Project Management

The need for projects and project management

Apart from managing the continuing routine day to day activities of an

organization, managers must also manage change.

Change occurs as new products are introduced, new factories and offices

established, new technology and new processes adopted or when jobs or

organization structures are redesigned.

Change involves a set or related activities with a identifiable start and end.

A project is a temporary set of activities needed to achieve a specified one-

off objective.

Projects differ from on-going operations in the following characteristics:

Characteristic Project Operations

Continuity Unique, one-off Repetitive

Duration Finite Continuing

Improvement mode Revolution Evolution

Type of situation Making a change Staying the same

Forces on management Disequilibrium Equilibrium

Resources Transient Stable, continuing

Management objective Flexibility Stability

Performance measure Effectiveness Efficiency

Management focus Goals Roles

Management knowledge Uncertainty Experience

In Manufacturing, setting up a new factory, changing a factory layout and

introducing a new product or new technology are examples of changes that

would be managed as projects.

A manufacturing organization may have several such projects going on at the

same time.

Some management activities such as Design are normally managed on the

basis of managing a set of projects.

A design department will exist in many manufacturing organizations to manage a

set of design projects.

Design consultants manage design projects for clients.

Much of the Marketing function involves sets of activities associated with

promoting products.

A sales promotion can be managed as a project.

As continuing change becomes the 'norm' more organizations are managing all

of their activities as projects.

Project activities

The starting point for defining a project is to identify the activities needed to

accomplish it.

It defines the boundary and sets an overall objective of what is to be achieved;

for example design and install a new manufacturing system ( but not yet a

detailed objective of time or cost).

The primary project tasks are those directly associated with the physical change

being made, perhaps involving the erection of buildings, the purchase and

installation of machines and the recruitment of operators are not difficult to

identify.

However, the design, financial, planning and training activities needed must also

be included.

Operators may need to be trained.

If land is to be bought legal activities will be needed.

Some activities can occur independently and at the same time as others, but

many activities will not be able to start until other activities have finished.

These relationships are called dependencies.

For each activity it is necessary to define the set of activities on which the activity

is dependent.

Such activities are called the predecessor activities of the particular activity.

Activities with no predecessors are start activities.

They can start as soon as approval is given for the project to start.

Activities that are not listed as predecessors are final activities.

As soon as they have finished the project is finished.

In defining the activities in a project it is necessary to identify the work content,

resource requirements and the duration of the activity.

Resources may be materials or machines but for many activities they are people.

An activity might be expressed as 240 man-hours of design work, or as work

taking 2 designers 3 weeks to do. (240 hours is the work content, 2 designers is

the resource, 3 weeks is the duration assuming a 40-hour week).

Clearly resource and duration will be related.

The greater the resource the less the duration.

PROJECT STRUCTURE

A small project will comprise a single set of activities.

A larger project will be split into smaller parts, each containing a set of activities.

The split can be by time phases and/or by function.

Project phases

A project that is planned to take a long time (say more than 3 months) is likely to

be split into time stages of phases.

These are not arbitrary divisions of time, but are identifiably different stages

through which a project passes.

For a large project the project execution phases may be split into several phases.

Milestones are events such as the completion of a phase of a project.

They are themselves project activities, usually of short duration.

The purpose of a milestone activity is to control the project by monitoring

performance, approving the work done and authorizing the progression to the

next phase of the project.

Work breakdown structure

A project that involves several different types of work, involving different

departments, skills and resources may be split into smaller parts, each

department or resource unit having a identifiable part of the whole project.

Each of these parts is called a 'work package' that comprises a set of similar

project activities.

For example in a project to design and install a new manufacturing system, there

will be some design work packages, manufacturing work packages and work

packages for other types of work.

The structure of work packages that form the whole project is called the Work

Breakdown Structure, WBS, of the project.

An intermediate level, in which a set of work packages are grouped and related

to the organization structure is called the Organization Breakdown Structure,

OBS.

This level is used to define responsibilities for project management, for project

costing and budgeting and for project control.

This breakdown of the whole project is useful for project management.

