Production Planning

& Control

Chapter 5
Project Planning & Control

Chapter5 1
 Project Planning
& Control
™Project management is the discipline of organizing and
managing resources (e.g. people) in such a way that the
project is completed within defined scope, quality, time and
cost constraints.
™A project is a temporary and one-time endeavor undertaken
to create a unique product or service, which brings about
beneficial change or added value.
™ This property of being a temporary and one-time
undertaking contrasts with processes, or operations, which
are permanent or semi-permanent ongoing functional work to
create the same product or service over and over again.
Chapter5 2
 Project Planning
& Control
™The management of these two systems is often very
different and requires varying technical skills and
philosophy, hence requiring the development of project
management.
™The first challenge of project management is to make sure
that a project is delivered within defined constraints.
™The second, more ambitious challenge is the optimized
allocation and integration of inputs needed to meet pre-
defined objectives.
™A project is a carefully defined set of activities that use
resources (money, people, materials, energy, space,
provisions, communication, etc.) to meet the pre-defined
Chapter5 3
objectives.
 Project Management

™Definitions
™PMBOK (Project Management Body of Knowledge as
defined by the Project Management Institute - PMI):"Project
management is the application of knowledge, skills, tools and
techniques to project activities to meet project
requirements."[
™PRINCE2 project management methodology: "The
planning, monitoring and control of all aspects of the project
and the motivation of all those involved in it to achieve the
project objectives on time and to the specified cost, quality
and performance."[4]
Chapter5 4
 Project Management

™PROJECT: A temporary piece of work with a finite end

date undertaken to create a unique product or service.
Projects bring form or function to ideas or needs.
™DIN 69901 (Deutsches Institut für Normung - German
Organization for Standardization):
™"Project management is the complete set of tasks,
techniques, tools applied during project execution"

Chapter5 5
 Project Management
™Project objectives
™Project objectives define target status at the end of the
project, reaching of which is considered necessary for the
achievement of planned benefits. They can be formulated as
S.M.A.R.T.
™Specific,
™Measurable (or at least evaluable) achievement,
™Achievable (recently Acceptable is used regularly as well),
™Realistic and
™Time terminated (bounded).
™The evaluation (measurement) occurs at the project
closure. However a continuous guard on the project progress
should be kept by monitoring
Chapter5
and evaluating. 6
 Project Life Cycle

™ The Project Life Cycle refers to a logical sequence of

activities to accomplish the project’s goals or objectives.
Regardless of scope or complexity, any project goes through
a series of stages during its life.
™ There is first an Initiation or Birth phase, in which the
outputs and critical success factors are defined, followed by a
Planning phase, characterized by breaking down the project
into smaller parts/tasks, an Execution phase, in which the
project plan is executed, and lastly a Closure or Exit phase,
that marks the completion of the project.

Chapter5 7
 Project Life Cycle

™ Project activities must be grouped into phases because by

doing so, the project manager and the core team can
efficiently plan and organize resources for each activity, and
also objectively measure achievement of goals and justify
their decisions to move ahead, correct, or terminate.
™It is of great importance to organize project phases into
industry-specific project cycles. Why? Not only because each
industry sector involves specific requirements, tasks, and
procedures when it comes to projects, but also because
different industry sectors have different needs for life cycle
management methodology.
Chapter5 8
 Project Life Cycle

™ Diverse project management tools and methodologies

prevail in the different project cycle phases. Let’s take a
closer look at what’s important in each one of these stages:
1) Initiation
In this first stage, the scope of the project is defined along
with the approach to be taken to deliver the desired outputs.
™ The project manager is appointed and in turn, he selects
the team members based on their skills and experience.
™The most common tools or methodologies used in the
initiation stage are Project Charter, Business Plan, Project
Framework (or Overview), Business Case Justification, and
Milestones Reviews.
Chapter5 9
 Project Life Cycle

2) Planning
The second phase should include a detailed identification and
assignment of each task until the end of the project.
It should also include a risk analysis and a definition of a
criteria for the successful completion of each deliverable.
The governance process is defined, stake holders identified
and reporting frequency and channels agreed. The most
common tools or methodologies used in the planning stage
are Business Plan and Milestones Reviews.
3) Execution and controlling
The most important issue in this phase is to ensure project
activities are properly executed and controlled.
Chapter5 10
 Project Life Cycle

™ During the execution phase, the planned solution is

implemented to solve the problem specified in the project's
requirements. In product and system development, a design
resulting in a specific set of product requirements is created.
™ This convergence is measured by prototypes, testing, and
reviews. As the execution phase progresses, groups across
the organization become more deeply involved in planning
for the final testing, production, and support.
™ The most common tools or methodologies used in the
execution phase are an update of Risk Analysis and Score
Cards, in addition to Business Plan and Milestones Reviews.
Chapter5 11
 Project Life Cycle

