2

CHAPTER MEL613IP (2-0-2) 3 Credits

Project Management
1
Lecture Notes:
Roshan Raman Fundamentals
Faculty of Mechanical Engineering
NCU, Gurugram
India
of
Project
Management
 Faculty of Mechanical Engineering,

Contents
• Syllabus
• Learning Objectives
• Introduction to P.M
• Project and Operation management
• Characteristics of a Project
• Challenges of Project Management
• Project Life Cycle

Project Management
 Project Management
Contents
• PROJECT MANAGEMENT
• 1 Project conception and appraisal
• Concept of a project, historical perspective, various issues: Time, cost, Quality, Project
Identification and Screening: Various methods and frameworks, Factors for project appraisal,
Criteria for project selection, Financial measures, some examples
• 2 Project Planning
• Project representation, network concepts, Consistency and Redundancy in Project Networks,
Activity on arc representation, concept of scheduling, Critical Path Method, Basic Scheduling
with A-O-A, Activity on node representation, Basic Scheduling with A-O-N Networks
• 3 Project crashing and Resource considerations
• Probabilistic Scheduling: Uncertainty and probabilistic considerations in project, PERT, Three-
estimate approach, Project Scheduling with Probabilistic Activity Times, Heuristic approach for
Linear Time-Cost Tradeoffs in Projects, Resource Profiles and leveling, Limited Resource
Allocation
• 4 Project Implementation
• Considerations in implementation, Project Monitoring and Control with PERT / Cost,
Behavioral and human issues, Team Building, Desirable attributes of project leader,
computers in project management , Project Completion, Review
 Faculty of Mechanical Engineering,

Brief Syllabus to be Covered:

• Introduction to Project Management : What is Project Management, Project
Management vs. Ongoing Operations,
• Project Types: Pure Project, Functional Project and Cross-Functional or Matrix
Projects.
• Project Planning: Work Breakdown Structure, Project Control Charts

• Network Planning Models; Critical Path Method (CPM), Program Evaluation and
Review Technique (PERT),
• Floats, Time-Cost Trade-off, Crashing, Resource Loading and Leveling
• Project Control and Evaluation DCF approach, Payback, NPV and IRR methods
Project Control and Evaluation Mechanisms, Project Time and Cost Overruns,

• Contract Management. Ethics in PM.

• Causes of Project Failure and Preventive Measures. Case Studies Relating to
Successful and Unsuccessful projects,
• IT Applications in Project Management – Primavera software.

• Books: 1. Project Management, Clifford F. Gray, Erik W. Larson, McGraw-Hill Series

• 2. Project Management, R.K Singal, Kataria & Sons
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Project Management
 Faculty of Mechanical Engineering,

Learning Objectives
• Understand the growing need for better project
management, especially for Manufacturing /Information
Technology projects

• Explain what a project is and provide examples of

manufacturing projects

• Describe what project management is and discuss key

elements of the project management framework

Project Management
 Project Management

• Project Conception and Appraisal

• Project Management: An Overview
• Project Identification and Screening
• Project Appraisal: Part I
• Project Appraisal: Part II
• Project Selection
 Project Management

• Project Planning
• Project Representation
• Consistency and Redundancy in Project
Networks
• Basic Scheduling with A-O-A Networks
• Basic Scheduling with A-O-N Networks
 Project Management

• Project Crashing and Resources

• Project Scheduling with Probabilistic Activity Times
• Linear Time-Cost Tradeoffs in Projects: A Heuristic
Approach
• Resource Profiles and leveling
• Project crashing with multiple objectives
• Limited Resource Allocation
 Project Management

• Project Implementation
• Project Monitoring and Control with PERT /
Cost
• Team Building and Leadership in Projects
• Organizational and behavioral issues
• Computers in project management
• Project Completion and Review
 Project Management
• Project Conception and Appraisal
• Project Management: An Overview
• Project Identification and Screening
• Project Appraisal: Part I
• Project Appraisal: Part II
• Project Selection
• Project Planning
• Project Representation
• Consistency and Redundancy in Project Networks
• Basic Scheduling with A-O-A Networks
• Basic Scheduling with A-O-N Networks
• Project Crashing and Resources
• Project Scheduling with Probabilistic Activity Times
• Linear Time-Cost Tradeoffs in Projects: A Heuristic Approach
• Resource Profiles and leveling
• Project crashing with multiple objectives
• Limited Resource Allocation
• Project Implementation
• Project Monitoring and Control with PERT / Cost
• Team Building and Leadership in Projects
• Organizational and behavioral issues
• Computers in project management
• Project Completion and Review
 WHAT IS A PROJECT
PURPOSE
• An undertaking or venture to accomplish some
objective or goal
STRUCTURE
• A set of interrelated jobs whose accomplishment
leads to the completion of the project
COMPONENTS
• Jobs or activities consume time and resources and
are governed by precedence relations
 Faculty of Mechanical Engineering,

What is a project ?

