Project Planning Execution Manual
Project Planning Execution Manual
MANUAL
Prepared By __________________________________
Head Project Management Systems
Approved By ____________________
_____________________
_
Managing Director & CEO
Dated ____________________
_____________________
_
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INDEX
0Table of contents with detail showing topics covered in each section
Chapter
Section
1 Introduction
1 Preamble
2 Overall scheme
2 Project Planning
1 Planning techniques
Work break down structure, Organization break down structure, Mapping of
WBS and OBS, Cost Centre and mapping with BOQ,
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INDEX
6 Organization
1 Typical site organization
2 Responsibility Matrix
3 Job descriptions of site functions
9 Material Management
1 System for Descon Supplied Material
Sourcing, Vendor evaluation, Purchase order, Delivery Challan, Material
loading, receiving, Inspection, Stacking, Issuance and return
2 Client Material Handling
3 Reconciliation reports
4 Disposal of Surplus Material
10 Monitoring of progress
1 Earned man-hours concept
2 Estimation of progress
3 Progress and Efficiency Control
4 Progress up-dating
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INDEX
4 Pre-mobilization planning
1 Contract award
2 Selection of site manager and core team
3 Gather core team and start training
4 Understand scope of work, Descon and Client responsibility
5 Comparison of Bid and Contract
6 Determine impact on costs
7 Revisit execution strategy
8 Revise WBS and OBS if required
9 Revise budget and cash flow forecasts
10 Revision of Level 3 Plan
11 Revise manpower histograms
12 Prepare 3 month look ahead
13 Mobilization plan
14 Appoint mobilization incharge
15 Configure project management systems
16 Prepare MRP
17 Prepare HSE plan
18 Prepare project specific method statements
19 Prepare rigging studies
20 Prepare WPS, PQRs and Project Quality Plan
21 Get schedules for client deliverables
22 Summary of Inputs and Outputs for this stage
5 Mobilization
1 Site clearance
2 Arrangement of site facilities
3 Commission security set up
4 Set up stores for Descon material and Client Warehouse
5 Arrange indirect manpower deployment
6 Arrange direct manpower deployment
7 Recruitment
8 Manpower, induction. orientation
9 Set up staff attendance and control facilities
10 Arrange equipment and plant deployment
11 Procurement of first lot of deliverables
12 Negotiate and award sub contracts
13 Set up project monitoring systems
14 Determine resource availability
15 Prepare 4 week look ahead
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INDEX
11 Construction work
1 Scheduling of work
2 Responsibility for execution
3 Reporting of progress
4 Quality Health Safety and Environment
5 Civil work
6 Mechanical work
7 E & I works
8 Equipment and Plant
9 Completion and handing over
13 Cost control
1 Bid / Proposal
2 Budgeting
3 Budget Rev 1
4 Project Planning
5 Project Resource Planning
6 Execution
7 Project Progress and Cost Control Sys tem
8 Monitoring
9 Profitability Analysis
10 Cash Flow Analysis
11 Key Performance Indicators (KPI)
14 Feedback to client
15 Invoicing client
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CHAPTER – 1
Introduction
1.1 Preamble
1.1.1 Purpose
This manual has been compiled to standardize procedures and have their
summaries readily available for use in the company’s construction business. It
covers activities from the time a construction job is awarded to the company,
planning and mobilization stages, scheduling execution and monitoring of
activities, interaction with the client, work completion stage, demobilization
and finally incorporation of feedback from projects as they are completed.
1.1.2 Objective
Project Planning & Execution Manual has the following objectives: -
• Standardize work practices and establish benchmarks for performance
measurement.
• Develop capability to operate internationally with a multi-national task
force.
• Facilitate boundary less information flow.
• Consolidate existing knowledge base of best practices and to continuously
improve the same.
• Eliminate duplication and wastage of resources.
• Bring HR focus in line with organization needs.
• Train manpower on Core Competencies.
• To inculcate a culture of Plan, Do, Check, Act (PDCA) cycle.
