Project Initiation *Project Selection (based upon commercial or non-commercial considerations)

Project Initiation

*Project Selection (based upon commercial

or non-commercial considerations)

*Project Charter (authorization)

*Preliminary Scope Statement

What is Project Planning ?

• It is complete road-map to go from point A to B.

• Project planning is a rational determination of how

to initiate, sustain, and terminate a project

• Project planning starts with the development of a

vision - the ability to see something that is invisible

to others

Why Plan a Project ?

• To eliminate or reduce uncertainty

• To improve efficiency of the operation

• To obtain a better understanding of the objectives

• To provide basis for monitoring and controlling work

Project Planning Considerations

• Project planning is much wider activity with following key

considerations

– Cost estimating and budgeting

– Technology strategies scheduling

– Specification of deliverables

– Resource usage estimating

– Delineation of organizational structure

– Information and control system sign

– Risk Identification, and so on.

Project Implementation

• Procure Materials, Vehs, Equipt etc.

• Establish Field Offices (Build and test

Facilities)

• Teams go out to work (Data Collection, survey)

• Develop support requirements

• Produce system

• Verify performance

• Modify as required, etc.

Monitoring, Control and Evaluation

• Discrepancies are called variances

• The acceptable levels of variance should

be determined at the outset of the project

• EVA

Difference between;

• Monitoring

• Control

• Evaluation

Termination

• Exit Strategy (Donors are Extremely Interested)

• Train functional personnel

• Transfer materials

• Transfer responsibility

• Release resources

• Reassign project team members

• Sustainability Aspects

• Warranty/ Guarantee

PROJECT PLANNING TECHNIQUES

• Work Breakdown Structure (WBS)

• Network Diagrams/CPM/PERT/Crashing/

Resource Levelling etc.

• Gantt Chart

• Earned Value Analysis

Work Breakdown Structure

The Work Breakdown Structure (WBS)

is a deliverable oriented grouping of the

project components (products/services)

which organizes and defines the total

project scope.

Work Breakdown Structure

• Management tool for subdividing the work into

logical components.

• Hierarchical structure that shows relationships of

elements to each other and to the overall contract.

• Organizes work into short manageable tasks.

• Basis for cost and progress planning and

reporting.

EXAMPLE of WORK BREAKDOWN STRUCTURE

Construction

Project

Area B

02.00

Civil

Construction A

01.01

Civil

Construction B

02.01

Electromechanical A

01.02

Electromechanical B

02.02

Earthwork

01.01.01

Foundations and

Structures

01.01.02

Architectural

Finishes

01.01.03

Electrical

and control

01.02.01

Piping

01.02.02

Equipment

01.02.03

Preparation

Tests

01.02.04

Earthwork

02.01.01

Foundations

and Structures

02.01.02

Architectural

Finishes

02.01.03

Electrical

and Control

02.02.01

Piping

02.02.02

Equipment

02.02.03

Preparation

Tests

02.02.04

Project

Level

Area A

01.00Area

Level

Group

Level

Work-

Package

Level

EXAMPLE OF WORK BREAKDOWN STRUCTURE

01.00 Area A

01.01 Civil Construction A

01.01.01 Earthwork A

01.01.02 Foundation and structures A

01.01.03 Architectural Finishes A

01.02 Electromechanical A

01.02.01 Electrical and Control A

01.02.02 Piping A

01.02.03 Equipment A

01.02.04 Preparation Tests A

BUILDING

A HOUSE

CONSTRUCTION

OF HOUSE

OUT

BUILDINGS

LAND

SCAPING

GARDEN

GARDENCIVILCARTENTER/

PLUMBER

ELECTRIC/

PAINTERS

FOUNDA-

TIONSWALLS ROOF

DOORS/

WINDOWBIC

PLUMBINGWIRING

PAINTINGFINISHING

GARAGE

DRIVE

WAY

GREEN

HOUSE

FENCE

GROUND

• 100% Rule. If not included in WBS, it is not in scope.

• Planned outcomes and deliverables, not planned

activities

• Not list of work or activities, but classification or

grouping of deliverables

• Mutually exclusive elements

• Progressive elaboration, or Rolling wave planning.

Estimating

• Resources

• Time

• Costs

Project Network DiagramsProject Network Diagrams

• Project network diagrams are the preferred

technique for showing activity sequencing.

• A project network diagram is a schematic

display of the logical relationships among, or

sequencing of, project activities.

