PROJECT PLANNING WANG SONG JIANG (Professor) MP:13033336177 E-mail: [email protected]

PROJECT PLANNING

WANG SONG JIANG

(Professor)MP:13033336177

E-mail: [email protected]

A, Warming-Up1, Introduction(1) Myself: Wang Songjiang(2) Students Yourselves……2, Teaching Program (1) 36 Teaching hours dividing into 18 hours for

teaching;(2) Another 18 for team-working in terms of Cas

e Study by the form of Assignments;(3)Assignments taking 30% of scoring;(4)Final Paper Examination taking 70% of the sc

oring

B, Structure of Project Management

1, Project Planning;

2, Project Decision-Making;

3, Project Plan Drawing-up;

4, Project Implementation Management;

5, Project Financing.

C, Project Life-CycleProject

proposal Project planning

Project Decision-making

Project plan

Project Financing

Implementation

M.＆E.

Project ending

New project

Piloting & Testing

D, Project Management Activities in Project Four Phases

Definition/Starting Plan & Design Execution & Control End & Delivery

1.Project Proposal2, Project Planning3.Project Feasibility Study (DM)4.Risks5, HRM6, CM7,Financing

1.Project Plan2.Scope /WBS3. Product Design4.Risks5, HRM6, CM7,Financing

1.Schedule2.Cost3.Quality4.Procurement5, Risks6, HRM7, CM

1.Train customer2.Transfer documents/Project3.Release resources4.Risks5, HRM6, CM

E, Project and Project Management

What is project?

What is project management?

Part One Project Planning

It is a long time practice but still can be challenged on theory and methodology.

Without the planning, it can do nothing.

I, Problem AnalysisMethodological outline

- Problem listing

- Problem tree analysis

- Problem matrix

- Case study

I-1, Problem List--Card Method

Per card 1 idea

1 problem1 thought

Same logic=same color

Clear writing

never Not more than three lines per card

-CAPITALES-handwritten

I-2, Linear Problem SequencePoor housing

Low income ofhouseholds

Low agriculturalproduction

Inadequate farming

techniques

Poor extensionservice

I-3, Circular Sequence

Increasing waste land

Lack of cultivable land

Over utilization of land

Soil ErosionDegradation

of land

I-4, Tree Sequence

Flooding Disturbed waterBalance in lowLying regions

Landsides

Disturbed Water

balance

ReductionIn forest areas

Bush fires

I-4-1, Problem Tree Analysis-basic procedures-

-step 1 Identify major problems existing within the stated problem situation.-step 2 Write up short statement of the ‘starter problem’.-step 3 Write up causes of starter problem.-step 4 Write up effects of starter problem.-step 5 Form a diagram showing the cause- effect-relationship in form of a tree.-step 6 Review diagram as a whole and verify its validity and completeness.

I-4-2, Starter Problem Identified MatrixCriteria/Weight Starter Problem 1 Starter Problem 2 Starter Problem n

Importance

weight:0--1

1,3,5*weight 1,3,5 *weight 1,3,5 *weight

Emergency weight:0--1

1,3,5 *weight 1,3,5 *weight 1,3,5 *weight

Coreweight:0--1


Feasibility weight:0--1


Note: 1 point=negative

Note: 3 points=neutral

Note: 5 points=positive

I-4-3, Problem Analysis

Is a set of techniques to:- Analyze an existing problematic situation in a

systematic way.

- Identify major problems in this context.

- Define one important problem as the ‘starter problem’.

- Visualize the cause-effect-relationships in a diagram. (problem tree)

I-4-4, Cause-Effect-Relationship

The causes and effects of a problem will be analyzed by separation and connection

if

Pastures areovergrazed

Cause

then

Reductionin grazing

Areas

Effect

I-4-5, Attention 1. Word problems as negative conditions

2. One problem per card

3. A problem is not the absence of a solution but an existing negative state

Climate Irregular rainfall

Frequent bus acci-dents because of

bad road condition

Frequent bus accidents

Bad road condition

No pesticides available

Harvest is infestedby pests

4. Avoid general, meaningless formulations

5. Identify existing problems, not possible, imagined or future ones.

6. Around 30-40 well formulated and arranged cards is enough.

7. The position in the problem tree does not indicate the importance of a problem.

Underdeve-lopment

Low regionalincome

Badinfrastructure

I-4-6, Problem TreeThe ‘problem tree’ is a diagram showing the cause-effect-relationship of an existing

problematic situation

effects

‘starter problem’

causes

I-4-7, Problem Tree: bus example

Loss of confidence in bus company

People are latePassengers

hurt or killed

Frequent bus accidents

Bad road condition

Bad condition of buses

Drivers not careful enough

No ongoing maintenance

Buses are too old

effects

‘Starter problem’

causes

I-4-8, Problem Matrix: bus example

1 2 3 4 5sum

Bad road condition 1 0Bad condition of buses 2 3Drivers not careful 3 3No ongoing maintenance 4 0Passengers are killed 5 4Sum 3 2 2 3 0

CAUSESEFFECTS

Direct relation Indirect relation No relationVertical :has the bad road condition an effect on the condition of the buses.

Horizontal: are the bad condition of the buses a cause for the bad road condition?

II, Objectives Analysis

Methodological outline

- objective and objectives analysis

- objectives tree

- project region’s resources and culture

- CASE STUDY

II-1, Objectives Analysis

Is a set of techniques to: describe the future situation that will be

achieved by solving the problem. identify potential alternatives for the

project clarify the intentions of the project identify the means-end-relationship.

