Chapter 7

PROJECT MANAGEMENT (IMPLEMENTATION )

 CHAPTER 8
CONTENTS
Part:- one :-
1. PROJECT PLANNING AND SCHEDULING
Part two
2. FORMS OF PROJECT ORGANIZATION
• This part deals with three different project management structures
used by firms to implement projects:
– functional organization,
– dedicated project teams, and
– matrix structure.
 Definition of project planning
• Planning is concerned with the future.
• Planning in a project environment may be described as establishing a
predetermined course of action within a forecasted environment.
• Project planning includes:-
– the prediction of the tasks necessary to achieve a goal,
– the estimation of required resources to accomplish the tasks, and
– the scheduling of people and tasks to meet the deadline.
• Planning is determining what needs to be done, by whom, and
when, in order to fulfil one’s assigned responsibility
– Planning the project involves determining:-
• what needs to be done (scope, deliverables),
• how it will get done (sequence of activities),
• who will perform it (human resources),
• how long it will take (schedule),
• how much it will cost (budget) and what are the risks?
 ……….

• A comprehensive project planning covers the

following areas (Chandra, 2006; ICMR, 2007;
Pearce and Robinson, 2001):
a) Planning the project work- the activities relating to the project
must be spelt out in detail. They should be properly scheduled
and sequenced.
b) Planning the manpower and organization- the manpower
required for the project must be estimated and the
responsibility for carrying out the project work must be
allocated.
c) Planning the money- the expenditure of money in a time-
phased manner must be budgeted.
d) Planning the information system- the information required for
monitoring the project must be defined.
 ….
• In the planning stage, the project is broken-down in
to many manageable elements, fixed in to a time
frame with in the overall time schedule, with an
allotment of resources with in the overall project
cost, and released for execution.
• An achievable realistic plan fitting in with the overall
project time and project cost is the essential
requirement for a project’s success.
• Performance guidelines and a controlling system to
evaluate and modify the performance as required
shall form part of the plan.
What do we plan?
 The work (Identify project activity
 Estimate activity duration
 Determine resource requirements:-Manpower/ Financial
resources
 Construct/ analyze the project network.
 ………What is Project Planning ?

• When articulating the project objectives you should follow

the SMART rule:
 Specific – get into the details. Objectives should be specific and
written in clear, concise, and under­standable terms.

 Measurable – use quantitative language ( numbers, %, etc.).

You need to know when you have successfully completed the task .

• Acceptable – agreed with the stakeholders

• Realistic – in terms of achievement. Objectives that are
impossible to accomplish are not realistic and not attainable.
Objectives must be centered in reality.

• Time bounded – Objectives should have a time frame with an end

date assigned to them.
Steps in Planning a Project
 The following steps are to be followed while planning a project:
1. Project objectives, requirements, ad scope are set.
– These outcome elements specify project end results, desired results, and time,
cost, and performance targets.
2. The specific work activities, tasks, or jobs to achieve objectives are
broken down, defined, and listed. (What?)
3. A project organization is created specifying the departments,
subcontractors, and managers responsible for work activities. (Who?)
4. A schedule is prepared showing the timing of work activities, deadlines,
and milestones. (When, in what order?)
5. A budget and resource plan is prepared showing the amount and timing
of resources and expenditures for work activities and related items.
(How much and when?)
6. A forecast is prepared of time, cost, and performance projections for the
completion of the project. (How much time is needed, what will it cost,
and when will the project be finished?)
Tools/ Techniques of Planning and Scheduling
– Bar Chart (Gantt Chart)
– Network Techniques
• Critical path method (CPM)
• Program evaluation and review technique
(PERT)
 …Cont’d
Tools of Project Planning
1. Bar chart(Ghant chart)
– A Gantt chart is a graphical depiction of the task
flow, with dates
– Dates are shown as the x-axis, so questions about
start/end times can be answered
• e.g. Relative start times of parallel tasks
• e.g. Completion of all of an activity’s tasks
• e.g. Chronological dependencies between tasks
 A pictorial device in which activities are
represented with time

10
 Project Management
Example of Gantt Chart
Month
0 | 2 | 4 | 6 | 8 | 10
Activity
Design house
and obtain
financing
Lay foundation
Order and
receive materials

Build house

Select paint

Select carpet

Finish work

1 3 5 7 9
Months 11
2. Network Planning Techniques
• Program Evaluation & Review Technique (PERT):
– Developed to manage the Polaris missile project
– Many tasks pushed the boundaries of science &
engineering (tasks’ duration = probabilistic)

• Critical Path Method (CPM):