The set of work pages done by the manufacturing department can be seen as a

sub-project, managed by the manufacturing department.

The individual work packages can also be seen as sub-projects.

Question

A small manufacturing organization is planning to install a new machine into an existing factory in order to manufacture a new component.

Define 15 to 20 activities needed for the project. (top-level, not detail).

Estimate some resource requirements for each activity.

Develop an organization breakdown structure. (this could include contractors)

 

PROJECT STRATEGY

At the project conception phase it is necessary to consider the project strategy,

that is the planned way of doing and managing the project (at a strategic level,

not a detailed level).

At this stage the reason for the project and the expected outcomes need to be

defined.

These will explain why the project is being proposed and the costs and benefits

expected (not a detailed analysis).

The reason may be to solve a problem, to increase manufacturing capacity or in

some other specific way to assist the organization in achieving its corporate

objectives

Four project strategies are shown below:

Project objectives

The objectives of the project team are to complete a given project within time,

cost and resource budgets.

The achievement of good quality will also be an objective.

It may not always be possible to achieve all of these objectives simultaneously.

Usually one of them will predominate and this will determine the way the project

is managed.

In setting objectives it is important that they are clear and quantified. The SMART

criteria have been developed to assist in setting objectives. Objectives should be

o Specific (bounded)

o Measurable (defined times, costs, performance)

o Agreed (between all the stakeholders)

o Realistic (achievable)

o Timed (defined timescale)

 

THE PROCESSES OF PROJECT MANAGEMENT

Project Management involves -

Project definition - Identifying the activities to be done, and the overall timescale

for the

Project strategy - Deciding which activities will be done in-house and which will

be contracted-out

Project organization - Relating activities to responsibilities, setting up a project

team (more details in this unit)

 Project Planning - The collection of data and determination of the project

duration and resource requirements. This is done prior to the start of the project.

Re-planning is usually required during implementation if actual progress differs

from planned progress

Resource Scheduling - The procurement of resources or re-scheduling within

limits imposed by currently available resources. (Manpower, machines materials

and money).

Project Budgeting - The initial planning of project expenditure by each

department for each accounting period. A project budget is created from a

resource schedule. The budget is used as a plan against which actual values are

compared during project implementation

Project Appraisal - The analysis of capital expenditure against future expected

revenues to determine the financial viability of the project.

Project Control - The monitoring of progress and expenditure during

implementation. Actual progress and expenditure is compared with budgeted

values. Differences between actual and budgeted values are called variances.

The process of measuring variances is called variance analysis. This may lead to

re-planning and re-scheduling as the result of delays.

PROJECT ORGANIZATION

Project organization is similar to product organization.

Several projects may be in progress simultaneously.

Different sections will be created, one for each project.

Staff may be involved in more than one project.

Senior staff will co-ordinate all projects.

A project manager leads a multi-disciplinary project team which has the range of

skills needed to implement a project.

Project documentation

Administrative systems are needed to support project managers.

Project management differs from managing operations, but has similar across

projects in different industries.

Project Support Systems have been devised to provide a structure of

documentation and reporting for effective project management.

PRINCE (Projects IN Controlled Environments) is one such decision support

system.

PRINCE embodies proven best practice and provides a common language and

framework for project managers.

In Britain PRINCE is used on all Government projects and is becoming widely

used in the private sector.

PRINCE defines the role of the project manager as being to:

Establish terms of reference. Use a defined structure for delegation and communication. Divide the project into manageable stages (phases). Ensure resources are agreed in any approval to proceed. Provide regular management reports

Use meetings at key points of a project.

PRINCE offers standard documentation and a reporting structure that focuses on

monitoring activities, identifying problems and bringing a project on track to

achieve the project objectives.

British Standards in project management

British Standards have been developed in the field of project management.

These provide a common terminology, standard forms of diagram and

explanations of techniques.

British Standards in project management

Standard Topic

BS4335:1987 Glossary of terms in project network analysis

BS6079:1996 Project Management

BS:ISO 10006:1997 Guidelines to quality in project Management

BS:EN13290:1999 Space project management

HB10108 Project management in manufacturing

HB10112 Essentials of project and systems engineering management

HB101113 Project risk management, techniques and insights

PROJECT PLANNING USING NETWORK ANALYSIS

Network analysis is an analytical technique used for project planning.