II-2, Means-End-Relationship

If cause A effect B

Mean X end Y

then

To achieve

Vegetation cover conserved

Overgrazing is stopped

II-3, Objective Tree Analysis: basic procedures

Step 1 restate all problems of the problem tree into positive conditions that are desirable and realistically achievable

Step 2 examine the means-end-relationships to assure validity and completeness of diagram

Step3 if necessary - revise statements - add new objective - delete objective

II-4, Attention

The positive future condition have to be: Desirable

Achievable

Realistic

No hidden solutions

Nomads reduced

Regional incomeincrease

Regular rainfall

Pesticidesavailable

II-5, Objectives Tree In the ‘Objectives tree’ all negative condition of the ‘problem tree’

will be restated into positive condition that are:

-desirable

-realistically achievable

All objectives are of the same importance

II-6, Objectives Tree: bus example grouping

Confidence in bus company improved

Less passengers are hurt

Passengers are arrive at scheduled time

Frequency of bus accidents considerable reduced

Road conditions improved

Buses keep in good condition

Drivers drive carefully

Buses regularly maintained

Old buses are regularly replaced

II-7, Objectives Tree: bus example--Order

1--Confidence in bus company improved

2--Less passengers are hurt

3--Passengers are arrive at scheduled time

4--Frequency of bus accidents considerable reduced

7--Road conditions improved

6--Buses keep in good condition

5--Drivers drive carefully

9--Buses regularly maintained

8--Old buses are regularly replaced

II-7-1, Objectives Tree: bus example—Project Design1, Grouping: Put the objectives into one group

within the objective tree in terms of they are the same objectives or/and similar objectives or/and likely objectives.

Group A=objective 2 and 3

Group B=objective 1, 4, 5, 6, 8 and 9

Group C=objective 7

2, Project Planning

Project A (Group A): Improving of Passengers Safety Project Project B (Group B): Up-grading of Management for Bus Company

Project C (Group C): Road Infrastructure Re-building Project

II-7-2, Objectives Tree: bus example—Project Priority Matrix

Criteria Weighting Project A Project B Project C

No. of Beneficiaries

Degree of Participation

Utilization of Local Resources

Eco-Environment Impact

Contribution to Employment

Affordability

Eco-Soc-Econ-Benefits

Experience & Lessons

Gender Issue Contribution

Contribution to Social Rest

∑ Note: 1 point=negative



II-7-3, Objectives Tree: bus example—Project Priority Scoring

1, More Than Four Times Anonymous Weighting and Scoring by Experts and Specialists ;

2, Experts and Specialists Team(1)7-9 Persons;(2) Background should be the

Economists/Management Researchers, Technologists, Administrators etc.

(3) How to Deal with the Highest Points and the Lowest Points ?

III, Alternatives Analysis

Decision techniques

-terminology

-’traditional’ decision techniques

-multicriterial decision technique

zopp –alternative analysis

Case study

III-1, Alternatives Analysis: basic procedure

Step1 identify objectives you do not want to peruse Step2 identify' means-ends-ladder’ as possible alternative project or project component step3 label alternatives step4 assess which alternative might represent an optimal project strategy by using cretins such as: - resource limitation - technical feasibility - ecological implications - social risks - political will - sustainability - cost-benefit-relation - self-help contribution - income generation

III-2, Case Study: guideline1. identify objectives you do not want to peruse

2. identify' means-ends-ladder’

3. Label the identified options

4. Identify selection criteria

5. Prepare decision ,make assumptions: cost, feasibility, etc

6. Select one project that you want to realize

7. Presentation of selection/decision procedure and results

III-3, List of Options Apartment A

Apartment B

Apartment C

Apartment D

Apartment E

Apartment F

Apartment G

Monthly rent : 80DMDistance: 15min







III-4, Table of Options/Criteria

Apart.1 Apart.2 Apart.3 Apart.4

rent 80DM 650DM 250DM 200DM

space 10m2 50m2 18m2 35m2

distance 15min 2min 50min 40min

Qualitative

aspects

bathroom,

No kitchen,

dirty

Bathroom

Kitchen

Friendly landlord

No own bathroom

And kitchen,

Unfriendly landlord

Bathroom

kitchen,

1200DM

Commission fee

options

criteria

III-5, Order-Matrix

1.rank 2.rank 3.rank 4.rank

Criteria 1(rent) A(partment)1 A4 A3 A2

Criteria 2(space) A2 A4 A3 A1

Criteria 3(distance) A2 A1 A4 A3

Criteria 4(quality) A2 A4 A1 A3

ordercriteria

III-6,Test of Total Dominance/Recessives

Total dominance One option has the 1st rank in regard to all criteria.

select this option Total recessives One option has the last rank in regard to all criteria:

exclude this option from further

decision process

III-7, Voting-Matrix

1.rank 2.rank 3.rank 4.rank

Apartment 1(A1) - 3 2 2

Apartment 2(A2) 1 - 1 1

Apartment 3(A3) 2 3 - 4

Apartment 4(A4) 2 3 0 -

optionsoptions

III-8, Advantage-Disadvantage-TableA1/A2 A1/A3 A1/A4 A2/A3 A2/A4 A3/A4

Criteria 1 A A A D D D

Criteria 1 D D D A A D

Criteria 1 D A A A A D

Criteria 1 D D D A A D

Advantage 1 2 2 3 3 0

disadvantage 3 2 2 1 1 4

Number of comparison: z=[n(n-1)/2]×cn= number of option c= number of criteria

comparison

CriteriaCriteria

III-9, Scope of Alternative(4 option)

1,2,3,4 2,1,3,4 3,1,2,4 4,1,2,3

1,2,4,3 2,1,4,3 3,1,4,2 4,1,3,2

1,3,2,4 2,3,1,4 3,2,1,4 4,2,1,3

1,3,4,2 2,3,4,1 3,2,4,1 4,2,3,1

1,4,2,3 2,4,1,3 3,4,1,2 4,3,1,2

1,4,3,2 2,4,3,1 3,4,2,1 4,3,2,1

24 different rank orders

III-10, Decision

compared to Apartment 1 Apartment 2

Is the ADVANTAGE of apartment 1(to save 570 DM) outweighing the DISADVANTAGE to live in a 40m2

smaller room And to have a thirteen min longer walking distance and to have no Kitchen and to live in a dirty

apartment

A1 D2 D3 D4 YES NO

A1/A4 A2/A4

IV, Project Planning Matrix (PPM)

Presentation of the whole project in one matrix.