– Developed to coordinate maintenance projects in the
chemical industry
– A complex undertaking, but individual tasks are routine
(tasks’ duration = deterministic)
 PERT and CPM
PERT: Program Evaluation and Review Technique
CPM: Critical Path Method

• Graphically displays project activities

• Estimates how long the project will take
• Indicates most critical activities
• Show where delays will not affect project
 ………………..2. NETWORK

Network: It is a graphical and logical model or plan which

lists out the sequence of various operations which are
required to be performed for the final achievement of the
project objectives.
Network:- Shows the sequential relationships among activities
using nodes and arrows.
 Use of nodes or arrows

Arrows an arrow leads from tail to head

directionally. Indicate Activity.
 Activity:- A task or a certain amount of work required in the

project which requires time to complete

 Nodes A node is represented by a circle
Indicate EVENT, a point in time where one or more activities
start and/or finish.
Activity-on-Node
Activity-on-Node Fundamentals
Fundamentals

FIGURE 6.2
 Activity-on-Arrow
Activity-on-Arrow Network
Network

An Activity is an arc with two nodes at its beginning and its end

a
b
c
d FIGURE A6.1
 AoA:
AoA: Activity
Activity Predecessors
Predecessors

A list of immediate predecessors is needed.

Task Predecessor
a -- a b c
b a
c b
Task Predecessor
a d
a ---
b -- c
b
c b
d a
Operations Management
17
 AoA:
AoA: Activity
Activity Predecessors
Predecessors

Task Predecessor
a --- b
a c
b a
c a d
d a

Task Predecessor a
a --- d
b
b --
c
c --
d a,b,c
 AoA
AoA May
May Need
Need Dummy
Dummy Activity
Activity

• Two activities have the same starting and ending nodes

• A single activity connects to two or more nodes

Task Predecessor d
b
a --- a
b a
c
c a
d b,c
• Try this: a,b  c and a,d  e
Activity-on-Arrow
Activity-on-Arrow Network
Network

FIGURE A6.2
simplified network diagram for a dinner project indicates as follows;
Terms & Definitions:

Activity-
◦ Any portion of a project which consumes
time or resources & has a definite
beginning & an end is called as an activity.
◦ It is denoted by an arrow. The symbol above
arrow indicates activity description & the
number below indicates activity duration in
time units.

DESCRIPTION

DURATION
 Event-
◦ The beginning & the completion of
activity is termed as an event.
◦ It indicates a particular instant of time at
which some specific milestone has been
achieved.

Node
 Network logic-
This denotes the technical dependencies
among the activities.
e.g. Network logic in the network drawn
below is that activity A must be completed
before activity B can be started.
A B
1 2 3 Series

PRECEEDING SUCCESSOR
ACTIVITY

Example EVENT
 network consists of three activities: designing the house, obtaining financing, and
actually building the house:-
1 Design house Obtain financing Build house
2 3 4
 Example 1- A simple network
Consider the list of four activities for making a simple product:
Activity Description Immediate predecessors
A Buy Plastic Body -
B Design Component -
C Make Component B
D Assemble product A,C
 Immediate predecessors for a particular activity are the activities that, when completed,
enable the start of the activity in question.
 Sequence of activities
 Activities A and B Can start anytime, since neither of these activities depends upon the
completion of prior activities.
 Activity C cannot be started until activity B has been completed
 Activity D cannot be started until both activities A and C have been completed.
 The graphical representation is referred to as the PERT/CPM network

Arcs indicate project activities

1 A 3
D 4
B C
2

Nodes correspond to the beginning and ending of activities

25
Here the arrows represent activities while the nodes
represent the start and the end of an activity (i.e. events).

When one activity depends upon another, both appear on the

diagram as two arrows having a common node.
Basic patterns of AOA diagrams(Activity on Arrow network (AOA)

C
 • Types of activities
 Predecessor activity: Activities that must be completed
immediately prior to the start of another activity are called
predecessor activities.
 Successor activity: Activities that cannot be started until
one or more of other activities are completed, but
immediately succeed them are called successor activities.
 Concurrent activities: Activities that can be accomplished
concurrently are known as concurrent activities.
Types of event-

Tail event- an event which marks the

beginning of an activity
e.g. event 1 is said to be tail event to activity A as
it indicates the beginning of the activity A.

