Keanu
Lecture 8
Introduction to Project Management
Lecturer: Dr. Khalegh Barati
Term 3, 2020
CVEN3101
ENGINEERING OPERATIONS AND CONTROL
What is a Project?
A project is a temporary endeavour undertaken to create a unique product,
service, or result.
A project can create:
• A product that can be either a component of another item, an enhancement of
an item, or an end item in itself.
Example: construction of a house
• A service or a capability.
Example: controlling safety of labours during construction of a building
• An improvement in an existing product.
Example: renovation or upgrading of a building
• A result, such as an outcome or document.
Example: feasibility study to find if construction of a new building is required
• Or a combination of one or more products, services, or results.
2
Project Characteristics
• Every project has definite objectives.
• Every project is unique.
• Every project is a temporary activity.
• Every project involves unfamiliarity, risk, and uncertainty.
• Every project involves progressive elaboration.
• Every project requires sets of resources.
• Every project has specific start and end dates.
3
Project vs Operation
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Project Operation
Temporary Ongoing
Unique Repetitive
Terminated when objective is attained Objective is to continue permanently
Performance intensive Efficiency intensive
Requiring project manager Requiring operation manager
Operation is an ongoing execution of activities and it follows organizational
procedures to produce the same result or conduct a repetitive service. An
operation is typically permanent in nature.
Both project and operation have a purpose, use constrained resources, and
require planning, execution, and control.
Table 1: Project and operation differences
Project Performance
Four major dimensions that define the project performance are scope, time,
cost, and quality. These parameters are interrelated and interactive.
Successful completion of a project would require accomplishment of specified
scope with desired quality within scheduled time and budget.
Project Performance = f(Scope, Cost, Time, Quality)
5
Project Life Cycle
Initiation
Planning
Execution
Monitoring and
Controlling
Closure
Project life cycle is the series of phases that a project passes through from its
initiation to its closure.
6
Initiation
During this phase, the project is conceptualised and its feasibility is determined.
Activities that should be performed in this phase include:
• Defining the project goal
• Conducting feasibility study
• Defining the project scope
• Identifying the project manager and the key stakeholders
• Identifying potential risks
• Determining estimated budget and time
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Planning
This stage plans how the project’s objectives developed in the initiation phase
can be delivered. It includes planning the steps necessary to meet project
objectives by further identifying the specific activities and resources required to
complete the project.
The plans created during this phase will help to manage time, cost, quality,
scope, and risks of the project in the next phases.
Activities that should be performed in this phase include:
• Preparing detailed project cost and timeframe
• Developing communication strategy amongst stakeholders
• Preparing construction drawings
• Getting required approvals and certificates
• Developing quality control and assurance procedure
• Planning resources and procurement
8
Execution
This is the phase that is most commonly associated with project management.
The project is constructed and its deliverables are completed based on the
plans and drawings which have been prepared in planning phase.
During this phase, project managers are responsible for allocating and
supervising the project activities while keeping the entire project on time and on
budget.
Project managers also need to manage procurements and the supplies.
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Monitoring and Controlling
Monitoring and controlling phase is sometimes combined with execution
because these two phases often occur at the same time.
During this phase, project management team closely measures the progress of
the project to ensure it’s proper development.
Documentations such as data collection and report preparation are required.
Monitoring and controlling phase is closely linked to project planning. While
planning determines what tasks are to be done, monitoring and controlling
establish how well these tasks have been done.
Monitoring and controlling phase will also detect any necessary corrective
action or change in the project to keep the project on track.
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Closure
The closure phase occurs once the project deliverables have been produced
and the client validates and approves them.
During this phase, the project management team will close contracts with all
stakeholders including suppliers, consultants, and subcontractors.
A project report must be also prepared and submitted to the project client
including the project summary, starting from initiation to closure.
This phase allows the project management team to evaluate the project and
archive its documents. Getting lessons from the previous mistakes and
successes, involved contractors build a stronger and more successful team for
the next projects.