The ‘PPM’ provides a one stage summary:

- Why a project is carried out.

- What the project is expected to achieve.

- How the project is going to achieve these results.

- Which external factors are crucial for the success

of the project.

- How we can assess the success of the project.

- Where we will find the data required to assess the success of he project.

IV-1, Logic of a Project combined hypotheses

Overallgoal

Projectpurpose

results

activities

Then

If

Then

If

IV-2, Matrix

Overall goal

Project purpose

Results

Activities

indicatorsMeans of

verification

Importantassumptions

Horizontal logic

Vertical logic

Working procedures

IV-3, Project Planning Matrix

Narrative

summary

indicators Means of

vertification

Assumptions

Overall goal For long term sustainability

Project

Purpose

Project

Results

Project

activities

Necessary resources for activities Pro-condition for project

ST

EP

1

ST

EP

3

ST

EP

4

ST

EP

2

STEP 5

IV-4, Project Planning Matrix: Bus example

Overall goal

Financial funds for public transportation reduce

Importation of new buses amounts to less than 50,000US$/year

Buses remain main means of transportation

Project purpose

Citizens are using the public transport

After 2 years at least 65%of citizens are using public buses regularly

Fuel costs remain stable

Project results

The buses are maintained regularly

Repair of buses after 2 years lasts not more than 1hour

Fares do not increase more than incomes of citizens

Project activities

Bus drivers are introduced how to maintain buses

Specification

6-weeks-training-course for bus drivers

Trained bus drivers do not leave bus company

indicators assumptions

IV-4-1, Summary of Objectives/Activities(1row)

The Summary of objectives/activities shows the basic structure of the project.

- The project purpose describes the anticipated benefit of the project. It contributes to achieving the overall goal.

- The project results are objectives which the project management must achieve. The project results are necessary requirements to achieve the project purpose.

- The project activities are implemented in order to obtain the project results.

IV-4-2, Indicators(2 row)

- Indicators are measuring the contents of objectives in terms of:

-Quantity how much? -Quality how well? -Time when? -Location where? - Indicators tell if an objective is achieved.- Indicators provide a basis for monitoring and

evaluation.

IV-4-3, Indicators: working procedure

Objective:

Step 1 identify indicators

“small farmers increase rice yield”

Step 2 quantity

10.000 small farmers (owing three acres or less) increase production by 50%

Step 3 quality

same quality of harvest as 1983 crops

Step 4 time

Between oct.1984 and oct.1985

Step 5 location

Umbia province

Step 6 combine

eg. Agricultural productionincreased

10.000 small farmers in umbra province increase their rice Yield by 50% between oct.1984 and oct.1985 maintaining

Same quality of crops as 1983

IV-4-4, Means of Verification(3.row) Means of verification give an exact description where to

find the data necessary to verify the indicator. Important questions:

- what information?

- by whom provided?

- how reliable are the sources?

- is special data-gathering required? Indicators for which no suitable means of verification can

be identified must be replaced by verifiable indicators.

IV-4-5, Assumptions(4.row)

Assumption are conditions that must exist if the project is to succeed but which are not under direct control of the project.

Assumptions are :

- important factors.

- outside of project control.

- necessary for project success.

IV-4-6, Assessment of Assumptions 1.Question: “is the assumption important?”

2. Question: “how likely will it occur?”

3. Question: “can the project be re-designed”

No: don't includeyes

Almost certain :don’t include

Quite likely:-include it in PPM - try to influence it Not likely

No : killer assumption-stop project

-warn decision makesYes: Redesign project

Part Two Project Decision-Making (PDM)

The project decision-making has been practiced more than thousand years, such as Great Wall, Pyramid and etc.

Subjective-decision-making needs diversity theories, approaches, methods, means and measures to deal with the quite new future.

I, Financial Benefit Analysis on PDMI-1, NPV Method;

I-2, B/C Ratio Method;

I-3, IRR Method;

I-4, Pt Method;

I-5, NPVR Method;

I-6, Discount Rate;

I-7, Sensitive Analysis.

I-8, Case Study: Financial Analysis on PDM i=10%; USD 10,000

Time (yr)

CI

Cash in

CO

Cash out

NCF

NCF=(CI-CO)i

ANCF

ANCF =∑NCFi

1 0 12

2 3 7

3 5 3

4 17 0

5 17 0

∑

II, Economic Analysis on PDMII-1, Shadow Price;

II-2, Social Discount Rate;

II-3, CI Structure;

II-4, CO Structure;

II-5, ENVP;

II-6, EB/C Ratio;

II-7, EIRR;

II-8, EPt

II-9, Relations between Economic Analysis and Financial Analysis on PDM

III, Social Benefit Analysis on PDM

1, Establishing of Social Benefit Evaluation System(1)Selection of Social Benefit Criteria by Experts and Specialists Team(2)Seletion of Weighting Score for each Criteria by Experts and

Specialists Team(3)Selection of Experts and Specialists Team; Scoring①7-9 Persons;②Background should be the Economists/Management Researchers,

Technologists, Administrators etc. ③ More Than Four Times Anonymous Weighting and Scoring by

Experts and Specialists Team④How to Deal with the Highest Points and the Lowest Points ?

