1. Project Management
Prof. S.K.Rawat

2. Introduction to Project Management
Modern project management began with the Manhattan Project, which the U.S. military led to develop the atomic bomb
In 1917 Henry Gantt developed the Gantt chart as a tool for scheduling work in job shops
In 1958, US Navy developed PERT charts
In the 1970s, the military began using project management software, as did the construction industry
By the 1990s, virtually every industry was using some form of project management
Prof. S.K.Rawat

3. What Is a Project?
A project is a temporary endeavor undertaken to accomplish a unique purpose
Attributes of projects
Unique definable purpose.
Temporary, one time activity, never to be exactly repeated.
Require resources, often from various areas.
Teams are formed for a purpose and disbanded after achieving the purpose.
Prof. S.K.Rawat

4. Attributes of Project
Projects cut across the organizational lines; many disciplines are involved.
Should have a primary sponsor and/or customer / stake holder/s
Involve uncertainty and unfamiliarity, does not fall under the “routine” category of activity
Project is the process of working to achieve a pre-defined goal and during the process, the project may pass through various phases
Prof. S.K.Rawat

5. EXAMPLES
Pyramid of Egypt (2500 B.C. 2.3 Mn. Stone blocks weighing 2 to 70 tons each, quarried and carried over the Niles, height equivalent of 40 storey building, 13 acres of land, stones fixed with accuracy of .04 inch!!)
100,000 laborers, 40,000 skilled masons, over 150,000 women & children to be housed & fed!
Prof. S.K.Rawat

6. EXAMPLES
Numerous other examples like Taj Mahal, Eiffel tower, international space station by NASA, anti missile system developed by India, etc.
Advantix advanced photo system created by Kodak in one of their most ambitious projects ever
From construction, information technology to research, projects could be conceived in all possible fields.
Each project is unique in many ways.
Prof. S.K.Rawat

7. The Triple Constraint
Every project is constrained in different ways by its
Scope goals: Quantity & Quality
Time goals
Cost goals
It is the project manager’s duty to balance these three often competing goals
Prof. S.K.Rawat

8. The Triple Constraint of Project Management
Successful project management means meeting all three goals (scope, time and cost) – and satisfying the project’s sponsor!
Prof. S.K.Rawat

9. What is Project Management?
Project management is “the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project” (PMI)*
*The Project Management Institute (PMI) is an international professional society. Their web site is
Prof. S.K.Rawat

10. CHARACTERISTICS OF PROJECTS
Project has a definite start and finish (Time goals and Scope goals –quantity and quality and).
Project consists of a well-defined and unique collection of jobs, activities, or tasks which when complete; mark the end of project.
Project is constrained by cost, time & resources and has specified performance requirements.
The jobs may be started or stopped independent of each other, within a overall given sequence.
Prof. S.K.Rawat

11. Project Stakeholders
Stakeholders are the people involved in or affected by project activities
Stakeholders include
The project sponsor or promoter, project team, equity / share holders
support staff
Customers / users
Suppliers / Vendors / Sub-contractors
Financial Institutions / lenders / bankers
Govt. / Approving authorities
Affected population / opponents to the project
Prof. S.K.Rawat

12. Project Management Framework
Prof. S.K.Rawat

13. Project Management Tools and Techniques
Project management tools and techniques assist project managers and their teams in various aspects of project management
Some specific ones include
Project Charter and Work Breakdown Structure - WBS (scope)
Gantt charts, PERT charts, critical path analysis (time)
Cost estimates and Earned Value Analysis (cost)
Prof. S.K.Rawat

14. Advantages of Project Management
Bosses, customers, and other stakeholders do not like surprises.
Good project management (PM) provides assurance and reduces risk.
PM provides the tools and environment to plan, monitor, track, and manage schedules, resources, costs, and quality.
PM provides a history or metrics base for future planning as well as good documentation.
Project members learn and grow by working in a cross-functional team environment
Prof. S.K.Rawat

15. PROJECTS ARE SHAPED BY THEIR ENVIRONMENT
Time
Technology
Cultural System
Social System
Political System
Regulatory & Legal System
Economic System
Organisational System
Prof. S.K.Rawat

