An Overview of Project Management

Definition of Project
A project is a group of unique & inter-related activities that are planned and
executed in a certain sequence to create a unique product or service, within a
specific time frame, budget and the clients specifications.
According to Project Management Institutes a Project is defined as, A
temporary endeavor undertaken to create a unique product or service
Temporary means that every project has a definite beginning and end. Unique
means that this product, service, or result is different from others that may have
preceded it.
The British standard defines a project as, A unique set of coordinated activities,
with definite starting and finishing points, undertaken by an individual or
organization to meet specific objectives within defined schedule, cost and
performance parameters.
In reality, the only part of the definition that fits all projects is that all of them are
jobs that produce something unique. Perhaps it would be better to say that they
are intended to be temporary in nature, meaning a one-time job. A repetitive job
is not a project.
A commercial project involves the following key considerations;
What is the cost?
What is the time required?
What are the capabilities that it provides to the organizations?
Whether it will fit into the strategies of the organization?
Some Of The Project Initiatives Include:
Constructing national highways (Infrastructure Project)
Organizing the Olympics

(Sports project)

Constructing a dam for better irrigation facilities. (Infrastructure Project)

Launching of new product

(Advertising and Marketing Project)

Implementing a new computer system

(IT project or upgrade)

Designing and Implementing a new organizational structure (HR Project)

Designing and Constructing a house or colony (Construction Project)
Project Parameters

Some common constraints that influence a project are:

1. Scope
2. Quality
3. Cost
4. Time
5. Resources
Management: It is the process of planning , organizing, leading and controlling
the work of organizational members and of using all available organizational
resources to reach specific organizational goals
What is Project Management?
Managing a project is called Project Management. According to PMI, application
of knowledge, skills, tools and techniques to project activities to meet project
requirements. Project management is accomplished through the application and
integration of the project management processes of initiating, planning,
executing, monitoring and controlling, and closing
OR
Project management is the art of directing and coordinating human and material
resources throughout the life of a project by using modern management
techniques to achieve predetermined objectives of scope, cost, time, quality and
participation satisfaction.
It includes:
defining project goals,
specifying how the goals will be accomplished,
what resources are needed, and relating budgets and time for completion.
This is to be undertaken in the most systematic manner failing which means
failing of project. This most systematic manner involves adoption of techniques
like CPM, PERT etc to control the activities within time frame at certain cost. The
use of plant and machinery in construction has improved the quality of
construction and reduced time of construction.
New techniques and methods are now adopted in construction in addition with
plants and machinery to make construction work easier , well within time
schedule and of high quality. Without the use of Project Management, managers
and organizations would find themselves facing an unpredictable and chaotic
environment over which they have little control. Thus, Project Management is
both necessary and essential to the success of the project

Construction industry
The construction industry is one of the oldest and largest industries. Construction
activities provides employment on large scale. The use of modern methods has
not only reduced the time of construction and number of peoples engaged in
construction but also have improved the quality of construction and materials.
The construction of high rise buildings, dams, barrages, railways, high chimneys
etc are undertaken easily because of the availability modern methods,
equipments and machines. The countries which still continue with traditional
labor intensive style of construction , which is time consuming and does not
match quality requirements demanded by client. If the construction project
schedules are not maintained , the cost increases by leaps and bounds. It must
be realized that the use of plants & machinery sometimes becomes absolutely
necessary for certain types of construction and also for ensuring quality and
saving time.
Why Construction industry?
What differentiate the construction industry from other industries is that its
projects are large, built on-site, and generally unique. Time, money, labor,
equipment, and, materials are all examples of the kinds of resources that are
consumed by the project.
Projects begin with a stated goal established by the owner and accomplished by
the project team. As the team begins to design, estimate, and plan out the
project, the members learn more about the project than was known when the
goal was first established. This often leads to a redefinition of the stated project
goals.
Types of construction-Public & Private
Construction projects are carried out by the public sector or the government and
also by private sector. The projects undertaken by government are much bigger
and involve outlays, and theses are of national importance and meant to direct
the overall economic development of the country.
For example , a river valley project involving construction of dams, barrages,
irrigation and navigation canals, aqueduct, and generation of hydro-electric
power is a huge project which takes long time to complete and require large sum
of money. Construction of steel plants, power plants, national highway, long span
bridge etc also urban renewal scheme, big housing projects or establishing new
town are also generally carried out by the government. Many of these jobs are
of specialized in nature and hence need specialized contractors. In private
sectors , the job is normally undertaken only by when budget is ready and there
are no quotations based on percentage less than the scheduled price The rates
quoted are workable and once stated these are normally finished on time.
Major types of construction