™4) Closure
In this last stage, the project manager must ensure that the
project is brought to its proper completion.
™The closure phase is characterized by a written formal
project review report containing the following components: a
formal acceptance of the final product by the client,
™ Weighted Critical Measurements (matching the initial
requirements specified by the client with the final delivered
product), rewarding the team, a list of lessons learned,
releasing project resources, and a formal project closure
notification to higher management.
™No special tool or methodology is needed during the
closure phase. Chapter5 12
Project Life Cycle

Chapter5 13
 Project Organization

The various considerations in forming a project

organization are
™Proportion of the companies work that is performed by
projects
™The scope & duration of projects
™The capabilities of the available person
™The preference of decision makers
There are four options available in choosing an appropriate
organization for projects.
™Functional Organization
™Project Coordinator
™Project matrix
™Project Team Chapter5 14
 Matrix Organization
Structure
Top management

Manager Manager Manager Manager

Quality Engineering Production Marketing

Project A
A A A A
Manager

Project B B B B B
Manager
Chapter5 15
 Role of Project Manager

™A project manager is the person who has the overall

responsibility for the successful planning and execution of a
project. This title is used in the construction industry,
architecture, information technology and many different
occupations that are based on production of a product or
service.
™The project manager must possess a combination of skills
including an ability to ask penetrating questions, detect
unstated assumptions and resolve interpersonal conflicts as
well as more systematic management skills.

Chapter5 16
 Role of Project Manager

™Key amongst his/her duties is the recognition that risk

directly impacts the likelihood of success and that this risk
must be both formally and informally measured throughout
the lifetime of the project.
™Risk arises primarily from uncertainty and the successful
project manager is the one who focuses upon this as the
main concern. Most of the issues that impact a project arise
in one way or another from risk.
™A good project manager can reduce risk significantly,
often by adhering to a policy of open communication,
ensuring that every significant participant has an
opportunity to express opinions and concerns.
Chapter5 17
 Role of Project Manager

™It follows from the above that a project manager is one

who is responsible for making decisions both large and
small, in such a way that risk is controlled and uncertainty
minimized. Every decision taken by the project manager
should be taken in such a way that it directly benefits the
project.
™Project managers use project management software, such
as Microsoft Project, to organize their tasks and workforce.
These software packages allow project managers to produce
reports and charts in a few minutes, compared to the several
hours it can take if they do not use a software package

Chapter5 18
 Role of Project Manager

™The role of the project manager encompasses many

activities including:
™Planning and Defining Scope
™Activity Planning and Sequencing
™Resource Planning ,Developing Schedules
™Time Estimating ,Cost Estimating
™Developing a Budget ,Controlling Quality
™Managing Risks and Issues
™Creating Charts and Schedules
™Risk Analysis,Benefits Realization
™Scalability, Interoperability and Portability Analysis
™Documentation ,Team Leadership
™Strategic InfluencingChapter5 19
 Problems in Managing Project

™Managing a project can be complex& challenging

assignment .
™Since some of project are unique,very little prior expertise
available.
™A project manger has to control diverse activities to
control project goals
™Persons from different disciplines are associated to
contribute for project
™Subcontractor who are unfamiliar with the organization
may be brought in for caring out minor portion of work in
the project

Chapter5 20
 Project Planning &
Control Techniques
Project Planning
™Project Planning includes all activities that result in a
course of action foe a project.
™Planning involves decision making regarding resources to
be committed
™Planning also involves of setting boundaries
™Identifying controllable & accountable-non accountable
variables
™Project control
™ is that element of a project that keeps it on-track, on-time,
and within budget. Project control begins early in the project
with planning and ends late in the project with post-
implementation review,Chapter5
having a thorough involvement21of
each step in the process
 Project Planning &
Control Techniques

Project Project Project

Planning Scheduling Control

Chapter5 22
 Network Fundamentals
™A network diagram is a model that uses small
circles(nodes) connected by lines or branches (arcs) to
represent precedence relationship.
™Networks are frequently used to show precedence
relationship among the activities .

Prepare Site In s
t
3 gen all
5 era
ite

tor
tS

s
lec

Obtain
Se

Select vendors
License
1 2 4 7 8
Design Plant
Sele
ct P
e i n tors
rso r a a
nne T er
Chapter5
l 6 op 23
 Network Fundamentals
Commonly used Network Symbols:
Activity
Dummy Activity

Event

A B
Activity A Must begin before activity B
1 2 3

A C
1 Activity A & B can occur concurrently
3 4 But both must finish before activity
C begins
2 B
Chapter5 24
 Network Fundamentals

D E
4 4 6 Activities A & D can occur Concurrently
But both must be finished before activity
C
E begin.Activity B can begin only when
A B activity A completed.C is dummy activity
1 2 3

Activity A & B can occur concurrently

A C 4
1 But both must finish before activity
3 C & D begins.
C can begin independently & vice versa
2 B D 5
Chapter5 25
 Project Planning& Scheduling
What is Project Plan?

