Program Programme : BBASemesterSubject Code: IB 0006Subject Name: Project Planning and SchedulingUnit Number: 3Unit Title : Developing the Breakdown Structure

Program Introduction

The work breakdown structure is a detailed listing of the deliverables and tasks for building the product or delivering the service. It is a top down, board to specific hierarchical outcome of the work to perform. It is a structured organization of project scope, schedule, and cost information. WBS is defined as the structure, or organization of project scope into a hierarchical breakdown for planning, assigning responsibility, managing, controlling, and reporting progress.

Program Objectives:

Recognize the difference between activities and tasks. Understand the importance of the completeness criteria to your ability to manage the work of the project. Explain the approaches to building the work breakdown structure. Determine which of the approaches to use for generating the work breakdown structure for a given project. Generate a complete work breakdown structure. Use a joint project planning session to generate a wok breakdown structure.

Program WBS Structuring Keys

WBS Level Name Description

1Business sector Line of business with the organization 2Business Unit The specific facility or site within the business sector 3Area Physical aspect of the project that have discrete boundaries 4System Often systems across multiple areas but their scope or cost may require discrete analysis 5Discipline Tends to be a main focus on how the work is performed civil, structural foundation design, piping etc., 6Work Group Direct cost indirect cost, engineering cost, owners cost etc 7Work Category Anything from a drawing group to an equipment specification to pouring a specific type of foundation. 8Element Type of cost, for example, labour cost, a material cost, a subcontract cost, an engineering cost, an owners cost, etc.

Program To maximize the structure when developing the WBS, the following should be considered.

It must be simple to use. A simple WBS will be more easily adopted by end users resulting in consistent use. It must be flexible so it can be adaptable, get applied consistently across all types of projects. As the WBS is developed each organization must consider how the structure can support current and future projects and / or clients. The WBS has to be applicable and functional in each of these disciplines, providing cost information at different levels of detail or from differing perspective of scope. Along with supporting cost monitoring reporting and forecasting, the WBS must also provide properly structured cost information for contract packages, progress / performance measurement , cash flow projections and the fixed asset register.

Program WBS and the Estimate

Once the organization has developed its WBS, every cost estimate prepared should apply this structure. Properly structuring and applying the WBS will result in significant benefits in estimate preparation and in the estimates relationship with other project and financial tools. In the estimating process a consistent approach to estimating will emerge. This consistency in approach will soon increase accuracy and efficiency in preparation, modification and the review / validation process. Estimators will have the benefit of the WBS to use as a framework that acts to prompt input or note exclusions. The grouping of cost elements will speed preparation and clearly link relationships between scope items. When they exist as well as allow for cost models to easily be inserted or deleted in cost estimates.

Program WBS and Cost Control

As the project progresses and increase activity the WBS continues to increase in usefulness. The baseline estimate should seamlessly transfer to the control estimate and cost reports. The procurement change management and performance measurement efforts are facilitated, as well as the ability to incorporate information from these efforts into revised forecasts and cost reports.

When the WBS is structured to support contract packages, project teams can quickly review bids to determine where they may vary from plan. As these variances are identified, forecasts can be adjusted accordingly. Additionally the information can be used to develop initiation strategies by revising the procurement plan if needed.

Program WBS Flexibility

In applying the WBS to projects, a reasonable amount of flexibility should be used. An easy trap and major pit fall is applying the WBS too rigidly. The following questions should be asked to determine whether too much rigor is being applied. What level of detailed information is required to provide cost control and forecasting? What will be required for close out and final reports at the end of the project? Will tracking by assets fit your WBS? Do costs require differentiation for tax considerations? Will the project be executed within the WBS format?

Program WBS Development

The entire project sits at the top level of the WBS, which is referred to as level zero. Developing a WBS involves subdividing the project into three to nine deliverable elements at the next level, level one (the basis of the decision is addressed below). Then each of the level one items will be divided into three to nine level two items, and each of the level three items and so on. The WBS should emphasize real deliverables e.g. approval requires a signature on a deliverable price of paper and as noted previously at each juncture the basis of the division should be similar, if not identical, for all sub tasks at a given level.

Program Division Bases Any given project can be subdivided from various perspectives that often reflect the different mindsets of different managers. For example, the transition from each level in a WBS to the next level may be oriented around schedules or resources, but the most useful (and admittedly most difficult) WBS will use deliverables as the breakdown basis.

Coding the WBS For purposes of proper documentation and structured implementation, the WBS is often coded in a unique manner. We will illustrate this by an example of a project of South Florida Rail Corridor (SFRC). This project is procured through and under the control of TRL-RAIL. The project is located in the three most populated counties of South Florida, USA. Miami Dade, Broward and Palm Beach. This design build project that includes the design and construction of approximately 45 miles of a new second mainline track.

Program Basically, this WBS consists of eight levels of detail. These levels are identified as follows:

1. Full funded grant agreement 2. TRI-RAIL phases 3. Category 4. Location 5. Subcategory 6. Work element 7. Work detail 8. Cost code

Program zThe WBS Detail Level

The WBS is a tree showing the hierarchy of the required work to be performed to complete a project. It depicts the work contents in the manner in which the work is to be accomplished. The work elements are structured in WBS levels in such a way, wherein discarding levels provide work definition in increasing detail.

Level 1 Contains only the quantified project objectives, e.g. build a power plant or develop an airplane.

Level 2 Contains the major project segments or subsections. Level 3 Contains definable components or subsets, necessary to accomplish the Level 2 major project segments.

