PART C - Engineering Management Project Management: Definition of a project A project is a logically sequenced set of tasks or activities designed to achieve

a service or produce a task within an agreed time frame, at an agreed cost and maintain an agreed quality; Examples of projects may include: Modification to an existing design. Planning a course of study. Preparing for an overseas stay. Construction of a new building or extension to an existing building. Planning a sports event such as the formula 1 GP, football finals etc. A union or student rally.

A project management approach is used when it is necessary to manage the activity, the resources and the funds to produce the desired outcome, within a specified budget and time frame. Projects can be seen as an independent planning method in which a business can redirect or refocus its efforts in a closely managed and organised way. Short History of Project Management: The principles and concepts of project management originating from Gantt charts used by Henry Gantt, during World War I as a visual planning aid in the ship construction industry. Gantt used his charts to show progress, work completed and the work to be done on a number of independent construction activities. The Gantt chart, now used in Microsoft Project software shows the relationship between tasks and time.

RMIT University

Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 1 of 22

For example: Figure 1: Gantt chart outlining tasks to be performed. Activity Purchase tractor Plough fields Plant crop Often associated with the Gantt chart is a time indicator that can show progress to date. In addition those activities that have been completed can be shaded to add extra visual input. Figure 2: Gantt chart outlining tasks completed by Thursday. Activity Purchase tractor Plough fields Plant crop Monday Tuesday Wednesday Thursday Friday Saturday Monday Tuesday Wednesday Thursday Friday Saturday

The Program Evaluation and Review Technique (PERT) management approach was developed and introduced when more complex and precision planning was necessary particularly for the US navy for use in their Polaris missile program during the 1950s to simplify the scheduling of activities and resources. Each logical task or activity was set out in a diagram from start to finish, left to right, and the length of time it would complete the activity, the duration was a part of the planning process. Managers of intricate projects could access an easy visual method of keeping track of the progress of each task or
RMIT University Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 2 of 22

activity to ensure that each one finished on time, in order to meet the project deadline. The Du Pont organisation developed the concept of the critical path of a project that is identification of the longest path to the last activity meaning the shortest possible time for the project to complete. This was based on estimates for the duration of each activity. The PERT approach developed improvements in activity duration estimates. Rather than rely on guess work PERT examined three activity duration possibilities. The possibilities included the most optimistic; the most probable and the most pessimistic activity durations, in order to arrive at the most accurate estimate of a new activity. By the 1960s the concept of planning involved creating a network where then relationships between these activities were displayed in diagram format. At first there was two different ways of to show the relationships between activities within a project: 1. Activity on the arrow (AOA).

Figure 3 - Example of an AOA network

Prepare wall A Paint wall A

2. Activity on the node (AON). In an AON a node is a junction or an intersection point

Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 3 of 22

RMIT University

A D

Figure 4 - Example of an AON network (activity on the node) In figure 4 an accompanying activity list would explain the nature of activities A, B, C, and D. Although some projects still use AOA format the majority of current projects use the AON approach, however the circle has been replaced with the box and the activity is now known as the activity in a box AIB. Figure 5 example of AIB activity.

Activity B

Activity A

Activity D

Activity E

Activity C

In figure 5 activities are shown in boxes outlining the logical flow of work from beginning to end. Boxes are preferred, as more information such as costs, cost codes, responsibility and activity descriptions and duration can be added to the box format.

RMIT University

Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 4 of 22

A typical box format can contain any information relevant to the planning of the project, such as that shown in figure 6. Activity No 8 Remove fence Cost $390.00 Code 113 Duration 4 days Figure 6 - example of information within an activity box. In figure 6 the four corners of the box are reserved for information regarding the starting and finishing times of the activity. Many organisations prefer using the Gantt chart as a simple graphic of the project; however the amount of information that can be displayed on one chart is limited compared with the AIB network. The techniques of Gantt and PERT were adopted as part of a network approach and became what we know today as project management. Group Activity 1: (non assessable) Between your groups describe a project one of you has been involved with, at home at work or even arranging to enrol into a program at University, and consider the following questions: What were the most satisfying aspects of the project? What were the things that went wrong? If you were to manage a similar project in the future, what would you do differently? Responsibility David

RMIT University

Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 5 of 22

Managing Projects A Project is a planned undertaking. The undertaking can be a physical construction or repair, or it can be a new/revised process or provision of a service. At the centre of many business activities is the planning process. Each new undertaking may carry its own planning. It may involve such that a company or individual may spend time going from one project, with its own planning process, to the next project with an entirely different process. The key to project management is that an outcome or product is achieved by cutting the work to be done into pieces. These pieces will each carry its own goals, budgets, resources, workplaces, managers and personnel. The size of these pieces of work will vary from project to project, business to business and government to government. Here are some examples of pieces of work: Project stages. Project elements. Project steps. Project tasks. Project activities.