™Project Planning means different things to

different people.

™To some the Project Plan is all of the project

management documentation: the project definition
document, organization chart, quality plan, schedule,
change control procedure, risk management strategy,
etc.

™To others the Project Plan is simply the schedule

that shows who will do which work tasks and when,
and to them
Chapter5 26
 Project Planning& Scheduling

™Project Planning is the act of building this schedule.

™Here we will use the term Project Planning in this second
sense: building the task by task schedule which we will call
the Project Plan
™Project Planning - Large and Small Projects

™Large projects and small projects are very different

animals in terms of the Project Planning that they
need. For a very small project a back-of-an-envelope
plan may be perfectly adequate. There might even be
no written down plan at all.
Chapter5 27
 Project Planning& Scheduling

™But for a large project the Project Planning will need to

produce a detailed, formal plan showing precisely who will
do which bits of work and when
™Project Planning conceals a trap for the unwary. Most
project leaders get experience of Project Planning on small
projects. They learn a lesson over and over again: you don't
need to bother with all that formal Project Planning stuff.
™ And they're right, you don't need to do much, if any,
formal Project Planning on a small project. But you then
give that person a large project, they know they don't need to
bother with formal Project Planning, so they don't. And
you have a disaster in the making.
Chapter5 28
 Project Planning& Scheduling

Project Planning including:

• dividing the project into plan able stages
• when to build the project plan
• who constructs the project plan
•how simple the project plan can be for a small project.
•how complex the project plan will be for a large project
• detailed project plans and high level overview project
plans
• work task size,• step by step guide to constructing a
project plan,• summarizing the project plan for senior
management ,• communicating the project plan
• getting team buy in to the project plan
Chapter5 29
 Project Planning& Scheduling

•how complex the project plan will be for a

large project
• detailed project plans and high level
overview project plans
• work task size
• step by step guide to constructing a project
plan
• summarizing the project plan for senior
management
• communicating the project plan
• getting team buy in to the project plan 30
Chapter5
 PERT/CPM Chart

PERT or "Project Evaluation and Review

Technique":
• Another derivative of the GANTT chart
• Multiple time estimates were used for each
activity that allowed for variation in activity
times
• Activity times are assumed to be random, with
assumed probability distribution ("probabilistic")
• Activities are represented by arrowed lines
between the nodes or circles
Chapter5 31
 PERT/CPM Chart
CPM or "Critical Path Method":
• tool to analyze project and determine duration,
based on identification of "critical path"
through an activity network.
• Knowledge of the critical path can permit
management of the project to change duration.
• A single estimate for activity time was used that
did not allow for variation in activity times
• Activity times are assumed to be known or
predictable ("deterministic")
Activities are represented as nodes or circles
Chapter5 32
 PERT/CPM Chart
PERT/CPM

Over time, CPM and PERT merged into one

technique referred to as "PERT / CPM ".
• Visually easier to see precedence
relationships
• Ideal for large projects with many activities

They consist of a network of branches and

nodes.

Chapter5 33
PERT/CPM Chart

Chapter5 34
 PERT/CPM Chart

Two types:

Activity-on-node (AON) -- nodes represent

activities and arrows show precedence relationships.
Activity-on-arrow (AOA) -- arrows represent
activities and nodes are events for points in time.

Dummy
inserted into the network to show a precedence
relationship, but it does not represent any actual
passage of time Chapter5 35
PERT/CPM Chart

Chapter5 36
 PERT/CPM Chart
Activity Slack

Slack is computed by:

Sij = LSij - ES ij
Or
Sij = LFij - EF ij

Slack enables resources to be temporarily diverted other

activities to:
•avoid delays
•compensate for an inaccurate time estimate

Chapter5 37
 PERT/CPM Chart
Most network activities are estimates
•project uniqueness means little historical basis
•subject to a lot of uncertainty
Using probabilistic methods rather than deterministic to
minimize uncertainty
Activity Scheduling
Earliest Start time (ES): the earliest time an activity can start
Forward pass: start at the first node and move forward
through the network to determine the earliest start time for an
activity
Earliest Finish time (EF):
the earliest start time plus the activity time
EFij = ESij + t ij
Chapter5 38
PERT/CPM Chart

