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LESSON 18
PROJECT PLANNING (CONTD.)
Broad Contents
Sorting Out Projects
Objectives and Reasons of Project Planning
Policies, Procedures and Standards in Projects
18.1
Sorting Out Project:
As we move into consideration of details of project, we need to know exactly what is to be done, by
whom, and when. All activities required to complete project must be precisely delineated and
coordinated. Necessary resources must be available when and where they are needed, and in correct
amounts. Some activities must be done sequentially, but some may be done simultaneously. If large
project is to come in on time and within cost, great many things must happen when and how they are
supposed to happen. In this section, we propose conceptually simple method to assist in sorting out and
planning all this detail.
To accomplish any specified project, several major activities must be completed. First, list them in
general order in which they would normally occur. Reasonable number of major activities might be
anywhere between two and 20. Break each of these major activities in two to 20 subtasks. There is
noting sacred about these limits. Two is minimum possible breakdown and 20 is about largest number
of interrelated items that can be comfortably sorted and scheduled at given level of task aggregation.
Second, preparing network from this information is much more difficult if number of activities is
significantly greater than 20.
It is important to be sure that all items in list are at roughly same level of task generality. In writing
book, for example, various chapters tend to be at same level of generality, but individual chapters are
divided into finer detail. Indeed, subdivisions of chapter may be divided into finer detail still. It is
difficult to overstate significance of this simple dictum. It is central to preparation of most of planning
documents that will be described in this chapter and those that follow.
Some times problem arises because some managers tend to think of outcomes (event) when planning
and other think of specific tasks (activities). Many mix two. Problem is to develop list of both activities
and outcomes that represents exhaustive, non-redundant set of results to be accomplished (outcomes)
and work to be done (avidities) in order to complete project.
Procedure proposed here is hierarchical planning system. First, goals must be specified. This will aid
planner in identifying set of required activities for goals to be met, project action plan. Each activity has
outcome (event) associated with it, and these activities and events can be decomposed into sub-activities
and sub-events, which may, in turn, be subdivided again. Project plan is set of these action plans.
Advantage of project pan is that it contains all planning information in one document.
Assume, for example, that we have project whose purpose is to acquire and install large machining
center in existing plant. In hierarchy of work to be accomplished for installation part of project, we
might find such tasks as "Develop plan for preparation of floor site" and "Develop plan to maintain
plant output during installation and test period". These tasks are two of larger set of jobs to be done.
Task " . . . preparation of floor site" is subdivided into its elemental parts, including such items as "get
specifics on machine center mounting points". "Check construction specification on plant floor" and
"Present final plan for floor preparation for approval".
Short digression is in order before continuing this discussion on action plans. Actual form action plan
takes is not sacrosanct. In some cases, for example, amounts of specific resources required may not be
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relevant. On others, "due dates" may be substituted for activity durations. Appearance of action plans
differs in different organizations, and may even differ between departments or division of same
organization (though standardization of format is usual, and probably desirable in any given firm). In
some plans, numbers are used to identify activities; in others, letters. In still others, combinations of
letters and numbers used.
Tree diagram can be used to represent hierarchical plan. Professor Andrew Vazsonyi has called this type
of diagram Gozinto Chart after famous Italian mathematician, Professor Zepartzat, Gozinto, of
Vazsonyi's invention (Readers familiar with Bill of Materials in Materials Requirements Planning
(MRP) ­ system will recognize parallel to nested hierarchical planning).
Objective: Career Day
Steps
Responsibility
Time (Weeks) Prec.
Resources
1. Contact Organizations
a. Print forms
Secretary
6
-
b. Contact organizations
Program Manager
15
1. A
c. Collect display information
Office Manager
4
1. B
d. Gather college particulars
Secretary
4
1. B
e. Print programs
Secretary
6
1. D
f. Print participants' certificates Graduate Assistant
8
-
Objective: Career Day
Steps
Responsibility
Time (Weeks)
Prec.
Resources
2.
Banquet
and
Refreshments
a. Select guest speaker
Program Manager
14
-
b. Organize food
Program Manager
3
1. b
Caterer
c. Organize liquor
Director
10
1. b
Dept
of
Liquor
Control
d. Organize refreshment Graduate Assistant
7
1. b
Purchasing
Objective: Career Day
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Steps
Responsibility
Time (Weeks) Prec.
