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PROJECT MANAGEMENT

PROJECT
MANAGEMENT

SUBMITTED TO,
PROF. VIJU NAVARE

COMPILED BY,
NISHA MEHBUBANI - 73
MAYUR CHUG - 63
JATIN PARWANI - 88
RONAK TOTLANI - 116
MADHURI SHYAMDASANI - 110
AMIT NARANG
1 - 79
PROJECT MANAGEMENT

CONTENTS

Sr.
Particulars Page no.
no.

1 Introduction on Project n‟ Project Management 3–4

2 Role of a Project Manager 4–6

Project life cycle


 Initiation
3  Planning 6–7
 Execution
 Control

Techniques for Planning, Scheduling and Control of Project


 Gantt Charts
 Network Techniques
4 7 – 11
i. Critical Path Method
ii. Programme Evaluation and Review Technique
 Crashing Networks

Risk management
 Risk Identification
5 11 - 13
 Risk Assessment
 Risk Response Planning

6 References 13

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I. INTRODUCTION
A project is “a unique endeavor to produce a set of deliverables within clearly
specified time, cost and quality constraints”. Projects are different from standard business
operational activities as they:
i. Unique
ii. Time scale
iii. Budget
iv. Resources
v. Risk
vi. Change
“Project Management is the skills, tools and management processes required to undertake
a project successfully”. Project Management comprises:
i. A set of skills. Specialist knowledge, skills and experience are required to
reduce the level of risk within a project and thereby enhance its likelihood of
success.
ii. A suite of tools. Various types of tools are used by project managers to
improve their chances of success. Examples include document templates,
registers, planning software, modeling software, audit checklists and review
forms.
iii. A series of processes. Various management techniques and processes are
required to monitor and control time, cost, quality and scope on projects.
Examples include time management, cost management, quality management,
change management, risk management and issue management.

1. Characteristics of a project

i. Purpose: A project involves a single, definable purpose, end item, or result,


usually specified in terms of cost, schedule and performance requirements.
ii. Complexities: Project complexity often arises from the complexity of
advanced technology, which may introduce new and unique problems.
iii. Uniqueness: Every project is unique in that it requires ding something
different than was done previously. Even in “routine” projects variables such
as laws, labor market, public services, and local utilities make each project
different. A project is a onetime activity, never to be exactly repeated again.
iv. Unfamiliarity: Given that a project differs from what was previously done, it
also involves unfamiliarity. It may encompass new technology and for the
organization undertaking the project, may rise the risk & uncertainty.
v. Impermanence: Projects are temporary activities. Once the goal is achieved,
the organization is disbanded or reconfigured to begin work on a new goal.
vi. Lifecycle: The projects pass through several distinct phases, called the project
lifecycle. The tasks, the people, organizations, and other resources change as
the project moves from one phase to the next.

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2. Project goals
Virtually every project has 3 overriding goals:
i. Budget: The budget is the specified or allowable cost for the the project.
ii. Schedule: The schedule includes the time period over which the work will be
done and target date for when it will be completed.
iii. Performance requirements: The performance requirements specify what is
to be done to reach the end item or final result.

3. Project management: the person, the team, the system

a. The Project Manager:


i.Accountable for the whole project
ii.Responsible for planning, directing & integrating all efforts towards achieving
project goals.
b. The Project team:
i. Teamwork is crucial for success of a project as a single cohesive team can
achieve the desired results
ii. Teams often cut across different functional areas across the organization
c. The Project Management system:
i. Provides for “Integrative planning and control”
ii. Permits integration of “vertical” and “horizontal” elements of project
organizations
iii. Vertical here corresponds to tasks in the projects & Horizontal corresponds to
functional units within the project.

4. Apollo space program:


The Apollo program was the American spaceflight
endeavor which landed the first humans on the Moon. The
goal was accomplished during the Apollo 11 mission on
July 20, 1969. The mission was unprecedented in nature
given the unfamiliarity of the lunar environment, the
magnitude of the effort & resources required. The
reputation of the entire country & NASA was at risk with
this mission.