1. Residential housing construction

2. Institutional & commercial buildings

3. Infrastructure & heavy construction like dam, bridge, barrage, highway etc.
Construction industrys Key players

Owner or Client

Designer/ consultant

Contractor/Builder

Construction industrys Key players(Modern perspective)

Owner or client

Designer / consultant

Contractor / Builder

Construction manager

Owner
Owner is also called client. Owner is the person who actually arranges money for
particular project. Owner is a real instinct who has to launch idea. Owner may be
a person or organization Government/private. He provides funds. He is a
funding agency for the project. Scope definition is also provided by the owner.
Consultant/ Designer
During construction, the role of a consultant is to administer the contract as
described in the Contract Documents. Consultants are professionals, typically,
appointed by the client to perform expert tasks on a project. This might include:

Field investigation for project

Providing advice on setting up and defining the project.
Developing and co-ordinating the design.
Preparing production information and tender documentation.
To prepare estimation and specification.
To float tender, appraisal and approval.
Contract administration.
Inspecting the work of contractor

Contractor
May be individual or organization. Responsible for planning and execution of
constructions work. Big constructions companies can deal in designing,
tendering, and scheduling. Contractor may be main / prime contractor or
specialty/ sub-contractor.
Main/ Prime contractor

Prime contractor is the person who actually execute the contract. He actually
negotiate the contract with client. He is the key person who is responsible to
change dream of owner into physical shape. Contractor is assigned the whole
job. He needs directions from engineers/consultant and clients. This makes a
triangle of owner, contractor and engineer. In this triangle, there is a two way
traffic.
For example, owner can question contractor and engineer and so is contractor
and engineer. Contractor signs an agreement with the owner and holds his
position.
Following are some tasks performed by General Contractor:

Assure the work to be completed on time he specified.

He must use Tool and plant at the site, which he has specified at the time of contract.
He must arrange labor force

Sub contractor:
It is also a project player. It is also known as special contractor. They actually
provide facilities to the main contractor for the sub projects. There is
an agreement between these main and subcontractor. Tasks which are
performed by Sub contractor are :

o
o
o
o
o
o
o
o

Electric wiring.
Plumbing.
Air condition supply.
Wood work.
Paint.
Providing soil for project.
Steel fixing.
Concreting

Construction manager(CM):
Construction manager is the person who actually coordinates the construction
process on behalf of the contractor. Construction manager is not common in
some countries. Usually in other countries, contractor assigns construction work
to a CM who deals and manages all the things related to construction. His duties
include:

o
o
o
o
o
o
o
o

Site investigation
Coordination for design and drawings.
Design project organization for sound execution of project.
Estimation initial planning and budgeting .
Coordinate and direct construction workers and subcontractors.
Tender appraisal.
Select tools, materials and equipment.
Meet contractual conditions of performance

o
o
o
o

Review the work progress on daily basis

Prepare internal and external reports pertaining to job status
Supervising the work
Ensure quality construction standards and the use of proper construction techniques

WHAT IS VALUE ENGINEERING

Value engineering is a total of management which approaches the question of
saving cost from the point of view of value. It cuts unnecessary costs which
neither provides quality nor customer features. Requires co-operation of all
functional departments. In large organisations, there are value engineering
teams having full time jobs.
Value Engineering (VE) is concerned with new products. It is applied during
product development. The focus is on reducing costs, improving function or both,
by way of teamwork-based product evaluation and analysis. This takes place
before any capital is invested in tooling, plant or equipment. This is very
significant, because according to many reports, up to 80% of a products costs
(throughout the rest of its life-cycle), are locked in at the design development
stage.
What is Value?
The minimum money which has to be expended in purchasing or manufacturing
a product to create the appropriate use of esteem factors.
Value and cost

value=

Function
Cost

Value: What the product is worth to the customer.