16. IMPACT OF ENVIRONMENT (CONTD.)
Resources, Budgets.
Methods & Tools of Project Management.
Depend on above factors & change accordingly.
Prof. S.K.Rawat

17. STAGES OF A PROJECT AUTHORIZATION SANCTION HAND OVER Concept Scope
Detail Engineering
& Design
Documentation
PROJECT EFFORTS
Development
& Definition
Schedule
Failure Analysis
Procurement
Budget
Manufacturing & Construction
Learning
Resources
Evaluation
Operation & Maintenance
Trails
& Commissioning
Organization
P R O P O S A L
P L A N N I N G
I M P L E M E N T A T I O N
C L O S I N G
Prof. S.K.Rawat

18. PROJECT MANAGER
His responsibility is to plan, organize, direct and integrate work efforts of all participants to achieve the set project goals (costs, time schedules and scope goals).
One person in the organization who is accountable for the project and is totally dedicated to achieving its goals.
Leadership qualities are essential.
Prof. S.K.Rawat

19. DUTIES OF A PROJECT MANAGER
AS A RESOURCE MANAGER: Manage and direct project resources to achieve the project objectives.
AS A PLANNING & CONTROL MANAGER: Develop the project plan and ensure that the work is completed on time, within given budget and with acceptable quality.
AS A CO-ORDINATOR: Interface with higher management regarding project review, issues & approvals. Must also relate to line managers and staff.
Prof. S.K.Rawat

20. What does a project manager do?
Directing : Project Resources
Motivating : Project Team
Planning : Anticipate and plan
Supervising : The Project Work
Administering : Administrative Tasks
Doing : Doing some tasks directly
Training : Project Team
Counselling : Technical, Business, Project & Personal issues
Delegating : Delegate & supervise
Resolving Conflict : Over resources and schedules
Prof. S.K.Rawat

21. PROJECT TEAM Project work is team work.
Project work is accomplished by a group of people from different functional areas and organizations.
Size and composition of the team will vary depending on the project requirements. The team may be disbanded after the project work is completed.
Prof. S.K.Rawat

22. PROJECT IMPLEMENTATION
PROJECT MANAGEMENT
PROJECT PLANNING
PROJECT IMPLEMENTATION
PROJECT CLOSURE
INVESTMENT
DECISION
SCOPE
DEFINITION
PROJECT
SCHEDULING
PROJECT
BUDGETING
Specifications
Deliverables
Time frame
Organization
Budgets
WBS / CBS
Activity based costing
Cost breakdown
Cash flow
Earned value
IDEA
GENERATION
PROJECT
ENVIRONMENT
GANTT
CHARTS
NETWORK
TECHNIQUES
PERT
CPM
CRITICAL CHAIN
FEASIBILITY &
APPRAISAL
RISK
ASSESSMENT
Market
Technical
Financial
Economic
Ecological
Sensitivity
Scenario
Simulation
Decision tree
Prof. S.K.Rawat

23. Network Techniques
Any project is a set of activities and those activities need to be performed in a particular sequence. Most activities will have dependence on some other activity.
Example: We cannot start construction of roof until pillars and walls are builded. Similarly, painting of the building cannot be started unless all masonry work has been completed.
A network diagram establishes this inter-relationship and dependencies between activities.
Prof. S.K.Rawat

24. Network Technique
PERT (Programme Evaluation and Review Technique) and CPM (Critical Path Method) are the methods used to draw the network diagrams.
These two methods are quite similar like twins with some minor differences.
For long they have been referred to in the same breadth. Therefore, they have been merged and called Network Diagram Technique.
Prof. S.K.Rawat

25. CPM
CPM approach is applied to more routine nature work situations and therefore, considerable amount of past data is available for similar activities.
The activity durations can be estimated with a fair accuracy.
The total time for completion based on critical path duration is also quite accurate and helps in controlling the project schedules more effectively.
Prof. S.K.Rawat

26. CPM
How do you know that the schedule worked out for 30 days is the best possible and most economical schedule?
How much extra cost will be required for reducing this schedule by 5 days?
Will that be beneficial for overall project implementation?
These are some of the most common questions that every project manager is required to answer satisfactorily. CPM (Critical Path Method) helps the manager to answer these questions.
Prof. S.K.Rawat

