ECM 511.3Project Planning and Control

Curriculum Course Objectives:  The objective of this course is to equip the students with the basic concepts of project and

its management and to make the understand and use the planning and controlling tools independently.

 Course content1. Concept, definition and characteristics of a project, project lifecycle and project phases. (6

hrs.)2. Project Planning Tools : (10 hrs.)

1. Gantt chart, linked bar chart, mile stones chart, line of balance, CPM/PERT and Earned value analysis.

3. Resource allocation/leveling. (2 hrs.)4. Project monitoring and control : (9 hrs.)

1. Introduction to project monitoring and control cycle, project schedule, cost & quality control.

5. . (4 hrs.)6. PMIS. (4 hrs.) References :  Project Management by Harold Kerzner. Management by H. Koontz and others, McGraw Hill, New Delhi CPM in Constructin Management by James O’ Brien, McGraw Hill, New York. Project Management by H.N. Ahuja, John Wiley, New York. PERT and CPM by Khadelwal & Punmia. Principles of Management by Terry George and S. Franklin, Travellers Book, New Delhi. Precedence and Arrow Networking Techniques for Construction by Robert B. Harris.

John.Wiley and Sons, New York      

Book list

Project Management A Managerial Approach by: Sammul J. MantelProjects Planning Analysis Selection

Implementation & Review by: Prasanna Chandra

Project management by: K. NagarjanProject management by :Dr. G.R. AgrawalProject management by: John M. NicholasProject management with PERT and CPM by:

B.C. PunmiaPERT and CPM by: L.S. Srinath

“ There is no any underdeveloped country in the world, they are under managed countries”

by: Peter Drucker

What is project?Project• The term “ project” refers to a high- value, time bound, special

mission with predetermined performance objectives”.• The project mission is accomplished within complex project

environments, by putting together human and non-human resources into a temporary organization headed by a project manager.

• A project can be considered to be any series of activities and tasks that have:

• Have a specific objective to be completed within certain specified time and specifications.

• Have defined start and end dates• Have funding limits• Consume resources (i.e. man, money, material, machine and minute

)• Uniqueness from different perspectives.

Management Management is the process of getting activities completed

efficiently and effectively with and through other people.What the managers do, that is management, such as

planning, organizing, staffing, directing, controlling, coordinating, reporting and budgeting.

Project management

• It is the planning, organizing, directing and controlling of company resources for a relatively short term objective that has been established to complete specific goals and objectives.

• Project management utilizes the systems approach to management by having functional personnel (the vertical hierarchy assigned to a specific project / the horizontal hierarchy

Tools and Techniques of Project Management• There are various tools and techniques used for

project planning, scheduling and controlling. • The following five tools among the most and

widely used types are as follows:– Bar chart or Gantt Chart– Network analysis

• CPM• PERT

– Line of balance– The S – curve

– WBS

Classification of projects

1. On the basis of nature

Basis Nature of projectsSector Non-industrial or industrialOwnership Private or publicOutput Goods producing or service

providingMotto Profit or non profit orientedScale Small, medium, large, Mega

[small > less than $10 million][medium > $ 10 million to $ 100

million] [Large > $ 100 million to $ 1000

million][Mega > over $ 1000 million]Note: As per Indian Data

contd..

2. On the basis of duration

Long duration projects (over 10 years)Medium duration projects (3 to 10 years)Short duration projects (few months to 3 years)Special short term projects (less than 1 year)

Contd…

3. On the basis of construction

Residential construction project [ 2 to 4 storied residential purposes building, etc]

Building construction project [ Departmental store, hospital, academic institutions, apartment building, high rise building etc

Heavy engineering construction project [ dam, bridge, highway, road, etc]

Industrial construction project [ steel factory, chemical plant, fertilizer factory etc]

Sources of projects

Government organizationsPrivate sectors [Private investors]International non-government organizations

(INGOs)Non-government organizations (NGOs)Public + private partnership (JV)Bio-lateral projectMulti-lateral project

Common characteristics of project1. Objective 2. Investment3. Definite start time and end time4. Space / location5. System6. Life cycle7. Uniqueness 8. Constraints 9. Team work10. Flexibility11. Structure 12. Contracting and subcontracting13. Beneficiaries 14. Temporary 15. Dynamic 16. Realistic and reasonable

Project Identification / project selection

Performance of existing industries Availability of raw materials Availability of skilled labour Import / export statistics Price trend Data from various sourcesGovernment policy

Analysis of economic and social trends Political situation Financial analysis

Project phases / life cycle of the project

1.Conceptual phase / Formulation phase2.Planning phase3.Implementation phase4.Termination phase.

