PROJECT MANAGEMENT SECTION

MODULE

MEBy
E 508
Eng. H. Chingosho
{PhD cand, MSc. Renewable Energy Engineering, MSc Manufacturing Systems Engineering, B.Eng., MZweIE (ZIE), E.C.Z (ZIM), CEM ®, AEE, USA)}

Module A
(The first section summarizes the major points of Module A and then develops the planning, scheduling
and project modules more fully.)

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1. PROJECT MANAGEMENT
It is concerned with planning and controlling of projects: eg construction projects. It is not only concerned
with planning and controlling, but also with the management of people too. The Project leader is a very crucial
and important person.

What are the characteristics of a project?

 A unique, one-off exercise

 A risk venture

 Creates change

 Constraint restricted (e.g. quality, time and money)

 Involves a range of specialist functions

 Involves the simultaneous co-ordination of activities

 Coexists with other exercises/operations

1.1 Characteristics of a project- summary

1. Defined objective
2. Time scale
3. Resources
4. Budgets
5. Risk/change
6. Cross functional

1.2 What influences a project?

TIME, PEOPLE, SPECIFICATIONS, BUDGET

1.3 Concepts

Although each project has a unique set of goals, there is enough commonality at a generic level to permit the
development of a unified framework for planning and control. Experts are needed to collect and interpret data,
negotiate contracts, arrange for resources, and deal with the welter of technical and organizational issues that
impinge on both the cost and schedule.

A typical project contains:

 Project initiation, selection, and definition

Identification of needs [e.g., by quality function deployment (QFD)]
Selection of the “most promising” alternatives
“Selling” the configuration and getting approval

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 Project organization
Structuring the work content of the project into a work breakdown structure (WBS)
Allocation of WBS elements to participating organizations

 Analysis of activities
Definition of the project’s major tasks
Development of a list of activities required to complete the project’s tasks
Development of precedence relations among activities
Development of a network model
Development of milestones
Updating of the network and its elements

 Project scheduling
Estimation of activity duration’s
Estimation of activity performance dates

 Resource management
Allocation of resources among project/activities

 Technological management
Development of a configuration management plan
Total quality management (TQM)

 Project budgeting
Of direct and indirect costs
Monitoring actual cost

 Project execution and control

Detection of deviations in cost, configuration, schedule, and quality
Implementation of corrective plans

 Project termination
Evaluation of project success

1. Project initiation, selection, and definition. The trigger can come from any number of sources, including a
current client, in personnel, or a proposed request from an outside organization. If the need is considered
important and feasible solutions exist, the need is translated into technical specifications through such
techniques as QFD (quality function deployment).

2. Project organization. Many entities, ranging from private firms and research laboratories to public utilities
and government agencies, may participate in a particular project. Define the work content, and to array them
hierarchically in a treelike form known as the organizational breakdown structure (OBS) is similarly
represented. In the OBS, the line of communication between and within organizations are defined.

3 Project scheduling. The expected execution dates of activities are important from both a financial
(acquisition of the required funds) and operational (acquisition of the required resource) point of view.
4. Resource management. Activities are performed by resources so that before any concrete steps can be
taken, requirements have to be identified.

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It is important, however, to remember that successful implementation of the initial schedule is subject to
unexpected to random effects that are difficult (or impossible) to predict. Sources of uncertainty, such as a
downturn in the economy, labor unrest, technology breakthroughs or failures, and new environmental
regulations, may always be a cause for alarm.

Project control systems are designed with three purposes in mind: (i) to detect current deviations and to forecast
future deviations between actual progress and the project plans. (2) to trace the source of these deviations, and
(3) to support management decision aimed at putting the project back on the desired course.

The information gleaned from this process is compared to the updated plans across all aspects of the project.
Because deviations in one area (e.g., schedule overrun) may affect the performance and deviations in other
areas (e.g., cost overrun), it is important to look at things from a systems point of view.

1.4 Life Cycle of A Project

A synopsis follows.

1. Conceptual design phase.

2. Advanced development phase.
3. Detailed design phase.
4. Production phase.
5. Terminate phase
6. Operational phase

2.1 Organizational Life Cycles

Projects exhibit life cycles as they move through five distinguished phases of development.

New products, services, or roles for the organization have their genesis in ideas evolving within the
organization. Typically, such systems ideas go through a distinct life cycle, i.e. a natural and pervasive order of
thought and action. In each phase of this cycle, different levels and varieties of specific thought of action are
required within the organization to assess the efficiency of the system. The generic phases of this cycle serve to
illustrate the life-cycle concept and its importance.

The conceptual phase is one in which the idea is conceived and given preliminary evaluation.

2.1.1. Conceptual Phase

TABLE 1
CONCEPTUAL PHASE
________________________________________

1. Determined existing needs or potential deficiencies of existing systems.

2. Establish system concepts which provide initial strategic guidance to overcome existing or potential
deficiencies.

3. Determine initial technical, environmental, and economic feasibility and practicability of the system

4. Examine alternative ways of accomplishing the system objectives.

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5. Provide initial answers to the questions:
a) What will the system cost/
b) When will the system be available?
c) What will the system do?
d) How will the system be integrated into existing systems?
6. Identify the human and non-human resources required to support the system.

7. Select initial system designs which will satisfy the system objectives.

8. Determine initial system interfaces

9. Establish a system organization.

2.1.2. The Definition Phase

The fundamental purpose of the definition phase is to determine, as soon as possible and a accurately as
possible, cost, schedule, performance, and resource requirements and whether all elements, projects, and
subsystems will be fit together economically and technically.

Decisions that are made during and at the end of the definition phase might very will be decisions to cancel
further work on the system and redirect organization resources elsewhere.

TABLE 2
DEFINITION PHASE
________________________________________

1. Firm identification of the human and nonhuman resources required

2. Preparation of final system performance requirements.

3. Preparation of detailed plans required to support the system.

4. Determination of realistic cost, schedule, and performance requirements

5. Identification of those areas of system where high risk and uncertainty exist, and delineation of plans
for further exploration of these areas.

6. Defining of intersystem and intersystem interfaces.

7. Determination of necessary support subsystems

8. Identification and preparation for the documentation required to support the system, such as policies,
procedures, do descriptions, budget and funding papers, letters, memoranda, etc.

________________________________________

The acquisition process involves such things as the actual setting up of the system, the fabrication of hardware,
the allocation of authority and responsibility, the construction of facilities.

2.1.3. Production Phase

TABLE 3.

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PRODUCTION PHASE

________________________________________

1. Updating of detailed plans conceived and defined during the preceding phases

2. Identification and management of the resources required to facilitate the production processes, such as
inventory, suppliers, labor, funds etc.

3. Verification of system production specifications

4. Beginning of production, construction, and installation

5. Final preparation and dissemination of policy and procedural documents.

6. Performance of final testing to determine adequacy of the system to do the things it is intended to do

7. Development to technical manuals and affiliated documents describing how the system is intended to
operate.

8. Development of plants to support the system during its operational phase.

________________________________________

2.1.4. The Operational Phase

The fundamental role of the manager of a system during the operational phase is to provide the resource support
required to accomplish system objectives. This phase indicates the system has been proved economical,
feasible, and practicable and will be used to accomplish the desired ends of the system.

TABLE 4
OPERATIONAL PHASE

1. Use of the system results by the intended user or customer

2. Actual integration of the project’s product or service into existing organization systems.’

3. Evaluation of the technical, social, and economic sufficiency of the project to meet actual operating
conditions.

4. Provision of feedback to organization planners concerned with developing new projects and systems

5. Evaluation of the adequacy of supporting systems.

________________________________________

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2.1.5 The Divestment Phase

The divestment phase is the one in which the organization gets out of the business which it began with the
conceptual phase. Every system-be it a product system, a wagons system, a management system, or whatever –
has a finite lifetime.

TABLE 5
DIVESTMENT PHASE

1. System phasedown.

2. Development of plans transferring responsibility to supporting organizations.

3. Divestment or transfer of resource to other systems.

4. Development of “lessons learned from system” for inclusion in qualitative-quantitative data base to
include:-

a) Assessment of image by customer

b) Major problems encountered and their solution
c) Technological advances
d) Advancements in knowledge relative to department strategic objectives
e) New or improved management techniques
f) Recommendations for future research and development
g) Recommendations for the management of future programs, including interfaces with associate
contractors.
h) Other major lesson learned during the course of the system

3. PROJECT COSTING AND BUDGETING

3.1 Pricing Out The Work

Logical pricing techniques are available in order to obtain detailed estimates. The following thirteen steps
provide a logical sequence in order to better control the company’s limited
resources. These steps may vary from company to company.