27. CPM
Let us consider an example to understand Critical Path Method (CPM).
Find out the total time for project completion, critical path and total float available on non critical activities.
Activity A B C D E F G H K L
Duration
(D) 3 5 7 4 6 8 2
Immediate
Predecessor --
D,E
G,F
H,K
Prof. S.K.Rawat

28. CPM Activity A B C D E F G H K L Duration (D) 3 5 7 4 6 8 2 Immediate
Predecessor --
D,E
G,F
H,K
Successor
B,C D
E,F G H
H,K L -- A 3 K 2 1 2 B 5 3 D 4 5 G 5 6 8 L 4 9 C 7 E 6 X H 8 4 F 4 7
Prof. S.K.Rawat

29. CPM 3 8
12/16 16 21
23/29 29 33 C 7 1 A 3 2 B 5 4 E 6 D F 8 9 G X H K L 10
14/21 21
Activity A B C D E F G H K L
Duration(D) 3 5 7 4 6 8 2
Forward Pass
EST
EFT
(EST + D) 3 8 10 12 16 14 21 29 23 33
Prof. S.K.Rawat 3 3 8 10 10 16 21 29 21

30. CPM 3 12 16 27 29 33 C 7 1 A 3 2 B 5 4 E 6 D F 8 9 G X H K L 10 21
Activity A B C D E F G H K L
Duration(D) 3 5 7 4 6 8 2
Backward Pass
LST
LFT 3 12 10 16 16 21 21 29 29 33
Prof. S.K.Rawat 7 3 12 10 17 16 21 29 27

31. A-C-E-G-X(Dummy)-H-L (Duration = 33 Week)
CPM C 7 1 A 3 2 B 5 4 E 6 D F 8 9 G X H K L 10 16 21 33 29
Activity A B C D E F G H K L
Duration(D) 3 5 7 4 6 8 2
Activity A B C D E F G H K L
Duration(D) 3 5 7 4 6 8 2
F Pass
EST 3 8 10 16 21 29
EFT 12 14 23 33
B Pass
LST 7 3 12 10 17 16 21 27 29
LFT 33
Total Float 4 7 6
Critical Path
A-C-E-G-X(Dummy)-H-L (Duration = 33 Week)
Prof. S.K.Rawat

32. PERT
PERT model is an event oriented network that recognises the specific ‘stages’ of completion or ‘milestones’ in the project.
The events are the end results of an activity. The interdependence of the events is well defined.
It introduces a lot of uncertainty about the time estimates and efforts required to complete the activity.
For example some projects, like R&D projects, there is no past data to base the time estimates. Sometimes, external factors have a strong influence on the project and therefore, the time required to complete the project is not precisely known.
Prof. S.K.Rawat

33. PERT PERT method is used to estimate time in the following manner:
Optimistic time (O): It is the minimum possible time that an activity can take to complete, considering that activity does not encounter any problems.
Most likely time (M): It is the best estimate of the time required to complete an activity, assuming that the activity faces moderate delay as normally expected.
Pessimistic time (P): It is the maximum possible time the activity could take to finish, assuming that the activity faces maximum possible problems and delays.
Prof. S.K.Rawat

34. PERT
Expected time (TE): It is the best estimate of the time required to complete an activity, assuming everything proceeds as normal.
The implication being that the expected time is the average time an activity would require, if the activity were repeated on a number of occasions over an extended period of time.
Thus the expected time is given as
The probability of the project completing within the total schedule time calculated on the basis of three estimates is 50%.
Prof. S.K.Rawat

35. PERT
Using the formula, the average time for various activities is calculated.
Network is drawn based on relationships given.
Critical path is identified as the longest path in the network out of various paths available.
Find standard deviation for critical activities. i.e.
Find variance for critical activities. i.e.
Find standard deviation of critical path duration =
Prof. S.K.Rawat

36. PERT Let us consider an example to understand PERT method.
Draw the project network and identify all paths through it.
Find expected duration and variance for each activity.
What is expected duration of project with 50% chance of completion?
Find standard deviation.
Activity A B C D E F G
Predecessor --
D,E
Duration O 1 2 3 M 4 5 6 P 7 8 14 15
Prof. S.K.Rawat