II. ROLE OF A PROJECT MANAGER

1. Clear goals and objectives:


A project without a goal or objectives is baseless. So, this indicates the importance of
goals and objectives. Therefore, goals and objectives provide a framework or path towards
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which the organization has to run. It must be ensured that the goals of all functional
departments are integrated effectively.

2. Proper flow of communication:


Interaction with the customer and ensure that (S) he is satisfied is the major concern in the
project management. Not only customers but also the upper management, the Interaction with
the upper management is necessary to make them commit to the success of the project. A
proper flow of communication would enable timely completion of job with less repetition and
confusions.

3. Effective integration system:


In project management, the project manager has to ensure that all the functional
departments of the organization are effectively integrated. The basic motto behind this is that
all the needs and requirement and goals of the entire functional department will be addressed
and it well ensure non occurrence of confusions and misunderstandings, thereby achieving
the goals and objectives.

4. Effective formation and implementation of project ideas:


Every organization prepares number of project ideas. But the question is how many of
them are effective and promising, which can be ensured with an effective idea formation.
Effective idea formation makes its implementation promising. Even implementation of the
idea is most difficult task as compared to the idea formation, because it is affected by the
number of factors internal or external to an organization.

5. Acquisition and allocation of resources:


There is end number of resources available in the organization such as raw material,
human resources, technology, etc which are scarce and costly in nature. Therefore, the
organizations must ensure a proper acquisition (i.e. grabbing the resources and its proper
allocation also. This will ensure an optimum utilization of resources in the organization.

6. Ensuring coordinated and motivated team:


Ensure that the team members stay focused on the objective and remain motivated
throughout the project cycle. A well motivated, communicated and coordinated team ensures
proper flow of the project. Therefore, a project manager needs to make a team of motivated
people to ensure the goal attainment.

7. Preparing milestones:
The project manager needs to do a good job of arriving at various phases of the project
and having milestones to signify the completion of each of this phase. The project manager
has to ensure what sort of reviews need to be conducted during the various phases of the
project and who would be responsible for performing these reviews.

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8. Identifying, managing and controlling risks:


Envisioning the possible risks, which could have adverse impact on the project and
coming up with contingency plan is what the major role played by the project manager here.
He/she need to handle the risks in a professional way whenever it happens to ensure the
success of the project.

9. Cost management:
Cost management refers to an activity of cost estimation and then comparing it with the
actual cost of the project. Higher the cost, higher the price of a commodity in the market.
Arriving at an optimal project plan, avoiding resource conflicts and controlling cost of the
project helps to make a project most cost effective.

10. Time management:


Early on in the planning phase the project manager needs to arrive at the task duration for
each of the major tasks in the project. This (S) he does with the help of project leads and
other team members in addition to using historical data from similar projects done in the past.
The manager needs to have the adequate buffer in terms of task duration.

III. PROJECT LIFE CYCLE (PLC)

1. Initiation Stage
The Project Initiation Phase is the 1st phase in the Project Management Life Cycle, as it
involves starting up a new project. We can start a new project by defining its objectives,
scope, purpose and deliverables to be produced. We can hire the project team, setup the
Project Office and review the project, to gain approval to begin the next phase.

2. Planning Stage
It involves creating of a set of plans to help guide the project team through the execution
and closure phases of the project.

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The plans created during this phase will help to manage time, cost, quality, change, risk
and issues. They will also help manage staff and external suppliers, to ensure that we deliver
the project on time and within budget.

3. Execution Stage
In this phase, we will build the physical project deliverables and present them to the
customer for signoff. The Project Execution Phase is usually the longest phase in the project
life cycle and it typically consumes the most energy and the most resources. To enable
ourselves to monitor and control the project during this phase, we will need to implement a
range of management processes. These processes help us to manage time, cost, quality,
change, risks and issues. They also help us to manage procurement, customer acceptance and
communications.