Step 1: Provide a complete definition of the work requirements.

Step 2: Establish a logic network with checkpoints.
Step 3: Develop the work breakdown structure
Step 4: Price out the work breakdown structure
Step 5: Review WBS costs with each functional manager
Step 6: Decide upon the basic course of action
Step 7: Establish reasonable costs for each WBS element
Step 8: Review the base case costs with upper-level management
Step 9: Negotiate with functional managers for qualified personnel
Step 10: Develop the linear responsibility chart
Step 11: Develop the final detailed and PERT/CPM schedules
Step 12: Establish pricing cost summary reports
Step 13: Document the result in a program plan.

 A detailed cost breakdown for each WBS element. If the work is priced out at the task level, then there
should be a cost summary sheet for each task, as well as rollup sheets for each project and the total
program.

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 A total program manpower curve for each department. These manpower curves show how each
department has contracted with the project office to supply functional resources. If the departmental
manpower curves contain several “peaks and valleys”, then the project manger may have to alter some
of his schedules to obtain some degree of manpower smoothing. Functional managers always prefer
manpower-smoothed resource allocations.

 A monthly equivalent manpower cost summary. This table normally shows the fully burdened cost of
r the average departmental employee carried out over the entire period of project performance. If
project cost have to be reduced, the project manger performs a parametric study between this table and
the manpower curve tables.

 A yearly cost distribution table. The table is broken down by WBS element and shows the yearly (or
quarterly) costs that will be required. This table, in essence, is a project cash flow summary per
activity.

 A functional cost and hour summary. This table provides top management with an overall description
of how many hours and dollars will be spent by each major functional unit, such as a division. Top
management would use this as part of the forward planning process to make sure that there are
sufficient resources available for all projects. This also includes indirect hours and dollars.

 A monthly labor hour and dollar expenditure forecast. This table can be combined with the yearly cost
distribution, except that it is broken down by monthly, not activity or department. In addition, this
table normally includes manpower termination liability information for premature cancellation of the
project by outside customers.

 A raw material and expenditure forecast. This shows the cash flow for raw materials based upon
vendor lead times, payment schedules, commitments, and termination liability.

 Total program termination liability per month. This table shows the customer the monthly cost for the
entire program. This is the customer’s cash flow, not to the contractor’s. The difference is that each
monthly cost contains the termination liability for man-hours and dollars, on labor and raw materials.
This table is actually the monthly costs attributed to premature project termination.

3.2 Life Cycle Costing (LCC)

Life cycle costs are the total cost to the organization for the ownership and acquisition of the product over its
full life. This includes the cost for R&D production, operation, support, and, where applicable, disposal. A
typical breakdown description might include:

R&D costs: The cost of feasibility studies: cost/benefit analyses; system analyses; detail design and
development; fabrication, assembly, and test of engineering models, initial product evaluation, and associated
documentation.

Production cost: The cost of fabrication, assembly and testing of production models, operation and
maintenance of the production capability and associated internal logistic support requirements, including test
and support equipment development, spare/repair parts provisioning, technical data development, training, and
entry of items into inventory.

Construction Cost: The cost of new manufacturing facilities or upgrading existing structures to accommodate
production and operation of support requirements.

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Operation and maintenance cost: The cost of sustaining operational personnel and maintenance support;
spare/repair parts and related inventories; test and support equipment maintenance, transportation and handling,
facilities, modifications, and technical data changes, and so on.

Production retirement and phaseout cost: The cost of phasing the product out of inventory due to obsolescence
or wear out, and subsequent equipment item recycling and reclamation as appropriate.

Life-cycle cost analysis is the systematic analytical process of evaluating various alternative courses of action
earlier on in a project, with the objective of choosing the best way to employ scarce resources. Life cycle cost
is employed in the evaluation of alternative design configurations, alternative manufacturing methods,
alternative support schemes, and so on. This process includes:

 Defining the problem (what information is needed)

 Defining the requirements of the cost model being used
 Collecting historical data/cost relationships
 Developing estimates and test results.

Successful application of LCC will:

 Provide downstream resource impact visibility

 Provide life cycle cost management
 Influence R&D decision-making
 Support downstream strategic budgeting

There are also several limitations to life cycle cost analyses. They include:

 The assumption that the product, as know, has a finite life cycle
 A high cost to perform, which may not be appropriate for low-cost/low-volume production
 A high sensitivity to changing requirements.

Life cycle costing requires that early estimates be made. The estimating method selected is based upon the
problem context.

 Information Estimating Methods.

 Judgement based on experience
 Analogy
 SWAG method
 ROM method
 Rule of Thumb methods
 Formal Estimating Methods
 Detailed (from industrial engineering standards)
 Parametric

Life cycle cost analysis is an integral part of strategic planning since today’s decisions will affect tomorrow’s
actions. Yet there are common errors made during life cycle cost analyses.

 Loss or omission of data

 Lack or systematic structure
 Misinterpretation of data
 Wrong or issued techniques
 A concentration on insignificant facts

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 Failure to asses uncertainty
 Failure to check work
 Estimating the wrong items

3.3 Cost Control

Cost control should be performed by all personnel who incur costs, on merely the project office.

Cost control implies good cost management, which must include:

 Cost estimating
 Cost accounting
 Project cash flow
 Company cash flow
 Direct labor costing
 Overhead rate costing
 Others, such as incentive, penalties, and profit-sharing

The following might be a management policy guide for a program or project manger;

 Approving all estimates, and negotiating all estimates and the definition of work requirements with the
respective organizations
 Approving the budget, and directing distribution on budgeting of available funds to all organizational
levels by program element.
 Defining the work required and the schedule.
 Authorizing work release. He/she may not, however, authorize work beyond the scope of the contract.
 Approving the procuring work statement, the schedules, the source selection, the negotiated price, and
the type of contract on major procurement.
 Monitoring the functional organization’s performance against released budgets, schedules, and
program requirements.
 When cost performance is unacceptable, taking appropriate action with affected organization to modify
the source requirements or to stimulate corrective action within the functional organization so as to
reduce cost without changing the contracted scope of work.
 Being responsible for all communications and policy matters or contracted programs so that no
communicative directive shall be issued without the signature or concurrence of the program manager.

3.4 Cost Control Problems

No matter how good the cost and control system is, problems can occur. Below are common causes of cost
problems.

 Poor estimating techniques and/or standards, resulting in unrealistic budgets.

 Out-of-sequence starting and completion of activities and events
 Inadequate work breakdown structure
 No management policy on reporting and control practices
 Poor work definition at the lower levels of the organization
 Management reducing budgets or bids to be competitive or to eliminate “fat”
 Inadequate formal planning that results in unnoticed, or often uncontrolled, increases in scope of effort.
 Poor comparison of actual and planned costs.
 Comparison of actual and planned costs at the wrong level of management
 Unforeseen technical problems

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 Schedule delays that require overtime or idle time costing
 Material escalation factors that are unrealistic

Cost overruns can occur in any phase of project development. Below are the most common causes for cost
overruns:

 Proposal phase
 Failure to understand customer requirements
 Unrealistic appraisal of in-house capabilities
 Underestimating time requirements
 Planning phase
 Omissions
 Inaccuracy of the work breakdown structure
 Misinterpretation of information
 Use of wrong estimating techniques
 Failure to identify and concentrate on major cost elements
 Failure to assess and provide for risks
 Negotiation phase:
 Forcing a speedy compromise
 Procurement ceiling costs
 Negotiation team that must “win this one”
 Contractual phase:
 Contractual discrepancies
 SOW different from project team

Design phase

 Accepting customer requests without management approval

 Problems in customer communications channels and data items
 Problems in design review meetings

Production phase

 Excessive material costs

 Specifications that are not accepted
 Manufacturing and engineering disagreement

3.5 Project Budget

3.5.1. Introduction

An organization’s budge (usually expressed in dollars) represents management’s long range, midrange, and
short-range plans. The budge should contain a statement of prospective investments, management goals,
resources necessary to achieve those goals, and a timetable. Its structure should match that of the organization.

In particular, a functional structure shows an organization’s investments and expenditures grouped in three way
(1) development of new products (engineering) (2) production of existing products (manufacturing and (3)
campaigns for new or existing products (advertising marketing) A project-oriented structure, on the other
hand, reveals the organization’s planned costs and expected revenues for each component of an
organization’s budget.

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The budget of any specific project is tied to the organizational budget. When an organization is involved in
several projects, the budgets of these projects are coordinated centrally. It is important to combine the budget of
each project to avoid the risk of steering the organization into financial difficulties. This issue constraint in the
decision making process.