Given a list of activities and their durations, it is NOT possible to determine how

long it will take to complete the set of activities which form a project.

The duration of the project depends on how the activities are related logically.

Some activities can occur at the same time as others (in parallel), but some can

only be done after others have been completed (in series or sequentially).

The concurrent and consecutive relationships between activities enable a

network diagram of the activities to be drawn.

Only then can the project duration be determined.

A network diagram can be constructed when the relationships between activities

are known.

For each activity a set of preceding activities is identified.

Using the activity-on-arrow method only one type of relationship is possible: that

is a finish-start relationship.

This means that one or more activities must be finished before one or more other

activities can start.

For example, if activities A and B need to be completed before activity C can

start. This can be written as:

C < A + B meaning that C depends on A and B.

C can only start when both A and B have been completed.

A and B are predecessors of C and C is a successor of (or dependent on) A and

B.

This type of dependency is called a finish-start dependency since it requires

predecessor activities to finish before the successor activities can start.

Activities are drawn as arrows which are joined by nodes (which are drawn as

circles) representing events.

An event is the state of completion of a set of activities which must all be

completed before another activity or set of activities can start.

On a network diagram the length of an arrow is not related to time, the diagram

shows only the logical relationships between activities.

These relationships indicate the series or parallel connections between activities.

A project will have a start and an end event representing the completion of none

and all activities respectively.

The start event is usually drawn at the left.

The first activities that can be done are those that have no dependency.

A network diagram can be built up by plotting those activities that can start when

those on which they are dependent have already been plotted.

When two or more activities can start after the completion of a given activity then two or

more activity arrows will radiate rightwards from that activity.

The angle at which they are drawn has no meaning other than to separate the different

activities.

When one activity depends on two or more preceding activities being completed then the

arrows for these activities will converge rightwards to a single event.

This event represents the completion of the two or more activities, not just one of them.

The final activities are those on which no other activities are dependent.

These activities will converge rightwards to the single end event of the network.

This represents the completion of the whole project.

In some cases a 'dummy activity' is needed to represent the logic in a network.

A dummy is an activity of zero duration and zero resource.

It is shown as a dashed arrow on the network.

Dummies are needed where the logic relating a set of activities cannot be drawn using a

single event node.

Activities, durations and dependencies

Activity Duration Resource Cost Dependency

A 4 X 2400 -

B 12 Y 18000 A

C 3 X 1800 A

D 13 Y - A

E 4 Y 6000 A

F 0 - - B

G 15 Y 15000 C + F

H 1 X 600 D

I 11 X 8250 D

J 5 X 1500 E

K 15 Y 7500 H + J

1. Durations are in weeks

2. A has no dependency and so is the starting activity.

3. No activities depend on G, I or K so these are end activities.

4. D has no cost. It could be a 'lead time' or a waiting time. It is an activity for this analysis since a period of time is required for it to occur.

5. F has no duration. It is not a real activity. It is a 'dummy' activity introduced in order to resolve the logic relating a set of activities. (A set of overlapping dependencies cannot always be represented by a single event.)

Project time analysis

Time analysis is based on analyzing the event times.

Event times represent in-process due dates.

For each event two times can be calculated:

The earliest time by which the event can occur.

The latest time by which it must occur if

the overall project time is to be achieved.

A time of 0 is usually assigned to the start event and by passing forwards through the

network the earliest time for each event is calculated.

Where more than one activity leads to an event, the earliest event time is the latest of the

set of earliest activity finish times.

This is because all incoming activities must be completed for the event to occur.

Earliest activity finish time = Earliest activity start time + activity duration      

When the end event is reached, the project duration can be determined as the

time of the end event.

Event times for this analysis are times from start, NOT dates.

As a project is implemented it would be normal to state the event times as

calendar dates.

Using the project duration and passing backwards through the network the latest

time for each event is calculated.