Program

The reversal of the trends in the export growth during 1990-91, and thereafter, required a massive export thrust. Since July 1991 the Government of India initiated the process of economic reforms aimed at globalization and liberalization of Indian economy. A number of policy changes were announced leading to the declaration of the Export-Import Policy 1992-97. This policy brought about all round liberalization of exports and imports Besides, under the Liberalized Exchange Rate Management System (introduced as a result of the simplification of the foreign exchange law and procedures), the entire amount of export proceeds can now be converted into Indian rupees at the market determined rate of exchange. *The year 1998-99 was the worst year for Indias exports with exports recording a negative rate of growth of 3.9%. The decline in exports was caused mainly due to recession in global trade, fall in prices in the international market, infrastructural bottlenecks, introduction of strict sanitary and phyto-sanitary standards by developed countries and so on. This trend continued and exports recorded the growth rate of 11% for the year 1999-2000 followed by 20% for year 2000-2001. However, the export performance for the year 2001-02 was very disappointing as the growth in exports was meager at 0.6% over the same period in the previous year. a renewed attempt by the Export-Import Policy 2002-07 to promote exports so as to increase Indias exports from the level of USD 44.56 bn. (2000-01) to USD 88 bn. by the end of 2006-07 to achieve 1% share of the global merchandise trade*Most nations publish their balance of payments figures monthly, quarterly and annually. The accounts themselves show the structure of a nations external trade, its net position as an international lender or borrower, and trends in the direction of its economic relationships with the rest of the world. The balance of payments on current account shows the income and expenditure for purchase of current goods and services. It records the current position of the country in the transfer of goods, services, and merchandise as well as invisible items, donations, unilateral transfers, etc. It shows the countrys financial position in the international scenario, the extent of accumulated foreign exchange reserves, foreign assets and liabilities and the impact of current transactions are included in the capital account in order to find out the exact foreign exchange reserve. The capital account provides relief to deteriorating balance of payments positions*The challenge before the emerging market economies is to leverage foreign savings to promote domestic growth without having the long-term consequences of external payment imbalances. However, current account deficits, per se, need not necessarily enhance the productive capacity and thus overall GDP growth. This would depend on underlying component factors leading to the current account deficit. The distinction between gross capital inflow and net inflow is useful. As the latter must equal the CAD, there is no way in which net use of foreign savings can increase without an increase in the CAD. *The current account, after being in surplus during 2001-02 to 2003-04, reverted to a deficit in 2004-05. This was despite a robust growth in net invisible account fuelled by software exports and private transfers. The current account deficit (CAD) is attributed to the widening trade deficit, driven primarily by the rise in international prices of petroleum products and gold. They reached a high of 5.1 per cent of GDP in 2006-07 after a somewhat modest growth rate of 3.1 per cent in 2005-06. The net result of these two trends has been a gradual rise in reserve increase to reach 4 per cent of GDP in 2006-07. The most welcome feature was the rise in gross foreign direct investment inflows of US $ 23.0 billion in 2006-07. With FDI outflows also increasing steadily over the last five years, overall net flows moderated. Portfolio investment in the first half of 2006-07 was lower in comparison because of the initial slump in equity markets*Share of engineering goods and petro products has increased by 7.6 percentage points and 10.7 percentage points, respectively. The share of primary products has declined somewhat with the decline in share of exports from agricultural and allied sector being partly offset by a rise in the share of ores and minerals by 2.8 percentage points. The share of chemicals, including petrochemicals, has increased marginally. The share of petroleum crude and products has risen further to 18 per cent in the first half of 2007-08 from 15 per cent in 2006-07. Engineering goods share also maintained a rising trend in 2007-08 . The perceptible increase in the share of petroleum products in total exports reflected not only the rise in POL prices but also Indias enhanced refining capacity. *The share of capital goods imports shows the sharpest rise of about 4.9 percentage points in 2006-07 over 2000-01 due to a 3-7 percentage point rise in the share of transport equipment and 1.6 percentage point rise in the share on non-electrical machinery (excluding machine tools). It, however, increased to 13 per cent in the first half of 2007-08. Imports of gold and silver have been at around 8 per cent, though it has increased to 10 per cent in the first half of 2007-08. Share of electronic goods imports has increased to 9 per cent, while food and allied imports show a marginal fall in share due to the fall in the share of edible oils, though import of cereals has shot up in 2006-07 from a negligible level.*With rising POL prices, and Indias rising exports of refined POL products, the United Arab Emirates (UAE) and Saudi Arabia have emerged as the third and fourth largest trading partners of India. With rising POL prices, and Indias rising exports of refined POL products, the United Arab Emirates (UAE) and Saudi Arabia have emerged as the third and fourth largest trading partners of India. There is a perceptible change in the share of Indias trade with Iran and Nigeria (due to rise in import of mineral fuel and oil, etc.) and Australia (due to rise in import of precious stones, metals, mineral fuel and oil, and ores), while the share of Singapore after increasing in some years has moderated. The largest trade deficits are with Saudi Arabia, China and Switzerland. The trade deficit with China has increased further in April-September 2007.

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In terms of export destination, the United States continued to be the principal destination accounting for 14.9 per cent of Indias total exports in 2006-07. Indias merchandise exports to South Asian countries increased by 16.6 per cent in 2006-07 compared to the 20.5 per cent growth in 2005-06. Growth in exports to Iran, Saudi Arabia, Belgium and Japan was good. In recent years, India witnessed a major change in its direction of trade in general and with China in particular. Indias export to China, in US dollar terms, was growing at the rate of 20.4 per cent and 22.7 per cent for the years 2005-06 and 2006-07, respectively *In 2006-07, Asia and ASEAN continued to be the major source of Indias imports accounting for 57.5 per cent of total imports. Country-wise, imports from China recorded high growth of 60.1 per cent over and above the 53.1 per cent growth in the previous year. share of iron and steel increased from 0.8 per cent to 8.5 per cent for the same period, while the share of electronic goods, organic chemicals and inorganic chemicals are declining.

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