Function: Properties and qualities of product.
Cost: Money value of materials used, Labour & indirect costs.
Phases of VE:
VE job plan can be accomplished in four phases.

Information ( get the facts)

Speculative (Brainstorm)
Analytical (investigate and evaluate)
Proposal (sell/present)

Information (get the facts):

Together data concerning the item as presently designed.

What is item? What are its functions? What does it do?

Evaluate what are basic functions of item? What is its worth? Also what is cost/worth
ratio etc.
Also know what are high-cost or poor value areas?

Speculative (Brainstorm):

To generate numerous alternatives for providing items basic functions.

What alternative systems, materials , or methods can be considered.

Analytical (investigate and evaluate):

To evaluate, criticize, and test the proposed alternatives.

To estimate the dollar value of each alternative.
Also determine the alternatives which offer the greatest potential of cost saving.

Proposal (sell/present):

Development
To review the alternative solutions.
To assess technical feasibility of each alternative.
Presentation
To prepare sound proposal to management, and present a plan for implementation.

VALUE ENGINEERINGAPPROACH:

6-Phases of Value Analysis Exercise:(Diagram)

Value Engineering in organizations helps to identify:

The problem or situation that needs to be changed/improved

All that is good about the existing situation
The improvements required in the situation
The functions to be performed
The ways of performing each function
The best ways among the selected functions
The steps to be followed to implement the function

Application of Value Engineering:

Overall quality and performance.

Work together to reduce cost.

Latest developments.

Service function.

Desired objective.

Construction Planning
Planning can be defined as drawing up a method or scheme of acting, doing,
proceeding, making, etc., developed in advance. Construction projects involve
using different resourceshuman, equipment and material, money, etc., and at
all times. The task of a construction planner is to draw up plans for optimum
utilization of all these resources and to ensure appropriate preparedness at all
times. Construction of a large project involves diverse agenciesgovernment
regulators, clients/owners, designers, consultants and contractors. It is important
to ensure proper coordination to ensure that the agencies do not work at crosspurposes, and that the common goal is served. It should be noted that plans are
drawn up at each of the stages or phases of a project, though different
terminologies are used at times depending upon the stage of the project. Ex:feasibility plan, preliminary plan etc.
Initially when the project is at the inception stage, the plan could be referred to
as a feasibility plan, while in the engineering and execution stages, terms such
as preliminary plan and construction plan, respectively, are commonly used.
TYPES OF PROJECT PLANS
Schedule, cost, quality and safety can be identified as specific items on which
the success of any (construction) project is evaluated. Thus, at times it makes
sense to have different plans for each of these criteriaand draw up (separately)
a time plan (or schedule), cost plan, quality plan and safety plan. Depending
upon the nature and stage of the project, one may also need to deal with a plant
and equipment plan, a maintenance plan and a staff deployment plan.

1. Time Plan
Time is the essence of all construction projects, and contracts often have clauses outlining
awards (bonus payments) or penalties (as liquidated damages) for completing a work ahead
or later than a scheduled date. While effort is made to ensure timely completion of work, it
should be noted that some of the common reasons for delays could be a sluggish approach
during planning, delay in award of contract, changes during execution, and alterations in
scope of work, delay in payments, slow decision-making, and delay in supply of drawings
and materials, and labor trouble.
Several reasonably well-established techniques are available and commonly used for time
planning (or scheduling) activitiesfor example, critical path method (CPM), programme
evaluation and review technique (PERT),) etc. The choice of the method to be used in a
particular case depends on the intended objective, the nature of the project, the target
audience, etc.
2. Manpower Plan

This plan focuses on estimating the size of workforce, division in functional

teams and scheduling the deployment of manpower. It may be noted that
manpower planning also involves establishing labour productivity standards,
providing suitable environment and financial incentives for optimum productivity,
and grouping the manpower in suitable functional teams in order to get the
optimum utilization.