2, Social Benefit Evaluation Matrix (see next page)

III, Social Benefit Analysis on PDM

Criteria Weighting

0-1Economist Technologist Administrator

No. of Beneficiaries

Degree of Participation

Utilization of Local Resources

Local Management Improving

Contribution to Employment

Affordability

Conservation of Indigenous Knowledge/Culture

Experience & Lessons

Gender Issue Contribution

Contribution to Social Rest

∑ Note: 1 point=negative



IV, Ecological Benefit Analysis

1, Ecological Environment (Negative) Impact Assessment (EIA)

2, Long Term Bio-diversity (Negative) Impact Assessment (BIA)

3, Methodology on EIA and BIA

Part Three Project Plan Drawing-up

For a project to succeed, it must have a good plan.

However, the good plan will not ensure the success of the project.

I, Contents of Project Plan1, Objective Design 2, Tasks Break-down—WBS3, Procedure of Tasks Implementation—CPA & Ghantt C

hart4, Approaches, Methods, Means and Measures of Tasks Im

plementation—Marketing, Technology and Management or/and Administration

5, Relations between Implementers and Monitors—Organization Management, M & E

6, Cost Estimation and Controlling; Budgeting7, Quality Control8, Project Plan Matrix9, Conclusions; Assessment; Recommendations10, Others

II, Project Objective Drawing-Up1, Only one objective (called as goal) drawing-up or

summarizing from the objective group, which has been become the objective of the project plan.

2, The description of the objective within the project plan should be included at least four factors, to wit:

(1)Quantitative criteria;

(2)Clearn time period;

(3)Resources input in monetary that namely as COST;

(4)Approaches, methods, means and measures to carry out the objective.

III, Project Tasks Break-DownIt uses the tool, namely WBS (Work Break-Down Structure) to break the tasks from the project objective until the tasks have been broken into the smallest task for implementing.

The WBS can be formed as Table Form (or Flow-Chart Form in the next page), which illustrating in the bellowing hereunder.

Coding Tier 1 Coding Tier 2 Coding Tier 3 Coding Tier ...…n

1.1 Objective 1 1.1.1 Task 1 1.1.1.1 ……

1, Goal 1.2 Objective 2 1.1.2 Task 2 1.1.2.1 ……

1.3 Objective 3 1.1.3 Task 3 1.1.3.1 ……

WBS in Flow-Chart Form

Tier 0（Goal）

1000

Tier 1（Objectives）

1100 1200 1300 1400 1500 1600 1700 1800

Tier 2（Tasks Package）

1410 1420 1430 1440 1450 1460 1470 1480 1490

Tier 3（Activi ti es）

1451 1452 1453 1454 1455 1456

WBS

Construction of Ship

（March 24, 2007）

Pow

er

Electricity

Pip

e

Body

Bearing

Fram

e

Mach

ine

Room

s

A

Part

B

Part

C

Part

D

Part

E

Part

F

Part

G

Part

H

Part

K

Part

a b c d e f

IV, Project Procedure of Tasks Implementation

1, Gantt Chart (see following page)

2, CPA

(1)Exmating Task DurationE(t)=(1*Optimistic Time+4*Most Likely Time+1*Pessimistic Time)/6

(2)Critical Path Analysis

e.g. German Breakfast Gantt Chart and CPA (see the next page)

Geting-Up:7： 00， Clothing: 5 minutes, Cleaning Face: 4 minutes, Boiling Water: 10 minutes, Take milk: 5 minutes, Cooking Milk: 5 minutes, Eating: 5 minutes (only one stove)

Order Tasks Time Pre-Tasks Post-Tasks

1 Clothing 5 __ __ 2,3

2 Boiling Water 10 1 5

3 Cleaning Face 4 1 4

4 Taking Milk 5 1 5

5 Cooking Milk 5 2, 4 6

6 Eating 5 5 __ __

Order Tasks Time 7:05 7:10 7:15 7:20 7:25 7:30

1 Clothing 5

2 Boiling Water

10

3 Cleaning Face

4

4 Taking Milk

5

5 Cooking Milk

5

6 Eating 5

Clothing5

Taking Milk5

Cleaning Face4

EatingEating 5

Boiling Water

10

Cooking MilkCooking Milk

5

V, Approaches of Tasks Implementation1, Technology(1)Technical Design(2)Engineering Activities(3)Qquipment and Facilities(4)Energy Supply(5)Others2,Management(1)Organazation(2)Plan(3)Leadship(4)Cooperation, Coordination, Communication and Controlling3, Marketing(1)Prodeuct Design(2)Pricing(3)Placing(4)Promotion(5)Public Relations(6)Politic Power(7)4Cs (Customs’ Needs, Cost Affordability, Convenience, Cooperation )

VI, Relations between Implementers and Monitors—Organization Management, M & E

1,Organazation Structure

(1)Bureaucracy Structure

(2)Project Structure

(3)Matrix Structure

2, M & E (Monitoring and Evaluation)

(1)Pre-Project M & E

(2)Project M & E

(3)Post-Project M & E

(4)Procedure of M & E

Humanresources

Finance andadministration

Marketing Engineering Manufacturing Procurement

PurchasingReceiving and

inspectionElectronicsengineering

Softwareengineering

Mechanicalengineering Design

Domesticsales Assembly Testing

Productionscheduling

Internationalsales Fabrication

President

Customerservice

Project Bureaucracy Organization

Project coordination

Zeus Electronics, Inc.President

Humanresources

Finance and administration

Marketing Engineering Manufacturing Procurement Project manager

Project Organization Project team

Project Aproject

manager

Project Bproject

manager

Project Cproject

manager

Pro. A

team

Pro. A

team

PresidentHuman

resources Finance

Engineering Manufacturing Marketing Director of

projects

Projectadministration

1

2

3

Pro. A

team

Designengin.