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Project Management
Project management is the application of processes, methods, skills,
knowledges, and experiences to achieve specific project objectives according
to the project performance criteria within agreed parameters. Project
management has final deliverables that are constrained to a limited times and
budget.
A key factor that distinguishes project management from just ‘management’ is
that project management has a final deliverable and a finite timespan, unlike
management which is an ongoing process.
Project managers need to have a wide range of skills and experiences to be
able to successfully manage the project under any condition or circumstance.
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Project Management Knowledge
Areas
Integration
Scope
Schedule
Cost
Quality
Procurement
Human Resource
Communications
Risk
Stakeholder
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Project Integration Management
Project integration management includes the processes and activities to
identify, define, combine, unify, and coordinate various processes and activities
within the project management team. As its name shows, project integration
management contains the tasks that hold the overall project together and
integrate it into a unified whole.
The project integration management includes the following six processes:
• Develop project charter
• Develop project management plan
• Direct and manage project work
• Monitor and control project work
• Perform integrated change control
• Close project
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Project Scope Management
Project scope management includes the processes required to ensure that the
project includes all the work required, and only the work required, to complete
the project successfully. Managing the project scope is primarily concerned with
defining and controlling what is and is not included in the project.
The project scope management includes the following six processes:
• Plan scope management
• Collect requirements
• Define scope
• Create WBS
• Validate scope
• Control scope
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Project Schedule Management
Project schedule (time) management includes the processes required to
manage the timely completion of a project. It specifically refers to developing a
schedule that can be met, then performing required actions to ensure that the
schedule happens during project construction.
The project scope management includes the following seven processes:
• Plan schedule management
• Define activities
• Sequence activities
• Estimate activity resources
• Estimate activity durations
• Develop schedule
• Control schedule
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Project Cost Management
Project cost management involves planning and controlling the budget of the
project.
This process includes activities such as planning, budgeting, estimating, financing,
funding, managing, and monitoring costs to make sure that the project is finished
within the scheduled budget.
This phase covers and tracks the project's total expenditure against the actual
budget to make sure that the project is moving on track and within the pre-
allocated budget.
The project cost management includes the following four processes:
• Plan cost management
• Estimate costs
• Determine budget
• Control costs
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Project Quality Management
Project quality management includes the processes and activities determining
quality policies, objectives, and responsibilities so that the project will satisfy the
needs for which it was undertaken.
Project quality management works to ensure that the project requirements,
including product requirements, are met and validated.
The project quality management includes the following three processes:
• Plan quality management
• Perform quality assurance
• Control quality
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Project Human Resources Management
Project human resource management includes the processes that plan, develop,
manage, and lead the project team.
The project team is comprised of the people with assigned roles and
responsibilities for completing the project.
A human resource management plan must be developed to identify and
document project roles, responsibilities, required skills, reporting relationships,
and create staff management strategy.
The project human resource management includes the following four processes:
• Plan human resource management
• Acquire project team
• Develop project team
• Manage project team
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Project Communications Management
Project communications management includes the processes that are required to
ensure timely and appropriate planning, collection, creation, distribution, storage,
retrieval, management, monitoring, and controlling of project information.
Most of the time of the project management team is spent for communicating with
project stakeholders including clients and subcontractors.
Effective communication creates a bridge between all stakeholders of the project
which has significant impact project success.
The project communications management includes the following three processes:
• Plan communications management
• Manage communications
• Control communications
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Project Risk Management
Project risk management includes the processes of conducting risk
management planning, identification, analysis, response planning, and
controlling risk for a project. The objective of project risk management is to
decrease the likelihood and impact of negative events in the project.
The project risk management includes the following six processes:
• Plan risk management
• Identify risks
• Perform qualitative risk analysis
• Perform quantitative risk analysis
• Plan risk responses
• Control risks
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Project Procurement Management
Project procurement management includes the processes necessary to
purchase or acquire products, services, or results needed from outside the
project team. Project procurement management involves deciding what must
be procured, issuing requests for bids or quotations, selecting vendors,
administering contracts, and closing them when the job is finished.