Resources
3. Publicity and Promotion
a. Send invitations
Graduate Assistant
2
-
World processing
b. Organize gift certificates
Graduate Assistant
5.5
-
c. Arrange banners
Graduate Assistant
5
1. d
Print shop
d. Contact faculty
Program Manager
1.5
1. d
Word processing
e. Advertise in college paper
Secretary
5
1. d
Newspaper
f. Class announcements
Graduate Assistant
1
3. d
Registrar's office
g. Organize posters
Secretary
4.5
1. d
Print shop
Objective: Career Day
Steps
Responsibility
Time (Weeks) Prec.
Resources
4. Facilities
a. Arrange facility for event
Program Manager
2.5
1. c
b. Transport materials
Office Manager
.5
4. a
Movers
Table 18.1: Partial Action Plan for College "Career Day"
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Level
00089
Toy bus
0
10003
10002
Level
10189
Case
Packing
1
Toy bus
Level
20003
20289
2
Bus box
Toy bus
30089
30077
Wheel/a
Body
Level
3
Level
400337
50317
40050
40039
4
Plastic
Plastic
Axle
Wheel
50317
50702
Level
Plastic
Plastic
5
Figure 18.1: Gozinto Chart for Toy Bus
Important of careful planning can scarcely be overemphasized. Slevin developed list of ten
factors that should be associated with success in implementation projects. Factors split into
strategic and tactical clusters. Of interest here are strategic factors:
Project Mission:
It is important to spell out clearly defined and agreed-upon goals in beginning of project.
Top Management Support:
It is necessary for top managers to get behind project at outset and make clear to all
personnel involved that they support successful completion.
Project Schedule or Plan:
Detailed plan of required steps in implementation process needs to be developed, including
all resource requirements (money, raw materials, staff and so forth).
At this point, it might be helpful to sum up this section what description of how planning
process actually works in may organization. Assume that you as project manager have been
given responsibility for developing computer software required to transmit medical X-Ray
from one location to another over telephone line. There are several problems that must be
solved to accomplish this task. First X-Ray image must be translated into computer
language. Second, computerized image must be transmitted and received. Third, image
must be displayed (or printed) in way that makes it intelligible to person who must interpret
it. You have team of four programmers and couple of assistant programmers as signed to
you. You also have specialist in radiology assigned part-time as medical advisor.
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S#
Steps
Due Date
Responsible
Precedent
1.
Ajax management advised of changes
24/7
Bob, Van
-
2.
Begin preparing Instat sales dept to sell Ajax 24/7
Bob
1
consumer Division products effective 1/1/96
3.
Prepare to create two sales groups: (1) Instat (2) 1/8
Bob
1
Ajax Builder Group effective 1/1/96
4.
Advise Instat regional managers of sales division 1/8
Bob
2,3
changes
5.
Advise Ajax regional managers of sales division 1/8
Van
2,3
changes
6.
Visit Ajax management and plan to discuss merger 1/8
Smith
4,5
of operations
7.
Advise Ajax sales personnel and agents
14/8
Smith
6
8.
Visit Instat to coordinate changeover
26/8
Bob
6
Gerard
9.
Interview Ajax sales personnel for possible 30/8
Instat Regional
7
positions
Manager
Table 18.2: Tabular Action Plan for Ajax-Instat Merger
Your first action is to meet with programmers and medical advisor in order to arrive at technical
requirements for project. From these requirements, project mission statement and detailed
specifications will be derived. (Note that original statement of your "responsibility" is too vague
to act as acceptable mission statement). Team then develops basic actions needed to achieve
technical requirements for project. For example, one technical requirement would be to develop
method of measuring density of image at every point on X-Ray and to represent this
measurement as numerical input for computer. This is first level of project's action plan.
Responsibility for accomplishing first level tasks is delegated to project team members who are
asked to develop their own action plans for each of first level tasks. These are second level
action plans. Individual tasks listed in second level plans are then divided further into their level
action plans detailing how each second level task will be accomplished. Process continues until
lowest level tasks are perceived as "units" or "packages" of work.
18.2
Objectives and Reasons of Project Planning:
One of the objectives of project planning is to completely define all work required (possibly
through the development of a documented project plan) so that it will be readily identifiable to
each project participant. This is a necessity in a project environment because:
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If the task is well understood prior to being performed, much of the work can be
preplanned.
If the task is not understood, then during the actual task execution more knowledge is
gained that, in turn, leads to changes in resource allocations, schedules, and priorities.
The more uncertain the task, the greater the amount of information that must be processed
in order to ensure effective performance.
These considerations are important in a project environment because each project can be
different from the others, requiring a variety of different resources, but having to be performed
under time, cost, and performance constraints with little margin for error.
