Wednesday, October 9, 2013

PROJECT MANAGEMENT PROCESS

INTRODUCTION

The Project Management must follow a well-defined Process involving a number of stages. Important stages of Project Management Process are presented in chart PM-04. 


It consists of the following stages:

1)       FEED (Front End Engineering & Design) 
2)       Planning
3)       Development (E & P)
4)       Construction
5)       Monitoring & Reporting
6)       Evaluation
7)     Close-Out

A more detailed view of the project execution process is presented in the following figure.


1.         FEED

FEED, (Front End Engineering and Design) is the starting point for every project and includes conceptual design and basic engineering for the project. The Conceptual Design is a study phase in the life cycle of a project where ideas are generated and alternatives are evaluated. This phase results in development of a basic process concept, a preliminary schedule and a rough cost estimate (ROM).

The conceptual design is followed by Basic Engineering which is the elaboration of the conceptual design into a package, defining the process requirements and the associated equipment and project facilities. A cost preliminary estimate is also developed during this phase.

As this stage determines the nature and scope of development as well as the project cost estimate, it is very crucial for the final success of any project. In case of shortcomings during this phase, it is very unlikely that the project will be successful in meeting the project goals, objectives and needs. At this stage all deficiencies in the basic parameters are duly identified and rectified. This stage includes a cohesive plan that encompasses the following areas:

      
      1)       Conceptual design for the operation of the project
      2)       Clear definition of project scope and objectives.
3)       Detailed process description.
4)       Detailed studies analyzing the business needs and goals.
5)       Major and critical equipment and machinery requirement.
6)       Preliminary cost estimate.
7)       Project Master Schedule.
8)       Financial analyses of the costs and benefits.
9)       Project charter including costs, tasks, deliverables, and milestones.
10)  Many a times, a small prototype of the final product is built and tested. Testing is generally performed by a combination of testers and end users.


 A detailed discussion on FEED will be available in forthcoming blogs.

2.         PLANNING


Planning is the next step in project management process. It is said to be basic to all human activity and the application of common sense. It involves working out the details of what is required to be done, when it is to be done and how is it to be executed. In other words, planning involves identifying needs and opportunities, working out various possible courses of action, identifying the most appropriate actions, evaluating feasibilities to achieve the plans, estimating the resources needed to meet the objectives, anticipating possible road-blocks and fixing targets and milestones for meeting the final objectives. Planning techniques are found to address many organizational problems, opportunities and growth. Whether the priority is an effective design, completion targets, cost optimization, or new initiatives, good planning is bound to increase the chances of the success of a project. It helps to analyze and assess present needs, future challenges and assists in testing various alternatives. Good plans always allow for flexibility to adapt changing circumstances. The basic need of project planning is to increase the likelihood of a project being implemented efficiently, effectively and successfully. A failure to adequately plan meticulously reduces the project's chances of success.

In the case of project execution, planning starts immediately after the development of preliminary Project Business Plan (PBP) and Project Execution Plan (PEP) and continues simultaneously with the development of these documents. As planning is very basic to any project control activity it is done well ahead of most actions being executed.
The basic need of planning is to manage time, cost and resources adequately to estimate the work and to effectively manage risk during project execution. A failure to adequately plan meticulously reduces the project's chances of success. A plan generally consists of:
 
1)     Establishment of the Project Coding Structure. The coding structure needs to be line        with the Work Breakdown Structure (WBS).
2)     Selection of the team members
3)     Establishment of the level of detail required. 
4)     Development of major project milestones after meticulous study and including                   adequate float. 
5)      A clear definition of scope and deliverables
6)      Identification of activities and actions required to complete the deliverables.
7)      Development of interfaces for all deliverables between the project team members           within the boundaries of project milestones.
8)      Networking the activities in a logical sequence taking care of the interfaces.
9)      Development of project schedules
10)   Estimating the resource required for completion of the activities.
11)   Development of realistic cost estimates with adequate contingency reserves.
12)   Meticulous detailing of the structure ensuring single point accountability.
13)   Development of well-defined assumptions towards the development of cost estimate.
14)   Establishment of Risk Management plans


A detailed discussion on Planning will be available in forthcoming blogs.

3.         DEVELOPMENT

Development is the next step in the Project Management Process. During this stage, the project gets developed. This stage is also known EP Stage or the detailed engineering and procurement stage.

A)       Engineering
The detailed Engineering includes the following disciplines:


1)       Process
2)       Piping
3)       Mechanical
4)       Electrical
5)       Telecommunications
6)      Automation/ Instrumentation
7)       Civil & Structural


             A detailed discussion on Engineering will be available in forthcoming blogs.

B)       Procurement
The Procurement includes the following:
1)       Finalization of Purchase Orders of Equipment
2)       Finalization of Module Fabrication & Assembly contracts
3)       Issue of Purchase Orders for Bulk Materials
4)       Inspection and Expediting
 
A detailed discussion on Procurement will be available in forthcoming blogs.