In a matrix organization, the budget links the functional units to the projects. On a specific project the cost of
resources invested by the functional unit is charge against the project’s budget. This link is one of the interfaces
between the functional structure and the project aspect of the matrix organization. In this chapter we discuss the
principles used in developing, presenting, and using the budget in a project environment. The major focus is on
the relationship between the organizational and the individual budgets of each project undertaken.

A well-designed budget is an efficient communication channel of management. Through the budget, managers
(at all levels) are advised of their organizational goals and the resources allocated to their units.

A detailed budget defines expected costs and expenditures, thus setting a framework of constraints within which
each manager is expected to operate. These constraints represent organizational policy and goals.

The well-structured budget is a yardstick that can be used to measure the performance of organizational units
and their managers. Managers who participate in the budget development process commit themselves, their
subordinates, and their unit’s resources to the goals specific in the budget. It is also a useful tool for identifying
deviations from plants, the magnitude and these deviations, and their source. Therefore, it is part of the baseline
for cost and schedule control systems.

In addition, the budget’s structure depends on the organizational structure, while its level of detail depends on
the planning horizon for which it was prepared.

3.5.2. Budget Type

The long-range, or strategic, budget defines an aggregate level of activity for the organization over a period of
several months to several years.

By using the budgeting process, management establishes long-range goals, schedules to achieve these goals,
and the available resources.

A midrange, tactical budget is a detailed presentation of the long-range budget and covers 12 to 24 months. It is
updated quarterly. The task to be performed provides the basis of the entries. A rolling planning horizon is used
so that every time (eg. Quarterly) the midrange budget is updated, a budget for the ensuing quarter is added
while the budget for the recently completed quarter is deleted. The tactical budget details the monthly-expected
costs of labor, materials, and overhead for each task. In a functional organization, the tactical budget projects
the expected costs and revenues of each product family and the expected costs of each functional department.

A project’s budget contains several dimensions.

The first relates to the tasks and activities to be performed. The primary effort is to establish the relationship
between cost and time for scheduled tasks and activities.

The second dimension is based on the organizational breakdown structure. Each task is assigned to an
organizational unit in the OBS.

The third dimension is the work breakdown structure. Each task is assigned to a WBS element in the lowest
level of the hierarchy. Over time, however, they are distributed among the WBS elements at their
corresponding levels.

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As each organization develops its own budgeting procedures, several points can help make the budget an
efficient vehicle for planning, as well as a standard channel of communication.

3.6 Project Budget And Organizational Goals

The budget of an organization reflects management’s goals. These goals and organizational constraints
determine decision on project selection, resource allocation, and the desired rate of progress for each project.
The budget depends on the perceived organizational mission and the sector to which the organization belongs
(private, government, or non-profit). It also depends on internal and external environmental factors.

3.6.1. Competition:

Most organizations in the private sector need a competitive edge to survive. External challenges force
continued improvement within the organization and occur in various ways, such as the following;

3.6.2 Profit

The ability to generate in the short and long run is essential to most organizations in the private sector.
Selection decisions are frequently based on a project’s expected profits.

3.6.3 Cash Flow:

The organizational cash flow is an aggregate of all routine activities combined with other ongoing
projects. When unexpected cash flow problems arise, projects that generate quick cash become high-
priority items in the budget allocation process. In some cases an organization may prefer projects that
begin to produce revenues and immediately, albeit small, over projects that begin to produce revenues
and higher profits in the distant future. In the short run, to improve the cash position of the firm,
activities that generate income (like payment milestone) may be budgeted earlier than other activities
that have the same or an ever shorter slack.

3.6.4. Risk

Uncertainty and risk may influence budgetary decisions. An organization that tries to avoid the risk of
delays may budget its projects according to an early start schedule. This, in turn, may lead to early
expenditures and cash flow problems. Organizations that try to minimize the risk of cost overruns
sometime budget each activity as its lowest level. If a longer activity duration occurs, the lowered risk
of a cost overrun can translate into an increased risk of delays.

The selection of new projects my also be influenced by risk assessment. In this case, the project’s
portfolio, to which the organization is committed, is affected by the organization’s perceived risk level.

3.6.5. Technological Ability:

Some organizations in the public sector are willing to budget high-tech projects in order to acquire
new, more advanced technologies.

3.6.6. Resources:

Each project’s budget is a monetary representation of the value of resource allocated to perform that
project. If adequate resources are not available, little can be accomplished, so whatever effort is
expended will have negligible effect.

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3.6.7. Perceived Needs:

Project selection and budgeting depend largely on organizational goals. In the government sector,
especially in defense, perceived needs (or new threats) are a driving force. Cost and risk
considerations might be secondary when national security or public health are considered.

4. PROJECT PLANNING, CONTROL & REVIEW

4.1. Project Planning

Project control starts with project planning, since the project plan is the key to the development of
adequate control procedures and mechanisms. Starting with a statement of work, performance
standard specifications, and associated documentation, the objective of a project planning phase is
achieved by.

Determining what is to be done and translating it into a work breakdown structure (WBS). The WBS, as the
name implies, it a technique for breaking down a total job into its component elements which can be displayed
to show the relationship of the elements to each other and the whole.

Establishing a project team based on the major tasks. This project team, working with the existing functional
organizations, determines the who.....? of the project-functional effort.

Coupling the tasks and resources, which determine the who does what through the development of a linear
responsibility chart.

Creating the key planning and control documentation, for subsequent derivation of schedule and cost criteria
against a single framework.

Developing an event-logic network and, perhaps, associated CPM or PERT analysis. This network is then
translated into a schedule, taking into consideration the resource constraints and other projects’ priorities. This
then defines the when of the project-function effort.

Establishing manpower, facilities, and subcontractor requirements by task. From these factors, task and subtask
cost estimates are developed for project control.

Finally, after integration of the component elements, and after resolution of problems, teh overall plan is
submitted for general manager approval.

4.2 Specifications Of The Project Plan

A project plan, or some such document outlining applicable plans and planning tasks, is an essential tool of
project management. It provides the necessary guidance for all the participants in developing the project as it
gains in maturity and it forms the basis for the project operations. The project package plan will be described in
detail in the following sections.

1. Project summary
2. Project schedules
3. Project management
4. Marketing intelligence
5. Operational concept
6. Acquisition
7. Facility support
8. Logistic requirements

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9. Manpower organization
10. Executive development and personnel training
11. Financial support
12. Project requirements
13. General information
14. Proprietary information

4.2.1. Project Summary

The project manager originates this section. It will be short in length and is prepared primarily with sufficient
information to ensure understanding by top-level organizational officials who are interested in the key features
of the project and what the project is intended to accomplish.

4.2.2. Project Schedules

The project manager prepares these schedules with the assistance of participating organizations.

The project schedules should provide a generalized picture of the major milestones, key events, or critical
actions which the project manager deems vital to the execution of the project. If detailed scheduling is required,
event logic network techniques or individual-action Gantt charts can be used.

4.2.3. Market Intelligence

A market is defined as the place where buyers and sellers exchange goods. A market for the project is that
environment where the product on service of the project is demanded.

This section will include a current analysis of the competitive situation in the market (e.g. the competition to be
faced by another company’s product) and an estimate of all such potential capabilities to be encountered in the
future probably using swot analysis.

4.2.4. Operational Concept

The operational concept will be originated by the project manager and contains in summary form the objective
and a clear identification of the project or capability that it will replace or enhance. To be included are
conceptual statements covering:

Objectives
Limitations
Expected use
Readings
Support
Organizational Structure
Work force
Personnel
Training and education
Facilities
Availability dates

4.2.5. Acquisition

Portrays the development test-production plan to achieve the project objectives as described in section 1. This
includes:

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Project description and performance, reliability, and maintainability

Subsystem description: Essentially the same information will be shown here as for the above system.

Personnel area subsystem: A detailed explanation of the human factors of the project and how these factors
integrate into the system.

Background, difficulties, and approach.

Test and evaluation data.

4.2.6. Facility Support

This section gives a description of the real facilities (plants, access roads, easements) required to support the
project.

4.2.7. Logistic Requirements

This section will be originated by the organizational logistician and encompasses a comprehensive summary of
the logistic support required for the project. It will include:

Logistics concepts, principles, and requirements in the areas of materials, supplies, spare parts, repairs,
engineering, transportation, materials handling, quality control, test support, data processing equipment, support
facilities (e.g., terminal facilities) and medical services.

4.2.8. Work Force And Organization

This section is concerned with the degree of work-force allocations for the project. It will become the basis for
the recruitment action of the personnel department. Thi section will contain:

Projections of work-force requirements by type (salaried, wage-rated) and the skill required.