Approaches for Developing NetworksApproaches for Developing Networks

• Activity on Arrow– Activities drawn on arrows

– Nodes are used as Milestones

– Dummy activities

–

• Activity on Node– Activities drawn on Nodes

– Arrows are used to represent Flow

Basic rules for Developing NetworksBasic rules for Developing Networks

• Network flow typically from left to right• An activity cannot begin until all preceding connected

activities have been completed• Each activity should have a unique identification

number• An activity identification number must be larger than

that of any activities that precede it• Looping is not allowed• Conditional statements are not allowed

Work Breakdown Structure, Most Likely Durations & Precedence Relationships for a Project

Work Breakdown Structure, Most Likely Durations & Precedence Relationships for a Project

A. Select computer software

B. Install software

C. Install office network

D. Test software

E. Develop database

F. Train employees

G. Implement system

3

5

7

6

8

3

2

A

A

B

B

C,D

E,F

Most Likely Immediate

Activity Duration (Weeks) Predecessor(s)

Activity-on-Node Network Representation Activity-on-Node Network Representation

Activity-on-Arc / Arrow Representation Activity-on-Arc / Arrow Representation Activity-on-Arc / Arrow Representation Activity-on-Arc / Arrow Representation

Comparison of Networks Requiring Dummy Comparison of Networks Requiring Dummy Activities for Activity-on-Arc RepresentationActivities for Activity-on-Arc RepresentationComparison of Networks Requiring Dummy Comparison of Networks Requiring Dummy Activities for Activity-on-Arc RepresentationActivities for Activity-on-Arc Representation

Critical Path MethodCritical Path Method

• The techniques help to answer questions like:– What is the expected project

completion date?– What are the scheduled start/end dates

for each activity?– Which activities are “critical”?– How long can a non-critical activity be

delayed?

Critical Path MethodCritical Path Method

• Initially, treat expected time (t) as fixed duration

• The CP is the longest route through the

network

• If these activities are delayed, the whole project

is delayed

• To reduce the overall duration of the project

look at the critical activities

Determining the Critical Path for ProjectDetermining the Critical Path for Project X X

CP calculationCP calculation

• Forward Pass

For each activity

calculate the Earliest

Start (ES) and Earliest

Finish (EF)

ES for an activity

leaving a node =

largest value of EF for

all activities entering

the node

• Backward Pass

For each activity

calculate the Latest

Start (LS) and Latest

Finish (LF)

LF for an activity

entering a node =

smallest value of LS

for all activities leaving

the node

EF=ES+t LS=LF − t

SlackSlack

• Slack is the length of time an activity

can be delayed without affecting the completion

date of the project.

S la ck=LS − ES=LF − EF

Example Network DiagramExample Network Diagram

1

2

3

4 7

5

6

8

AA66

BB22

EE33

HH

44

CC

33

GG

33

II22

FF22

JJ

22

D5

Calculating SlackCalculating Slack

Activity ES LS EF LF Slack

A 0 0 6 6 0

B 0 7 2 9 7

C 6 10 9 13 4

D 6 7 11 12 1

E 6 6 9 9 0

F 9 13 11 15 4

G 11 12 14 15 1

H 9 9 13 13 0

I 13 13 15 15 0

J 15 15 17 17 0

Adding ES, EFAdding ES, EF

1

2

3

4 7

5

6

8

A [0,6]

A [0,6]

66

B [0,2]

B [0,2]22

E [6,9]

E [6,9]

33

H [9,13]H [9,13]

44

D [6,11]

D [6,11]

55

C [6,9]C [6,9]

33

G [11,14]G [11,14]

33

I [13

,15]

I [13

,15]

22

F [9,11]

F [9,11]

22

J [15,17]J [15,17]

22

ES

EF

Adding LS, LFAdding LS, LF

1

2

3

4 7

5

6

8

A [0,6]

A [0,6]

6 [0,6

]

6 [0,6

]

B [0,2]

B [0,2]2 [7,9]

2 [7,9]

E [6,9]

E [6,9]

3 [6,9]3 [6,9]

H [9,13]H [9,13]

4 [9,13]4 [9,13]

D [6,11]

D [6,11]

5 [7,12]

5 [7,12]

C [6,9]C [6,9]

3 [10,13]3 [10,13]

G [11,14]G [11,14]

3 [12,15]3 [12,15]

I [13

,15]

I [13

,15]

2 [1

3,15

]

2 [1

3,15

]

F [9,11]

F [9,11]

2 [13,15]

2 [13,15]

J [15,17]J [15,17]

2 [15,17]2 [15,17]

LSLS

LFLF

Draw Network Diagram

Budget approval from the CEO is required before

purchasing a new machine for a factory. The use

of new machine necessitates employing a new

operator who must be specially trained, using a

training manual and some special equipment,

which is delivered with the machine.

The training itself does not depend upon the new

machine being installed and working. Once the

machine is installed and the operator is trained,

production can be started.