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1.1.3 Scope
This manual covers the planning, execution and progress monitoring activities
of construction projects. Plant Services and EPC projects are not covered in
this manual. Details related to Contract Administration and Finance are
covered under separate manuals.
The planning part of the project involves deciding what is to be done, when,
by whom and with what resources. It is just as important to have a properly
designed system to maintain close observation of activities once the
construction gets underway. Constant vigilance is required to find out what
has actually been accomplished, what remains to be done and whether
resources are available to do it in time. A properly designed project
management system is meant to organize the working and to identify potential
problems so that they can be communicated in time to management. This
enables proper corrective actions to be taken.
The table 1-2 on the following page explains the actions to be taken by the
individuals designated at each of the key assignments in the overall scheme.
The number in the extreme left column of the table identifies the referred box
on the flow chart. Major activities that are to be performed by the individuals
designated to the assignments are identified in the central column while the
salient outputs from one functionary to another are listed in the right hand
column. This table and the accompanying flow diagrams are provided here to
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give the reader an overview of the overall scheme. Individual activities and the
relevant form of the outputs are described and defined in the corresponding
chapters. Detailed responsibilities of the individuals are included in the Job
Descriptions that are provided in Chapter 6 on Organization. The typical site
organization chart is included in that chapter as Attachment 6-1, Typical Site
Organization.
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Late Start
The latest possible time an activity can be started without delaying the end
date of the project.
Early Finish
The earliest possible time at which an activity can be finished.
Late Finish
The latest possible time at which an activity can be finished without delaying
the end date of the project.
Free float
It’s the margin of delay for an activity without delaying its successor activity.
See Attachment 2.10
Total Float
It’s the margin of delay for an activity or a chain of activity without delaying
the project. See Attachment 2.11
Scheduling
The process of calculating start and end dates of the activities.
Forward Pass
The process of calculating start and finish dates of each activity starting from
the project start date. This process generates early start and early finish dates
for each activity. See Attachment 2.12
Backward Pass
The process of calculating start and finish dates of each activity starting from
the project finish date. This process generates late start and late finish dates for
each activity. See Attachment 2.13
Data date
The point in time that separates actual (historical) data from future (scheduled)
data.
Man-hours
It is yardstick for measurement of effort. For example, 4 Man-hour will mean
any of the following:
1 man working for 4 hours
4 men working for 1 hour
Standard Man-hours
Estimated effort per unit required to perform a job in terms of man-hours.
Earned Man-hours
It is amount of work executed in terms of standard man-hours.
Project / Budgeted Man-hours
Total number of man-hours required to execute a project.
Actual Man-hours
It is the amount of man-hours actually utilized to execute work.
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Cost Center
A Cost Center is the lowest identifiable/measurable activity to which costs
incurred can be booked.
Direct Cost
Costs that can be clearly attributed to the activity performed. These costs are
dependent on quantity of the work performed.
Indirect Cost
Costs that cannot be clearly attributed to specific activity. These costs are
incurred irrespective of the quantity of the work performed.
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CHAPTER – 3 (Attachments)
(Attachments)
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CHAPTER – 4
Pre-mobilization
Pre-mobilization Planning
For a project to progress satisfactorily in its earlier phases it is necessary to
start the planning activities as early as possible. It is desirable to have a period
of three to four months for the initial planning before actual mobilization to
site. This period of pre-mobilization starts from the time when assessment of
interaction with the client indicates that there is a strong likelihood of the
contract being awarded to Descon. The individual pre mobilization activities
are described in the following paragraphs. Please refer to Attachment 4.1
flow chart for pre-mobilization planning
4.1 Contract Award
After evaluation of bids it is usual for the client to shortlist the contractor for
awarding the job and to issue a Letter of Acceptance (LOA) or Letter of Intent
(LOI) to the contractor. This letter is advance intimation to the selected
contractor of the customer’s intention to award the project as per the
“Conditions of the Contract”. It may be addressed to the Proposal Manager,
Head Business Development, or the Head of the relevant Business Area. The
recipient acknowledges receipt of LOI/LOA. Most projects are to be carried
out against tight time schedules and this practice of issuing the LOI gives
advance notice to the contractor to start preliminary planning in order to
reduce the reaction time that would be required after award of the contract. It
enables the contractor to start early mobilization of resources that would be
required to carry out the project.