Strategy for locating qualified people

4.2.9 Executive Development And Personnel Training

This section will be originated by the education and training office and is designed to provide a comprehensive
summary of the personnel and training required to support the project.

4.2.10 Financial Support

The project manager, in collaboration with the finance officer, will be responsible for developing implementing
instructions, ensuring overall consistency of data, and preparing and collating the section.

4.2.11. Project Requirements.

This part will consist of a consolidation of the organizational requirements which generated the requirement for
the project. Included would be such documents as a resolution of the board of directors.
4.2.12. Proprietary Information

Policy regarding the public release of information about the project. Instruction concerning any special handling
of the equipment or documentation of the project.

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4.3 Critical Project Dimensions

Three critical general dimensions which can be used for assessing the progress of most projects are cost, time,
and performance. Cost refers to the resources being expended. One would want to assess cost sometimes in
terms of an expenditure rate (e.g. dollars per month) and sometimes in terms of total cumulative expenditures
(or both). Timeless of progress in terms of a schedule which has been set up. “Is the project on schedule?” or
“How many days must be made up?” reflect this dimension on progress.

The third dimension of project progress is performance, i.e, how is the project meeting its objectives or
specifications?

CONTROL

The need for personnel with various kinds of expertise will similarly vary.

4.3.1. Project Control

In managing a project, the cost, scheduling, and technical performance must be controlled throughout the life
cycle. Control of the project requires that adequate plans be formed, suitable standards developed, and an
information system set up that will enable the project to be monitored through comparisons of planned
performance with actual performance. When the inevitable deviations of actual performance from planned
performance occur, corrective action can be taken to realign the project resources in order to “get back on track”

4.3.2. Control Systems

In a control system, a number of elements are found.

1. An objective or function, is the purpose of the system.

2. Inputs consisting of information, material, or energy
3. Outputs, which are the end results of the conversion of inputs
4. A sequence, which is the precedence of actions for converting inputs into outputs.
5. Resources, both human and material, which assist in the conversion of inputs into outputs
6. Feedback loops, which permit the adjustment of inputs and outputs to accomplish systems
objectives.
7. An environmental setting within which communication can be effected to responsible officials
to reallocate resources.

4.3.3. Defining Control

Control is the restraining function of a system (control is the objective of feedback and is defined as the
monitored state of a system a regulatory means.

There are at least two levels of control. Anthony, et al, refer to these as “management control” Management
control is the process by which it is ensured that activities and resources are directed toward the efficient and
effective accomplishment of objectives as specified in the planning process. Operational control, on the other
hand, is “the process of assuring that specific tasks are carried out effectively and efficiently”

The “operational control” level is more concerned with the assessment of specific task accomplishment.

4.3.4. The Need For Control Systems

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Control systems advise the project manager of the extent of deviations and the recommended corrective action
or alternative course of action which will put things on course.

4.3.5. Prerequisites Of A Control System

Regardless of the complexity of the project, however, certain basic conditions must be met in order to have a
workable control system.

It must be understood by those who use it and obtain data from it,
It must relate to the project organization, since organization and control are interdependent, neither can
function properly without the other.
It must anticipate and report deviations on a timely basis so that corrective action can be initiated
before more serious deviations actually occur.
It must be sufficiently flexible to remain compatible with the changing organizational environment.
It must be economical, so as to be worth the additional maintenance expense.
It should indicate the nature of the corrective action required to bring the project back into consonance
with the plan.
It should reduce to a language (word, pictures, graphs, or other models) which permits a visual display
that is easy to read and comprehensive in its communication.
It should be developed through the active participate of all major executives involved in the project.

Cost is a consideration obviously related to size and complexity.

The project plan schedule provides several reports which are used by the project manager and others to monitor
and gauge the project’s progress. Some of these reports include:
1. A milestone report/barchart, which is a list of approximately 35 activities that marks the completion of
major work efforts.
2. Monthly analysis report, which is a written report prepared by the project planner providing a
discussion of the most pressing schedule problems.
3. A work action report, which is a listing of all activities that have to be started, maintained in progress,
or completed within a preset interval.
4. A procurement status report, which is a listing of the detailed procurement scheduling activities
associated with the procurement specifications.
5. The primary equipment report, which provides a listing of major equipment activities such as drawing
and delivery dates related to the nuclear steam system supplier and the turbine generator supplier.
6. A project cost-control program, which covers the preparation and maintenance of current and detailed
cost information for the project.
7. A project estimate, which is an essential element providing for budget monitoring and cash-flow
projections. This estimate is based on plant layout drawings, flow diagram, instrumentation drawings,
electrical one-line drawings, and equipment sizing.
8. Also within the project cost control program is a cash-flow system, which provides total integration
with the project schedule, project budget, and field cost-accounting system.

4.4 Project Review

Periodic formal reviews effective in comparing progress with the progress plan.

The project review should be accomplished by the project manager in collaboration with key clientele.

5. GROUP DYNAMICS AND TEAMS

5.1. GROUP BEHAVIOUR

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 In this section we examine group behavior and the implications to the PROJECT manager

Definitions
A group is defined as two or more individuals who come together to achieve a particular objective.
Groups are classified as being formal or informal. Formal groups have defined structure, tasks and
objectives. Informal groups have an undefined structure and area response to the need for social
contact. It is possible to further sub-classify groups into the following.

a) Command Group
A command group comprises subordinates who report to a section leader.

b) Task Group
This is an interdisciplinary group which is established to accomplish a specific task.

c) Interest Group
An interest group comprises people who come together to achieve a particular objective although they
are not organizationally aligned e.g. Trade Union.

d) Friendship Group
A friendship group is a social grouping, formed on an informal basis.

Groups form for a number of reasons. These include:

i) security: people believe there is strength in numbers e.g. trade unions

ii) status: people join groups which other people recognize as important
iii) Self-esteem: the inclusion of a person in and an important group increases their self-esteem.
iv) Affiliation: people join a group to fulfil the need for social interaction
v) Power: groups give power to their members e.g. trade unions
vi) Goal achievement: groups can be formed to attach a particular problem.

5.2 GROUP DEVELOPMENT

Group development is a dynamic process. Although groups are in a continual state of change, four specific
phases can be identified.

a) Forming
In this stage members are uncertain of their purposed, the group structure and group leadership. This stage is
complete when members accept their group role.

b) Storming
This stage is characterized by inter-group conflict over the hierarchy and leadership of the group. This phase is
completed when the hierarchy is established.

c) Norming
In this phase close relationships develop and a cohesive group forms. This phase is completed when the
members develop a common acceptance of behavior and expectations.

d) Performing
In this stage the group is relatively stable and functional. The hierarchy and relationships are accepted and the
emphasis is on performance and achievement of the goal

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It is difficult to identify what makes a group effective. Sometimes, the group development passes smoothly
through the four stages identified. In some cases conflict at various stages may be beneficial. Stages may even
occur simultaneously and in some cases the development reverts to a previous stage.

5.2. GROUP STRUCTURE

To understand group structure we must examine three basic concepts: roles, norms and status.

a) Roles

All members of the group assume a particular role. Members may have many roles and the key to
understanding behavior is to identify the role which a person is playing.

Certain attitudes and behaviors are consistent with the role, these create the role identity. People have the
ability to change roles rapidly when the situation demands, e.g. the shop steward promoted to foreman quickly
assumes a pro-management role.
A person’s view of how they should behave in a particular role is termed role perception. Role perception is
base on interpretation of how we believe we are supposed to behave in certain situations.

Role expectations are how we believe others should act in a group situation e.g. what do we consider to be the
role of women in society? Role expectations introduces the psychological contract which is an unwritten,
unspoken agreement between employer and employee concerning each other expectations.

When two or more role expectations are contradictory conflict occurs. Role conflict causes frustration and
tension and when it occurs people generally adopt a formal response or follow guidelines which govern
organizational activities.

b) Norms

All groups have established norms, i.e. acceptable standards of behavior. In a test carried out in a bank wiring
observation room the monitored group comprised a group of men who were given incentive payments
corresponding the their individual output. The test indicated that the output was informally controlled by the
group. The group set a norm which was accepted as being an adequate day’s work. The output of individuals
was controlled by such factors as sarcasm, name-calling and ridicule.

c) Common Norms

Norms develop gradually as group members learn what behaviors are necessary for the group to function
effectively. Common norms which operate in the working environment are performance, effort, dress and
loyalty.