2

3

1

Electr.engin.

1

1

Soft.engin.

1

Mech.engin.

2

1

Thch.docu.

1

1

Asse-mbly

2

1

Test-ing

1/2

1

Quality

1

1

Cus.service

1

1/2

Dom.sales

2

2

Intern.sales

1

2

Project Matrix Organization

VII, Cost Estimation and Controlling; Budgeting

1, Cost Estimation

C(e)=Amount of Resources *Price/Per UnitTypes,

Quality,

Input Time,

Source of Resources

2, Budgeting

3, Earned Value (EV): Cost/Schedule Control System3, Earned Value (EV): Cost/Schedule Control System

(1)BCWP (Budgeted Cost of Work (1)BCWP (Budgeted Cost of Work Performed)=EV=(ACWP/BCWS)*ACWPPerformed)=EV=(ACWP/BCWS)*ACWP

(2)ACWP ( Actual Cost of Work Performed)= Actual Cost(2)ACWP ( Actual Cost of Work Performed)= Actual Cost

(3)BCWS (Budgeted Cost of Work Scheduled)=Planned Cost

(4)CV (Cost Variance)=EV-ACWP

(5)SV (Schedule Variance)=EV-BCWS

(6)CIP (Cost Performance Index)=EV/ACWP

(7)SCI (Schedule Performance Index)=EV/BCWS

(8)BAC (Budget at Completion)=Total Cost

(9)ETC (Estimate to Complete)=EAC-ACWP

(10)EAC (Estimate at Completion) has four formulas:

①EAC=ACWP+ Remaining BCWS/CPI

②EAC=ACWP+ETC

③EAC=ACWP+ EAC=ACWP+ Remaining BCWS

④EAC=BAC/CPI

(11) Five Valuable Understanding

① Question: How much work should be done?

Answer: Budgeted cost for work schedule

Acronym: BCWS

② Question: How much work is done?

Answer: Budgeted cost for work performed

Acronym: BCWP/EV

③ Question: How much did the “is done” work cost?

Answer: Actual cost of work performed

Acronym: ACWP

④ Question: What was the total job supposed to cost?

Answer: Budget at completion

Acronym: BAC

⑤ Question: What do we now expect the total job to cost?

Answer: Estimate at completion

Acronym: EAC

(12) Case Study and Interpretation on EV

① Case: Task A---BCWS=$1,000; ACWP=$850

② EV (BEWP)=(ACWP/BCWS)*ACWP=($850/$1,000)*$850=$722.5

Interpretation of EV: Task A, which was supposed to complete today, is scheduled to cost $1,000. I am only 85% done on this task. Thus I have done $722.5 worth of work, which is my earned value.

③ CV=EV-ACWP=&722.5-$850=-127.5

Interpretation of CV:I have done $722.5 worth of work (EV), but it actually cost me $850. It has cost me $127.5 more to do what I have done than I originally thought (CV).

④ SV=EV-BCWS=&722.5-&1,000=-277.5

Interpretation of SV: As of today, I was supposed to have done $1,000 worth of work on Task A (BCWS). I have actually done $722.5 worth of work (EV). Thus, I am behind in my schedule by &277.5 worth of work (SV).

⑤ CIP=EV/ACWP=722.5/850=85%

Interpretation of CIP: I have done $722.5 worth of work (EV). It has cost me $850 to do so (ACWP). Each dollar I actually spent generated 85% worth of work (CPI).

⑥ SCI=EV/BCWS=$722.5/$1,000=72.25%

Interpretation of SCI: I have done $722.5 worth of work (EV). The value of work scheduled is $1,000 (BCWS). Each dollar of scheduled work generated 72.25% worth of work (SCI).

VIII, Quality Control

1,Four Absolutes of Quality Management

(1)Quality is defined as “conformance to requirements”, not as “goodness” or “elegance”.

(2)The system for causing quality is “prevention” , not “appraisal or inspection or assessment etc”.

(3)The performance standard of quality must be “zero defects”, not “that’s close enough”.

(4)The measurement of quality is the detailed description, not indices.

VIII, Quality Control2,TQM (Total Quality Management)

(1)Definition

Total: The everyone is involved in continuous improvement (including suppliers and customers).

Quality: The implied and expressed customer requirements are fully met.

Management: The senior executives are committed to approach.

(2)Quality Control

The quality control entails monitoring production processes to see that they produce goods according to an established standard. The important tool is the “control chart”.

① Variance---The variance is non-conformance to requirements.---The degree of the variance can be measured by determining the level of departure from required performance levels.②Control Chart

Upper Control Limit (UCL) Outlier ○10.5mm

○ ○ ○ ○ ○10.3mm

○ ○ ○ ○ ○ ○ ○10.3mm

Lower Control Limit (LCL) ③PDCAStep 1:Plan for quality (plan);Step 2: Implementation the plan (do);Step 3: Check to see how things are going (check);Step 4: Based on your “check” effort, adjust the process to improve performance (act). P A C D

IX, Project Plan MatrixTask Impleme

nter Monitor Time Cost($

10,000)Quality Pre-

TaskParallel-Task

Post-Task

Changing

1.1.1 Wang Smith Mar.15 to Mar. 7

12 Criteria 1.1.0 1.1.9 1.2.4 Reasons, Appling, Approved, Recording

1.2.4 Bill Bush Apr. 2 to May 5

34 Criteria 1.3.2 1,7,6 1.2.3 Reasons, Appling, Approved, Recording

1.3.6 Richard Duan June 7 to July 17


1.7.2 Lee Alli Aug. 3 to Sep. 27


…… …… …… …… …… …… …… …… …… ……

X, Conclusions; Assessment; Recommendations

1, Conclusions

2, Assessment

3, Recommendations

4, Appendix

5, Project Plan Report Format

Part Four Project Implementation Management

Implementation is an execution to carry the project plan into the project practicing.

