Unit-3

Project Management:

1. It is a scientific way of planning, implementing monitoring and controlling the various

aspects of project such as time, money, material, manpower and other resources with the
intention of achieving the basic objectives or goals including technical, cost and time
schedule.

2. It also involves coordination of group activity where the manager plan, organize staff and
other resources, direct and control to execute the project within constraints of time, cost
and performance.

3. Project management is an 'investment of resources to produce goods and services for

consumption.

4. The elements of project management control included program objectives, policy

restrictions, resources constraints, government regulations, process implications, review of
outputs and revision of objectives.

B. Phases of Project Management:

1. The process of project management may be divided into six broad phases

Start Identification Formulation Appraisal

Management Implementation Selection

S.No. Phase Requirements
1. Selection of a project after sound scanning of the environment of investment
Identification opportunity and potential returns.
2. Translation of the project idea into a concrete project by analysis of
Formulation important parameters Preparation of feasibility report.
3. Analysis and evaluation of market, technology, financial and economic
Appraisal parameters break-even analysis, rate of return and profitability assessment.
4.
selection Project selection based on objectives and constraints.
5. Implementation Project completion within allotted resources.

6. Management Operation of enterprise with maximization of returns.

C. The Requirements of Various Phases:

The importance of project management is as follows:

1. Clear Project Plan and Process: The primary function of project management is to avoid
confusion by outlining a clear plan and a process from the beginning to the end.

2. To Establish Plan and Schedule: Having agreed on a project schedule, sticking to it

inculcates discipline required to avoid delays. A pre- deter determined process through the
project lifecycle gives the project a clear path.

3. Teamwork: People are made to work in a team on a project, due to the benefits that
accrue through sharing and knowledge of skills. It inspires team members to collaborate on
a project.

4. To Maximize Resources: Project risk management and project tracking with regular
reporting ensure economic and efficient use of all the resources.

5. To Keep Control of Costs: Based on the project scope, some projects may incur high
costs. So, it is essential to keep track of the budget Incorporating project management
strategies eases the budget overrun risks.

6. To Build on Knowledge: Project management serves as a asset to a company and helps to

build on both experience and knowledge.

7. To Manage Quality: It is crucial to ensure top-quality results Project management

identifies, controls, and manages standards. This result in a high-quality product/service and
a satisfied client.

8 Continuous Oversight: Project management methods ensure the Continuous gain control
over ongoing proved budget make sure the are on the right track and within the

Scope in Project Management:

1. In project management, scope is the defined features and functions of a product, or the
scope of work needed to finish a project.

2. Scope involves getting information required to start a project, including the features the
product needs to meet its owner's requirements.

3. Project scope is oriented towards the work required and methods needed, while product
scope is more oriented toward functional requirements.

4. If requirements are not completely defined and described and if there is no effective
change control in a project, scope or requirement, then result may not be favorable.

5. Scope management in a project includes:

i. Listing the items to be produced or tasks to be done.

ii Their required quantity, quality, and variety.

iii.The time and resources available and agreed upon.

iv. Modifying the variable constraints by dynamic flexible juggling in the event of changed
circumstances.

B. Work involved in project scope management are:

1. Planning scope management: A scope management plan is created based on input from
the project plan, the project charter, and consultation with stakeholders.

2. Collecting requirements: A requirements management plants created based on the scope

management plan plus stakeholder input Interviews, focus group discussions, surveys, etc.,
art used to understand requirements. This will all be documented.

3. Defining scope: A project scope statement is produced based on all the requirements
documentation plus the project charter and the scape management plan This definition will
be the basis for all project activity.

4. Creating the Work Breakdown Structure: A Work Breakdown Structure (WBS) is built
after analyzing the project scope statement and the requirements of documentation. The
WBS is basically the entire project broken down into individual tasks, and deliverables that
are clearly defined.

5. Validating scope: Here, deliverables are inspected and reviewed Either they are accepted
as complete or further revisions are requested.

6. Controlling scope: As the project is executed, scope must be controlled. Performance

reports are compared against project requirements to see where gaps exist, which may
result in changes to the project plan.

The roles of a project manager in a project are

1. Planning: A project manager is responsible for formulating a plan to meet the project's
objectives while adhering to an approved budget and timeline.

2. Leading: An essential part of any project manager's role is to assemble and lead the
project team. This requires excellent communication, people, and leadership skills, as well
as a keen eye for others' strengths and weaknesses.

3. Execution: The project manager participates in and supervises the successful execution of
each stage of the project. This requires frequent. open communication with the project
team members and stakeholders.
4. Time management: Staying on schedule is crucial to completing any project, and time
management is one of the key responsibilities of a project manager. Project managers
should be experts at risk management and planning.