It is interesting to examine how norms develop, Norms are usually established in one of four ways:
a) Statements made by the group leader
b) Historically due to critical events in the group’s history
c) Primacy in which the group follows accepted precedents
d) Carry over in which norms are imported as members join from other groups.

Norms assist the group to survive and assist members to predict the behavior of others. In addition norms
reduce personal embarrassment, as members know how to behave within the group.

d) Conformity

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Members seek continued acceptance by the group and therefore conform to group behavior. Status is defined as
a grading or rank of a member within the group. Status can be formally given by title or informally given by
other members of the group.

Research work on status indicates that low status personnel work smoothly if their actions are initiated by high
status personnel. Similarly if high status personnel believe that their actions are stimulated by lower status
personnel problems may occur. This was demonstrated in the Shyte studies which wee carried out on people
working in a restaurant. Although status is important in a group situation group members must perceive that
status is equitable.

5.3 BEHAVIOUR

A number of variables have been identified which affect group behavior. These include personality, group size
and the similarity between individuals in the group.

a) Personality
The personality characteristics of group members plays an important part in determining group
behavior.

b) Group Size
The size of the group affects the overall behavior of the group. Tests have shown that odd numbers
work best and that five to seven is the optimum group size. It is also clear that the bigger the size of
the group the lower the individual output of members.

c) Similarity of individuals
Heterogeneous groups work better than homogenous groups as they possess a wider skill range and
contain people with more diverse abilities.

5.4 GROUP COHESIVENESS

A number of factors have been identified which influence group cohesiveness. These include:

a) time spent together

b) severity of initiation into the group
c) the group size, small groups are more cohesive
d) external threats increase cohesiveness
e) previous success increases team spirit and the cohesiveness of the group.

Cohesiveness and productivity are linked. A cohesive group is very productive provided that the goals are
clearly defined.

5.5 IMPLICATIONS

An understanding of group behavior is important as people generally work in groups. The importance of roles is
important as it enables the manager to predict behavior. Norms are important as they control the behavior of the
group. Managers may influence norms by teaching or instilling improved norms in the group.

Managers must be aware that status is important within the group and that it must be distributed fairly.

Cohesiveness should be encouraged and the group and organizational goals should be linked.

6. WHAT ARE NETWORK ANALYSIS TECHNIQUES?

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INTRODUCTION

PERT – Program Evaluation & Review Technique CPM – Critical Path Method

 Activity On Arc (AOA) or Activity On Node (AON)

 Identities critical activities (i.e. bottlenecks)
 Illustrate task interrelationships
 Calculates earliest/latest task start times

Project Management can be defined as a process which aims to ensure that a project successfully achieves its
business goals. A project being a unique exercise, in which limited resources are used to achieve predefined
objectives, within cost and time constraints. To achieve each objective requires an approach which addresses
the unique and transient nature of projects. The problem-solving cycle of define, plan, implement and control
focuses on the uncertainty of projects and applies standard management processes.

The planning and management of a project through a schedule allows a manager to assess project feasibility and
coordinate the efforts of those involved. Establishing the overall time to complete a project, together with
identifying the critical activities and specific resources requirements, is crucial in determining the risks and
dynamics of implementation. The time available to undertake each activity, combined with the amount and
difficulty of the work to be completed, strongly influences the nature of the task to be managed. Once under
way, milestone scheduling is essential for good and timely project monitoring and control.

The main purposes for developing a project schedule are:

- to ensure that the objectives are achievable within and resource constraints
- to establish the levels of resources required throughout the project
- to make sure resources are made available when required to ensure focused and consistent
work
- to ensure that activity and project deadlines are met.

This package presents the two main techniques which are predominantly used to plan and control projects. The
use of network analysis, for establishing overall project duration, setting start and finish dates for individual
activities and identifying critical activities, will be discussed. Together with the application of Gantt charts for
determining resource requirements, setting project milestones and monitoring actual project progress.

6.1 LEARNING OBJECTIVES

You should be able to:

(a) Assess the feasibility of a proposed project, in terms of available time and resources.

(b) Identify those tasks within a project which, if delayed, will set-back the completion of the whole
project.

(c) Show diagrammatically the time phased relationship between 1 individual project tasks, and the
occurrence of special events or milestones.

(d) Compare actual project progress against planned and recognize when remedial action is required.

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6.2 NETWORK DIAGRAMS

A network diagram is a mathematical model which represents precedence relationships between individual
tasks, that in total, constitute a project, the critical Path Method (CPM or critical path analysis, CPA) and
Program Evaluation and Review Technique (PERT) are network analysis tools which can be used to study the
precedence relationships. Though originally designed for different applications, CPM and PERT are very
similar and the following discussion does not distinguish between them.

CPM/PERT regards project tasks as activities that take a specified and depicts the precedence relationships
between activities in the form of a network diagram. The diagram uses arrows (--->) to represent activities,
whilst events, which are points in time representing the start and/or finish of activities, are symbolized by
circles (0). The basic rules for producing a diagram are:

1. All activities are labeled above the corresponding arrow, whilst the duration of the activity is shown
below the arrow.
2. All events are numbered sequentially, starting from the left.
3. Time increases from left to right.
4. The network diagram should start and finish at single events.
5. There should be no activities dangling and no loops.

The network diagram below shows the precedence relationship between the activities necessary to release a
contract for the building of a new plant, together with the time estimates for completing each activity (shown in
weeks).

The path with the longest sequence is known as the critical path; i.e. The activity times of all items on this path
are critical to the project completion date. The sum of these activity times is the expected mean time of the
critical path (T) and the earliest completion date for the total project. Other paths will have excess time (or
float), and the float associated with any path is simply the difference between T and the time for the given path.
The critical path for the network in figure 1 is path E (1-2-4-5-6-7-8-) with a total time or T of 36 weeks.
Whilst path C has seven weeks float (i.e. T (36) - Path C (29)). The critical path activities are highlighted on a
network diagram by thicker, bolder arrows.

Path Events Activity Times

A 1-2-3-4-5-7-8 6+8+2+8+6+2 = 32
B 1-2-3-4-5-6-7-8 6+8+2+8+0+8+2 = 34
C 1-2-3-4-6-7-8 6+8+2+3+8+2 = 29
D 1-2-4-5-7-8 6+12+8+6+2 = 34
E 1-2-4-5-6-7-8 6+12+8+0+8+12 = 36
F 1-2-4-6-7-8 6+12+3+8+2 = 31
G 1-2-6-7-8 6+5+8+2 = 21

ACTIVITY 1 For the data shown in the following table.

a) Draw the network diagram and identify all unique activity paths.

b) Identify the critical path.

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 Activity Preceding Activity Activity Time
1-2 - 6
1-2 - 7
2-4 1-2 2
2-5 1-2 3
3-5 1-3 5
3-6 1-3 1
4-7 2-4 3
5-7 2-5,3-5,6-5 6
6-5 3-6 0
6-7 3-6 5

6.3 NETWORK ANALYSIS

In managing projects, it is often useful to know how early or late an individual activity can be started or finished
without affecting the scheduled completion date for the total project.

The earliest start time (ES) for an activity is the total of the durations of all the preceding activities, starting at
the beginning of the network, which lead to that particular activity. This procedure is called a forward pass.
Where two or more paths converge at the start of an activity, the activity’s ES is recorded on the network
diagram by the number in the top left corner of the event circle at the start of the arrow.

The earliest finish time (EF0 for an activity assumes that the activity starts at its ES and takes its expected
duration time i.e. EF+ES+t) and is calculated during the forward pass.

Float is the amount of time an activity can be delayed without delaying the earliest start of any succeeding
activity. Although float is associated with each activity, it really belongs to the path because if an activity uses
up its float, all activities along.

In managing projects, it is often useful to know how early or late an individual activity can be started or finished
without affecting the scheduled completion date for the total project.

The earliest start time (ES) for an activity is the total of the durations of all the preceding activities, starting at
the beginning of the network, which lead to that particular activity. This procedure is called a forward pass.
Where two or more paths converge at the start of an activity, the activity’s ES is determined by the longest total
path duration up to that point. An activity’s ES is recorded o the network diagram by the number in the top left
corner of the event circle at the start of the arrow.

The earliest finish time (EF) for an activity assumes that the activity starts at its ES and takes its expected
duration time t (i.e. EF +ES + t) and is calculated during the backward pass.

The latest finish time (LF) for an activity is that which will not delay the scheduled completion of the project.
An activity’s LF is calculated by, starting at the end of the network, successively subtracting from the scheduled
project completion time, the duration of activities which precede the particular activity. This procedure is called
a backward pass. If two or more paths diverge from an activity, the activity’s LF is determined by the path with
the shortest total time, because that path has the least float. The LF for the last activity is the project completion
time. An activity’s LF is recorded on the network diagram by the number in the top right corner of the event
circle at the end of the arrow.