The procurement management includes the following four processes:
• Plan procurement management
• Conduct procurements
• Control procurements
• Close procurements
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Project Stakeholder Management
Project stakeholder management includes the processes required to identify the
people, groups, or organisations that could impact or be impacted by the project,
to analyse their expectations and their impact on the project, and to develop
appropriate management strategies for effectively engaging them in project
decisions and execution.
Stakeholder management also focuses on continuous communication with
stakeholders to understand their needs and expectations, address issues as they
occur, manage conflicting interests, and foster appropriate engagement of
stakeholder in project decisions and activities.
The stakeholder management includes the following four processes:
• Identify stakeholders
• Plan stakeholder management
• Manage stakeholder engagement
• Control stakeholder engagement
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Videos
https://www.youtube.com/watch?v=BOU1YP5NZVA
https://www.youtube.com/watch?v=hr68bgoP4z4
Introduction to Project Management
https://www.youtube.com/watch?v=rMVEUoANT64
https://www.youtube.com/watch?v=xq7Y-B6Xd28
Project Management Areas
https://www.youtube.com/watch?v=gaokJetFYGw
https://www.youtube.com/watch?v=EBnUasP5Qc0
What Is PMBOK?
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https://www.youtube.com/watch?v=10cX6ZZiShE
Project vs Operation
Project Management Techniques
WBS
Gantt Chart
CPM
PERT
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WBS
PMBOK defines work breakdown structure (WBS) as a hierarchical
decomposition of the total scope of work to accomplish the project objectives
and create the required deliverables.
WBS is actually a way to organise the project and decompose it into smaller
tasks. It provides a graphic breaking down of a project.
Breaking down of a project is continued until we reach work packages – a
small set of readily identifiable activities which can be assigned to a team or a
subcontractor.
There are two common types of process-oriented WBS and deliverable-
oriented WBS which can be developed for a project.
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Process-oriented WBS
A process-oriented WBS decomposes the project in terms of processes. It
actually defines what steps need to be taken to construct a project. WBS
elements in a process-oriented WBS are typically the construction activities that
are required to deliver a project. Example WBS elements in a process-oriented
WBS include design, procurement, excavation, and concreting.
Residential Project
1.
Design 2. Project
Management 3.
Demolition
4.
Excavation
5.
Concreting 6.
MEP
2.1. Contract
Management
1.2.
Architectural
Design
1.1.Structural
Design
2.2. Site
Management
3.1.
Asbestos
Collection
3.3. Site
Clearance
3.2.
Structure
Demolition
4.2. Detail
Excavation
4.1. Bulk
Excavation
5.2.
Formwork
5.1. Steel
Fixing 6.1.
Electrical
Process
6.3.
Plumbing
Process
6.2.
Mechanical
Process
1.3 MEP
Design 2.3. Project
Planning
5.3. Concrete
Pouring
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Deliverable-oriented WBS
A deliverable-oriented WBS (also known as product-oriented WBS) decomposes
the project into smaller and more manageable deliverables (products). Deliverables
are typically tangible components which need to be delivered to complete the
project. They are typically a physical component or an item that needs to be
produced, obtained, or supplied as a result of executing project activities.
Residential Project
1.
Plans 2.
Slab 3. Concrete
Structure
4.
Roof
5.
Façade 6. Interior
Finishes
2.1. On-
ground
Slab
1.2.
Architectural
Plan
1.1.
Structural
Plan
2.2. First
floor Slab
3.1.
Columns
3.3.
Beams
3.2. Walls 4.2.
Sheets
4.1.
Tiles
5.2.
Brick
Facades
5.1.
Cladding
6.1.
Doors
6.3.
Cabinets
6.2.
Windows
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WBS Applications
• Subdivision of project
• Identification of work packages
• Identification of project levels
• Sharing activities between involved subcontractors
• Assignment of responsibilities to individual managers
• Identification of interfaces at all levels
• Geographical distribution of budgets
• Documentation of the project information
• Budget allocation
• Schedule management
• Progress control
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Gantt Chart
Gantt Chart is a graphic display of
schedule-related information. In this
chart, activities are listed on the
vertical axis, dates are shown on
the horizontal axis, and activity
durations are shown as horizontal
bars placed according to start and
finish dates.