37. PERT Let’s find out estimated expected time(TE) for each activity byG
Predecessor --
D,E
Duration O 1 2 3 M 4 5 6 P 7 8 14 15 TE
Activity A B C D E F G
Predecessor --
D,E
Duration O 1 2 3 M 4 5 6 P 7 8 14 15 TE 2 4 3 1 6 5 7
Prof. S.K.Rawat

38. PERT
Now draw network diagram using expected time for various activities.
Activity
Predecessor
Duration (TE) A -- 2 B 4 C 3 D 1 E 6 F 5 G
D,E 7 5 D 1 2 A 2 E 6 G 7 1 B 4 C 3 3 6 4 F 5
Prof. S.K.Rawat

39. Critical Path is B-E-G as duration is maximum (17) at this path.
PERT
Now let us find critical path by calculation of duration for different paths
Path
Duration
A-D-G 10
B-E-G 17
C-F 8 1 A 2 B 4 C 3 D 5 E 6 F G 7
Critical Path is B-E-G as duration is maximum (17) at this path.
Prof. S.K.Rawat

40. Standard Deviation of Critical Path= √9 = 3 weeks
PERT
Let’s find Standard deviation & variance for critical path
Activity
Predecessor
Duration
Std Deviation
Variance O M P TE б б2 A -- 1 7 2 B 4 C 8 3 D E 5 14 6 F G
D,E 15
Activity
Predecessor
Duration
Deviation
Variance O M P TE б б2 A -- 1 7 2 B 4 C 8 3 D E 5 14 6 F G
D,E 15
Standard Deviation of Critical Path= √9 = 3 weeks
Total 9
Prof. S.K.Rawat

41. CONCEPT OF BREAK EVEN ANALYSIS
Break-event analysis involves the study of revenues and cost of a firm in relation to its volume of sales.
It specifically determines the volume at which the firm’s costs and revenues will be equal.
The break-event point (BEP) may be defined as the level of sales at which total revenues equal total costs and the net income is equal to zero.
BEP is also known as no-profit no-loss point.
Prof. S.K.Rawat

42. CONCEPT OF BREAK EVEN ANALYSIS
It may be determined either in terms of physical units or money (i.e., sales value in rupees).
 The main objective of the break-even analysis is not simply to spot the BEP, but to develop an understanding of the relationship of cost, price and volume within a company’s practical range of operations.
The break-even chart is an “excellent instrument panel for guidance in controlling your business.”
Prof. S.K.Rawat

43. CONCEPT OF BREAK EVEN ANALYSIS
BEP may be determined either in terms of physical units or money (i.e., sales value in rupees).
The main objective of the break-even analysis is not simply to spot the BEP, but to develop an understanding of the relationship of cost, price and volume within a company’s practical range of operations.
The break-even chart is an “excellent instrument panel for your guidance in controlling your business.”
Prof. S.K.Rawat

44. BEP for Physical Units This method is for the single-product firm.
The break-even volume is the number of units of product that has to be sold in order to cover all expenses-both fixed and variable.
The selling price of a unit covers not only variable cost but also leaves a margin (contribution margin).
This margin is contributed toward the fixed costs.
The break-even point is reached when sufficient numbers of units have been sold so that the total contribution margin of the units sold is equal to the fixed costs.
Prof. S.K.Rawat

45. BEP for Physical Units
The formula for calculating the break-even point is:
where Contribution Margin per unit = Sales (Selling Price) – Variable Cost Y
Total Revenue
BEP
Cost & Revenues
(in rupees)
Total Cost R
Fixed Cost Q
Production
(in physical units) O X
Prof. S.K.Rawat

46. Example on BEP (Units) This method is for the single-product firm.
The break-even volume is the number of units of product that has to be sold in order to cover all expenses-both fixed and variable.
The selling price of a unit covers not only variable cost but also leaves a margin (contribution margin).
This margin is contributed toward the fixed costs.
The break-even point is reached when sufficient numbers of units have been sold so that the total contribution margin of the units sold is equal to the fixed costs.
Prof. S.K.Rawat