24
The latest start time (LS) for an activity, which will not delay the project, is LS + LF-t and is calculated during
the backward pass.

Float is the amount of time an activity can be delayed without delaying the earliest start time of any succeeding
activity. Although float is associated with each activity, it really belongs to the path because if an activity uses
up its flow at, all activities along that path become critical. For example, if the float on a path is three days and
an activity takes three days longer than planned, the float for all activities along that path are zero.

For the previous example in figure 1, the complete network diagram is shown in figure 2, together with the
relevant table showing float.

Network analysis shows the sequence and interdependence of activities. It allows the start and finish of each
activity to be determined, together with how much room for maneuver there is if the project is to finish on a
certain date.

ACTIVITY 1. For the data given in ACTIVITY 1:

a) Determine the ES, LS, EF, LF and float for all activities.
b) Redraw the network diagram showing ES and LF for all activities.

Activity Preceding Activity Activity Time

1-2 - 6
1-3 - 7
2-4 1-2 2
2-5 1-2 3
3-5 1-3 5
3-6 1-3 1
4-7 2-4 3
5-7 2-5,3-5,6-5 6
6-5 3-6 0
6-7 3-6 5

6.4 WHAT ARE THE LIMITATIONS OF CPM ANALYSIS?

1. No time scale shown on CPM

2. No resources oriented no tasks or activities against time.

3. Poor communication – difficult to interpret other peoples diagrams.

4. Does not identify milestones, important events.

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7. PROJECT SCHEDULING USING PERT (PROGRAM EVALUATION AND REVIEW
TECHNIQUE)

PERT has several distinguishing characteristics:

 It forms the basis for all planning and predicting; provides management with the ability to plan for best
possible use of resources to achieve a given goal within time and cost limitations.

 It provides visibility and enables management to control “one-of-a-kind” programs as opposed to

repetitive situations.

 It helps management handle the uncertainties involved in programs by answering such questions as to
how time delays in certain elements influence project completion, where slack exists between
elements, and what elements are crucial to meet the completion date. This provides management with
a means of evaluating alternatives.

 It provides a basis for obtaining the necessary facts for decision making.

 It utilizes a so-called time network analysis as the basic method to determine manpower, material, and
capital requirements as well as providing a means for checking progress.

 It provides the basic structure for reporting information.

The result has been the PERT procedure, which, when applied properly, can do the following jobs:

Cut project costs and reduce time scale

Coordinate and expedite planning
Eliminate idle time
Provide better scheduling and control of subcontract activities.
Develop better troubleshooting procedures
Cut the time required for routine decisions, but allow more time for decision-making.

The following management information can be obtained from such a representation:

Impact of late starts

Impact of early starts
Slippage in planning

The crucial path is vital for successful control of the project because it tells management two things.

Because there is no slack time in any of the events on this path, any slippage will cause a
corresponding slippage in the end-date of the program unless this slippage can be recovered during any
of the downstream events (on the critical path)

Because the events on this path are the most critical for the success of the project, management must
take a hard look at these events in order to improve the total program.

7.1. PROJECT COST MODE

26
Network calculations assume TIME as the only measure of effectiveness and that adequate control can be
achieved by controlling the start and finish of activities.

Associate each activity with a “normal duration” and an associated normal cost usually a minimum direct cost.

7.2 SCHEDULING

Project scheduling deals with the planning of timetables and establishment of dates during which various
resources, such as equipment and personnel, will perform the activities required to complete the project.

The scheduling activity integrates information on several aspects of the project, including the estimated duration
of activities, the technological precedence relations among activities, constraints imposed by the availability of
resources and the budget, and if applicable, due-date requirements.

A key milestone identified as an important event in the project life cycles, and may include, for instance, the
fabrication of a prototype, the start of a new phase, a status review, a test or the first shipment.

Key milestones should be defended for all major phases of the project prior to startup. If the milestones are
spread too far apart, continuity problems in tracking and control can arise. On the other hand, too many
milestones can result in unnecessary busywork, over control, confusion, and increased overhead costs.

Some examples with well-defined boundaries include:-

Project kickoff
Requirements analysis complete
Preliminary design review
Critical design review
Prototype fabricated
Integration and testing completed
Quality assurance review
Start volume production
Marketing program defined
First shipment
Customer acceptance test complete.

To apply PERT/CPM, a thorough understanding of the project’s requirements and structure is needed. Four
questions must be answered to begin the modeling process:
1. What are the chief project activities?
2. What are the sequencing requirements or constraints for these activities?
3. Which activities can be conducted simultaneously?
4. What are the estimated time requirements for each activity?

PERT/CPM network provide the following benefits:

They furnish a consistent framework for planning, scheduling, monitoring, and controlling projects.
They illustrate the interdependence of all tasks, work packages, and work units.
They aid in setting up the proper communication channels between the participating organization and
points of authority.
They can be used to estimate the expected project completion dates as well as the probability that the
project will be completed by a specific date.

27
 They identify so-called critical activities which, if delayed, will delay the completion of the enter
project.

They also identify activities with slack that can be delayed for specific periods of time without penalty,
or from which resources may temporarily be borrowed without negative consequences.

They determine the dates on which tasks may be started, or must be started, if the project to stay on
schedule.

They illustrate which tasks must be coordinated to avoid resource or timing conflicts.

They also indicate which tasks may be run, or must be run, in paralleled to achieve the predetermined
completion date.

7.3 STOCHASTIC APPROACH

Only in rare instances is the exact duration of a planned activity known in advance. It is logical to analyze past
data and to construct a frequency distribution of related activity durations.

The beta distribution provides a closer fit to the frequency data.

In project scheduling, probabilistic considerations are incorporated by assuming that the time estimate for each
activity can be derived from three different values:

a = optimistic time, which will be required if execution goes extremely well.

m = most likely time, which will be required if execution is normal

b = pessimistic time, which will be required if everything goes badly

To convert m, a, and b into estimates of the expected value d and variance (v) of the elapsed time required by
the activity, two assumptions are made. The first is that the standard deviation, s (square root of the variance),
equals one-sixth the range of possible outcomes; that is

S = b-a
6

The rationale for this assumption is that the tails of many probability distributions (such as the normal
distribution) are considered to lie about 3 standard deviations from the mean implying a spread of about 6
standard deviations between tails.

The second assumption concerns the form of the distribution and is needed to estimate the expected value, d.
The expected value of the activity duration given by

D = 1 (2m+ (a+b) ﴿ = a+4m+b

3 2 6

7.4 ANALYSIS OF PERT AND CPM ASSUMPTIONS

PERT and CPM are models of projects and hence are open to a wide range of technical criticisms, difficulty in
accurately estimating durations, variances, and costs, validity of using the beta distribution in representing

28
durations, validity of applying the central limit theorem, and the heavy focus on the critical path for project
control.

However, the cost of applying PERT or CMP rarely exceeds 2% of total project cost. Thus this added cost is
generally outweighed by the savings from improved scheduling and reduced project time.

7.5 PRINCIPAL ASSUMPTIONS AND CRITICISMS OF PERT/CPM

1. Assumption: Project activities can be identified as entities, that is there is a clear s

beginning and ending point for each activity.

Criticism: Projects, especially complex ones, change in content over time and therefore a
therefor a network constructed in the planning phase may be highly inaccurate later.

2. Assumption: Project activity-sequence relationships can be specified and arranged in a directed

network.

Criticism: Sequence relationships cannot always be specified beforehand.

3. Assumption: Project control should focus on the critical path.

Criticism: It is not necessarily true that the longest path obtained from summing activity
expected durations values will ultimately determine project completion time. What
often happens as the project progresses is that some activity not on the critical path
becomes delayed to such a degree that it extends the entire project. Attention would
center on those activities that have a high potential variation.

7.6 SUMMARY OF PERT ASSUMPTIONS

Individual task durations are random variables from a beta distribution. Distribution skewed since early
completion is much less common than late completion?

Assume that individual tasks not on the critical path have no effect on expected project durations, nor the
variance. This may not be failed if sub-critical path have expected durations close to expected project durations
as well as high variances. In this case a simulation may be required to determine the distribution of project
duration. In practice a simulation is generally used.

Project completion is normally distributed. Precedence relationships are all ‘finish to start’ strict – no overlaps.

In most projects there are additional constraints that must be addressed such as those associated with resource
availability and the budget.