It's a temporary endeavor undertaken to create a unique

product, service or result.

A project is temporary in that it has a defined beginning and

end in time, and therefore defined resources and scope.

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Project Management
 PROJECTS AS
AGENTS OF CHANGE

State B

Alternative
Projects
(Paths)
State A
 FEATURES OF PROJECTS

• Well defined collection of jobs

• Generally non-repetitive, one time effort

• Jobs interrelated through precedence

• Jobs otherwise independent

 PROJECT FEATURES

• Jobs consume time and resources

• Coordination needed between individuals,
groups & organisations
• Constant pressure of conformance to
time/cost /performance goals
 Mass production

Batch
Production

Job
Production

Q
Quantity Projects
to be
Made
1

P (No. of Products or “VARIETY”)

 LIFE CYCLE OF A PROJECT

• Selection of the project

• Project Planning
Scope of work & network development
Basic Scheduling
Time Cost tradeoffs
Resource Considerations in projects
• Project Implementation
• Project Completion and Audit
Motivation in Introducing
New Products

For profit

To satisfy need
 Contribution to New Product Ideas

• Sales and Marketing (close touch with

customer)
• Top management (Active listener to visitor and
customer feedback)
• Production department (limited to production
ease and economics)
• Research and Development (prompted by new
developments in materials & technology)
 Generation of new product ideas

• Brain storming (preferably by interdisciplinary

team)
• Team apprised of
– Company objectives & long term goals
– Current economic scenario
– Preferred field of activity (expertise)
– Approximate budget for new product
• Each one generates ideas which are recorded
without criticism or evaluation
 Evaluation of New Product Ideas

• The evaluation of the new product ideas could be

done on a number of criteria
– Likely demand and pattern of growth
– Ease of raw material availability
– Availability of Production technology
– Competition and likely market share
– Likely revenues and costs of operation
– The product life cycle
• An example to illustrate this process is taken up next
 An example of screening of ideas

Idea/ Demand Comp Ease Cost of Likely Score

factor etition of processi profit
Raw ng
Mtl
Computer 6 3 6 5 6 26
peripherals
Fast food 8 6 9 7 5 35
Fashion 4 5 7 4 4 24
clothing
Soaps and 9 2 7 6 4 28
detergents
Each factor evaluated on a scale of 1(least desirable) – 10 (most desirable)
 INPUT(S) OUTPUT(S)
Transformation
-Men Useful
-Machines Economic/Social/Political Goods or
Environment Services
-Materials -dynamic
-Money -uncertain
-Information FEED BACK
-Energy
---------- Undesirable
outputs
(Effluents, Fumes etc.)
 Customer needs & desires
• Desires • Needs
– Natural, as hunger, – When a desire becomes
shelter, love and strong enough and
security warrants fulfilment, it
becomes a need.
– Generated by exposure – Customer demand is
to circumstances and based on real or
temptations artificially generated
(as in advertisements on needs
media, TV,neighbour) – Needs are constantly
changing
 MORTALITY OF IDEAS

Screening
35-40 ? Economic
evaluation Development
Testing
Commercialization
Number
of ideas

3-24 months ?
Time
NEW CHALLENGES IN PRODUCTION

Price Quality

COMPETITION

• More producers
• Demanding customers

Reduced Customer
lead times satisfaction
Greater
variety
PRODUCTION AS A PART OF THE
SUPPLY CHAIN

Transformation
process

Vendors Warehouses Retailers

 Faculty of Mechanical Engineering,

Project management
Project management is the application of
knowledge, skills, tools and techniques to project
activities to meet the project requirements.
Project management can be defined as planning,
directing, and controlling resources (people, equipment,
and material) to meet the technical, cost, and time
constraints of the project.

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Faculty of Mechanical Engineering,

Project management

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 Conclusions

• This course has focused on the Life Cycle

issues in Projects
• The Strategic, Operational and Tactical Issues
in Projects
• The approach has been on conceptual issues
as well as modeling of key processes and
decisions
 Faculty of Mechanical Engineering,

Challenges/Constraints of
Project Management

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Project Management
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Characteristics of a Project

• A single definable purpose, end-item or result

Defined • Every project is unique

• Projects are temporary activities

T&T • Projects are time based

• Projects differ from operations

Different • Major projects can be divided into subprojects

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Project Management Vs.

General Management

PROJECT MANAGEMENT GENERAL MANAGEMENT

Everything is an exception Manage by exception

Project Manager must be creative , flexible

It just need a good project manager
and problem solver

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Project Management
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Difference between Project Vs. Ongoing

Operations
 Projects are unique and temporary (definitive beginning and ending), while
operations are ongoing and permanent with repetitive output.