47. BEP for Physical Units
Example: Fixed costs of a factory are Rs.10,000/year, the variable costs are Rs.2 per unit & the selling price is Rs.4 per unit.
Solution:
The break-even point would be:
In other words, the company would not make any loss or profit at a sales volume of 5,000 units as shown below:
Sales
Cost of goods sold
Variable Rs. 2.00/-
Fixed cost
Net Profit
Rs. 4 x 5000 = 20,000
Rs. 20,000
Rs. 2 x 5000 =
Rs. 10,000
Rs. 10,000
Rs. 20,000
Rs. 10,000
NIL
Prof. S.K.Rawat

48. BEP for Sales
Multi-product firms are not in a position to measure the BEP in terms of any common unit of product.
They find it convenient to determine their BEP in terms of total rupee sales.
The BEP would be the point where the contribution margin (sales value- variable costs) would equal the fixed costs.
The contribution margin ratio is expressed as a ratio contribution margin/unit to sales.
Prof. S.K.Rawat

49. } } } BEP for Sales The formula for calculating the BEP (Sales) is:
Total Revenue line }
Profit Y
Profit Zone
BEP
Cost & Revenues
(in rupees)
Total Cost line }
Fixed Cost
Loss Zone
Fixed Cost line
Variable Cost line }
Variable Cost O X
Sales
Prof. S.K.Rawat

50. SALES (BEP)
Example: Fixed profit for a product if the sales is Rs. 10,000, variable cost & fixed cost for the product is Rs. 6,000 & Rs. 3,000.
Solution:
From the given data the company makes a profit of Rs. 1,000.
Now let us calculate BEP(Sales) & check whether there is profit or loss at BEP(Sales)
Sales
Cost of goods sold
Variable cost
Fixed cost
Net Profit
Rs. 10,000
Rs. 6,000
Rs. 3,000
Rs. 9,000
Rs. 1,000
Prof. S.K.Rawat

51. SALES (BEP) We know that Contribution Margin Ratio is calculated as :
The BEP(Sales) would be:
Thus at the sales value of Rs.7,500 (BEP), there is No-profit No-loss.
Sales(BEP)
Cost of goods sold
Variable cost
Fixed cost
Net Profit
Rs. 7,500
@ [( )= 0.6]
Rs. 0.6 x 7500 = 4,000
Rs. 4,500
Rs. 3,000
Rs. 7,500
NIL
Prof. S.K.Rawat

52. QUALITY MANAGEMENT Definition of Quality
Quality is defined as customer satisfaction.
According to ISO 9000, “Quality is the total features and characteristics of a product or service that has an ability to satisfy stated or implied needs of customers.”
Concept of Quality: Broadly, quality is:
Fitness for use.
Grade.
Degree of preference.
Degree of excellence.
Conformity of requirement.
Prof. S.K.Rawat

53. QUALITY MANAGEMENT Principles of Quality Management (QM)
The ten principles of Quality Management is listed below:
Vision based.
Customer focused.
Prevention oriented.
Scientifically approached.
Process given more importance than the end result.
Data based on analysis.
Continuous improvement strategies.
Cost conscious attempt.
Documentation for traceability.
Reward / Recognition assured.
Prof. S.K.Rawat

54. QUALITY CIRCLE Characteristics of QC
Small primary groups of employees, size 8 to 10 people.
Membership is voluntary.
Members choose their own leader.
Members meet regularly according to an agreed schedule.
Members are specially trained in problem solving and analysis techniques in order to play their role effectively.
Basic role of QC is to identify and solve work related problems.
It enable members to use their hidden talents, creative skills and competence for tackling problems.
It contributes members self esteem and self confidence.
Prof. S.K.Rawat

55. QUALITY ASSURANCE
Quality Assurance is what a company claims on the product label.
QA is a planned and systematic production processes that provide confidence in a product's suitability for its intended purpose.
It is a set of activities intended to ensure that products (goods and/or services) satisfies customer requirements.
It regulates the quality of raw materials, assemblies, products and components; services related to production; and management.
It is important to realize also that quality is determined by the intended users, clients or customers.
Even goods products with low prices can be considered quality items if they meet a market need.
Prof. S.K.Rawat