1. Conceptual phase / Formulation phase

In this phase, the following major activities are included:It is also called initial phase / definition phase

of the project.Project identification / selection / formulation

Pre-feasibility study of the project Preliminary design of the project Preliminary estimate of the project

2. Planning phase

• It includes following major activities in this phases:– Detail feasibility study– Appraisal – Project approval – Detail engineering survey and design

• Analyzing and designing the structure and its elements

• A set of explicit drawings and specification • Setting standards of safety and performance• Technology (construction methods)• Detail estimation of the project• Preparation of BOQ, Tender Form, Standard

specification, detailed drawings,

Feasibility study Technical analysis Marketing analysis Socio - economic analysis Managerial analysis Financial analysis Environmental analysis / resettlement plan

Process / flow chart of Feasibility study of the Project

Initial screening

Is the idea promising?

Plan feasibility Analysis

Generation of idea

Terminate

Conduct market analysis

Conduct technical analysis

Conduct Financial analysis

Conduct economic and ecological analysis

Is project worthwhile? Terminate

Prepare Funding proposal

No

Yes

No

Process of Feasibility Analysis of the Project

Contd..

Procurement It involves two major types of activities:

Contracting and subcontracting Single general contract or Subcontracting for different activities.

Material and equipment management General contractor himself manages all the material

and equipment requirements.Detailed manpower planning Detailed scheduling of the resources Establish monitoring / inspection / controlling

mechanismBudget planningInvolvement of the expert team

3. Implementation

Site hand overSet up project organizationExecution and controlling

Maximum mobilization of resources as per planning and scheduling

Controlling system: Effective monitoring and evaluation (checking, testing, sampling, progress monitoring)

Controlling of scheduling, cost and performance (CPM, PERT, “S” curve, Quality checking)Maintain project management information system

(PMIS)

4. Termination phase

• It involves the following activities:– Records are prepared of the actual construction work

finally carried out at site.– Changes are recorded for reason of technical

performance and financial implications.– To inspect the construction work thoroughly and have

any defects removed.– Warranty period (back to correct problems)– Evaluation of the project– Project completion report– Issue of final completion certificate– To prepare operating instructions and maintenance

manuals.

Pre-considerations to be taken before selection of the project

Technical feasibility (including project design)Socio – economic benefits and financial

profitability analysesPolitical situationEnvironments friendliness and sustainability

considerationsInstitutional, managerial and legal requirementsOrganization and working processImplementation plan and working processMonitoring and control systemEvaluation : on-going and ex – post project

evaluation 

Project MangerProject can not be completed within the time, cost and

quality unless a good project manager run the project. The project manager is delegated the authority of the

general manger in order to accomplish the desired objectives successfully.

Project manager is the key person of the whole project and responsible to complete the project within the time frame, project cost and required quality.

Project manager may “ make or break” the project.

The project manager aims to achieve its mission By managing :

Time and progress Cost and cash flow Quality and performance Organizational behavior

With Organization resources

By Planning resources Scheduling resources Organizing resources Directing resources Monitoring resources Controlling resources

Within Quality constraints Time constraints Cost constraints Environment constraints.

Responsibilities of Project Manager To produce the end result with the available resources and

within the constraints of time, cost and performance / technology.

To meet contractual profit objectives. To make all required decisions whether they be for alternatives

or termination. To act as the customer (external) and upper – level and

functional management (internal) communications focal point. To negotiate with all functional disciplines for accomplishment

of the necessary work package time, cost and performance . technology.

Defining and maintaining the integrity of a project Development of project execution plan Organization for execution of the plan Direction, coordination and control of project activities Contract management Projecting and problem solving Satisfaction of customer, government and the public Achievement of project objectives, cash surplus and higher

productivity To resolve all conflicts, if possible.

Project Manager

Role of project manager

1. Interpersonal roles : managers must deal with others both inside and outside the organization. Interpersonal roles consist of:

Figurehead role: It deals with ceremonial and symbolic activities, for example greeting and receiving visitors.