 Projects have a fixed budget; on the other hand, operations have to earn a
profit in order to run the business.

 Projects are executed to start a new business objective and terminated

when it is achieved, while operational work does not produce anything new and
it is ongoing.

 Projects create a unique product, service, or result; Operations produce the

same product, aim to earn a profit, and keep the system running

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Project Management
Difference between Project
Manager and Operational
Manager
 Faculty of Mechanical Engineering,

Build a car manufacturing facility

Project Operation
Management Management

Factors affecting
??

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Project Management
Faculty of Mechanical Engineering,

Why Project Fails ??

Lack of Interest

Inadequate
Inaccurate Cost
Documentation
Estimations
and Tracking
Bad
Leadership

Inexperienced
Poor
Project
Communication
Managers

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 Faculty of Mechanical Engineering,

Basic Terms:

1. Program
2. Portfolio
3. Stakeholders
4. Sponsors
5. Project Charter

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Project Management
Faculty of Mechanical Engineering,

Project Life Cycle

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Faculty of Mechanical Engineering,

IT Project Cycle

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Project Management Process

Groups
• Project management can be viewed as a number
of interlinked processes
• The project management process groups include
– initiating processes
– planning processes
– executing processes
– controlling processes
– closing processes
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THE PROJECT ORGANIZATION

STRUCTURE
There are two design factors that significantly influence the process of developing a
project management structure. These are the level of specialization and the need for
coordination. The project manager should consider these factors at the moment of
designing the project organization in order to maximize the effectiveness of the
structure.
Hence, the project organization structure is a way how different organization
utilizes their team members in efficient way.

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Project Managers, on the other hand, work with a project team toward a
specific goal. The Project Manager may have expertise in a particular field, such
as Software Development, but works with a cross-functional project team to
meet a specific goal.

Functional Managers: Expertise of that specific function. If you are the Data
Architect manager, you will know and strive for the best processes,
technology, and management of all things related to data architecture.

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 Faculty of Mechanical Engineering,

Project with three

ORGANIZATION STRUCTURES

Models planned to be elaborated are:

1. Functional type of organization where the project is part of the functional

organization of the enterprise;

2. Pure project organization, and

3. Combined or matrix systems.

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Functional type Organization

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Advantages of using the Functional elements of the project

include:

1. Maximum flexibility in the use of staff

2. Individual experts can be utilized by many different projects
3. Specialists in the division can be grouped to share knowledge and
experience
4. Technical expertise is maintained within the functional area
even if individuals leave the project or organization.
5. The functional division contains the normal path of advancement
for individuals whose expertise is in the functional area.
6. Functional area is a home after the project is completed.

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There are also Disadvantages to housing the project in a

functional area:

1.Motivation of team members is often weak.

2. Needs of the client are secondary and are responded to slowly.

3. Occasionally, no individual is given full responsibility for the project.

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Advantages & Disadvantages of

Functional type Organization

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Pure Project/Projected Organization

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Advantages

•The project manager has full authority over the

project.
•Team members report to one boss.
•Lines of communication are shortened. Decisions are
made quickly.
•Team pride, motivation, and commitment are high

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Disadvantages

•Duplication of resources: Extra accumulation of resources such

as machines, printers within different teams

•Organizational goals and policies are ignored

•Repetition of Tasks by different teams

•Lack of new technology transfer due to weakened functional

divisions

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Matrix Project Organization

•A matrix structure in which people and resources are grouped in
two ways simultaneously by function and project.

•Two Boss Employees:

•Employee's who report to two superiors: The Product Manager

and Functional Manager

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Balanced Matrix

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•Communication between functional divisions is enhanced.

•A project manager is held responsible for successful
completion of the project.
•Duplication of resources is minimized

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Case Study-01
Meeting the legal Obligations for
setting up a Small Chemical Plant

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 Abstract

Its consists of fulfillment of

programme with in the main
constraints of technical, financial,
time and legal obligations. Every
industrial enterprise is expected to
ensure compliance with various act
and regulations.
 1. Legal Obligations
Lots of legal work before and after
start of industry.
1.Proper working conditions
2. Social security
3.Pollution
etc..
2. Entrepreneurs and Line of
Business
Registration(Income tax act)
Trade practice act
3.Financing

Banks
4. Registration and Licencing
 5. Location Clearances

NOC: Industrial development

corporation
If nearby village: Gram Panchayat
6. Acquisition of Land

Agreement of lease
7. Construction and Use of
Building
Before start: NOC: Industrial
development authority
State ind. Dev. Corp.
After start:
Electrical inspector
Controller of explosives
Factory inspector
Water pollution board
Boiler inspector
8. Raw Materials and Utilities

Quotations
Controller of cement
Controller of steel
 Conclusions
Lots of coordination work is needed
with different agencies
Lag at any stage may put project to
late for many months
Case Study- 02