Chapter5 39
PERT/CPM Chart

Chapter5 40
PERT/CPM Chart

Chapter5 41
PERT/CPM Chart

Chapter5 42
PERT/CPM Chart

Chapter5 43
PERT/CPM Chart

Chapter5 44
PERT/CPM Chart

Chapter5 45
PERT/CPM Chart

Chapter5 46
PERT/CPM Chart

Chapter5 47
PERT/CPM Chart

Chapter5 48
 Solved Problems
1.Draw a network Diagram for the data given
Activity Immediate predecessor activity
A -
B A
C A
D B,C
E C
F D
G E
H F.G

Chapter5 49
 Solved Problems
Solution 1
D
4 5 F
B
H
A
88
11 2 Dummy Activity 7

C
3 6 G
E

A dummy activity 3-4 is introduced here because

activity B & C both proceed activity D and activity C
precedes activity E
Chapter5 50
 Solved Problems
2, Draw a network Diagram for the activities & determine
critical path
Activity Description of Duration of Immediate
activity Activity Predecessor
Activity
A Design Plant 12 -
B Select site 8 A
C Select vendor 4 A
D Select personnel 3 A
E Prepare site 12 B
F Mfg generator 18 C
G Prepare manual 5 C
H Install generator 4 E,F
I Train operator 9 D,G
J Obtain license 6 H,I
Chapter5 51
 Solved Problems
Solution 1 E
12
3 5
8 B H
18 F 4
A 6
C 88
11 2 4 7
4 G
12 9 J
5
I
D 3 6

To calculate the critical path The earliest & latest

completion of events is calculated by forward &
backward pass computation as shown in next slide

Chapter5 52
 Solved Problems
Solution 1 E
12 5
3
8 B 20 22 34 34 H
18 F 4
A 6
11 2 C 4 7 88
0000 12 12 4 16 16 G 38 38 4444
44 44
12 9 J
5
6 I
D 3
21 29

To calculate the critical path The earliest & latest

completion of events is calculated by forward &
backward pass computation as shown in next slide

Chapter5 53
 Solved Problems
3 The Activities of a Project and there time estimates are given below
Activity Estimated Duration of Activity

Optimistic Time Most likely Time Pessimistic Time

1 -2 2 5 8
1 -4 4 9 28
1 -5 5 11 17
2 -3 3 9 27
2 -6 3 6 15
3 -6 2 5 14
4 -6 3 6 15
5 -7 1 4 7
5 -8 2 5 14
6 -8 6 12 30
7 -8 2 5 8
Chapter5 54
 Solved Problems
Step1 Calculate Expected time (t0) for each Activities
Activity Expected time (t0) for each Activities(weeks)

1 -2 (2+(4*5)+8) / 6=30 / 6=5

1 -4 (4+(4*19)+28) / 6=108 / 6=18
1 -5 (5+(4*11)+17) / 6=66 / 6=11
2 -3 (3+(4*9)+27) / 6=66 / 6=11
2 -6 (3+(4*6)+15) / 6=42 / 6=7
3 -6 (2+(4*5)+14) / 6=36 / 6=6
4 -6 (3+(4*6)+15) / 6=42 / 6=7
5 -7 (1+(4*4)+7) / 6=24 / 6=4
5 -8 (2+(4*5)+14) / 6=36 / 6=6
6 -8 (6+(4*12)+30) / 6=84 / 6=14
7 -8 (2+(4*5)+8) / 6=30 / 6=5
Chapter5 55
 Solved Problems
7
5
15 34 5
11 30
11 6
11 4 7 88
0000 18 18 6 3939
39 39
25 25 14

Event
5 6
Number
2 3
5 6 16 17
EE LE
11
EE Early Event
Step2: Draw PERT diagram as above
LE late Event
Chapter5 56
 Solved Problems
Step2 Standard deviation for each activity=(tp-to)/6

Activity Standard deviation (weeks)

1 -2 (8-2)/6=6/6=1
1 -4 (28-4)/6=24/6=4
1 -5 (17-5)/6=12/6=2
2 -3 (27-3)/6=24/6=4
2 -6 (15-3)/6=12/6=2
3 -6 (14-2)/6=12/6=2
4 -6 (15-3)/6=12/6=2
5 -7 (7-1)/6=6/6=1
5 -8 (14-2)/6=12/6=2
6 -8 (30-6)/6=24/6=4
7 -8 (8-2)/6=6/6=1

Chapter5 57
 Solved Problems
Step3 Standard deviation for Critical path

Activity STD Deviation

1-4 4
4-6 2
6-8
4

Standard Deviation = (4*4)+(2*2)+(4*4)

= 6 Weeks
Chapter5 58
 Solved Problems
Step4 Calculation of Slack events

Event No Slack(weeks)
1 Nil
2 6-5=1
3 17-16=1
4 18-18=Nil
5 30-11=19
6 25-25=Nil
7 34-15=19
8 39-39=Nil
Chapter5 59
 Project Planning
& Control

End Of

Chapter 5

Chapter5 60