4.        CONSTRUCTION


Construction refers to the process of implementing the project as engineered and procured.  It consists of the processes used to complete the work defined in the project execution plan (PEP).  
A detailed discussion on Construction will be available in forthcoming blogs.

5.         MONITORING & REPORTING


Monitoring
Monitoring consists of those processes performed to observe project execution so that potential problems can be identified in a timely manner and corrective action taken, when necessary, to control the execution of the project. The key benefit is that project performance is observed and measured regularly to identify variances from the project management plan.






Monitoring and Controlling includes:
1)       Measuring the progress of project activities
2)       Monitoring the project cost, manpower and schedule against the project execution     plan and the project control base
3)        Identification of correction and mitigation plans to address issues and                    corresponding risks and applying corrective measures.

Reporting
The purpose of the Progress Reporting and monitoring mechanism is to enable the Project Team, the Project Owners and the Sponsors to follow, monitor and keep informed about the developments on the project. It is a key element of Project Management and projects a qualitative as well as quantitative summary of the project and the actions taken to control the project. It is an effective communication mechanism and is a key to the success of every project. Listed below are some of the important reports and monitoring documents generated:


1)       Monthly Progress Reports  
2)       Weekly Progress Reports 
3)       Milestone Charts 
4)       Schedule Updates 
5)       Manpower & Man-hour Charts 
6)       Needs List 
7)       Look Ahead Schedules 
8)       Critical Issues Reports 
9)       Schedule Critical Activities 
10)   Change Management Reports 
11)   Cost Control Reports 
12)   Financial Reports 
13)   Road Blocks

          A detailed discussion on Monitoring & Reporting will be available in forthcoming blogs.

6.         EVALUATION


The next step in the Project Management Process is the evaluation of all the work that has been done. Once the monitoring (also known as measuring) is done, it is essential to evaluate and analyze the data so collected. Given below are some of the areas of analyses:
 
1)       Progress evaluation
2)       Progress Performance Reports
3)       Monitoring the current status of project against the base line schedule
4)       Monitoring the current status of project against the base line cost estimates
5)       Establishment of Critical Path
6)       Forecasting project milestone completion targets
7)       Forecasting cost to complete each unit
8)       Estimation of progress performance
9)       Estimation of project productivity figures
10)   Identifying trends and change orders
11)   Identification of critical activities likely to impact the project
12)   Evaluation of schedule and cost risks
13)   Forecasting final project completion schedule and cost

Given below is a discussion on some of these topics. A detailed discussion will follow in future blogs:
A)      Progress Evaluation:
Project progress is a key factor in the measurement of project performance, especially in the areas of schedule and cost. It controls the measurement of engineering, procurement and construction costs and schedules. An accurate measurement of progress serves as a basis for the evaluation of performance against the project’s control base on schedule and budget. Progress (percent complete) is measured by using a weighted average method of computing "earned" values.

B)       Earned Value
Earned Value technique is used as a way to accurately measure and manage project performance to enhance project control. It allows simultaneous measurement of budget and schedule conformance, and captures their interrelationship better than most other methods. That is why the Earned Value Technique has found a universal recognition on the evaluation of performance on major projects. It measures the efficiency at which work is performed pin-pointing the project problems at grass root levels.
 
The progress reporting system is set up as soon as a reasonable breakdown of drawings, specifications and other activities are available for various engineering disciplines. This occurs soon after the availability of basic designs, execution approach and the initial cost estimate. The Control Level Schedules provide a listing/grouping of all deliverables (drawings, specifications, etc.) and activities required for the completion of a project. The weighted value is determined for each item by allocating the estimated hours to each line item based on the respective discipline control budget. By determining the "percent complete" for each item at the end of a reporting period, the earned hours are calculated as follows:

P=E/H
Where
P= Progress
E= Earned Hours and
H= Estimated or Budget Hours

In other words, the total earned hours from work completed divided by the total control (estimated or budget) hours determines the physical progress for each item. A roll-up of all items and disciplines results in the physical progress for the unit or the whole project.


C)       Home Office Performance
 The home office performance is calculated using the expended hours and is a measure of work accomplished versus actual expenditures and is calculated on both an incremental and cumulative basis at the end of each reporting period. Performance of greater than 1.0 represents efficiency better than control budget and would result in under-run in home office work hours. Whereas, a performance figure of less than 1.00 is an indication of lower efficiency and would result in over-run in the work hours.

D)      Construction Performance
Construction progress is calculated using the "unitized progress reporting" system. Estimated work hours are established in the control base for each defined "unit" to be built or installed. Physical progress against each defined unit is measured and input into the progress system.

7.         CLOSE-OUT


As the name refers, Project Close-out is done at the completion of the project. A discussion under this includes:
1)       Why Close-Out
2)       Close out detail
3)       As-Built drawings and documents
4)       Final Cost Package



A detailed discussion on Project Close-Out will be available in forthcoming blogs.

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