4. Closure Stage
In this phase, we will formally close the project and then report its overall level of success
to our sponsors. Project Closure involves handing over the deliverables to our customer,
passing the documentation to the business, cancelling supplier contracts, releasing staff and
equipment, and informing stakeholders of the closure of the project. After the project has
been closed, a Post Implementation Review is completed to determine the project‟s success
and identify the lessons learned.

IV. PROJECT PLANNING, SCHEDULING, AND CONTROL


TECHNIQUES
1. Gantt Charts/Scheduling charts/ Horizontal Bar charts
i. Indicates what must be done and when it must be done. Every activity has a start date
and an end date. The progress of the project is mapped on the chart by shading the
horizontal bars.
ii. Easy to understand, Low cost and efficient for small projects. But it does not show
inter-relationships and dependencies among the activities. Example: - Construction of
a house.

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2. Network Scheduling Techniques

i. A Network Diagram makes use of circles and arrows to represent the planned
relationships and dependencies among the activities of a project. The activities must
be completed in a specified sequence as depicted in the network diagram in order to
successfully complete the project.
ii. An activity is a task that when performed, completes a part of the project. When all
activities are completed sequentially in the correct manner, the project is complete.
iii. An event is a milestone/accomplishment within the project. An activity always begins
and ends with an event. Events depict the start and end times of an activity. Events do
not consume resources. Example of Network Diagram of construction of house.

A. CPM – Critical Path Method


i. Used for projects that must be completed at the earliest to avoid the rising costs.
Example; construction of dam, bridges, etc.
ii. It is a quantitative technique. The precedence relationships between the activities and
the mutual dependence are described in detail.
iii. Identifies the most critical path in the project.
iv. Drawing CPM Network: -

a) Structural Analysis
 List of Activities.
 Drafting of the network.
 Numbering of events and activities.

b) Time Analysis
 Determination of „D‟.
 Progressive and Retrogressive computation of time.
 Calculation of Early and Late Start/End of activities.
 Assessment of critical path.
 Assessment of Floats/Slack.

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Example, construction of stadium for Commonwealth Games.

B. PERT – Program Evaluation and Review Technique

i. Used for non-repetitive projects that has never been done before and will not be done
again in precisely the same manner. Eg, War strategies, Mission to Moon, etc.
ii. Very accurately estimates the time required to complete a proposed project.
iii. The scheduling is detailed and logical.
iv. It is a very efficient controlling system because it takes into consideration all the
probable roadblocks that might arise during the project time-line.
v. CPM is deterministic in nature. But PERT, is probabilistic in nature. PERT computes
the time using 3 time variables viz., Optimistic time (To), Pessimistic time (Tp) and
Most-likely time (Tm). The average of these 3 probabilistic time variables is Expected
time (Te).

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3. Network Crashing
Involves reducing the project completion time without increasing the cost beyond the given
budget.

Example, crashing the final activities involved in construction of Commonwealth Games


stadium. Without crashing time required = 16 weeks and cost = 35 lacs. Target time of
completion = 10 weeks and Budget = 45 lacs.

ACTIVITY NORMAL CRASH NORMAL CRASH TIME


TIME TIME COST COST COST
RATIO
RESTROOMS 6 weeks 4 weeks 10 lacs 14 lacs 2 lacs /
week
SEATS 4 weeks 3 weeks 5 lacs 8 lacs 3 lacs /
week
PLUMBING 3 weeks 2 weeks 4 lacs 5 lacs 1 lacs /
week
FINISHING & 8 weeks 6 weeks 9 lacs 12 lacs 1.5 lacs
CLEANING / week
ELECTRICALS 7 weeks 4 weeks 7 lacs 8 lacs 0.33
lacs /
week

TOTAL 35 lacs 47 lacs

Steps in crashing: -

i. Determine the Time-Cost Ratio for each activity on the network.