3
B
A C
1 2 5

D
4

Parallel
Head event- the event which marks the
completion of an activity.

e.g. head event to activity A as it

indicates the completion or end of
activity A.
3

B
A
1 2 C 5

D
4
Burst & merge event-
The nodes from which a number of
activities emerge are called as burst event
or burst node.
The nodes to which number of activities
converges are called as merge nodes or merge
events.
 Error in networking
• Looping
• Dangling
• Mistake in succeeding and proceeding r/ship
 Network
Errors in drawing Network - Looping

2
A B

1 3
C
 Dangling
1 2 4

Event 1 is Start of Project Event 3 AND 4 is end of Project

3

Dummy activity:
A Dummy activity is an imaginary activity. It does not exist in the Project
activities.
 It is used in the network diagram to show dependency relationship or
connectivity between two or more activities
 consider a case where B and C have the same job reference and they can be
started independently on completion of A. But, D could be started only
completion of B and C. c
 EXAMPLE NW
• Example 1: Assume bank branch opening project has following activities along with
time duration: such as marketing study ,discussion with sharholders,budget ,get
license from NBE,
Activity Duration(months)
1-2 Marketing study 3
1-3 Discussion s.holders 4
1-4 budget 3
2-5 rent 4
3-5 RECRUITING EMPLOYEES 5
4- 5 hiring 7
5-6 License from NBE 3
6-7 OPENING 6

a)Draw the project network and identify all the paths.

2
3 4
1 4 5 3 6 6
7
3 5
3 7
4
Exercise :1- Draw project network diagram
Activities
1-2
1-3
2-4
3-4
2-5
4-5

5
1

4
3
Exercise :-ABC co. is bringing a new product on line to be
manufactured in their current facility. They have identified 11
activities and their precedence relationships.
Immediate Duration
Activity Description
Predecessor (weeks)
A Develop product specifications None 4
B Design manufacturing process A 6
C Source & purchase materials A 3
D Source & purchase tooling & equipment B 6
E Receive & install tooling & equipment D 14
F Receive materials C 5
G Pilot production run E&F 2
H Evaluate product design G 2
I Evaluate process performance G 3
J Write documentation report H&I 4
K Transition to manufacturing J 2
 Critical Path
Path
• Sequence of activities that leads from the starting node to the finishing
node/activity
Critical path
• The longest path; determines expected project duration
• Longest Path through Network
• Drives project completion date
• Least or Zero Float
• Delay on critical Path will delay completion of project
• Critical path is a sequence of activities from start to finish with zero slack
Slack
• Slack or float is the amount of time an activity can be delayed without delaying a
succeeding activity or the project finish date
• The time differential between the scheduled completion date and the required
date to meet the critical path. Slack, or float: The amount of time a noncritical
task can be delayed without delaying the project
• Slack shows how much allowance each activity has, i.e how long it
can be delayed without affecting completion date of project
Critical activities:- Activities on the critical path
 ……….
• The critical path is vital for successful
control of the project because:
– There is no slack time in any of the events on
this path
– The events on this path are the most critical
for the success of the project
 Time Estimates
• Deterministic
– Time estimates that are fairly certain
• Probabilistic
– Estimates of times that allow for variation
 40 of 85 .......... Network scheduling

Time estimation
40
 Three times values are obtained
 Optimistic time-time if no complications arise
 Most likely time-takes into account normal
delays
 Pessimistic time-time required if unusual
complications arise
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 41 of 85 8.5 Network scheduling

Average Time
41

te = (to + 4tm + tp)/6

where
te = weighted arithmetic average time
to = optimistic time
tm = most likely time
tp = pessimistic time
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 ACTIVITY Time estimate
Example: Optimisti Most likely Pessimistic Average(te)
c (to (tm (tp =(to+4tm+tp)/6
Project A
A,1-2 9 12 21 13
B,1-3 6 12 18 12
C, 2-4 1 1.5 5 2
D,3-4 4 8.5 10 8
E,2-5 10 14 24 15
F,4-5 1 2 3 2

activities time 2 15
A,1-2 13
13
B,1-3 12
5
C, 2-4 2 2
D,3-4 8 1
2
E,2-5 15
F,4-5 2 12 8
3 4
 43 of 85 8.5 Network scheduling

Determining the Critical Path

43
STEPS
1. Calculate the Earliest Occurrence Time (EOT)
for each event
 Time at which the event can be completed at
the earliest. It is computed beginning from
event o and moving forward.