Activity a m b

A 2 8 10 7.33 1.78

B 8 10 12 10 .44

C 2 3 15 4.83 4.69

Formula for PERTFormula for PERTFormula for PERTFormula for PERT

a - Optimistic time, m - Most likely time, b - Pessimistic timeExpected time: Variance of activities:

te=a+4m+b

6

22

6

ba

=s

s2t e

Solved Example

Act. Description Pre. Opt. (a) ML (m) Pes. (b) Exp. (t) Var

A R & D - 4.0 5.0 12.0 6 1.78

B Plan Mkt Res - 1.0 1.5 5.0 2 0.44

C Routing A 2.0 3.0 4.0 3 0.11

D Prototype A 3.0 4.0 11.0 5 1.78

E Mkt Broch. A 2.0 3.0 4.0 3 0.11

F Cost Est. C 1.5 2.0 2.5 2 0.03

G Prod. Test D 1.5 3.0 4.5 3 0.25

H Mkt Survey B, E 2.5 .5 5 4 0.69

I Pricing/Fcast H 1.5 2.0 2.5 2 0.03

J Final Report F, G, I 1.0 2.0 3.0 2 0.11

• Let T be total time of project. Expected value of T is calculated as:

• The variance in project completion time is:

17=t+t+t+t+t=E(T) JIHEA

1.652.722.72∴

0.110.030.690.111.78∴

2

==andσ=σ

++++=σ

σ+σ+σ+σ+σ=σ

2

2

2J

2I

2H

2E

2A

Probability of meeting a specified deadline

• Probability of completing the project in 20 weeks?

• Need to use the z value, calculated as;

z=20−17σ

=3/1 .65=1 .82

By looking this z factor of 1.82 in the z table, we get

the value of 0.9656, which means the chances of

completing this project in 20 weeks are 96.56%.

Attempt this exercise

Activity Immediate

predecessors

Duration (Days)

(a, m, b)

A - 3, 5, 7

B - 2, 3, 6

C B 4, 6, 10

D A, C 3, 7, 12

E C 2, 4, 8

F C 2, 3, 4

G D, E, F 3, 5, 8

Pakistan Institute of Management

Gantt ChartGantt Chart

1/1 1/15 2/1 2/15 3/1 3/15 4/1 4/15 5/1 5/15

Process Doc

Contract

Plan/Get data

Perform tasks

Write report

Test/deliver

Legend: Red = critical path; Blue = not critical path; Green = slack time

GANTT CHART

Pakistan Institute of Management

Gantt Chart for Project X

RESOURCE LEVELING Resource leveling aims to minimize the period-by-period variations in resource loading by shifting tasks within their slack allowances.

Figure: Before resource leveling

Figure: After resource leveling

Main Planning Activities;

Defining and agreeing Scope statementCreating WBS (upto WP level)Defining activities and their predecessorsEstimating resources (Time, People, Equipment,

Materials etc., and associated Risks etc) Draw network diagram, determine CP and Float/Slack Make GANTT chart and do Resource Levelling Make a Detailed Project Management PLan

Earned Value = Budgeted Cost of Work Performed (BCWP)

Calculate BCWP by taking budgeted cost X % physical completion

Cost Variance = CV=BCWP-ACWP (actual cost)

Schedule Variance = SV=BCWP-BCWS (budgeted cost)

Cost Performance Index = CPI=BCWP/ACWP

Schedule Performance Index = SPI = BCWP/BCWS

Key Earned Value (EV) Formulas

Earned Value Calculations for a One-Year Project After Seven Months

Activity Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Plan % Complete EV

Planning and Staffing 3 2 5 100 5

Prototype Design 3 3 6 100 6

Construct Prototype 8 8 16 100 16

Test/Evaluate Prototype 5 10 15 80 12

Full Design Specs 5 6 3 14 50 7

Documentation 2 2 1 1 1 1 8 12 0.96

Site Preparation 8 3 3 14 36 5.04

Construction 20 50 50 20 140 15 21

Test/Certification 10 6 4 20 0 0

Finishing 8 4 12 0 0

Maintenance Training 4 4 0 0

Monthly Plan 3 5 11 13 15 16 28 54 61 27 13 8 254 73

BCWS or Cumulative Plan 3 8 19 32 47 63 91 145 206 233 246 254

Monthly Actual 4 4 10 11 12 15 27 0 0 0 0 0 83

ACWP or Cumulative Actual 4 8 18 29 41 56 83

Monthly EV 3 5 11 12 11 7 24

BCWP or Cumulative EV 3 8 19 31 42 49 73

BCWP = EV = 73

BCWS = 91

ACWP = 83

CV=BCWP-ACWP -10

SV=BCWP-BCWS -18

CPI=BCWP/ACWP 0.9

SPI=BCWP/BCWS 0.8

Estimated time to complete 15 (original plan of 12 months divided by SPI of 80%)

Estimated cost at completion 289 (original plan of 254 divided by CPI of 90%)

CO

ST

TIME

EAC

ETC

Delay in completion

Schedulevariance

BCWP

ACWP Cost variance

BCWS

BACProject budget base line

Earned Value Chart for a Project