Leader role: It involves leadership, motivational and human resources management. These are essential to the management of people.

Liaison role: Activities for maintaining contracts outside the organization, for example with community

contd….

2. Informational roles: Managers receive information from inside and outside the organization. Informational roles consist of :

Monitoring role: Information gathering that is of value to organization.

Disseminator role: Transmission of information to those in the workplace. It can be written of oral, formal or informal.

Spokesperson role: Transmission of information outside the organization. Managers act as spokes person of the organization.

3. Decisional roles: Such roles emerge from day to day activities. They can be:

Enterpreneur role: Managers develop strategic models for future organizational actions. They identify opportunities and implement change.

Disturbance handler role: This involves corrective action for unexpected disturbances like strikes, natural disasters etc.

Resource allocator role: This involves allocating available resources where they are most needed to meet organization’s needs.

Negotiator role: This involves negotiating resolutions to disputes both inside and outside the organization. Examples may be trade agreement or trade union contract.

Skills of project managerManagers need a wide variety of skills. The

skills of project manager are as follows:Technical skillsHuman skillsConceptual skills

contd…

. Technical skills: They are ability to perform a specialized function. Project manager should know the technical skills of different aspects. S/he should be competent in his / her technical fields.

2. Human skills: They are ability to get along with people, get the jobs done through people, motivate people. They include skills such as: Communication Negotiation Bargaining Leading Influencing Motivating Discipline Conflict management etc.

Human skills are needed at all levels of manager. 3. Conceptual skills : These are ability to think and see

“big picture”. They are to relate the organization to environmental forces.

They reflect ability to organize information and to judge relationships. This skill is most needed for higher managers

Main Causes of Project failureIt is common to see a project failing to achieve its

mission of creating a facility within the specified cost and time.

Hardly, few projects get completed in time and within original costs.

According to the annual year 1989 – 90 of the Ministry of Programme Implementation of India, out of 351 projects each costing over Rs. 20 crores are as follows:56 % had cost overruns (totalling 20 % cost)49 % faced a time overrun from 1 to 157 months.

Factors contributing overruns are outlined below:Inadequate project formulation [ poor field

investigation, inadequate project information, inadequate project analysis, poor investment decision]

Poor planning for implementation [ inadequate time plan, inadequate resource plan, poor organization, poor cost planning]

Lack of proper contract planning [ poor contract award ]and

Lack of project management during execution [inefficient and ineffective working, delays, changes in scope of work and location, unforeseen natural calamities, poor cost estimation, management failure – planning failure, organizational failure, resource failure, directional failure, controlling failure, coordination failure, etc]

Main difficulties in project implementation in Nepal [Factors affecting in project failure in Nepal]

Unclear policy and objectivesWeak institutional capabilitiesLack of user participationDefective project designDelays in project approvalConsultant – related problemsProcurement delaysDelays in contract awardLack of coordinationDelays in budget releasePoor monitoring and evaluationCorruption

Assignment # 11. What is organization? Explain

Line organization Functional organization Pure project organization Matrix organization

2. What is project environment? Explain the environmental factors that affect the project.

Chapter 2 (Project Planning)

Planning Decides in advance like: What? Why? When? How?

Who? Where? And How much resources are needed to complete project? in order to achieve the objectives.

Sets the future course of action or sets the objectives

Sets the guide lines to guide all the personnel involved in the project team to a right track.

Puts the plan on a calendar date scale. Schedules, when the planned activities are to be

carried?

Contd..

General objective of the project planningTo complete the project successfully within the

specified time, budget and required performance.

Purpose of the project planning To completely define all work required so that it will

be ready identifiable to each project participant. To eliminate or reduce uncertainty To improve efficiency of the operation To obtain a better understanding of the objectiveso To provide a basis for monitoring and controlling work.

Types of project planning

Strategic planningTactical planningOperational planning

Areas of project planning

Human resource planningFinancial planningInventory planningEffective information planningMaterial planning / equipment planning

Project Planning Process / steps of project planningDefine the scope of work to be performed. Identifying the activities involved and assessing the

approximate quantities of physical resources needed activity –wise.

Preparing the logic or net-work diagram to establish a relationship among activities and integrating these diagrams to develop the project network or model.

Analyzing the project network or model to determine project duration, and identifying critical and non critical activities.

