Project Management, Planning and Control

Managing Engineering, Construction and Manufacturing Projects to PMI, APM and BSI Standards

Albert Lester

• Publisher: Butterworth-Heinemann
• Year: 2013
• eBook ISBN: 9780080983219
• Edition: 6
• Topic: Business
• Subtopic: Operations
• Index: Business

Covering the principles and techniques you need to successfully manage an engineering or technical project from start to finish, Project Management, Planning and Control is an established and widely recommended project management handbook.With clear and detailed coverage of planning, scheduling and control, which can pose particular challenges in engineering environments, this sixth edition includes new chapters on Agile project management and project governance, more real-life examples and updated software information.Ideal for those studying for Project Management Professional (PMP) qualifications, Project Management, Planning and Control is aligned with the latest Project Management Body of Knowledge (PMBOK) for both the Project Management Institute (PMI) and the Association of Project Management (APM), and includes questions and answers to help you test your understanding. It is also updated to match the latest BS 6079 standard for project management in construction.- Focused on the needs and challenges of project managers in engineering, manufacturing and construction, and closely aligned to the content of the APM and PMI 'bodies of knowledge'.- Structured according to the logical sequence of a major project, with a strong focus on planning, scheduling, budgeting, and control—critical elements in the management of engineering projects.- Includes project management questions and answers, compiled by a former APM exam assessor, to help you test your knowledge and prepare for professional examinations.

Chapter 1

Project Definition

Abstract

This chapter gives the definition of a project and explains the four main criteria given in the project management triangle, i.e., Time-bound projects, Cost-bound projects, Quality/Performance-bound projects, and Safety-bound projects. The importance of safety is emphasized by placing it in the centre of the triangle. The effect of ignoring safety is discussed by citing examples of disasters caused by lax safety procedures.

Keywords

Project management triangle; project criteria; cost-bound; time-bound; quality-bound; performance-bound; safety-bound

Chapter Outline

Project Definition

Time-Bound Project

Cost-Bound Project

Performance (Quality)-Bound Project

Safety-Bound Project

Project Definition

Many people and organizations have defined what a project is, or should be, but probably the most authoritative definition is that given in BS 6079-2:2000 Project Management Vocabulary, which states that a project is:

‘A unique process, consisting of a set of co-ordinated and controlled activities with start and finish dates, undertaken to achieve an objectives conforming to specific requirements, including constraints of time, cost and resources.’

The next question that can be asked is ‘Why does one need project management?’ What is the difference between project management and management of any other business or enterprise? Why has project management taken off so dramatically in the last 20 years?

The answer is that project management is essentially management of change, while running a functional or ongoing business is managing a continuum or ‘business-as-usual’.

Project management is not applicable to running a factory making sausage pies, but it will be the right system when there is a requirement to relocate the factory, build an extension, or produce a different product requiring new machinery, skills, staff training, and even marketing techniques.

It is immediately apparent therefore that there is a fundamental difference between project management and functional or line management where the purpose of management is to continue the ongoing operation with as little disruption (or change) as possible. This is reflected in the characteristics of the two types of managers. While the project manager thrives on and is proactive to change, the line manager is reactive to change and hates disruption. In practice this often creates friction and organizational problems when a change has to be introduced.

Projects may be undertaken to generate revenue, such as introducing methods for improving cash flow, or be capital projects that require additional expenditure and resources to introduce a change to the capital base of the organization. It is to this latter type of project that the techniques and methods described in this book can be most easily applied.

Figure 1.1 shows the type of operations that are suitable for a project type of organization and which are best managed as a functional or ‘business-as-usual’ organization.

Figure 1.1 Organization comparison

Both types of operations have to be managed, but only the ones in column (a) require project management skills.

It must be emphasized that the suitability of an operation being run as a project is independent of size. Project management techniques are equally suitable for building a cathedral or a garden shed. Moving house, a very common project for many people, lends itself as effectively to project management techniques such as tender analysis and network analysis as relocating a major government department from the capital city to another town. There just is no upper or lower limit to projects!

As stated in the definition, a project has a definite starting and finishing point and must meet certain specified objectives.

Broadly these objectives, which are usually defined as part of the business case and set out in the project brief, must meet three fundamental criteria:

1. The project must be completed on time;

2. The project must be accomplished within the budgeted cost; and

3. The project must meet the prescribed quality requirements.

These criteria can be graphically represented by the well-known project triangle (Figure 1.2). Some organizations like to substitute the word ‘quality’ with ‘performance’, but the principle is the same – the operational requirements of the project must be met, and met safely.

Figure 1.2 Project triangle

In certain industries like airlines, railways, and mining, etc., the fourth criterion, safety, is considered to be equally important, if not more so. In these organizations, the triangle can be replaced by a diamond now showing the four important criteria (Figure 1.3).

Figure 1.3 Project diamond

The order of priority given to any of these criteria is dependent not only on the industry but also on the individual project. For example, in designing and constructing an aircraft, motor car, or railway carriage, safety must be paramount. The end product may cost more than budgeted or it may be late in going into service, and certain quality requirements in terms of comfort may have to be sacrificed, but under no circumstances can safety be compromised. Airplanes, cars, and railways must be safe under all operating conditions.

The following (rather obvious) examples show where different priorities on the project triangle (or diamond) apply.

Time-Bound Project

A scoreboard for a prestigious tennis tournament must be finished in time for the opening match, even if it costs more than anticipated and the display of some secondary information, such as the speed of the service, has to be abandoned. In other words, cost and performance may have to be sacrificed to meet the unalterable starting date of the tournament.