After issuance of the letter of intent or award of the work and before signing
of the contract, the Proposal Manager ensures that any variations between the
contract and the tender requirements are resolved and documented. The
Contract Document is thoroughly reviewed by the Proposal Manager before it
is signed. After the review, Proposal Manager or any other person nominated
by the Executive Management signs the contract on behalf of the Company.
Contract agreement normally includes
• Letter of Acceptance and Letter of Intent (whichever applicable)
• The Tender
• Conditions of Contract
• Specifications
• Drawings
• Bill of Quantities
• Minutes of Pre-award meeting with client
• Project Master Schedule
• Other such documents that are intended to form the contract.
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The Business Area head in consultation with Head HRD and other BA Heads
decide the person who is to be assigned as the Site Manager for the project.
The person selected for this assignment has to be technically capable for
understanding the project and of leading the project team in achieving the
project objectives in a safe manner, within the agreed budget. He also has to
be familiar with the company’s procedures
procedures and project management systems.
Once the Site Manager has been selected, the Head BA in consultation with
him, select the other members of the Core Team for the project. These would
be the Planning and FEDC Manager, Construction Manager and/or the main
Discipline In-charges. These individuals could be selected from the resources
available within the company or from outside.
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Once the differences in the Final Contract and the Bid have been identified
some members of the team with a financial background are assigned the task
of evaluating their impact on costs . The impact on the budget and cash flow of
the project is studied and analyzed. In case the impact is significant then the
original correspondence is reviewed to see if there was some exception
claimed while submitting the proposal on account of which the client can be
asked to revise the terms of the contract .
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Enquires are floated to get more realistic price estimates for the procurement
of material and its delivery at the site. Similarly quotations are obtained from
other possible vendors for equipment required at the site. Methodology of
performing major jobs is reviewed to see how costs can be reduced. Efforts
are made to more extensively utilize Descon owned equipment that may now
be available in time for the project needs. E&P department is contacted to
confirm availability of Descon owned resources planned to be utilized at the
project and to see if additional Descon owned equipment could now be used
in place of hired equipment. Alternate options are considered and evaluated
for subcontracting out additional portions of the work. The following
advantages can be expected from sub contracting
• Lower direct and indirect costs
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• Hiring of technicians
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• Possession of camp
• Possession of site
• Setting up of offices
• Setting up of workshops
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Responsi
Input form Process bility. Output form
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CHAPTER – 4 Attachments
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CHAPTER – 5
Mobilization
A lot of resources and efforts are required to start a new project in a timely
and cost effective manner. ‘Mobilization’ means, to move and muster all the
resources required for the project and gear up for performing the job. The
period between award of the project and its starting date, as given in contract,
is called the ‘Mobilization Period’. It varies from project to project depending
upon the size of project, the contract conditions and total duration of the
project.
5.1 Site clearance
The first activity to start at the site after taking it over is to clear it up for
eventual setting up of the project and the temporary site facilities. It is planned
in advance, as all other activities at the site are dependent on it. Owing to the
large areas of most sites the clearance is arranged in a sequential manner so
that the area where the temporary site facilities are to be set up becomes
available while work on the other areas continues.
5.2 Arrangement of site facilities
Once the site clearance has progressed satisfactorily, work of setting up the
Site Facilities is started. This includes the following:
• Residential Facilities
• Stores / Warehouses
• QC Laboratory
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The permanent and contract employees are employed through HRD at Head
Office. Hiring of Management Cadre employees is done as defined in the
Hiring Policy of the Company HRD Policy- 02.
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CHAPTER – 6 Attachments
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CHAPTER – 7
• Eliminating surprises.
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7.2 Planning
7.2.1 Development of Three Month look ahead Plans
Succeeding three-month’s activities and targets are extracted from the Level-
03 plan to form a Three Month look ahead plan. This plan is prepared at least
one week before the start of the succeeding month. It starts at a point where
conditions are known and work can be planned in detail accurately for first
month of the period, with work for second and third months being dependent
on progress in the first and second months.