3. Material Plan
The material plan involves identification of required materials, estimation of required
quantities, defining specification and forecasting material requirement, besides identification
of appropriate source(s), procurement plans and monitoring the usage of materials.
4. Construction Equipment Plan

Modern construction is highly mechanized and the role of heavy equipment in

ensuring timely completion of projects cannot be over-emphasized. Machines are
used in modern construction for mass excavation, trenching, compacting,
grading, hoisting, concreting, drilling, material handling, etc. Induction of modern
equipments could improve productivity and quality, besides reducing cost. At the
same time, it should be borne in mind that heavy equipments are very costly and
should be optimally utilized in order to be productive.

5. Finance Plan
Given the fact that large construction projects require huge investments, and
a long time to complete, it is obvious that all the money is not required at any
one point in time. Contractors fund their projects from their working capital, a
part of which is raised by the contractors using their own sources (e.g., bank
loans secured against assets, deployment of resources from their inventory).
Whereas the rest comes from a combination of avenues such as mobilization
advance for the project, running-account bills paid by the client, secured
advances against materials brought at site, advance payments, and credits
from suppliers against work done. Thus, a careful analysis needs to be carried
out to determine how the requirement of funds varies with time.

WORK-BREAKDOWN STRUCTURE
Work-breakdown structure (or WBS), or simply work breakdown, is the name
given to a technique in project management in which the project is broken down
into manageable parts. WBS represents a task-oriented family tree of
activities and organizes, defines, and graphically displays the total work to be
accomplished in order to achieve the final objectives of the project. This
provides a central organizing concept for the project and serves as a common
framework for other exercises such as planning, scheduling, cost estimating,
budgeting, configuring, monitoring, reporting, directing and controlling the entire
project. Thus, it should be intuitively clear that for a complex project, greater
care is required in formulating a successful WBS.

A work-breakdown structure (usually triangular in shape) progresses downwards

in the sense that it works from pursuing general to specific objectivesmuch like
a family tree, it provides a framework for converting a projects objectives into
specific deliverables.
In cases of complex projects the power and utility of the WBS method in effective
management of the work is clearly demonstrated
Methodology of WBS

1. A project is split into different levels from top to bottom.

2. The WBS does not go into the details of activity at the operational level. The term
subprojects, work packages and tasks are used interchangeably

3. The tasks are broken down into activities that are the lowest level of a workbreakdown structure.
4. It should be borne in mind that once this breakdown is exhaustive, operations such as
development of the time schedules, resource allocation and project monitoring
become simplified.
Project PLANNING TECHNIQUESTERMINOLOGIES USED
Event and Activity
Event is a point in time when certain conditions have been fulfilled, such
as the start or completion of one or more activities. An event consumes
neither time nor any other resource. Hence, it only expresses a state of
system/project.
Activities take place between events. Activity is an item of work involving
consumption of a finite quantity of resources and it produces quantitative
results. Ex: activity i-j. The start (node i) and the completion (node j) of
this activity can be considered as events.
Dummy Activity
This activity does not involve consumption of resources, and therefore
does not need any time to be completed. It is used to define
interdependence between activities and included in a network for logical
and mathematical reasons.
Project network
A project network is a graph (flow chart) depicting the sequence in which
a project's terminal elements are to be completed by showing terminal
elements and their dependencies. It is always drawn from left to right to
reflect project chronology.
Precedence:
This is the logical relationship implying that an activity needs one activity
(or more activities) to be completed, before this activity can start. For
example, in order to be able to start plastering, the brickwork needs to
have been completed.
It is a common practice in most construction projects to represent the
precedence of activities in the form of a table, called the precedence
table.
For preparing the precedence table, a list of activities that should precede
a given activity is given. It should also be mentioned that this concept (of
precedence) is sometimes referred to as dependence.
Duration of an Activity

Duration of an activity (i, j) is denoted by D(i, j). This is the length of time
required to carry out an activity (i, j) from the beginning to its end. Depending
upon the activity and the level of detail, the duration may be expressed in days,
weeks, or months. A duration cannot be really fixed or given as a final number,
and as such remains only an estimate, based on past experience with
productivity, etc
Start and Finish Times
In principle, an activity can be started as soon as the groundwork involved
has been completed, but the client or contractor may (be able to) wait for
sometime before starting the activity without affecting the overall project
completion.
Similarly, depending upon the starting time and the duration, the activity
may be completed at different times.
Earliest start time of an activity: This is the earliest, that the activity (i, j) can
be started, i.e., all the necessary preconditions are met. Earliest start time of an
activity (i, j) has been denoted by EST(i, j)
Earliest finish time of an activity This is the earliest, that an the activity (i,
j) can be completed. Earliest finish time of an activity (i, j) has been denoted
by EFT(i, j). Mathematically, the relationship can be expressed as:

EFT (i , j )=EST ( i , j ) + D(i , j)

Latest finish time of an activity: This is the latest time that an activity
needs to be completed in order that there is no delay in the project completion.
Latest finish time of an activity (i, j) has been denoted by LFT(i, j)
Latest start time of an activity This is the latest time when an activity must
be started, in order that there is no delay in the project completion. Latest start
time of an activity (i, j) has been denoted byLST(i, j). Mathematically, the
relationship can be expressed as:

LST (i , j)=LFT (i , j)D(i , j)

Forward and Backward Pass
The forward pass moves from the start node towards the finish node,
and basically calculates the earliest occurrence times of all events.
Considering that the project starts at time zero, the earliest occurrence
time at each node is found by going from node to node in the order of
increasing node numbers, keeping in mind the logical relationships
between the nodes as shown by the connecting arrows.

 The earliest occurrence time for any node can be estimated from the
(maximum) time taken to reach that node from the different incoming
arrows.
He backward pass is made in a similar manner to that of the forward pass,
except that the process is carried out in reverse through the nodes,
starting from the end node and finishing at the start node.
the late occurrence time for different nodes can be found out, depending
on whether there is a single outgoing arrow from a node
For the end node the late occurrence time is considered same as the
earliest occurrence time.
The late occurrence times for these nodes can be simply determined as
Li = Lj D(i, j)
In case if multiple arrows reaching same node,
Li = Mjin[Lj D(i, j)], where the minimization is over all nodes j that
precede node i.
for some events (nodes) in the network, the two values (E and L) will be
the same if the latest project completion time is taken as the earliest
project completion time.
These events are called critical events and the path is called critical path.
Float or Slack Time
The time period by which an activity can be delayed without adversely
affecting project completion.
Total float in an activity Total float of an activity is the amount of time by
which the start of the activity may be delayed without causing a delay in
the completion of the project. This is calculated as:
TF(i, j) = LST(i, j) EST(i, j)
Or
TF(i, j) = LFT(i, j) EFT(i, j)
The values of TF(i, j) calculated from above equations are referred to as start
float and finish float respectively.
In terms of event times, the TF(i, j) can be defined as the late occurrence
time Lj of the succeeding event minus the early occurrence time E i of the
preceding event minus the duration of the activity defined between these
events.
Thus, TF (i, j) = Lj Ei D(i, j)

Free float
Free float is the amount of time by which the start of an activity may be delayed
without delaying the start of a following activity.
Free float is defined as the earliest occurrence time Ej of the following event
minus the earliest occurrence time Ei of the preceding event minus the duration
of the activity defined between these events. Free float for an activity (i, j) is
denoted by FF(i, j) and is calculated from the following expression: FF(i, j)
= Ej Ei D(i, j)
Independent float
Independent float is the amount of time by which the start of an activity may be
delayed without affecting the preceding or the following activity. Independent
float is defined as the earliest occurrence time Ej of the following event minus
the latest occurrence time Li of the preceding event minus the duration of the
activity defined between these events. Independent float for an activity (i, j) is
denoted by IF(i, j) and is calculated from the following expression: IF(i, j) = Ej Li
D(i, j)
Interference float: It is defined as the difference in total float and free float.
In other words,
Interference Float =TF(i, j) FF(i, j)
Critical Path: The critical path is defined as one that gives the longest time of
completion (of the project).
CRITICAL PATH METHOD
The Critical Path Method or Critical Path Analysis is a mathematically based
algorithm for scheduling a set of project activities. It is an important tool for
effective project management. Commonly used with all forms of projects
including; construction, software development, research projects, product
development, engineering, and plant maintenance, among others. Any project
with interdependent activities can apply this method of scheduling.
Critical path is the sequential activities from start to the end of a project.
Although many projects have only one critical path, some projects may have
more than one critical path depending on the flow logic used in the project. If
there is a delay in any of the activities under the critical path, there will be a
delay of the project deliverables. Critical path method is based on mathematical
calculations and it is used for scheduling project activities. This method was first
introduced in 1950s as a joint venture between Remington Rand Corporation and
DuPont Corporation.
The initial critical path method was used for managing plant maintenance
projects. Although the original method was developed for construction work, this
method can be used for any project where there are interdependent activities. In