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Example :-EOT for activities in Project A
activities time
A,1-2 13
B,1-3 12
C, 2-4 2
D,3-4 8
E,2-5 15
F,4-5 2

E=13
2 15
E=28
13
5
E=0 2
1
2
12 8
3 4
E=12 E=20
 45 of 85

Determining the Critical Path

45
STEPS
2. Calculate Latest occurrence time(LOT) for
each event
 the latest allowable time by which an event
can occur , given the time allowed for
completion of the project. Project
completion time is EOT of the last event.
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Example :-LOT for activities in Project A
activities time
A,1-2 13
B,1-3 12
C, 2-4 2
D,3-4 8
E,2-5 15
F,4-5 2

l=13
2 15
L=28
13
5
l=0 2
1
2
12 8
3 4
l=18 L=26
47

E=13
L=13
2 15 L=28
E=28
13
5
E=0 2
1
2
L=0
12 8
3 4
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E=12 E=20
L=18 L=26
PERT and CPM Differences
 PERT uses three time estimates (optimistic,
most likely, and pessimistic), CPM uses one
time estimate that represent the normal time
 PERT is probabilistic in Nature, based on beta
distribution for each activity time and normal
distribution for expected time duration; CPM is
based on a single time estimate and is
deterministic in nature

48
 Comparison Between CPM and PERT

CPM PERT
1 Uses network, calculate float or slack,
identify critical path and activities, guides Same as CPM
to monitor and controlling project

2 Uses one value of activity time Requires 3 estimates of activity time

Calculates mean and variance of time

3 Used where times can be estimated with Used where times cannot be estimated
confidence, familiar activities with confidence.
Unfamiliar or new activities

4 Minimizing cost is more important Meeting time target or estimating percent

completion is more important

5 Example: construction projects, building Example: Involving new activities or

one off machines, ships, etc products, research and development etc

49
 Exercise :-draw NW and find CPM
Event time
1-2 12
1-3 10
1-4 11
2-3 8
2-5 11
4-6 18
3-7 25
6-7 13
5-8 17
7-8 9

Example :-EOT for activities in the above Project

5 17
12
2
11 23
8
54
8
12

9
1 10 3
25 7
20 45
11 13
4 18 6
11 29
 51 of 85 8.5 Network scheduling

LOT for activities in THE ABOVE Project

17
51 12 2 5 8
11
37 54
8
12

9
10 3 7
1
25
20 45
0 11 13
4 18 6

14
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 52 of 85 8.5 Network scheduling

slack
5
17
52 2 8
12 12 11 23 37 54 54
8
12

9
10 3 7
1
20 20 25
45 45
0 0
11 13
4 18 6
11 29
14
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 53 of 85 8.5 Network scheduling

Slack
Event LOT EOT (LOT-EOT)
53
1 0 0 0
2 12 12 0
3 20 20 0
4 14 11 3

5 37 23 14

6 32 29 3

7 45 45 0
8 54 54 0

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 54 of 85 8.5 Network scheduling

Critical Path
5
17
54 2 8
12 12 11 23 37 54 54
8
12

9
10 3 7
1
20 20 25
45 45
0 0
11 13
4 18 6
11 29
14
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 EXAMPLE 2
SUPPOSE A CIVIL ENGINEERING FIRM HAS TO BID FOR THE CONSTRUCTION OF
A DAM. THE ACTIVITIES AND TIME ESTIMATES ARE GIVEN BELOW. DO THE
NEXT REQUIREMENTS.

Activity O m P
1-2 (a) 1 3 4
1-3 (b) 2 4 6
1-4 (c) 2 3 5
2-5 (d) 3 4 5
3-6 (e) 3 5 7
4- 7 (f) 5 7 9
5-8 (g) 2 3 6
6-8 (h) 4 6 8
7-8 (I) 3 4 6
REQUIRED:
a) Draw the project network and identify all the paths.
b) Compute the expected time for each activity and the expected duration for
each path.
c) Determine the expected project length.
d) Identify the critical path and critical activities.
SOLUTION
A)
CONT…..
Solution
B)
Times
Path Activity O m P te = O+4m+P Path total
6

1-2-5-8 a 1 3 4 2.83
b 2 4 6 4.00 10.00
c 2 3 5 3.17

1-3-6-8 d 3 4 5 4.00
e 3 5 7 5.00 16.00
f 5 7 9 7.00

1-4-7-8 g 2 3 6 3.33
h 4 6 8 6.00 13.5
i 3 4 6 4.17
CONT…..

C) The critical path is path 1-3-6-8, since it has the longest expected
duration.
Times
Path
Activity O m P

1-2-5-8 a 1 3 4
b 2 4 6
c 2 3 5
1-3-6-8 d 3 4 5
e 3 5 7
f 5 7 9
1-4-7-8 g 2 3 6
h 4 6 8
i 3 4 6
NEXT SLIDE- PART 2