5. Budget: Project managers devise a budget for a project and stick to it as closely as
possible. If certain parts of the project end up costing more than anticipated, project
managers moderate the spend and reallocate funds when necessary.

6. Documentation: A project manager must develop effective ways to measure and analyze
the project's progress. It's also a project manager's job to ensure that all relevant actions are
approved and that these documents will be available for future reference.

7. Maintenance: The work doesn't end once a project has been completed. There needs to
be a plan for ongoing maintenance and troubleshooting in the project.

Key Skills of Project Manager: A good project manager should have the following skills:

1. Planning and organizational skill,

2. Personnel management skill,

3. Communication skill,

4. Flexibility,

5. Problem solving capability,

6. High energy level,

7. Ability to take suggestion,

8. Ambition for achievement,

9. Ability to develop alternative options,

10. Knowledge of project management tool and technique,

11. Ability of self evaluation,

12. Capability to relate present events to project management, and

13. Entrepreneurial skills, initiative and risk taking ability

Project Life Cycle:

1. The sequence of phases through which the project will evolve is known as project life
cycle.
2. In simple words, a project life cycle is basically defined by its phases. according to which a
project swims through and finally reaches to handover stage.

3. The phases in project life cycle are as

A. Phase 1: Start up/Conceptualization of Project:

It contains the following keywords:

i. Purpose,

ii. Strategic fit,

iii. Objective,

iv. Scope,

v. Terms of reference,

vi. Draft schedule.

B. Phase 2: Planning of Project Activities and Resources:

It contains following keywords:

i. Scope,

ii. Select team members,

iii. Plan delivery,

iv. Quality plan,

V Baseline schedule,

vi. Baseline budget,

vi. Risk analysis,

viii. Issue register,

ix. Approvals, and

x. Communication plan

C. Phase 3: Execution of Project:

i. It contains following keywords

ii. Production of key deliverables,

iii. Monitor/control,

iii. Quality management,

iv. Cost management,

V Risk management,

vi. Issue resolution, and

vii. Change control reporting.

D. Phase 4: Termination of Project:

It contains following keywords:

i Contract close out,

ii. Team feedback,

iii. Recommendation for further action, and

iv. Post implementation review.

4. The level of activity required during project life cycle will vary with time
5. This can be illustrated by project life cycle curve as shown in Fig. 3.81
Amount/
man-hour
Spent

Phase-I Phase-II Phase-III Phase-IV

6. The level of activity is relatively low during the early phases, increases through the
implementation stage where the major volume of work is done.

7. This pattern is shown as a group of cumulative expenditure against time in Fig. 3.8.2.

Importance of project life cycle is as follows

i. Structure a Project:

Better structuring of a project helps in better monitoring and better results. With a project
life cycle, one can divide the project into several stages, making the structure easier to
understand and monitor

ii. Better Communication:

With the better structuring and planning of a project, the project life cycle helps in better
communication between employees and management. The employees know in advance
which tasks to perform on which date and when to complete them.

iii. Helps in Tracking Progress:

Finalization of schedule and cost, the project life cycle helps evaluate how competitive
project work has been going with planning and where the pace is required or cost-cutting is
essential.

iv. Helps in Better Project Management:

The project life cycle has great importance in terms of managing a project. It helps in
managing the project time, cost, resources, and efforts of employees. With the use of the
project life cycle, each aspect of a project is identified and planned initially, which helps
strategize each sub-task at a low cost.
v. Helps in Cost Controlling:

The project life cycle holds great importance as it makes sure that the project is completed
as strategized by the management that helps in cost controlling as the project is completed
within the decided resources.

vi. Better results:

The project life cycle is of great importance for project management and better project
results. The life cycle has been used widely for project planning and completing a project
because of its colossal significance.

Project Appraisal

1. Project appraisal is a process of detailed examination of several aspects of a given project

before recommending of same projects.

2. Project appraisal is a scientific tool and follows a specific pattern

3. The group who has promote the project, has to satisfy in all respect before taking step
ahead in the starting of project.

4. The group or institution has to ensure that investment on the proposed project will
generate sufficient return on the investment made and that loan amount disbursed for the
implementation of the project will be recovered along with interest within a reasonable
period of time.

5. The various factors considered for project appraisal are shown in Fig. 3.10.1 and include
technical, financial, commercial, economic ecological, social and managerial aspects.
6. The main stages of the system of project appraisal are given in Table 3.10.1.
Steps Aspects Process of Security
1. Economic Indicates priority use.