A Gantt chart must have a heading
with project title and location, date
of preparation, a brief description of
each activity, bars representing the
activities drawn to indicate duration,
and horizontal axis showing date.
Construction of a small house, Sydney, 1 June 2020
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Gantt Chart
A Gantt chart can provide the following
information.
▪ What the various activities are
▪ When each activity begins and ends
▪ How long each activity is scheduled
to last
▪ Where activities overlap with other
activities, and by how much
▪ The start and end date of the whole
project
▪ The precedencies
As a general rule, it is recommended to
cover no more than 100 activities in a
Gantt chart for easier scheduling and
management.
Time
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Gantt Chart
Gantt chart can also be used to develop S-curves (sigmoid curves).
S-curves are great graphical project management tools for planning,
monitoring, controlling, analysing, and forecasting project’s status, progress,
and performance.
S-curves can show the progress of work and the percentage of project
completion over time from the start of project.
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Example
A bridge is going to be constructed over one year including the six main
construction processes determined below. Developing a Gantt chart, draw the
project’s percentage completion S-curve.
Activities/
Month
Project
percent
M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12
Demolition 5 2 3
Excavation 15 3 9 3
Foundation 25 8 12 5
Piling 30 10 16 4
Decks 18 8 8 2
Asphalt 7 5 2
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Example
Solution:
Activity/Month Project
percent
M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12
Demolition 5 2 3
Excavation 15 3 9 3
Foundation 25 8 12 5
Piling 30 10 16 4
Decks 18 8 8 2
Asphalt 7 5 2
Completion % 2 3 3 9 11 12 15 16 12 8 7 2
Cumulative % 2 5 8 17 28 40 55 71 83 91 98 100
0
10
20
30
40
50
60
70
80
90
100
1 2 3 4 5 6 7 8 9 10 11 12
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Gantt Chart
One of the main applications of Gantt charts is developing project cash flow and
calculating project profit/loss.
Project cash flow is the net cash flow associated with the project during its life
cycles.
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To find project cash flow, the
following four parameters must be
determined.
• Cash inflow
• Cash outflow
• Cumulative cash inflows
• Cumulative cash outflows
Example
A construction management company has won a tender to construct a small
house in 20 weeks. Client will release the following payments.
Develop project cash flow diagram and calculate the profit of construction
management company considering the information in the Gantt chart below.
Payment time W1 W5 W10 W15 W20
Payment amount ($k) 100 140 70 60 50
Activities/Time W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W14 W15 W16 W17 W18 W19 W20
Excavation 15 20 22 14
Concreting 20 26 24 20 14 50
Bricklaying 10 8 6 15
Carpentering 5 4 5 3 10
MEP 15 18 22
Joinery 10 14 18
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Example
Solution:
Activities/Time W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W14 W15 W16 W17 W18 W19 W2
0
Excavation 15 20 22 14
Concreting 20 26 24 20 14 50
Bricklaying 10 8 6 15
Carpentering 5 4 5 3 10
MEP 15 18 22
Joinery 10 20 12
Cash inflow 100 0 0 0 140 0 0 0 0 70 0 0 0 0 60 0 0 0 0 50
Cash outflow 15 20 22 14 20 26 24 20 14 60 8 11 19 5 3 25 18 32 20 12
Cumulative
cash inflow
100 100 100 100 240 240 240 240 240 310 310 310 310 310 370 370 370 370 370 420
Cumulative
cash outflow
15 35 57 71 91 117 141 161 175 235 243 254 273 278 281 306 324 356 376 388
Cash flow 85 65 43 29 149 123 99 79 65 75 67 56 37 32 89 64 46 14 -6 32
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Example
Profit = Final cumulative cash inflow – Final cumulative cash outflow = 420 – 388 = $22k
Negative cash flow is when the construction company pays money to suppliers
and subcontractors before client pays for the work that has been completed.