the critical path method, the critical activities of a program or a project are
identified. These are the activities that have a direct impact on the completion
date of the project.
The essential technique for using CPM is to construct a model of the project that
includes the following:

A list of all activities required to complete the project (also known as Work
Breakdown Structure)
The time (duration) that each activity will take to completion
The dependencies between the activities.

CPM calculates

-The longest path of planned activities to the end of the project

-The earliest and latest that each activity can start and finish without making the
project longer
o Determines criticalactivities (on the longest path)
o Prioritize activities for the effective management and to shorten the planned
critical path of a project by:
The CPM Approach
Phase I
1. Break project into operations necessary for completion.
2. Determine sequential relationship of operations
a) Every operation must have event to mark commencement i.e. completion of
preceding operation
b) Can operations overlap?
Phase II
1. Create time estimates for each operation
2. Determine earliest possible start date, earliest possible finish date , latest start &
finish
3. Determine free floatand total float
4. Revised after completion of Phase III
Phase III
1. Establish time-cost relationship

2. Establish scheduling variations

3. Normal Start normal time, least cost
4. All-Crash Start least time, higher cost
Program Evaluation Review Technique (PERT)

What is the PERT ?

Program (Project) Evaluation and Review Technique (PERT): is a project
management tool used to schedule, organize, and coordinate tasks within
a project. It is basically a method to analyse the tasks involved in
completing a given project, especially the time needed to complete each
task, and to identify the minimum time needed to complete the total
project.
Historical Background

PERT was invented by Booz Allen Hamilton, Inc. under contract to the
United States Department of Defense's US Navy Special Projects Office
in 1958

A part of the Polaris mobile submarine-launched ballistic missile

project. This project was a direct response to the Sputnik crisis

CPM was developed by the dupont company & Remington-Rand-Univac

Used for large construction projects

Each were unaware of the others existence until the 1960s

When we use PERT ?

PERT is used when activity times are uncertain.

o Determine the duration of the project .

o Decision making under risk (P for probabilistic)
o It is generally used for those projects where time required to complete various
activities are not known as a priori. It is probabilistic model & is primarily
concerned for evaluation of time. It is event oriented.
TIME ESTIMATES
Three durations are taken in pert.
o

Optimistic time (to) It is the shortest time

can be completed.

Most likely time (tm) It is the probable time

required to perform the activity.

Pessimistic time (tp) It is the longest estimated time required to

perform an activity.

Expected time,

te=

in which the activity

t 0+ 4 tm+tp
6

STEPS IN PERT
1. Identify the specific activities.
2. Determine proper sequence of the activities.
3. Construct the network diagram.
4. Estimate the time required for each activity.
5. Determine the critical path.
6. Update the PERT chart.
Advantages of PERT
Expected project completion time.
Probability of completion before a specified date.
The critical path activities that directly impact the completion time.

The activities that have slack time and that can lend resources to critical
path activities.
Activity starts and end dates.
LIMITATIONS
The PERT Formula Requires Too Much Work.
The network charts tend to be large and unwieldy.
Calculating the time estimates is very complex for all the activities.
Updating of the project is time consuming and requires high costs.
Emphasis is laid only on time factors and cost factors are neglected.
Difference between CPM & PERT

CPM

PERT

CPM works with fixed

deterministic time

PERT works with

probabilistic time

CPM is useful for repetitive

and non complex projects with
a certain degree of time
estimates.

PERT is useful for non

repetitive and complex
projects with uncertain
time estimates.

CPM includes time-cost trade

off.

PERT is restricted to time

variable.

CPM- for construction

projects.

PERT- used for R&D

programs.