The Three Months look ahead plan explains in significantly more detail how
to achieve the desired amount of progress during this work period. It provides
guidance on how to organize the resources but their mobilization shall be
made with further confirmation of the work fronts through four weeks look-
ahead schedule. The Three Months look ahead plan is updated by the end of
every month by incorporating progress achieved during this month.
A sample Three Month Look ahead is enclosed as Attachment 7.1 while the
flow chart for preparation of the three month plan is at Attachment 7.2
7.2.2 Development of Four Week Look ahead Plan
Just as the Three Month plan was drawn from the level 3 Plan, a Four Week
look ahead plan is derived from the Three Months look ahead plan. This Four
week plan is developed by incorporating additional inputs from Client
regarding material and equipment availability and progress in associated
areas. This Four Week look ahead Plan includes detailed targets of progress to
be achieved in each discipline and becomes the basis of doing supervisor level
planning. Like the three month plan the Four Week Look ahead plan is also
rolled at the end of every week keeping in view progress during the week
completed.
For an example of a Four-week Look ahead plan please see A ttachment 7.3
while the flow chart for preparation of the three month plan is at Attachment
7.4
The Four Week Look ahead plan prepared by Planning and FEDC is reviewed
by the Discipline Incharge and the Discipline Engineers. They decide the
weekly targets for the individual supervisors in the group to meet plan goals.
These are then passed on to the Area Scheduler and Discipline Supervisors.
The Area Schedulers carry out daily scheduling at drawing level for each
supervisor. This day to day level 4 planning is done in the DPMS module of
PCS.
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• To convey to each supervisor drawing wise plan for the day as the
complete activity may take several days.
• To report back progress and efficiency with which the targets for the
day were achieved.
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• Tools
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• Fixed Assets
Computerized inventory records are updated at site to facilitate hand on
information for ready reference
Site issue requisition (SIR) are prepared by concerned Area Material
Coordinators and authorized by the Central Material Controller. Material is
issued against approved SIR. This document has the following Information
• Drawing Number
• Area reference
• Cost center.
• Expense head.
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Incharge site store initiates the Disposal and Write Off Request, duly signed
by the Project Manager after the material has been inspected by the concerned
representative from QC/E&P/PP&A and is declared scrap/ surplus, and then
forwards it to Head Office for obtaining approval of the competent authority.
Write-off Note is prepared and processed for each lot of material that is
disposed.
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CHAPTER – 10
Monitoring of Progress
All progress measurement at site is dependent on the information collected
from the daily schedule and time sheets (DSTS) This is then processed in
DPMS and GDMS to generate progress and efficiency reports. For the overall
scheme of progress measurement please refer to flow chart for progress
monitoring provided as Attachment 10.1
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Some of the other factors necessitating development of Rev 1 may be based upon the
factors i.e. if scope of work gets changed during execution due to additional client’s
requirements and uncontrollable conditions, arise such as results in inflation or
deflation
Budget Rev1 can be prepared using WINBID incorporating new criteria and cost data.
A note of caution here is never to use budgeting process to hide inefficiencies or to pad
contingencies.
13.4.1 Project
Break down of project into small work packages is called Work Breakdown
Structure. It is very important to break down project into smaller work
packages for effective project planning
planning and control. Following WBS is used in
Descon Engineering Ltd.
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1 Project
1.1 Construction
1.1.1 Discipline
1.1.1.1 Zone/Area
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This is basic contractual plan that defines start and end dates for each of the
major activities like design, procurement and construction.
For reference please see Attachment 2.7
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In this level the discipline-wise schedule for each of the above major activities
is prepared. For example schedule of Civil, mechanical and E&I construction
activities is separately defined.
For reference please see Attachment 2.8
13.4.1.4.3 Level 3 Planning
In this level, the level-2 plan is broken down into various Zones/Areas. The
activities of Level – 2 plan is further divided into smaller (up-to Cost Center
Level) and schedule of each cost center is provided. For example Mechanical
discipline is further broken down to rotary equipment, stationary equipment,
CS piping fabrication etc.