Whatever these divisions of work are called, they share one thing for a big piece of work to be done it is divided into smaller pieces. These pieces will most likely be separate or autonomous from each other during the planning and implementation of the project. At the end, each of these big and small pieces will have come together to enable completion of one big outcome. Projects start with a definition of a final perceived outcome or product. This statement of outcome, which might be called something like project purpose is meant to be the guide for navigation or tracking of all the big and smaller pieces of work.
Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 6 of 22

RMIT University

The project management team (or whatever it calls itself) needs to refer at regular intervals, to the project purpose, as well as all the written down stages, elements (big pieces of work) and steps, tasks, activities (smaller pieces of work). If the project management team, or the client buying the product/outcome, decides to change the project purpose then there will have to be adjustments to the written down pieces of work. need to be adjustment to the final project purpose. These notes contain examples of the divisions of work mentioned above. The formatting of these divisions will vary, according to the house style of the organisation. State and Territory Governments follow the guide to formatting of these planning documents listed in the Australian Government publication: Style Manual. The 6th Edition (2002) devotes 34 pages to the setting out of project management documents, for Government employees; these are a good guide for you, if you a dealing with Government departments, statutory authorities or committees. Self-audit Inspection Examples Concrete pourers recording the moisture content before performing the pouring into modules Aircraft maintenance engineers checking on warning light and its back-up system (saving the pilot from having to do the same when flying) University students checking that they have answered each section of a question in an examination The twin purposes of self-audit are to provide a guide or map of the sequence of steps to be taken in a procedure/process and secondly to require all operators to write their signature next to each self-checked step. Therefore, operator takes legal responsibility for stepping back and double
Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 7 of 22

On the other hand, if

someone decides to alter a written down piece of work, then there might

RMIT University

checking his or her own work.

This does not mean that the operator is

taking responsibility for any accidents or other later problems with a product; this self-audit is a legal responsibility for checking or validating the work just completed in the prescribed sequence. These self-audits are crossreferenced or linked (via file number, footnote or hyperlink) to make the tracing of any later problems possible. Self-audits can be required by law, such as acts or regulations from Government. Included in this category might be doctors registration of notifiable diseases, civil aviation regulations (CARs) as required by aircraft construction regulatory bodies such as FAA (US) and JAR (European Union); the filling out of income tax forms, log books filled out by drivers. Can you add to this list? Some self-audits are confidential for business use only. Others are for

handing in to a Government or industry regulation body. Some self-audits come in triplicate three copies with one copy for the operator as his/her receipt, one copy for the employer/manager and one copy for the regulatory authority. By the way, external accountants and auditors still work with the company to verify its financial record keeping and advise on budgets. Organisational Records Quality organisations are encouraged to keep records about which employees do which jobs. dealing with. These records inform the client who he/she is The records inform the operator about what is the

demarcation of duties expected or output anticipated annual work plans are negotiated between employer/manager and employee/operator. Finally, the information about who does what is written down on a single sheet of paper to give the big macro picture. This pyramid-shaped organisation chart has the manager (or owner) at the top of the pyramid, then the next level down are the division/area/territory managers, then maybe team leaders and finally there is you and me at the bottom of that pyramid. Each of the three, four or five levels of management (up to 14 in
Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 8 of 22

RMIT University

the military services of many countries) is linked with a statement about who is accountable to whom. Group Activity: RMIT University has a management structure. Start at the top maybe with a Chancellor or Vice Chancellor (or equivalent). will be a public document so probably not that difficult to trace. *This activity will be discussed at next tutorial class. Group leaders will be called upon to explain their findings to the class. External and International Documentation Individual businesses join together to form industry representative bodies. The purpose is to strengthen that industrys image and public voice, in its dealings with the media, with Government and with related industries. Another purpose of industry groups is to maintain minimum levels of behaviour (or standards), so that the reputation of that whole industry can be maintained or enhanced. Membership of that industry group will depend on individual businesses or organisations showing that they have the skills and motivation to maintain those standards. Some industries run a closed shop in which it is almost impossible to practice without membership of the relevant professional body or industry group. Examples of national voluntary but powerful industry self-regulation are: Admittance to the bar for already qualified lawyers or legal practitioners. Registration as a doctor by a national medical body such as a medical association (e.g., BMA), college of physicians, college of surgeons. Chapters of professional engineering associations. Bus proprietors association. Housing industry association (builders). Can you draw the pyramid showing who is accountable or answerable to whom? This