(In practice, the increased cost may well be a matter of further negotiation and the temporarily delayed display can usually be added later during the non-playing hours.)

Cost-Bound Project

A local authority housing development may have to curtail the number of housing units and may even overrun the original construction programme, but the project cost cannot be exceeded, because the housing grant allocated by central government for this type of development has been frozen at a fixed sum. Another solution to this problem would be to reduce the specification of the internal fittings instead of reducing the number of units.

Performance (Quality)-Bound Project

An armaments manufacturer has been contracted to design and manufacture a new type of rocket launcher to meet the client’s performance specification in terms of range, accuracy, and rate of fire. Even if the delivery has to be delayed to carry out more tests and the cost has increased, the specification must be met. Again, if the weapons were required during a war, the specification might be relaxed to get the equipment into the field as quickly as possible.

Safety-Bound Project

Apart from the obvious examples of public transport given previously, safety is a factor that is required by law and enshrined in the Health & Safety at Work Act.

Not only must safe practices be built into every project, but constant monitoring is an essential element of a safety policy. To that extent it could be argued that all projects are safety-bound, since, if it became evident after an accident that safety was sacrificed for speed or profitability, some or all of the project stakeholders could find themselves in real trouble, even in jail. This is true for almost every industry, especially agriculture, food/drink production and preparation, pharmaceuticals, chemicals, toy manufacture, aircraft production, motor vehicle manufacture, and, of course, building and construction.

A serious accident that may kill or injure people will not only cause anguish among the relatives, but, while not necessarily terminating the project, could very well destroy the company. For this reason the ‘S’ symbol when shown in the middle of the project management triangle gives more emphasis of its importance (see Figure 1.2).

While the other three criteria (Cost, Time, and Quality/Performance) can be juggled by the project manager to suit the changing requirements and environment of a project, safety cannot under any circumstances be compromised. As any project manager knows, the duration (Time) may be reduced by increasing resources (Cost), and cost may be saved by sacrificing quality or performance, but any diminution of safety can quickly lead to disaster, death, and even the closure of an organisation. The catastrophic explosions on the Piper Alpha gas platform in the North Sea in July 1988 killed 167 men and cost millions of dollars to Occidental and its insurers, and the explosion at the Buncefield, England, oil depot in 2009 caused massive destruction of its surroundings and huge costs to Total Oil Co. Additionally, the explosion on its Texas City refinery in March 2005, which killed 15 men and injured 170, and the blowout of the Deepwater Horizon drilling rig in the Gulf of Mexico in April 2010, causing 11 fatalities, have seriously damaged the reputation of BP and resulted in a considerable drop in its share price. In the transp...

Table of contents

• Cover image
• Title page
• Table of Contents
• Copyright
• Preface
• Foreword to the First Edition
• Acknowledgements
• Chapter 1. Project Definition
• Chapter 2. Project Management
• Chapter 3. Programme and Portfolio Management
• Chapter 4. Project Context (Project Environment)
• Chapter 5. Business Case
• Chapter 6. Investment Appraisal
• Chapter 7. Stakeholder Management
• Chapter 8. Project Success Criteria
• Chapter 9. Organization Structures
• Chapter 10. Organization Roles
• Chapter 11. Project Life Cycles
• Chapter 12. Work Breakdown Structures
• Chapter 13. Estimating
• Chapter 14. Project Management Plan
• Chapter 15. Risk Management
• Chapter 16. Quality Management
• Chapter 17. Change Management
• Chapter 18. Configuration Management
• Chapter 19. Basic Network Principles
• Chapter 20. Planning Blocks and Subdivision of Blocks
• Chapter 21. Arithmetical Analysis and Floats
• Chapter 22. The Case for Manual Analysis
• Chapter 23. Lester Diagram
• Chapter 24. Graphical and Computer Analysis
• Chapter 25. Milestones and Line of Balance
• Chapter 26. Simple Examples
• Chapter 27. Progress Reporting
• Chapter 28. Project Management and Network Planning
• Chapter 29. Network Applications Outside the Construction Industry
• Chapter 30. Resource Loading
• Chapter 31. Cash Flow Forecasting
• Chapter 32. Cost Control and EVA
• Chapter 33. Control Graphs and Reports
• Chapter 34. Procurement
• Chapter 35. Value Management
• Chapter 36. Health and Safety and Environment
• Chapter 37. Information Management
• Chapter 38. Communication
• Chapter 39. Team Building and Motivation
• Chapter 40. Leadership
• Chapter 41. Negotiation
• Chapter 42. Conflict Management and Dispute Resolution
• Chapter 43. Governance
• Chapter 44. Project Close-Out and Handover
• Chapter 45. Project Close-Out Report and Review
• Chapter 46. Stages and Sequence
• Chapter 47. Worked Example 1: Bungalow
• Chapter 48. Worked Example 2: Pumping Installation
• Chapter 49. Worked Example 3: Motor Car
• Chapter 50. Worked Example 4: Battle Tank
• Chapter 51. Primavera P6
• Chapter 52. BIM
• Appendix 1. Agile Project Management
• Appendix 2. Abbreviations and Acronyms Used in Project Management
• Appendix 3. Glossary
• Appendix 4. Examination Questions 1: Questions
• Appendix 5. Bibliography
• Appendix 6. Words of Wisdom
• Index
• Appendix 7. Sample examination questions