Exploring trade off between time and cost to arrive at the optimal time and costs for completing the project.

Establishing standards for planning and controlling men, materials, equipments, costs and project work schedule.

Forecasting input resources, production costs and the value of the work done.

Assigning physical resources like men, materials and equipment activity wise.

Forecasting the project budget and budget allocations Designing a control system for the organization.

Project approach in planning Top – down approach Vs. Bottom – up approach

Top – down approachThe practice of formulating a plan, programmes and

projects by central level authorities and pushed down to the grassroots level for its implementation is known as top – down approach

Under this approach, the requirements and interest of down level / local people while selecting and implementing developmental works are rarely taken into consideration.

Usually, most of the projects designated under top – down approach are experienced to face failure from a number of reasons. Among them, some of the key reasons for their failure are listed as follows

contd..

Ambiguous project objectives set on the basis of insufficient information and unreliable data while planning the project and designing its monitoring and evaluation system.

Conflicts in set objectives of different projects that are working to achieve the common goal of a programme.

Absence of field based experienced and / or qualified personnel to design and carry out projects

Lack of proper communication between project planning (central and project implementing (local) agencies.

Individual’s vested interest No timely release of budget from the center. Lack of political will to get the project implemented in

time Recruitment of unqualified and irrelevant project

personnel on political pressure Faded interest of local people to help implement and

sustain the project

Bottom – up approachDevelopment plans based on bottom – up

approach seek the participation of local people to identify, select and implement the project of their own need and interest.

Local Self Governance Act 2055 is directed to follow the bottom – up approach in formulating most of the development plans.

Planning process of development projects in the Nepalese contextFirst five year plan

1956 to 19612nd plan – 1962 to 19653rd plan – 1965 to 19704th plan – 1970 to 19755th plan – 1975 to 19806th plan – 1980 to 19857th plan – 1985 to 19908th plan – 1992 to 1997

contd…

9th plan - 1997 to 2002 10thplan -2002 to 2007Interim plan

2007 to 2010 (3yrs)

First engineering project – iron bridge over Bagmati Bridge in 1850

First hydro power project : Pharping hydro power project, in 1966 BS, capacity

Project planning tools / Functions or Methods of scheduling

Scheduling Types of scheduling [material, equipment, human resource ,

finance] Factors affecting scheduling [ location, nature of project, budget

constraint, weather, capacity of the owner / contractor, knowledge, experience of project manager, external environment]

Methods of scheduling Traditional tools / techniques / methods

Bar chart Milestone chart Linked bar chart

Modern tools / techniques / methods Networking model

CPM (critical path method) PERT (programme, evaluation and review technique)

“ S” curve / Earned Value Analysis (EVA) LOB (line of balance)

WBS ( Work breakdown structure)

Traditional techniques / methods

Bar chart Developed by Henry Gantt (1919) Gantt chart Two axis

Horizontal (time) Vertical (activities)

Limitations Not showing the interdependencies Not showing critical path / critical activities Not showing actual progress Not showing the resources Not suitable for big / large projects

Milestone chart Modified bar chart Shows major activities / events Indicated by the circle / square on the chart

Line of Balance

Modern techniques / methods

Networking model CPM

Developed by US Engineer working at DuPoint Company (1956), construction of chemical plant

Completed the project successfully by reducing 30 % of the project duration

Since then, widely spread over the world Used in construction and other industry project.

PERT Developed by US Navy Engineers working on large military

development programs, specially on its Polarish Weapon System in 1958.

Successfully completed the weapon system project with the help of management consulting firm of Booz, Allen and Hamilton.

Since then, widely spread all over the world, specially in research and development projects.

Differences between CPM and PERT

CPMActivity orientedUsed in repeating

projectDeterministic

approachSingle time estimateFocus on time, cost

and quality

PERTEvent orientedUsed in pioneer

projectProbabilistic

approachThree time estimate

Pessimistic Optimistic Most likely time

Focus on time and quality without constraint cost

Terminology Of The Networking TechniqueNetworkActivity

Critical activityNon-critical

activityDummy activity

Event Tail eventHead eventDual role

Float Total floatFree floatIndependent float

Slack timeEarliest start time

(EST)Earliest finish time

(EFT)Latest start time (LST)Latest finish time

(LFT)Forward pass (FWP)Backward pass (BWP)

Characteristics of critical path1. It is the longest path in the net work diagram2. It determines the project completion time or project

duration3. On the basis of project duration, the whole project is

planned.4. The activities lying on the critical path are the critical

activities. These activities can not be delayed by a single day.