What quality assurance do these national industry representative bodies offer to customers or clients?
Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 9 of 22

RMIT University

First, these associations will offer a set of promises of procedural standards, in the form of a charter. In early, medieval Europe, industry groups formed into guilds; these guilds not only wrote charters for their clients but they pooled resources to provide a shared secretariat for guild members. These guild halls (hence Guildhall in London) were the early beginnings of quality assurance as we know it today. Secondly, representative bodies set up, at their own expense, an ombudsman. This concept from Sweden is the provision of an independent legal representative to assist clients or customers in their complaints. The original concept was to allow a legal complaint system against public authorities. companies. International Standards This International Standards Organisation (ISO) registers businesses or organisations which want to demonstrate a certain level of quality assurance for all its clients. Project Documentation Project Work Statement On a spreadsheet the larger and smaller pieces of work are listed not necessarily in the chronological order in which they will be achieved. The attached example of a Project Work Statement shows how each of these listed big pieces of work, e.g., elements, and small pieces of work, e.g., activities, are drawn up on a typical document. For each of these elements and activities, there is a space of the document to show crucial planning features: Starting date of each element or activity. Review dates mid-way through. Finishing date (estimated). The activities or elements which, chronologically, either precede or follow immediately behind. This has been extended to NGOs (non Government organisations) such as the insurance industry and privatised electricity

RMIT University

Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 10 of 22

The team/group/individual responsible for the actual element or activity. The budget (estimated). The authorities or permission required before commencement and the signing off or authorisation following the element/activity completion.

Project Documentation Gantt chart We have mentioned Gantt charts earlier. Special mention might be made of the link between the documented pieces of work above and the repetition of this same data on a spreadsheet. A Gantt chart is a simple bar graph which each skyscraper or bar representing the piece of work. Another special feature of the Gantt chart is the milestone meetings. These meetings put in place formal meetings to review the implementation of the project. They usually come in between major pieces of work, just after one major element or whatever is completed and before the next. meetings are shown with diamonds. Project Documentation Risk Analysis See the following example. each listed piece of work: Likelihood of risked activity occurring. You estimate score out of 5. Consequences of risked activity. You estimate score out of 5. Level of risk for each risked activity. You multiply the above two to make a total score out of 25. Project Documentation Choosing the most viable new product option Project Documentation Risk Analysis and insurance Some insurance organisations work out a statistical chance of the risk becoming true. The recent floods in Europe were given a 100 in one chance of happening. CASA (Civil Aviation Safety Authority) uses similar calculations. (CASA has the primary responsibility for the maintenance, enhancement and
promotion of the safety of civil aviation in Australia.)
Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 11 of 22

Milestone

Note especially the three sections attached to

RMIT University

*Example: (to be noted and worked as a group) 1.1 Description of existing task. Passenger tray table, retractable from backs of passenger seats. Standard table 65cm x 45cm, moulded polypropylene with steel screwed single hinge to fit all Boeing 737 series and BAE jet aircraft manufactured after 1998. 1.2 Estimate of existing client base.

All passengers regardless of class (economy, first or business) flying short haul flights on scheduled routes. Passengers who require space to place food, drinks and other items purchased or given to passengers throughout the flight. Passengers who require space to store lap-tops, magazines and other items being utilised during the flight. 1.3 Estimate of existing attributes. 2.1 Product able to provide level surface within arms length, for temporary storage of plates, glasses, cutlery food and drink items plus passengers personal items required throughout the flight. Product able to be retracted and refolded by children and with minimum strength. Product able to hold glasses/cups in indentations in the event of aircraft turbulence. Product to conform to US, European and Australian safety standards. Product units easy to assemble clean and replace. Cost of replacement units installed on aircraft for $40. Product life-span required to be 8 years and be non-inflammable. Description of range of new attributes (options A & B) Option A existing trays to have added a new non-stick surface, to prevent items sliding off tray. New layer of non-stick material noninflammatory to be easily applied on one application, with an onsite installation cost of $8.00 each. Option B existing product fitted with new slow release hinges to ensure tray doesnt fall suddenly onto passengers laps. Installation cost to existing units $25 off-site for a 12 year lifespan. 2.2 Estimate of new client base. Passengers who would normally avoid consumption of in-flight food/drinks because of fear of spillage. Passengers wanting further convenience with use of a seat tray during aircraft turbulence. Crew members aiming to avoid removal of the tray food/cutlery items at short notice, in the event of aircraft turbulence.
Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 12 of 22

RMIT University

 2.3

Passengers wanting the slow release of tray, to avoid injury or bumping of other personal items.