7.7 PERT CONCLUSION

1. They are useful at several stages of project management from early planning, when selection
alternative programs and procedures, to scheduling phase when laying time and resource schedules and
finally in the operational phase when controlling and measuring actual against planned performance.

2. The techniques are straight forward and easily understood by all levels of employees. Data
calculations though tedious are not difficult. Manual or computer calculations can be done.

3. Network graph is simple and direct avoiding complexity in showing activities of a project and their
inter-relations. Provide an effective tool of communication at all levels.

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4. The calculations focus attention on a relatively small subject of activities in a project, critical for its
completion. Managerial action concentrated on exceptional problems hence more reliable planning
and effective control

5. The network forms a valuable documentation device for a project and its development. It can be used
to provide simple and graphic means of displaying responsibilities of various activities within a
project.

6. They enable manger to reasonably estimate total project costs for various possible completion dates.
The trade-of possibilities enable selection of a near=optimum schedule.

7. Applicable to many types of projects like aerospace development, construction, maintenance new
product introduction, missile count down etc. can be applied at several level which a project is a sub-
system.

8. CPM/PERT programs with resource scheduling and allocation routines help managers to project
resource requirements for any given schedule and best allocation of resources.

9. They can be used as simulation tools enabling manager to project future effects of planned or
unanticipated changes and to take appropriate action when there is need.

8.1 WHAT SKILLS ARE REQUIRED FROM A PROJECT LEADER?

To manage the stakeholders a project leader needs to be:

A negotiator
Assertive
A communicator
Persuasive
A salesman
Politically aware
Persistent
Credible
A networker

8.2 WHAT SKILLS ARE REQUIRED FROM A PROJECT LEADER?

To manage the project, a project leader needs to be:

Analytical
Organized
Flexible
Creative
Patient
Experienced, BUT not necessarily an expert

8.3 WHAT SKILLS ARE REQUIRED FROM A PROJECT LEADER?

To manage the team a project leader needs to be:

A facilitator
Positive
A visionary

30
 A good listener
Able to delegate
Motivated/energetic
Able to set expectations
Supportive

8.4 WHAT ARE THE CHARACTERISTICS OF A PROJECT TEAM?

Cross functional structure

Formal for a specific job
Non – hierarchical
Short term existence
Full and part time members

8.5 WHAT SKILLS DO TEAM MEMBERS REQUIRE?

High quality technical skills

Political awareness
Strong problem orientation
Strong goal orientation
High self-esteem

8.6 WHAT AFFECTS TEAM MEMBERSHIP?

 An individuals experience and skills

 Part time/Full time membership
 Delayed/shortened membership
 teamworking capabilities
 Personal compatibility
 Availability
 Train existing employees
 Recruit
 Hire consultants

8.7 WHAT ARE THE CAUSES AND RESULTS OF CONFLICT?

Organization change
Personality clashes
Threat to status
Contrasting perceptions and views
Problems identified and resolved
Increased creativity and experimentation
Better solutions and greater commitment
Cooperation and team work
Distrust between team member’s low moral

8.8 WHAT ARE THE POTENTIAL CONFLIC OUTCOMES?

INDIVIDUAL’S OUTCOME

WIN WIN-LOSE WIN-WIN

LOSE LOS-LOSE LOSE-WIN

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 LOSE WIN

OTHER PERSON’S OUTCOME

8.9 WHAT IS ASSERTIVE BEHAVIOUR?

Expressing feeling; Asking for favors;

Giving and receiving honest feedback;
Being direct.

Describe the behavior “When you do that ...”

Express your feelings “I feel ...”
Empathize “I understand why you...”
Negotiate a change “I want you to ...”
Indicate consequences “If you do (don’t), I will...”

8.10 WHAT ARE THE TRANSACTIONAL ANALYSIS EGOS?

Parent - Protective, controlling, nurturing,

Critical or instructive.
Refers to policies, standards and rules!
Leardership: Autocratic

. Adult - Rational, calculating, factual or unemotional

Leadership: The appropriate style

. Child - Spontaneous, dependent, emotional,

creative or rebellious.
Looks for approval and rewards
Leadership: Free-rein

8.11 THE PROJECT LEADER

Where do a project leader’s obligation lie?

See it from the leader point of view

* Anybody who has an interest in the project

- “Purse string” holder (we need the power station)
- End user. (We use power station)
- Interface (between user and purse string)
- Suppliers
- Management/employer

* Team
- Full time
- Part time

* Project itself

- Planning
- Review
- Control

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 Time: The quicker you get the product, the better. You will earn more money. E.g.: by the
end of he decade:

Budget: 1 billion dollars

Specification: WCM incorporating ISO 9000
People: affect the success of the project.
External issues: A project is not isolated.

8.12 WHAT DO PROJECT LEADERS HAVE TO INFLUENCE

TIME
EXTERNAL PRESSURES
ORGANISATIONAL POLITICS
PEOPLE
GOVERNMENT
ENVIRONMENT
SPECIFICATION
BUDGE
PERSONAL OBJECTIVES

8.13 WHAT REPRESENTS GOOD PROJECT OBJECTIVES?

. Specific
. Measurable
. Agreed to
. Achievable
. Timely
. Prioritized
. ONE driver

8.14 WHY UNDERTAKE PROJECT PLANNING?

- To assess project feasibility

- Achieve project objectives
- Identify all necessary activities
- Establish all resource requirements
- Ensure focus
- Ensure finely use of resources
- Productivity (Measures)
- Identifying tasks
- Allocate responsibilities

8.15 WHAT DOES PROJECT PLANNING INVOLVE?

- Breaking project down into meaningful tasks

- Establish task duration and precedence
- Assigning resources to each task
- Assigning responsibility for the completion of each task
- Scheduling tasks.

8.16 HOW ARE THE PROJECT TASKS IDENTIFIED?

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 - Establish the required results; quantify objectives
- Focus on the results and work backwards i.e. Z-A
- Ask what tasks have to occur to achieve each event
- Remember tasks are only a means to an end

8.17 HOW DETAILED SHULD THE TASKS BE?

. Detailed enough for the project?

. Sufficiently detailed to be credible.
. So that problems are NOT overlooked
. So that external resources can be co-ordinated
. Remember planning takes time and money

8.18 HOW IS TAK DURATION DETERMINED?

. Break tasks down into measurable actions

. Obtain accurate information
. Use problemalistic time estimates
. Task times are only estimates
. Future tasks affected by previous ones
. The human factor

8.19 WHY DO PROJECTS FAIL?

. Poor project leadership

. Inadequate project leader autonomy
. Poor project control
. Poor team development/organization
. Unrealistic project schedules
. Insufficient resources/team members
. Unclear project goals/objectives
. Weak project sponsorship

8.20 WHY DO PROJECTS SUCCED?

. Team participation in planning

. Project leader committed to: Budgets
Schedules
Performances
goals

. Absence of bureaucracy
. Clearly established success criteria
. Effective status and progress reports

8.21 HOW CAN CONTROL BE REGAINED?

. Reduce project scope

. Subcontract
. Partial delivery
. Incentives for supplied (Bonus)
. Re-negotiate
. Recover later

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8.22 ELEMENTS FOR THE CONTROL CYCLE

Plan – set targets and milestones

Assess and renegotiate
Do:
Review actual against planned.

8.23 CHARACTERISTICS OF A GOOD CONTROL SYSTEM

. Flexible
. -able to react to and report unforeseen changes
. Cost effective
. -cost of control<value of control
. Truly useful
. -satisfy needs of a project not an individual
. Timely operation
. -problems reported whilst it is possible to react
. Simple to operate
. Easy to maintain
. Capable of being extended or changed
. Fully documented.

8.24 WHAT AFFECTS PROJECT PLANS?

. Changes in resource availability

. The adoption of alternate methods/procedures
. Additional information
. More detailed task consideration
. Delays in critical tasks

9. GANTT CHARTS

The Gantt chart, as it is called, enumerates the activities to be performed on the vertical axis and their
corresponding duration on the horizontal axis. It is possible to schedule activities by either early start
or late logic. In the early start approach, each activity is initiated as early as possible without violating
the precedence relations. In the late start approach, each activity is delayed as mush as possible as long
as the earliest finish time of the project is not compromise.

The difference between the start (or the end) times of an activity on the two schedules is called the slack (or
float) of the activity. Activities that do not have any slack are denoted by a black bar and are termed critical.
The sequence of critical activities connecting the start and end points of the project is known as the critical
path, which logically turns out to be the longest path in the network. A delay in any activity along the critical
path delays the entire project. Put another way, the sum of durations for critical activities represents the shortest
possible time to complete the project.

Gantt charts can be modified further to show budget status by adding a column that lists planned and actual
expenditures for each task.