5. The activities lying on the critical path have zero float.6. Since the critical path is longest in the net work diagram,

it may have less activities than in other non critical path.7. The critical path may be more than one in the net work

diagram.8. The critical path may pass through dummy activities.9. The critical path on the net work diagram should be clear

visible or highlighted.

.

Exercises of CPM and PERTTutorial

Line of Balance [LOB]

It is a managerial technique for ascertaining the progress of various phases or activities of a project on any particular date.

LOB technique is an extension of Gantt chart.LOB technique indicates the progress of various

phases of a project on a particular date.The LOB chart gives a pictorial view of the progress

of the activities.From the LOB chart, we will be able

To identify those activities that are progressing as per the plan

To know the activities that are lagging behind the schedule and also

To know the activities that are ahead of the schedule.

Steps or procedures to be followed to draw the LOB chart1. To draw the plan of operations ( indicating all

the phases / activities in accordance with their precedence, succession, concurrence relationships.

2. To construct the objective chart3. To construction the progress chart.

Plan of operation This program is drawn to some scale using the

precedence, succession, concurrence relationships among the activities.

Contd..

Objective chartThe objective chart consists of two horizontal

lines.The horizontal line at the bottom represents

the starting point for any activity while the horizontal line at the top represents the end of all the activities.

The gap between two horizontal lines represents 100 % completion of all activities.

Progress chart The progress chart represents / shows the progress

of the activities on a particular date.

Example of LOBA project consists of the following phases / activities:

A. Construction of building Activities Time required

1. Digging of foundation pits 2 months

2. Construction of foundation 2 months

3. Construction of side walls 6 months

4. Fabrication of doors & windows 4 months

5. Roofing 6 months

6. Fixing of doors & windows 2 months

7. Wall finishing 4 months

8. Flooring 6 months

9. Plumbing & wiring 3 months

1. Machinery installation10. Fabrication of machine 8 months

11. Erection & commissioning of machine 3 months

Contd..

Conditions :The project was commenced on 1st January, 1995.The project manager wants to study the progress

of the project on 31st May 1996, using LOB chart.Construct a LOB chart as on 31st May 1996 and

offer your comments.

Contd..

Solutions :Prepare the relationships / logical sequence between the

activities Activities Predecessors Duration 1 - 2 months2 1 2 months 3 2 6 months 4 2 4 months 5 3 6 months 6,7,8,9 5 15 months 10 8 8 months 11 10 3 months

WBS [Work Breakdown Structure]WBS is an effective management tool of the project

management.Before planning any project, it is very necessary to use this

WBS tool for project planning.WBS is a process by which the whole project is divided

(breakdown) into various sub-projects, the sub-projects into various tasks, the tasks into various sub-tasks, the sub-tasks into the work packages, the work packages into the discrete activities.

The functional elements of the project is divided and arranged in hierarchical order so that all the activities of the project can be planned and managed well.

For example:The whole project is divided into following number of

levels:

Contd…..

Project

Sub-project

Task

Sub task

Work package

Activities

There is no hard and fast rule as to the number of levels into which the project is to be broken down.

The project is divided into the such discrete activities that can be planed, monitored, measured and corrected.

Level - 1

Level - 2

Level - 3

Level - 4

Level - 5

Work Breakdown Structure

Level-1

Level-2

Level-3

Work Breakdown Structure of Hospital Project

Assignment # 2What is project planning? Explain project

planning process in the context of Nepal.What are the weaknesses in project planning

process of Nepal? Explain the controlling mechanism to overcome those weaknesses.

Chapter 3 (Resource allocation and leveling) One of the main problems faced by a project manager is resource

allocation. For completing the project in time, he must have sufficient /

adequate resources required for each activity, when and where necessary.

If the project is to be completed exactly 15 months time, all the critical activities should be completed in time, so that the completion time is not exceeded.

The critical activities can be identified with the help of network diagram.

Man , money and material are three crucial resources required for any activity, if there is shortage of any one resource, the activity can not be completed in time, it may lead the project towards time over run.

Planning of the resources depends on the critical path or activities having float zero.

A project man