Strategies to achieve new improvements. Trial on a limited basis of two non-slip surface materials on two aircraft. The creation of a risk assessment utilising data from the trial wear and tear durability testing at CSIRO (ACT). The testing of pax seat space utilisation of four slow release hinges during seat maintenance programs at QANTAS maintenance (Avalon). Five focus group trials on risk assessment.

RMIT University

Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 13 of 22

3.1

Choice of most viable cost effective and potentially successful new attributes together with reasons.

My choice of new product attribute would be option A non-stick surface. It would be more viable due to the faster installation time, and the easier checking of non-conformances. Maintenance - by crew cleaning daily is easy, and compatible with existing duties. If test prove the safety of the new product, it may prove to be a quickly identifiable and popular new attribute. Cost effective choices place Option A ahead as well. An extra expense of 20% of original tray price (verses over 50% extra for Option B) is easier to justify in a climate of aviation cost cutting. Installations on-site during a minor routine maintenance would also be more cost effective than off-site installation by (possibly) specialist contractors who would have to fit in with the aircraft maintenance schedules.

RMIT University

Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 14 of 22

For an example of Contract Documentation, you are to refer to the attached PDF file The Contract Documentation Process

An example of PROJECT PLAN FORM

PROJECT TITLE PROJECT RESPONSIBILITY DETAILS Name of Organisation with Project Responsibility Names of Participating Organisations Name/Contact Details of Project Manager PROJECT TOTAL BUDGET $ PROJECT START/FINISH DATES PROJECT PURPOSE (Include background, community needs and project aims)

PROJECT ELEMENTS (Describe the broad spheres of work which will enable you to achieve the project purpose) Project Element 1 Project Element 2 Project Element 3 (if applicable)

RMIT University

Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 15 of 22

RMIT University

Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 16 of 22

PROJECT WORK STATEMENT

PROJECT ELEMENTS ACTIVITIES WITHIN EACH PROJECT START DATE ELEMENT

REVIEW DATE/

RESPONSIBLE

FINISH DATE

FOLLOW-ON

MILESTONE

1. 1.1 1.2 1.3 2. 2.1 2.2 2.3

RMIT University

Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 17 of 22

COMMENTS

ACTIVITIES

ELEMENT/

BUDGET $

ACTIVITY

PERSON/

IF YES, #

LINK TO

OTHER

GROUP

OVERVIEW Armed with your project plan and the tools for managing your project, one of your first considerations is the organisation of a project team briefing. It is at this venue that project activity leaders need to gain a clear understanding of their responsibilities regarding project management and communication. What is to be communicated, to whom, how and when? Plans for budget management, risk treatment and problem handling need to be discussed, understood and enacted. The main aim of this phase of the project is to ensure 100% effort from the project team to secure the project deliverables, on time, within budget and to the standards envisaged by the sponsor(s) and stakeholders. This is now the time to use the skills of leadership, team building and motivation that you learnt earlier to your advantage. Crisis Management or Crashing a Project Before you start your project you should be aware that things can go wrong with your project, no matter how conscientiously and professionally you and your team plan and work. Resources, materials and equipment can arrive late, storms and floods can impact on project activities, quality problems can arise and major and/or minor changes can throw the project behind schedule or over budget. When this happens you need to assess how to handle the crisis. By studying your network critical path you can determine if you have any skilled staff, or budget, resources and equipment, allocated to non-critical activities able to be diverted to your crisis activity. You can also estimate what extra costs might be incurred by accelerating or delaying a project

RMIT University

Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 18 of 22

activity.