The major limitations of bar graph schedules is their inability to show task dependencies and time-resource
trade-offs. Network techniques are often used in parallel with Gantt charts to compensate for these
shortcomings.

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A Gantt chart is a horizontal time bar chart that can be used for both project planning and control. All activities,
required to be undertaken as part of a project, are displayed on a Gantt chart in the form of thin lines or hollow
bars. The length of each bar being proportional to the estimated duration of the corresponding activity, and
shown against the same timescale as all other activities. The resulting bar chart gives an outline plan of the
timescale for a project. Such a chart clearly and effectively indicates which activities are to take place at any
time, and how the start and finish of each activity is related.

Once a project has commenced, a Gantt chart can be regularly updated to reflect actual project progress. This
can be achieving by drawing a solid bar (or a thick line) representing actual activity work performed, under the
original hollow bar. The completion of each activity is then indicated by vertical line at the right hand end of
the appropriate solid bar. The current date is usually represented by a dotted line that goes vertically across the
bar chart.

The information on a bar chart can be enhanced in a number of ways. For example, an
Additional column can be added to indicate who is responsible for carrying out a given activity. Individual
resource requirements, for an activity, can then be shown on the bar symbol, with the daily, weekly or monthly
totals (depending upon the detail for the bar chart) show on the bottom line. In this way the chart makes it
simple to allocate resources efficiently and identify resource shortages.

In addition, bar charts can identify points or events in a project that relate to a reporting requirement, or the
completion of a large or important activity. These special events are generally referred to as milestones and can
identified on a Gantt chart by diamond below the baseline. A hollow diamond relates to a scheduled milestone,
whilst a solid diamond identifies an achieved milestone.

A project’s critical path can be highlighted on a Gantt chart by listing the critical activities first, thereby
focussing attention.

4. Develop, for the following project, a plan that minimizes both the total project duration and the range
of the number of fitters required throughout the exercise.

Activity Duration (Weeks) Fitters (per week)

1-2 2 10
1-3 4 4
1-4 4 6
2-6 3 3
3-5 2 2
4-6 2 3
5-6 2 10

EXERCISE

As the project manger of a manufacturing system redesign project (incorporating a 5 month feasibility study and
a 6 months implementation period), working to a specified budget and terms of reference, suggest what
meetings and reports you wold organize, over the 11 months period, to monitor and maintain project control in
addition, under the heading of performance, costs and time, identify general reasons which may make it
necessary to take corrective action.

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SUPPLEMENTARY QUESTIONS

1. For the data in the following table construct a network diagram highlighting the critical path. Identify
all activity paths and their associated float.

Activity Duration

1-2 3
1-3 12
1-4 14
2-5 10
3-5 20
3-7 5
4-6 12
5-7 2
6-8 10
7-8 3

2. For the data in the following table construct a network diagram highlighting the critical path and
earliest start and latest finish times for each activity.

Activity Duration

1-2 12
2-3 8
2-4 4
2-6 3
3-5 12
4-5 18
4-6 5
5-7 4
6-7 9
7-8 6

10. ORGANIZATIONAL STRUCTURES

Behaviorists content that there is no one best structure to meet the challenges of tomorrow’s organizations. The
structure used, however, must be one that optimizes company performance by achieving a balance between the
social and the technical requirements. Sociotechnical factors change from situation to situation.

Organizations can be defined as groups of people who must coordinate their activities in order to meet
organizational objectives. The coordination function requires strong communications and a clear understanding
of the relationships and interdependencies among people. Organizational structures are dictated by such factors
as technology and its rate of change, complexity, resource availability, products and/or services, competition,
and decision-making requirements.

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10.1 ORGANIZATIONAL WORK FLOW

In the discussion of organizational structures, the following definitions will be used:

 Authority is the power granted to individuals (possibly by their position) so that they can make final
decisions for others to follow.
 Responsibility is the obligation incurred by individuals in their roles in the formal organization is order
to effectively perform assignments.
 Accountability is the state of being totally answerable for the satisfactory completion of a specific
assignment.

Authority and responsibility can be delegated (downward) to lower levels in the organization whereas
accountability usually rests with the individual. Accountability is the summation of authority and
responsibility.

10.2 TRADITION (CLASSICAL) ORGANIZATION functional

The general manager has beneath him all of the functional entities necessary to either perform R &D or develop
and manufacture a product. All activities are performed within the functional groups and are headed by a
department (or, in some cases, a division head).

10.2.1 Advantages of the Classical Traditional Organization

 Easier budgeting and cost control are possible

 Better technical control is possible
. Specialists can be grouped to share knowledge and responsibility
. Personnel can be used on many different projects
. All projects will benefit from the most advanced technology (better utilization of scarce
personnel)
 It provides flexibility in the use of manpower
 It provides a broad manpower base to work with
 It provides continuity in the functional disciplines; policies, procedures, and lines of responsibility are
easily defined and understandable.
 It readily admits mass production activities within established specifications
 It provides good control over personnel, since each employee has one and only one person to report to
 Communication channels are vertical and well established
 Quick reaction capability exists, but may be dependent upon the priorities of functional managers.

The functional managers maintain absolute control over the budget.

 Staffs can maintain expertise on a given project without sharing key personnel.
 Very rapid reaction time is provided
 Personnel demonstrate loyalty to the project; better morale with product identification.
 A focal point develops for out-of-company customer relations.
 There is flexibility in determining time (schedule), cost, and performance trade-offs.
 Interface management becomes easier as unit size is decreased.
 Upper-level management maintains more free time for executive decision-making.

10.3.2 DISADVANTAGES OF THE PRODUCT ORGANIZATIONAL FORM

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 Cost of maintaining this form in a multiproduct company would be prohibitive due to duplication of
efort, facilities, and personnel, inefficient usage.
 There exists a tendency to retain personnel on a project long after they are needed. Upper-level
management must balance workloads as projects start up and are phased out.
 Technology suffers because, without strong functional groups, outlook of the future to improve
company’s capabilities for new programs would be hampered (i.e., no perpetuation of technology)
 Control of functional (i.e., organizational) specialists requires top-level coordination.
 There is a lack of opportunities for technical interchange between projects.
 There is a lack of career continuity and opportunities for project personnel.

10.4 MATRIX ORGANIZATIONAL FORM

The matrix organizational form is an attempt to combine the advantages of the pure functional structure and the
product organizational structure. Each project manager reports directly to the vice president and general
manager. The project manager has total responsibility and accountability for project success. The functional
departments, on the other hand, have functional responsibility to maintain technical excellence on the project.
Each functional unit is headed by a department manager whose prime responsibility is to ensure that a unified
technical base is maintained and that all available information can be exchanged for each project.

10.4.1 Certain ground rules exist for matrix development:

 Participants must spend full time on the project; this ensures a degree of loyalty
 Horizontal as well as vertical channels must exist for making commitments.
 There must be quick and effective methods for conflict resolution
 There must be good communication channels and free access between managers
 All manager must have an input into the planning process
 Both horizontally and vertically oriented managers must be willing to negotiate for resources
 The horizontal line must be permitted to operate as a separate entity except for administrative
purposes.

The basis for the matrix approach is an attempt to create synergism through shared responsibility between
project and functional management.

* The answers to these questions depend* upon mutual understanding between the project and functional
managers. Since both individuals maintain some degree of authority, responsibility, and accountability on each
project, they must continuously negotiate.

Project management is more behavioral than quantitative and interpersonal skills and communicative skills are
extremely important attributes of the project manager.

 There should be no disruption due to dual accountability

 A difference in judgement should not delay work in progress

The majority of these disadvantages are related to the fact that there is no strong central authority or individual
responsible for the total project. As a result, integration of activities that cross functional lines becomes a
difficult chore, and top-level executives must get involved with the daily routine.

10.2.2 Disadvantages of the Traditional/Classical Organization

 No one individual is directly responsible for the total project (i.e.., no formal authority; committee
solutions)
 It does not provide the project-oriented emphasis necessary to accomplish the project tasks.

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 Coordination becomes complete, and additional lead tome is required for approval of decisions.
 Decisions normally favor the strongest functional groups
 There is no customer focal point
 Response to customer need is slow
 There is difficulty in pinpointing responsibility; this is the result of little or no direct project reporting,
very little project-oriented planning, and no project authority
 Motivation and innovation are decreased
 Ideas tend to be functionally oriented with little regard for ongoing projects.

10.2.3 Executive analysis of the traditional structure identified by Carlisle, arc

 Functional organizations do not tend to develop “general managers”

 Functional organizations develop a strong resistance to change.

-END-

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