Without proper planning, programs and projects can start off "behind the eight ball" because of
poorly defined requirements during the initial planning phase.
There are four basic reasons for project planning:
To eliminate or reduce uncertainty
To improve efficiency of the operation
To obtain a better understanding of the objectives
To provide a basis for monitoring and controlling work
There are involuntary and voluntary reasons for planning. Involuntary reasons can be internally
mandatory functions of the organizational complexity and an organizational lag in response time; or
they can be externally correlated to environmental fluctuations, uncertainty, and discontinuity. The
voluntary reasons for planning are attempts to secure efficient and effective operations.
Planning is decision making based upon futurity. It is a continuous process of making
entrepreneurial decisions with an eye to the future, and methodically organizing the effort
needed to carry out these decisions. Furthermore, systematic planning allows an organization to
set goals. The alternative to systematic planning is decision making based on history. This
generally results in reactive management leading to crisis management, conflict management,
and fire fighting.
18.3
Policies, Procedures and Standards:
A policy is a deliberate plan of action to guide decisions and achieve rational outcome(s). The
term may apply to government, private sector organizations and groups, and individuals.
Presidential executive orders, corporate privacy policies, and parliamentary rules of order are all
examples of policy.
A procedure is a specification of series of actions, acts or operations, which have to be
executed in the same manner in order to always obtain the same result in the same
circumstances (for example, emergency procedures). Less precisely speaking, this word can
indicate a sequence of activities, tasks, steps, decisions, calculations and processes, that when
undertaken in the sequence laid down produces the described result, product or outcome. A
procedure usually induces a change.
Standards in the context related to technologies and industries, is the process of establishing a
technical specification, called a standard, among competing entities in a market, where this will
bring benefits without hurting competition. It can also be viewed as a mechanism for optimizing
economic use of scarce resources such as forests, which are threatened by paper manufacture.
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18.3.1 Categories of Planning:
Strategic Planning:
Strategic planning produces fundamental decisions and actions that shape and guide
what an organization is, what it does, and why it does it. It requires broad scale
information gathering, an exploration of alternatives, and an emphasis on the future
implications of present decisions. Top-level managers engage chiefly in strategic
planning or long range planning. They answer such questions as "What is the purpose
of this organization?" "What does this organization have to do in the future to remain
competitive?" Top-level managers clarify the mission of the organization and set its
goals. The output needed by top management for long range planning is summary
reports about finances, operations, and the external environment.
Tactical Plans:
Top-level managers set very general, long-term goals that require more than one year to
achieve. Examples of long-term goals include long-term growth, improved customer
service, and increased profitability. Middle managers interpret these goals and develop
tactical plans for their departments that can be accomplished within one year or less. In
order to develop tactical plans, middle management needs detail reports (financial,
operational, market, external environment). Tactical plans have shorter time frames and
narrower scopes than strategic plans. Tactical planning provides the specific ideas for
implementing the strategic plan. It is the process of making detailed decisions about
what to do, who will do it, and how to do it.
Operational Plans:
Supervisors implement operational plans that are short term and deal with the day-to-
day work of their team. Short-term goals are aligned with the long-term goals and can
be achieved within one year. Supervisors set standards, form schedules, secure
resources, and report progress. They need very detailed reports about operations,
personnel, materials, and equipment. The supervisor interprets higher management
plans as they apply to his or her unit. Thus, operational plans support tactical plans.
They are the supervisor's tools for executing daily, weekly, and monthly activities. An
example is a budget, which is a plan that shows how money will be spent over a certain
period of time. Other examples of planning by supervisors include scheduling the work
of employees and identifying needs for staff and resources to meet future changes.
Resources include employees, information, capital, facilities, machinery, equipment,
supplies, and finances. Operational plans include policies, procedures, methods, and
rules.
Policies, procedures, and standards vary from project to project due to the uniqueness
of every project. Every Project Manager can establish project policies, within broad
limits set by the top management.
Although project managers have the authority and responsibility to establish project
policies and procedures, they must fall within the general guidelines established by top
management. Guidelines can also be established for planning, scheduling, controlling,
and communications.