Where more than one activity starts from an event its latest time is the earliest of

the set of latest activity start times.

This is because the latest event time must be early enough to allow the activities

on the longest path to be completed by the project completion time.

Latest activity start time = latest activity finish time - activity duration                     

When the start event is reached its latest time should be 0, the same as its

earliest time (if not there is an error).

It will usually be the case that at some events there is NO difference between its

earliest and latest times, whereas for other events, there is a difference, which is

referred to as the 'slack time' at the event.

This represents an amount of delay tolerance at the event.

This shows that the project duration is 33 weeks.

Critical Path through a network

A network comprises several paths of activities from its start to its end, one (or

more) of which is longer in duration than others.

This path determines the project duration and is referred to as the Critical Path.

This is the path that causes the project duration to be what it is.

There is no delay tolerance on the critical path and no slack time at the events on

it.

For the example network the critical path is through activities A-D-H-K.

Other paths through the network are not critical and on them an amount of delay

is tolerable without affecting the project time.

A non-critical path comprises activities whose duration is less than the time

available between the events where such a path joins the critical path.

These activities can 'float' in time between these events.

Float on an activity is calculated by referring to the times of the events at the start

and end of the activity.

Float = Latest time of end event - Earliest time of start event - duration                          

This float is only available for a given activity if some of it has not already been

used by a delay of a preceding activity on the same path.

Gantt Chart A network diagram is a logic diagram that does not itself show slack or float.

As an alternative a Gantt (or Bar) Chart can be drawn.

This shows when activities occur but does not show the logic connections.

It is however possible to show logic links on a Gantt Chart.

Network Diagram on a Time Base

Both logic and time scale can be shown if the network diagram is redrawn with

the arrows to scale in time.

This network on a time base diagram combines the logic of a network diagram

with the time scale of a Gantt chart.

It is able therefore to show the float time on some of the activity paths.

The network on a time base for the example network is shown in Figure.

Notice that some event number appear more than once.

Logically these represent the same event but the separate nodes show

separately the activity finish times.

Dashed lines link the separate parts of an event together.

It can be seen from Figure why A-D-H-K is the critical path.

It is the path that causes the project duration to be 33.

Other paths have float, which is visible on the diagram as dashed lines with no

arrows.

There is no float on the path A-D-H-K.

On the time based diagram activities are shown at their earliest times.

This maximizes the opportunity to recover from delays that extend the activity

duration and may affect the project duration.

However, delaying an activity until its latest time postpones expenditure and so

this may be beneficial.

In this case though the float time has been lost by the delayed start so further

delay would cause a problem.

In practice, these factors must be considered, along with claims for alternative

uses on scarce resources, in making a decision about when to start an activity.

Question 1

The table below gives a list a logical dependencies between sets of activities. Draw a part of a network to represent the logic in each case.

1 B < A

C < B

2 J < A

K < A + B

3 J < A + B

K < B

4 B < A

C < A

K < B + C

5 J < A

K < A + B + C

L < C

6 J < A

K < A + B

L < A + B + C

7 J < A + B

K < B

L < B + C

8 J < A

K < A + B

L < B + C

9 J < A + B + C

K < B + C

L < C

B < A means that B can start when A is finished

K < B + C means that K can start when both B and C are finished

Question 2

A project comprises the activities shown in the table below. For each activity its duration (in weeks) and dependencies are given.

Activity Duration Dependency

A 2 -

B 4 -

C 5 A

D 1 B

E 3 B

F 2 C + D

G 4 E

Draw a Network Diagram for this project.

Calculate the project duration.

Determine the critical path.

Draw the Network on a time base.

Determine the float on each activity.

Question 3

A manufacturing organization plans to install a new machine. This involves the following activities. This change will be managed as a project. For activity the duration is shown (in weeks) and the dependency on the completion of previous activities. You have been asked to analyse this project .

1 Draw an Activity-on-Arrow Network Diagram for this project.

2 Analyse the network and determine the float on each activity

3 Calculate the project duration

4 Identify the Critical path

5 Draw a Gantt Chart for the project, showing the float