Without the project implementation, every thing is just in the “paper work”.

The quality, cost and time schedule are called as “golden triangle” in the project implementation.

QualityQuality

CostCost TimeTime

I, Time Schedule Management1, Gantt Chart (see following page)

2, CPA

(1)Exmating Task DurationE(t)=(1*Optimistic Time+4*Most Likely Time+1*Pessimistic Time)/6

(2)Critical Path Analysis

e.g. German Breakfast CPA (see the next page)

Time

April 20 May 1

May 10

June 1

May 20

June 20

June 10

July 1 Aug. 1

July 20

Sep. 1

Aug 20

Sep. 10

Sep.16

July 10

Aug. 10

Take TV Program

Activities and CoordinationSurvey

Press MagazineAssistant Work

进度时间0 30 9060 120 146天

Gantt Chart

3.115

3.2

1.2.1

3

3.3

3.530

3.430

3.615 20

3.7

25/8

3.85

3.915

5.215

1.2.31.2.4

10 4

1

1.1.11.1.2

12

1.1.3

31.1.420 26/5

2.130

2.319

2.410

2.630

6/8

1.1.55

1.2.210

1.1.6

4 2

2.230

2.525

4.215

4.115 21/5 11/7

4.310

5.410

5.528 13/9

5.349

5.135 26/6

Toast Butter i n Bread

t=2 t=0. 5

Boil Water Boil Egg

t=7 t=0. 5

Prepare Coffee Put Coffee in Cup

t=8 t=0.5

Prepare Table Prepare Rice

t=2 t=1

1

2

3

4

5

6

II, Cost Management

1, Cost Estimation

C(e)=Amount of Resources *Price/Per Unit

Types,

Quality,

Input Time,

Source of Resources

2, Budgeting

3, Earned Value (EV): Cost/Schedule Control System3, Earned Value (EV): Cost/Schedule Control System

(1)BCWP (Budgeted Cost of Work (1)BCWP (Budgeted Cost of Work Performed)=EV=(ACWP/BCWS)*ACWPPerformed)=EV=(ACWP/BCWS)*ACWP

(2)ACWP ( Actual Cost of Work Performed)= Actual Cost(2)ACWP ( Actual Cost of Work Performed)= Actual Cost

(3)BCWS (Budgeted Cost of Work Scheduled)=Planned Cost

(4)CV (Cost Variance)=EV-ACWP

(5)SV (Schedule Variance)=EV-BCWS

(6)CIP (Cost Performance Index)=EV/ACWP

(7)SCI (Schedule Performance Index)=EV/BCWS

(8)BAC (Budget at Completion)=Total Cost

(9)ETC (Estimate to Complete)=EAC-ACWP

(10)EAC (Estimate at Completion) has four formulas:

①EAC=ACWP+ Remaining BCWS/CPI

②EAC=ACWP+ETC

③EAC=ACWP+ EAC=ACWP+ Remaining BCWS

④EAC=BAC/CPI

(11) Five Valuable Understanding

① Question: How much work should be done?

Answer: Budgeted cost for work schedule

Acronym: BCWS

② Question: How much work is done?

Answer: Budgeted cost for work performed

Acronym: BCWP/EV

③ Question: How much did the “is done” work cost?

Answer: Actual cost of work performed

Acronym: ACWP

④ Question: What was the total job supposed to cost?

Answer: Budget at completion

Acronym: BAC

⑤ Question: What do we now expect the total job to cost?

Answer: Estimate at completion

Acronym: EAC

(12) Case Study and Interpretation on EV

① Case: Task A---BCWS=$1,000; ACWP=$850

② EV (BEWP)=(ACWP/BCWS)*ACWP=($850/$1,000)*$850=$722.5

Interpretation of EV: Task A, which was supposed to complete today, is scheduled to cost $1,000. I am only 85% done on this task. Thus I have done $722.5 worth of work, which is my earned value.

③ CV=EV-ACWP=&722.5-$850=-127.5

Interpretation of CV:I have done $722.5 worth of work (EV), but it actually cost me $850. It has cost me $127.5 more to do what I have done than I originally thought (CV).

④ SV=EV-BCWS=&722.5-&1,000=-277.5

Interpretation of SV: As of today, I was supposed to have done $1,000 worth of work on Task A (BCWS). I have actually done $722.5 worth of work (EV). Thus, I am behind in my schedule by &277.5 worth of work (SV).

⑤ CIP=EV/ACWP=722.5/850=85%

Interpretation of CIP: I have done $722.5 worth of work (EV). It has cost me $850 to do so (ACWP). Each dollar I actually spent generated 85% worth of work (CPI).

⑥ SCI=EV/BCWS=$722.5/$1,000=72.25%

Interpretation of SCI: I have done $722.5 worth of work (EV). The value of work scheduled is $1,000 (BCWS). Each dollar of scheduled work generated 72.25% worth of work (SCI).

III, Quality Management1,Four Absolutes of Quality Management

(1)Quality is defined as “conformance to requirements”, not as “goodness” or “elegance”.

(2)The system for causing quality is “prevention” , not “appraisal or inspection or assessment etc”.

(3)The performance standard of quality must be “zero defects”, not “that’s close enough”.

(4)The measurement of quality is the detailed description, not indices.

