?
Web Log You can reach Focused Performance at: 601 Route 206, Suite 26-451, Hillsborough, NJ 08844 Voice: 908-874-8664 Contact Focused Performance
Miscellany
http://www.focusedperformance.com/toptenpm.html
27/07/2009
Project Information
John is a new Project Engineer with ABC and is in charge of a Flood Water Conservation (High Dam) project. Before coming to work with ABC, he worked for three years with a good management consultant firm as an on-site Engineer for high dam construction. Johns previous experience is more on the technical engineering for dam construction such as concrete placing procedures, soil mechanics etc. He knows his weaknesses in the construction management aspects of this project and makes an effort to talk to ABCs experienced Project Engineers and learn more from them as often as he can. Project is a turnkey type with contract duration of 2 years. Hydrological study, geo-technical study, surveying, design, drawing and detail costing are over. Site (excavation, piling, etc.), structural and concreting works are now to execute by ABC. Other work items may be subcontracted either for labor only or all costs depending upon the nature of these works. John has seven foremen and one engineer working with him. Of the eight foremen, Bob, Neil and Peter are highly experienced senior foremen with ABC. Scott, Tom and Michel are new foremen with no experiences. Carl is an experienced senior foreman that John had brought along from his former company. Dave, the Engineer, is a fresh graduate who has been sent by ABC to work with John.
Question
Based on the provided information, what do you think about the likelihood of the project being completed on time? Please provide four good reasons to support your thinking.
Home Assignment
1. Choose a project of your own convenience. Develop a Work Breakdown Structure (WBS) for the project. Note that the WBS should have minimum three distinct levels. 2. A project consists of 16 activities having their predecessor relationship as follows: (a) A is the first activity of the project. (b) B, C and D follow A and can be done concurrently. (c) E and G can not begin until C is completed and can be performed simultaneously.. (d) F is the immediate successor to activities B and E. (e) H and K run in parallel, and both succeed G. (f) L succeeds F and H. (g) I and J are immediate successor activities to activity D. (h) M and N are immediate successor to I and K. However, both M and N can be performed concurrently. (i) Activities O and P are the last activities. Activity O is the immediate successor to N and L. activity P is the immediate successor to M and J. Draw the AOA network and number the events. 3. A project consists of following activities with their durations and precedence relationship as presented in tabular form below. Activity Precedence Duration A 3 B A 15 C 5 D C 20 E A 5 F A 1 G F 25 H G 10 I H, K 3 J B 5 K J 10 L B 1 M L 10 N D, E 10 O I, M, N 10 Draw AON diagram indicating ES, EF, LS, LF and earliest finish time of the project. Also find out the Critical Path and calculate the total and free floats of each activity. 4. Briefly discuss the status and difficulties of Project Planning and Implementation in Nepal. What are your suggestions for improvement?
Assignment 1
1. Why do projects fail in Nepal? Give your suggestions for improvement. 2. What do you mean by Project Environment? Describe the different types of project environments and explain how they influence the project.
Assignment 2
1. What do you mean by Project Monitoring and Evaluation? What are the status and practices of Project M& E in Nepal? 2. What is Project control? Discuss the Project Control Cycle.
Assignment 3
1. Define Optimistic time estimate, Pessimistic time estimate and Most likely time estimate. Differentiate clearly between most likely time estimate (tL), mean time (tm) and expected time (tE). 2. What is a Gantt Bar Chart? A project consists of 8 activities A, B, C, D, E, F, G and H with their times of completion as follows: Activities Duration (weeks) A 2 B 4 C 2 D 4 E 6 F 4 G 5 H 4 The precedence relationship is as follows: A and B can be performed in parallel C and D cannot start until A is complete. E can not start until half the work of activity C is complete F can start only after activity D is complete. G succeeds C. H is the last activity, which should succeed E. Draw the bar chart. What is the total time of completion of the project? If there is increase of 2 weeks in time of completion of activity A, what will be the corresponding increase in the total time of the completion of the project. 3. What are different types of Project Organizations? Give a brief description of the advantages and disadvantages of each.
Assignment 4
1. What is Monitoring and Evaluation of Project? Give a brief description of Project M& E system of HMG, Nepal.