56. TOTAL QUALITY MANAGEMENT
Total Quality is a description of the culture, attitude and organization of a company that aims to provide continuous satisfaction of customers need with respect to products and services.
Total Quality Management is management strategy aimed at embedding awareness of quality in all organizational processes.
TQM has been widely used in manufacturing, education, government, and service industries, as well as NASA space and science programs.
Prof. S.K.Rawat

57. TOTAL QUALITY MANAGEMENT
Definition
“TQM is a management approach of an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society.”
 Total quality management (TQM) as “management the entire organization so that it excels on all dimensions of products and services that are important to the customer.”
Prof. S.K.Rawat

58. TQM STAGES
The various stages that exist in an organization during TQM implementation are shown in the figure below.
The first stage is a common situation seen in several organizations. In this stage, there are few people who constantly work (arrows), while there are several others who relax (dots). This is not a healthy situation for organizations.
The third stage has all arrows pointing towards the same direction. It indicates that there is a common goal or vision for the organization and every individual is focus on the same vision. This is the best of the previous three stages.
In the second stage it is noticed that there are no dots (no one is relaxing). But the arrows are focused in different directions. This means there is no single focus for the organization. Every achiever performs in his own way.
III II I
Stages Workers Orientation
Prof. S.K.Rawat

59. TQM STAGES
In this stage all the people are working as a team. When people work as a team, synergic effect sets in and there is always five times greater effect as compared to people working as a group.
As the number of people remains the same, it can be said that the fourth stage indicates a tremendous increase in productivity. (i.e., the input remaining same, the output has increased). IV
Stages Workers Orientation I II
III
Prof. S.K.Rawat

60. KAIZEN
Kaizen, Japanese for "change for the better" or "improvement", the English translation is "continuous improvement", or "continual improvement" is an approach to productivity improvement.
Kaizen is about effecting small changes continuously.
Employees are encouraged to participate and innovate with process and materials.
The improvements effected by the employees do not get materially rewarded. In Kaizen also, each improvement is reported and placed on the notice board.
Prof. S.K.Rawat
Copyright Kathy Schwalbe/Course Technology 1999

61. KAIZEN
A closer definition of the Japanese usage of Kaizen is "to take it apart and put back together in a better way.“
What is taken apart is usually a process, system, product, or service.
Kaizen is not about radical big bang improvements.
It is a daily activity and the changes are so small that they literally do not cost any money.
It is quite possible that an improvement effected today may get altered tomorrow itself with a better method.
Everyone participates in kaizen; people of all levels in an organization, from the CEO down, as well as external stakeholders when applicable.
Prof. S.K.Rawat
Copyright Kathy Schwalbe/Course Technology 1999

62. ‘5’S
The 5-S practice is a technique used to establish and maintain quality environment in an organization.
5-S is the key to Total Quality Environment.
The 5-S stands for five Japanese words- Seiri, Seiton, Seiso, Seiketsu, and Shitsuke.
The 5-S technique has been widely practiced by quality organizations world-wide.
Most 5-S practitioners consider 5-S useful not just for improving their physical environment, but also for improving their thinking processes too.
Many of the everyday problems could be solved through adoption of this practice.
Prof. S.K.Rawat
Copyright Kathy Schwalbe/Course Technology 1999

63. ‘5’S
Unfortunately, unlike other quality tools and techniques, this basic but powerful technique for quality improvement has not been known to the western world.
Workplaces in Japan are well-known for their cleanliness and orderliness. This results from the Japanese emphasis on training and discipline.
The logic behind the 5-S practice is that organization, neatness, cleanliness, standardization and discipline at the workplace are basic requirements for producing high quality products and services, with little or no waste, while maintaining high levels of productivity.
Prof. S.K.Rawat
Copyright Kathy Schwalbe/Course Technology 1999

64. ‘5’S
The English equivalents, their meanings and typical examples for ‘5’S is shown below: -
Japanese
English
Meaning
Typical Example
Seiri Structurize Organization Throw away waste
Seiton Systemize Neatness sec retrieval of
document
Seiso Sanitize Cleaning Individual cleaning
responsibility
Seiketsu Standardize Standardization Transparency of storage
Shitsuke Self-discipline Discipline Do 5-S daily
Prof. S.K.Rawat
Copyright Kathy Schwalbe/Course Technology 1999