① Variance---The variance is non-conformance to requirements.---The degree of the variance can be measured by determining the level of departure from required performance levels.②Control Chart

Upper Control Limit (UCL) Outlier ○10.5mm

○ ○ ○ ○ ○10.3mm

○ ○ ○ ○ ○ ○ ○10.3mm

Lower Control Limit (LCL) ③PDCAStep 1:Plan for quality (plan);Step 2: Implementation the plan (do);Step 3: Check to see how things are going (check);Step 4: Based on your “check” effort, adjust the process to improve performance (act). P A C D

IV, Procurement Management1, Procurement Planning

(1)Make-or-buy analysis

(2)Contract types and risks

①cost plus percentage of cost (CPPC);

②cost plus fixed fee (CPFF);

③cost plus incentive fee (CPIF);

④fixed price plus incentive fee (FPI);

⑤firm fixed price (FFP).

(3)Contract incentives

IV, Procurement Management2, Solicitation Planning

(1)Contract origination

(2)Evaluation criteria

3, Solicitation

4, Source selection

(1)Evaluation prospective contractors

(2)Contract negotiation

①Five steps;

②Negotiation tactics

IV, Procurement Management5, Contract Administration(1)Standard clauses(2)Elements of a legally enforceable contract(3)Changes and change control(4)Undifined work6, Contract Closeout(1)Organizing for contract management①Centralized contract②Decentralized contract(2)Privity contract(3)Foreign currency exchange

Part Five Other Management The communication management is the special

skills to solve problems in sociological approach, which can be the cheapest way to carry out it.

The human resource management is the most important sector within the project management, because the every thing has to be carried out by people.

The risk exists everywhere, which has to be controlled or at least minimized.

I, Communication Management1,Communication Model(1)Active listening(2)Feedback2, Communication Channels3,Types of Communication(1)Formal and informal(2)Verbal and written4, Communication Requirements5, Kickoff meeting6, Barriers to Communication: barriers lead to conflict7, Communication Role of Project: Project Manager & Customer8, Building Effective Team Communication(1)Be an effective communication(2)Be a communication expediter(3)Avoid communication blockers(4)Use a “tight matrix”(5)Have a project “war room”(6)Make meetings effective

II, Human Resource Management1, Forms of Organization 6, Team Building(1)Bureaucracy (1)Goal of project team building

(2)Project (2)Symptoms of poor teamwork(3)Matrix (3)Team building process2, Project Manager Role and Responsibilities 7, Motivation Theories(1)Functions (PLOC) (1)MASLOW’S Hierarchy of Needs(2)Roles (Owner, CEO, Implementer etc) (2)McGREGOR’S Theory X and Theory Y3, Types of Power (3)HERZHERG’S Theory of Motivation(1)Legitimate (4)Expectancy Theory(2)Corecive 8, Personnel Issues(3)Reward (1)Fringe Benefit(4)Expert (2)Perquisites(5)Refernt (3)Productivity4, Project Conflict (4)H.R. Functions (Training/TNA, Career planning, team building)(1)Conflict is unavoidable(2)Sopurces of conflict5, Conflict Management(1)Problem solving(2)Compromising(3)Wiyhdrawal(4)Forcing

III, Risk Management Every project manager understands risks are inherent in projects. In the context of projects,

risk is the chance that an undesirable event will occur and the consequences of all its possible outcomes.

1, Risk Management Flow-Chart

Risk

High

Low

Project life cycle

Cost

Chances of risks

occurring

Cost to fix risk event

Risk Event Graph

III, Risk Management2, Risk Management ProcessStep 1: Risk Identification One common mistake that is made early in the risk identification process is to focus on

consequences and not on the events that could produce consequences. The focus in the beginning should be on risks that can affect the whole project as opposed to a specific section of the project or network.

A risk profile is another tool that can help management teams identify and eventually analyze risks.

Step 2: Risk Assessment Assessing each risk in terms of: 1. The undesirable event. 2. All the outcomes of the event’s occurrence. 3. The magnitude or severity of the event’s impact. 4. Chances/probability of the event happening. 5. When the event might occur in the project. 6. Interaction with other parts of this or other projects. Documentation of scenario analyses can be seen in various risk assessment forms used

by companies.

Several techniques for risk assessing: ratio/range analysis, hybrid Several techniques for risk assessing: ratio/range analysis, hybrid analysis approaches, failure mode and effects analysis (FMEA), analysis approaches, failure mode and effects analysis (FMEA), probability analysis, scenario analysis: semi quantitative (this approach probability analysis, scenario analysis: semi quantitative (this approach uses time because most risk events are time dependent, impact project uses time because most risk events are time dependent, impact project delays, and are easily understood by risk team members).delays, and are easily understood by risk team members).

Step 3: Risk Response DevelopmentStep 3: Risk Response DevelopmentWhen a risk event is identified and assessed, a decision must be made When a risk event is identified and assessed, a decision must be made concerning which response is appropriate for the specific event. concerning which response is appropriate for the specific event. Responses to risk can be classified as mitigating (reduce the likelihood, Responses to risk can be classified as mitigating (reduce the likelihood, and/or reduce the adverse impact), transferring, sharing, and retaining. and/or reduce the adverse impact), transferring, sharing, and retaining. ①①Contingency PlanningContingency PlanningA contingency plan is an alternative plan that will be used if a possible A contingency plan is an alternative plan that will be used if a possible foreseen risk event becomes a reality. The contingency plan represents foreseen risk event becomes a reality. The contingency plan represents preventive actions that will reduce or mitigate the negative impact of the preventive actions that will reduce or mitigate the negative impact of the risk event. Like all plans, the contingency plan answers the questions of risk event. Like all plans, the contingency plan answers the questions of what, where, when, and how much action will take place.what, where, when, and how much action will take place.