For reference please see Attachment 2.9
13.4.1.4.4 Level 4 Planning
This plan is prepared at site. In this plan the activities of Level-3 are broken
down to drawing/Isometric level. In Descon working this exercise is done at
supervisor level.
For detail please review section 2.3
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In WINBID material packages are defined in Rule Bank for each cost center.
Standard quantity of each item required per unit of cost center output is given.
Material requirement is the product of quantity of cost center, standard
requirement and price. Quantity of each material is grossed up for all the cost
centers. Most important element is proper estimate of cost of each material
keeping in view the project life, economic environment etc.
13.5.1.2 Direct Labour
Like material, crew packages are also defined in WINBID. Craft wise
Standard Man Hours (SMH) are given in the database for unit output of each
cost center. It can be adjusted according to site requirement. Standard rate per
man-hour is also available in database. Craft wise man-hours requirement is
calculated for each item of BOQ with respect to relevant cost centers. Cost of
Direct Labour is product of craft wise total man-hours and standard rates.
13.5.1.3 Consumables
Standard requirements per unit of output of each cost center are given in
WINBID database. System calculates total requirement for BOQ for each cost
center. For budget purpose it consolidates each item of material with its total
cost.
13.5.1.4 Equipment and Plant
The WINBID programme has asset of rule banks that identify all indirect costs
identified as:
• Construction Overhead
• Site Facilities
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• Supervision
• Other Overheads
13.5.3 Consolidation of Direct and Indirect costs into billable BOQ’s
WINBID has the provision to consolidate all costs in a “map able” linkage between
billable revenue basis (BOQ’s) with cost centers. This is a pivotal capability for
identifying source of “run away costs” for the site management and to take swift
measures to remedy the cause(s).
This mapped cost report is also used to compare Company’s standard cost centers for
their efficiency from project to project.
13.6. Execution
For detail account of activities at this stage of project please refer to other relevant
sections of this Chapter
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Cash flow is considered a major yardstick of success (or failure) of any venture. An Income
Statement may include accountants estimate of revenue and cost but for cash flow one has to
reconcile cash balance at the end of each period. And therefore focus on cash flow warrants
good health of a project.
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The KPI’s are intended to facilitate higher management in getting awareness about a
businesses health in a brief and short form.
SOT = SOT
-----------
Direct Salary
MATERIAL
Direct
No of Indents, Planned Vs Actual
Indirect
Direct
No Of Emergency Indents
Indirect
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CHAP
CHAPTE
TER
R – 16 Atta
Attach
chme
ment
ntss
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CHAP
CHAPTE
TER
R – 17
Demobilization
As specific project target tasks begin to reach completion, demobilization of
resources comprising of manpower, equipment, and site facilities is started in
a phased manner. Shifting of resources from one work location to another
needs analytical review of project progress and the responsibility lies with Sit e
Manager who develops demobilization strategy with assistance of Planning
and FEDC Manager. A Demobilization schedule is prepared for all the
demobilization activities. This is based on demobilizing resources from site in
a manner that progress is not affected and unnecessary costs are avoided.
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17.4 Dispatch
Before dispatch from site a person authorized by the Site Manger for this
purpose inspects all items that have been demobilized and are to be dispatched
dispatched
to another site. He ensures that the condition of the goods is recorded and that
the item being dispatched is properly protected and secured for transportation.
For further details please refer to PC/SOP-04 Project winding up and
demobilization.
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CHAPTER – 18
Project Closeout
At the completion of the project a detailed close out report is prepared. This
report is meant to serve the following purposes.
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Copies of the report are prepared for the BA office and for PMS
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CHAPTER – 19
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Construction
works 11.1 List of quality documents
Handling of Extra
Work 12.1 Extra work Form
12.2 Extra Work Register
12.3 Flow diagram for handling of Extra Work
Cost controlling 0
13.1 Cost Accumulation Flow Chart
13.2 Rolling Cash Flow / Forecast
Invoicing Client 0
Demobilization 0
Project Feedback 0
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