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Table of Contents:
  1. INTRODUCTION TO PROJECT MANAGEMENT:Broad Contents, Functions of Management
  2. CONCEPTS, DEFINITIONS AND NATURE OF PROJECTS:Why Projects are initiated?, Project Participants
  3. CONCEPTS OF PROJECT MANAGEMENT:THE PROJECT MANAGEMENT SYSTEM, Managerial Skills
  4. PROJECT MANAGEMENT METHODOLOGIES AND ORGANIZATIONAL STRUCTURES:Systems, Programs, and Projects
  5. PROJECT LIFE CYCLES:Conceptual Phase, Implementation Phase, Engineering Project
  6. THE PROJECT MANAGER:Team Building Skills, Conflict Resolution Skills, Organizing
  7. THE PROJECT MANAGER (CONTD.):Project Champions, Project Authority Breakdown
  8. PROJECT CONCEPTION AND PROJECT FEASIBILITY:Feasibility Analysis
  9. PROJECT FEASIBILITY (CONTD.):Scope of Feasibility Analysis, Project Impacts
  10. PROJECT FEASIBILITY (CONTD.):Operations and Production, Sales and Marketing
  11. PROJECT SELECTION:Modeling, The Operating Necessity, The Competitive Necessity
  12. PROJECT SELECTION (CONTD.):Payback Period, Internal Rate of Return (IRR)
  13. PROJECT PROPOSAL:Preparation for Future Proposal, Proposal Effort
  14. PROJECT PROPOSAL (CONTD.):Background on the Opportunity, Costs, Resources Required
  15. PROJECT PLANNING:Planning of Execution, Operations, Installation and Use
  16. PROJECT PLANNING (CONTD.):Outside Clients, Quality Control Planning
  17. PROJECT PLANNING (CONTD.):Elements of a Project Plan, Potential Problems
  18. PROJECT PLANNING (CONTD.):Sorting Out Project, Project Mission, Categories of Planning
  19. PROJECT PLANNING (CONTD.):Identifying Strategic Project Variables, Competitive Resources
  20. PROJECT PLANNING (CONTD.):Responsibilities of Key Players, Line manager will define
  21. PROJECT PLANNING (CONTD.):The Statement of Work (Sow)
  22. WORK BREAKDOWN STRUCTURE:Characteristics of Work Package
  23. WORK BREAKDOWN STRUCTURE:Why Do Plans Fail?
  24. SCHEDULES AND CHARTS:Master Production Scheduling, Program Plan
  25. TOTAL PROJECT PLANNING:Management Control, Project Fast-Tracking
  26. PROJECT SCOPE MANAGEMENT:Why is Scope Important?, Scope Management Plan
  27. PROJECT SCOPE MANAGEMENT:Project Scope Definition, Scope Change Control
  28. NETWORK SCHEDULING TECHNIQUES:Historical Evolution of Networks, Dummy Activities
  29. NETWORK SCHEDULING TECHNIQUES:Slack Time Calculation, Network Re-planning
  30. NETWORK SCHEDULING TECHNIQUES:Total PERT/CPM Planning, PERT/CPM Problem Areas
  31. PRICING AND ESTIMATION:GLOBAL PRICING STRATEGIES, TYPES OF ESTIMATES
  32. PRICING AND ESTIMATION (CONTD.):LABOR DISTRIBUTIONS, OVERHEAD RATES
  33. PRICING AND ESTIMATION (CONTD.):MATERIALS/SUPPORT COSTS, PRICING OUT THE WORK
  34. QUALITY IN PROJECT MANAGEMENT:Value-Based Perspective, Customer-Driven Quality
  35. QUALITY IN PROJECT MANAGEMENT (CONTD.):Total Quality Management
  36. PRINCIPLES OF TOTAL QUALITY:EMPOWERMENT, COST OF QUALITY
  37. CUSTOMER FOCUSED PROJECT MANAGEMENT:Threshold Attributes
  38. QUALITY IMPROVEMENT TOOLS:Data Tables, Identify the problem, Random method
  39. PROJECT EFFECTIVENESS THROUGH ENHANCED PRODUCTIVITY:Messages of Productivity, Productivity Improvement
  40. COST MANAGEMENT AND CONTROL IN PROJECTS:Project benefits, Understanding Control
  41. COST MANAGEMENT AND CONTROL IN PROJECTS:Variance, Depreciation
  42. PROJECT MANAGEMENT THROUGH LEADERSHIP:The Tasks of Leadership, The Job of a Leader
  43. COMMUNICATION IN THE PROJECT MANAGEMENT:Cost of Correspondence, CHANNEL
  44. PROJECT RISK MANAGEMENT:Components of Risk, Categories of Risk, Risk Planning
  45. PROJECT PROCUREMENT, CONTRACT MANAGEMENT, AND ETHICS IN PROJECT MANAGEMENT:Procurement Cycles