For example, penalty rates for employees or contract penalty

clauses may need to be factored into your budget. Identifying which activities can be accelerated (or their duration cost reduced) is known as crashing a project or, for activity duration only, duration compression. For some projects acceleration can be achieved by rethinking how to run more activities in parallel rather than sequencing. For example rather than waiting for the walls of a building to be constructed before beginning to construct the roof, the roof could be constructed in parallel with the walls and hoisted into position immediately the walls are secured. Naturally the project manager would have to re-cost the technology and equipment involved and compare the result with the savings anticipated. How to Crash a Project 1. Study your network closely to determine which activities you can use to help you remain on or close to schedule. Those on the critical path will have the most significant effect in reducing total project duration. Note that with any change in activity durations your critical path may change. 2. Is it possible to divert resources to the selected activities from other activities? The resources may include people, equipment, materials or funds. 3. Determine the cost of your decisions. A crash cost chart can be used as in the figure below. Project Crash Costings and Implications
ACTIVITY NO. 7 RESOURCES TO BE ADDED 4 labourers 3 mixers 1 bobcat 8 hours 8 hours 8 hours $25.00p.h. $70.00p.h. $120.00p.h. $200.00 $1,680.00 $960.00 Site induction Broome hire Broome hire
Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 19 of 22

DURATION REQUIRED

RATE

TOTAL COST

COMMENTS

RMIT University

1 driver 9 11 2 painters 3 roofers

8 hours 4 hours 4 hours

$40.00p.h. $28.00p.h. $22.00p.h.

$320.00 $224.00 $264.00

Site induction Reallocate Activity 5 Reallocate Activity 4 from from

TOTAL

$3,648.99

Risk Analysis and Management Each business will have inherent risks and have its own degree of tolerance for acceptance of risk. Each organisation will determine how it will manage the risks to its business. also should be performed. Apart from performing cost-benefit analysis, in Further risk-management strategies should be selecting a budget proposal or proposals out of the alternatives, risk analysis incorporated into the selected proposal(s) for them to be successful. Risk, though a simple word, has several meanings. Most commonly, risk

means loss and there are several ways loss can happen. By taking action to avoid one type of risk we leave ourselves open to possibly suffering from another type for risk. Therefore, risk management is a compromise of action to reduce overall risk. identifying, associated analysing, with any Risk management is a systematic method for assessing, activity, treating or and communicating that will risk project proposal enable

organisations to minimise loss. Risk analysis is the evaluation of all areas of the budget proposal to determine their criticality and decide which require a contingency plan. The criticality is determined by studying the risks and the probability and extent of loss expected in each area. Risks can be quantified in monetary or nonmonetary terms or in both. Generally, techniques. risk analysis employs statistically based risk-evaluation

Any risk can be translated into cost of loss, which can be

characterised as one of the following three elements: Fixed costs.

Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 20 of 22

RMIT University

Variable costs. Uncertain costs.

Fixed costs are those costs of projects which are firmly known. There is a risk that these proposed fixed costs might be varied when the project is given the go-ahead. This risk could be managed by incorporating the probable losses or changes in the cost-benefit analysis. Variable costs are those which are certain to be needed for the project but which vary over some finite range. Similar to fixed costs, the probable losses could be taken into account in calculations. Uncertain costs are those that could be required during the course of the project but may not be required at all. It is very difficult to predetermine the probability of this occurring. Assessment for Project Management Group Project Assignment Assessment for this part of project management is a case study report discussing themes of a past, present or future project. You are asked to either: 1. Utilise a current project, borrowing the available data from a current employer. Or 2. Select your own project and request all/any required information from such sources as: Your local council, for proposed construction/renovation. State government Department such as the department of Health and Safety (DHS) for infrastructure improvement. Community group such as Community Fire authority (CFA) for installation/purchase of new equipment.

RMIT University

Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 21 of 22

Emergency relieve group (eg lifeline) for new process or service.

The themes for you to cover in a paragraph each plus any table, map and any other illustration are: Description of outcome or product Owners, managers, contractors, sub-contractors and stakeholders plus staff, all personnel working on project, together with responsibilities and an organisation chart. Legal and statutory requirements eg compliance with Food Act; Dangerous Goods Act; Australian Standards; Fork Lift drivers licence; occupational permit. Division of work into elements, stages, steps, tasks etc. Timing of each stage, step etc. include Gantt charts with milestone meetings (if available); list of all resources needed; budgets; and methods of payments. Please note: The project is due for submission by 15th May 2009.

RMIT University

Document: ProjectManagementclassnotes.doc Author: David Vogwell Save Date: 08/04/2009 Page 22 of 22