2. Technical Involves scale of the project and the process adopted.

3. Organizational Suitability is examined.

4. Managerial Adequacy and competence are critically scrutinized.

5. Operational Capacity of the project.

6. Financial Determines the financial viability for sound implementation and

efficient operation

7.Different factors are not independent but are highly interrelated

8. The methods of analysis may vary from project to project

9. Certain common aspects of study from the point of view of engineering and technology
are given below:

i Selection of technical process and appropriate technology

ii. Technical know-how and collaboration made, if any

iii. Size and scale of operation.

iv. Location advantages and availability of infrastructure facilities.

V. Selection of plant and machinery along with qualifications and capabilities of the supplies.

vi. Details of plant layout and factory buildings.

vii. Technical engineering services including power, water, etc.

vii. Project design and network analysis for project implementation schedule.

ix. Design of effluent disposal system and utilization of by products.

x. Project cost and comparison with similar projects regarding technology, product mix,
time spread and machinery.

The project appraisal is done due to following reasons:

1. For selecting the best project;

2. To assess projects credit-worthiness,

3. To assess the profitability of the project,

4 To assess the probable cost and benefit;

5. To assess the requirements of raw material,

6. To assess the fixed and working capital,

7. To anticipate a possible market of the product,

8. To assess the management's competence,

9 To find out whether the various factors of production are available.

10. For the fulfillment of social objectives such as employment generation. development of
backward areas, etc.

Market Appraisal:

1 The market appraisal deals with the market for the promotion of a product or services.

2 The main idea of a project is to produce same product or service and introduce it in
market for earning a profit

3. The success of any product depends upon the question as to whether the product and
service offered by the project is successful commercially

4. Market appraisal of a product is done studying the commercial successfulness of the

product or service offered by the project from the following angles:

a. Demand for the product,

b. Supply position for the product.
C Distribution channels,
d. Pricing of the product, and
e Government policies

6. Market appraisal consists of two aspects

a. Market opportunity for the product expressed in terms of demand forecast and market
shares
b. Marketing strategy and marketing process is the design of blue print consisting of a set of
inputs including product quality, price. design, agency discounts distribution
network/channels, packaging. etc

7 Market analysis should cover the following

a. Analysis of market opportunity and specifying marketing objectives.
b. Planning the process of marketing the product
C. Organization of the marketing process.
d. Control of the implementation of the marketing plan and taking corrective action when
the actual results deviate from the estimates or expectations

Technical Appraisal:

1. Technical Appraisal is the technical review to ascertain that the project is sound with
respect to various parameters such as technology, plant capacity, raw material availability,
location, manpower availability, etc

2. Technical appraisal is important as

i. It ensures that the project is technically feasible - all the inputs required to set up the
project are available.
ii. It facilitates the optimal project formulations in terms of capacity technology, location,
technology, size, etc on.

3. Usually, technical appraisal is carried out by independent agencies carrying out technical
studies or by the institution by their in-house technical experts.

4. Aspects of Technical Appraisal:

I. Manufacturing Process/Technology
II. Technical Arrangements
III. Material Inputs and Utilities
IV. Product Mix
V. Plant Capacity
VI. Location and site
VII. Machineries and Equipments
VIII. Structures and Civil Works
IX. Environmental Aspects

I. Manufacturing Process/Technology: Often two or more alternative technologies

available. The choice of technology is influenced by a variety of considerations plant
capacity, principal units, investment outlay production cost, use by other up product mix,
latest developments, and ease of absorption.

II. Technical Arrangements: Having a good technical collaborator or good consultant is very
important
IL Material Inputs and Utilities: It categorized into

I. Raw materials
II. Processed industrial material and components
III. Auxiliary materials and factory supplies
IV. Utilities
III. Material Inputs and Utilities: It categorized into

I. Raw materials
II. Processed industrial material and components
III. Auxiliary materials and factory supplies
IV. Utilities

IV. Product Mix: It is important for the unit to have flexibility to alter its product mix to
survive in changing market conditionxil

V. Plant Capacity: Number of units or volume that can be produced during a given period

VI. Location and site: Location should be close to sources of raw material or to the
consumption markets. Power should be available cost effectivel cheap, uninterrupted.

Water availability is also crucial. Accessibility by transportation is also important.

VII. Machineries and Equipments: Smooth flow of production can be achieved if the various
stages are matched well. External consultants must be employed for proper selection of
machineries and equipments

VIII.Structures and Civil Works: It comprise of

i. Site preparation & development

ii. Buildings and structures
iii.Outdoor works

IX. Environmental Aspects: Polluting units should be set-up in approved industrial zones
and where permission from Pollution Control Board is easily available. Effluent Treatment
Plants (ETPs) should be available to neutralize the output waste.