②②Contingency FundingContingency FundingContingency funds are established to cover errors in estimates, omiContingency funds are established to cover errors in estimates, omissions, and uncertainties that may materialize as the project is implssions, and uncertainties that may materialize as the project is implemented. The size and amount of contingency reserves depends on emented. The size and amount of contingency reserves depends on “newness” of the project, inaccurate time and cost estimates, techni“newness” of the project, inaccurate time and cost estimates, technical problems, mirror changes in scope, and problems not anticipatecal problems, mirror changes in scope, and problems not anticipated. d. ---Budget reserves. These reserves are identified for specific work p---Budget reserves. These reserves are identified for specific work packages or segments of a project found in the baseline budget or woackages or segments of a project found in the baseline budget or work breakdown structure. Budget reserves are for identified risks thrk breakdown structure. Budget reserves are for identified risks that have a low chance of occurring (small design changes and time aat have a low chance of occurring (small design changes and time and cost estimate errors). nd cost estimate errors). ---Management reserves. These reserve funds are needed to cover ---Management reserves. These reserve funds are needed to cover major unforeseen and potential risks and, hence, are applied to the major unforeseen and potential risks and, hence, are applied to the total project. Management reserves are established after budget restotal project. Management reserves are established after budget reserves are identified and are controlled by the project manage and terves are identified and are controlled by the project manage and the “owner” of the project.he “owner” of the project.

Contingency Fund Estimate (Thousands of Dollars)

Budget Budget Project

Activity Baseline Reserve Budget

Design $500 $15 $515

Code 900 80 980

Test 20 2 22

Subtotal $1,420 $97 $1,517

Management reserve — — 50

Total $1,420 $97 $1,567

Step 4: Risk Response Control The last step in the risk management

process is risk control—executing the risk response strategy, monitoring triggering events, initiating contingency plans, and watching for new risks. Establishing a change management system to deal with events that require formal changes in the scope, budget, and/or schedule of the project is an essential element of risk control.

III, Risk Management3, Change Control Management A major element of the risk control process is

change management. Changes come from many sources such as the project customer, owner, project manager, team members, and occurrence of risk events. Most changes easily fall into three categories:

(1) Scope changes in the form of design or additions represent big changes.

(2) Implementation of contingency plans, when risk events occur, represent changes in baseline costs and schedules.

(3) Improvement changes suggested by project team members represent another category.

(4)Change control systems involve reporting,controlling, and recording changes to the project baseline. In practice most change control systems are designed to accomplish the following:

①Identify proposed changes.

②List expected effects of proposed changes on schedule and budget.

③Review, evaluate, and approve or disapprove changes formally.

④Negotiate and resolve conflicts of change, conditions, and cost.

⑤Communicate changes to parties affected.

⑥Assign responsibility for implementing change.

⑦Track all changes that are to be implemented.

Every approved change must be identified and reflected in the project WBS and baseline. Project control depends heavily on keeping the change control process current.

IV, Project Financing Management1, Financing Management(1)Financing Definition(2) 22 Types of Financing2, Project Financing(1)Limited Recourse(2)Non-Recourse3, Types of Project Financing①BOT Build—Operate—Transfer②BOOT Build—Own—Operate—Transfer③BOO Build—Own—Operate④BTO Build—Transfer—Operate⑤BODBuild—Operate—Deliver⑥BOR Build—Operate—Renewal of Concession⑦BRT Build—Rent—Transfer⑧BLT Build—Lease—Transfer

⑨BTBuild—Transfer Immediately⑩CAOContract—Add—Operate⑾DBFODesign—Build—Finance—Operate⑿DBOTDesign—Build—Operate—Transfer⒀DBOMDesign—Build—Operate—Maintain⒁DCMFDesign—Construct—Manage—Finance⒂DOTDevelop—Operate—Transfer⒃FBOOTFund—Build—Own—Operate—Transfer⒄ROORehabilitate—Own—Operate⒅ROTRehabilitate—Operate—Transfer⒆PPPPrivate—Public—Partnership⒇TOTTransfer—Operate—Transfer

ReferencesWang S.J. ed. (2000), Project Management, Kunming University of Science

& Technology

Wang S.J. (2001), Project Planning & Decision-Making, Yunnan Science & Technology Press

Wang S.J. (2001), Sustainable Management of Resources, Yunnan Science & Technology Press

Wang S.J. (2002), BOT Project Management—Guiding to Implementation, Yunnan Science & Technology Press

Wang S.J. (2003), BOT Project Management in Yunnan’s Tourism Development, Yunnan University Press

Wang S.J. (2005), TOT Project Management, Yunnan Science & Technology Press

Wang S.J. (2006), TOT Project Management on Sino—Vietnam Economic Cooperation, Yunnan Science & Technology Press

US Project Management Association, (2003), Project Management Body of Knowledge

Assignment Requirements1, Teamwork with 5—7 persons

2, The teamwork is mainly based on the case study of GMS countries, which documenting and documentation in the text book.

3, The teamwork results must be presented in the public, which takes 30% of the final examination.

4, The way to do the teamwork is participation, team discussion, knowledge and experience sharing and learning by doing.

Assignments1, ASSIGNMENT 1: Problem Analysis in Problem List

Form, which requires at least 12 problems in each case study in each team, and public presentation by PPT.

2, ASSIGNMENT 2: Establishing of Problem Tree, which requires the result must be presented in public presentation by PPT.

3, ASSIGNMENT 3: Establishing of Objective Tree and Project Design, which should be in public presentation by PPT.

4,ASSIGNMENT 4: Drawing-up the Project Plan and the findings should be in public presentation by PPT.

Documents

PROJECT PLANNING WANG SONG JIANG (Professor) MP:13033336177 E-mail: [email protected]