-50
0
50
100
150
200
250
300
350
400
450
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Cumulative cash inflow Cumulative cash outflow
Cash flow
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CPM
Critical Path Method (CPM) is an algorithm for sequencing activities and planning
and scheduling the project. The step-by-step CPM system helps to identify critical
and non-critical activities from projects’ start to completion.
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CPM Advantages
• It visualises project in a clear graphical form.
• It determines the total project duration.
• It helps to identify the critical activities that need more attention.
• It helps with the management of deadlines and milestones.
• It determines the floating time of activities.
• It makes precedencies clear and transparent.
• It identifies the activities that can be shortened to reduce the total project
duration.
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PERT
Program evaluation review technique (PERT) is similar to CPM in that they are
both used to visualise the timeline and the activities that must be done for a
project.
In PERT, three different time estimates are created for each activity which are the
shortest possible time, the most probable time, and the longest time. These times
could the determined based on the past experiences, historical data, or feedback
of experts.
where:
ET: Expected time of an activity
σ2: Variance of an activity OT: Optimistic time of an activity
MT: Most likely time of an activity
PT: Pessimistic time of an activity
ET = OT + 4MT + PT
6 σ2=
PT −OT
6
2 Z=
PSD −PED
SD SD= σ1
𝑛 σ2
PSD: Project scheduled duration
PED: Project expected duration
SD: Standard deviation of the project
duration
Z: Probability of meeting schedule (Table 2)
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Example Table 2: Converting Z value to probability
If Z value is negative, its probability will be: 1 – (positive value of Z)
For example, the probability of Z= -1.80 will be: 1 – (z=1.80) = 1 – 0.9641 = 0.0359
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Example
For constructing a small bridge, the following four successive activities must be
conducted. Considering the table below, determine the following:
• Expected duration and variance of every activity.
• Expected project duration.
• Probability of project completion on or before 100 days.
Activity Description Optimistic Time
(day)
Most likely Time
(day)
Pessimistic Time
(day)
A Excavation 15 18 23
B Piling 30 38 45
C Decking 25 32 40
D Asphalting 5 6 8
A B C D
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Example
Solution:
Using the following two formula, the expected time and variance of each activity
are first calculated.
Activity OT MT PT ET σ 2
A 15 18 23 18.33 1.778
B 30 38 45 37.83 6.250
C 25 32 40 32.17 6.250
D 5 6 8 5.33 0.250
SD= σ1 n σ2 = 1.778 + 6.250 + 6.250 + 0.250 = 3.812
PED = 18.33 + 37.83 + 32.17 + 5.33 = 93.66 days
ET = OT + 4MT + PT
6 σ2=
PT −OT
6
2
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Example
Z= PSD −PED
SD = 100 −93.66
3.812 = 1.66
Using Table 2, the probability of project completion on or before 100 days = 0.9515
So, the probability of finishing the project in 100 days or less is 95.15%.
93.66 100
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Videos
https://www.youtube.com/watch?v=akO2Lf1fHmM
Work Breakdown Structure
https://www.youtube.com/watch?v=fB0wsdmV3Sw
https://www.youtube.com/watch?v=00s5efQWrgU
Gantt Chart
https://www.youtube.com/watch?v=i160aaBX7mE
https://www.youtube.com/watch?v=h2OZGx3qnaU
PERT
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https://www.youtube.com/watch?v=rxGcV0tuxRU
CPM
Summary
Project Definition
Project Characteristics
Project vs Operation
Project Performance
Project Life Cycle
• Initiation
• Planning
• Execution
• Monitoring and Controlling
• Closure
Project Management Techniques
• WBS
• Gantt Chart
• CPM
• PERT
47
Project Management Areas
• Integration Management
• Scope Management
• Schedule Management
• Cost Management
• Quality Management
• Human Resource Management
• Communications Management
• Risk Management
• Procurement Management
• Stakeholder Management