ii. On the critical path – identify the activity which has the smallest time-cost ratio.
Crash this activity.
iii. Find if there is any change in the critical path, i.e., has any other path become critical.
If yes, then calculate the time-cost ratio for the new critical path.
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iv. Repeat steps 2 and 3 – till the activities are crashed to reduce the project duration to
the desired time period.
v.
ACTIVITY TIME COST NEW TIME NEW COST
RATIO
RESTROOMS 2 lacs / week 4 – CRASH 14 LACS
SEATS 3 lacs / week 4 – NORMAL 5 LACS
PLUMBING 1 lacs / week 2 – CRASH 5 LACS
FINISHING 1.5 lacs / week 6 – CRASH 12 LACS
ELECTRICALS 0.33 lacs / week 4 – CRASH 8 LACS
TOTAL 44 LACS

Budget = 45 lacs. Cost of project completion in 10 weeks = 44 lacs. Means increase in cost is
9 lacs instead of 12 lacs (if all activities were crashed).

V. RISK MANAGEMENT

1. Meaning
The notion of project risk involves two concepts:
i. The likelihood that some problematical event will occur.
ii. The impact of the event if it does occur.

Risk is a joint function of the two; that is,


Risk = f (likelihood, impact)

2. Three major aspects of risk management


A. Risk identification:

There are many ways to identify project risks. One method proceeds according to project
chronology; that is, the risks associated with phases and events throughout the project life
cycle such as project feasibility, contract negotiation, engineering concept, or system
definition, design, and development are separately identified. Each phase has its unique set of
problems.
Risk can also be classified according to type of work or technical function, such as
engineering risks associated with product reliability and maintainability, or production risks
associated with the ability to manufacture a product, the availability of raw materials, or the
reliability of production equipment. Risk in projects can be classified as internal risks and
external risks (sources):-

a. Internal Risks:
Internal risks originate inside the project. Project managers and stakeholders usually
have a measure of control over these. Two main categories of internal risks are market risk
and technical risk.
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Market risk is the risk of not fulfilling either market needs or the requirements of
particular customers.
Technical risk is the risk of not meeting time, cost, or performance requirements due
to technical problems with the end-item or project activities.

b. External Risks:

The other main risk category is external risks, which includes 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, Supplier relations, Government regulations,
Weather (adverse) etc.

Identification Techniques: -
Among the techniques for pinpointing risks are analogy, checklists, WBS analysis, process
flowcharts and brainstorming.

B. Risk assessment:

Categorized into four, they are:

a. 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. Numerical values and qualitative ratings
are sometimes used interchangeably.

b. Risk Impact

What would happen if a risk hazard materialized? The result would be called risk impact.
Risk impact in projects is specified in terms of time, cost, and performance measures. 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. Risk
impact also can be expressed as a numerical measure between 0 and 1.0, where 0 is “not
serious” and 1.0 is “catastrophic.”
For example, insufficient numbers of skilled labour to staff a project has the impact of
extending the schedule or preventing the project from meeting user requirements.

c. Risk consequence

Risk consequence = (Impact) * (Likelihood)

d. Risk Priority

Projects are subject to numerous risks, yet only a few are important enough to merit
attention. Once the risk consequences for a project have been computed, they are rank-
ordered and those with moderate-to-high consequences are given a second look. Project team
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members, managers, subcontractors, and customers review them to ensure everyone‟s


awareness so that the appropriate risk responses can be planned.

C. Risk response planning:

Risk response planning addresses the matter of how to deal with risk. In general, the ways
of dealing with an identified risk include transferring the risk, altering plans or procedures
to avoid or reduce the risk, preparing contingency plans, or accepting the risk.

VI. REFERENCES
1. Production Management by Ashwathapa and Bhat.
2. Operations Management by Chase, Jacob and Aquilino.
3. Project Management by Nicholas.

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