Topic 6 Planning and Network Scheduling Techniques

Topic 6: Planning and network scheduling Technique

Chapter 11 PLANNING

1. General Planning
2. Life-Cycle Phases and Milestones
3. Understanding Participants’ Roles
4. Establishing Project Objectives
5. Project Specifications
6. Data Item Milestone Schedules
7. Work Breakdown Structure
8. Project Selection
9. The Role of the Executive in Planning
10. Management Cost and Control System
11. Work Planning Authorization
12. Stopping Projects
13. Detailed Schedules and Charts
14. Master Production Scheduling
15. Project Plan
16. Management Control
17. Enterprise Project Management Methodologies
18. Project Audits

Chapter 12 NETWORK SCHEDULING TECHNIQUES

19. Network Fundamentals

20. Graphical Evaluation and Review Technique (GERT)
21. Network Replanning
22. Estimating
a. Activity Time
b. Total Project Time
23. PERT/CPM
a. Planning
b. Problem Areas
c. Alternatives
24. Scheduling Problems
25. Project Management Software

PLANNING

Introduction
 The project manager is the key to successful project planning.
 Project planning must be systematic, flexible enough to handle unique activities, disciplined through reviews and
controls, and capable of accepting multifunctional inputs.
 Decision-makers must understand that, over the life cycle of a project, circumstances can change requiring
modification of the requirements, shifting of priorities, and redefinition of the desired outcomes.
 Projects usually begin with the development of a business case for the project.
 A business case is a document that provides the reasoning why a project should be initiated. It must contain both
quantifiable and unquantifiable information that justifies the investment in the project.
 The assumptions included in the project’s business case are made by marketing and sales personnel and then
approved by senior management as part of the project selection and approval process. The expectations for the final
results are based upon the assumptions made.
 Assumptions made by the project manager are often surrounding the enterprise environmental factors and the
organizational process assets.
o Enterprise Environmental Factors: These are assumptions about external environmental conditions
that can affect the success of the project, such as interest rates, market conditions, changing customer
demands, and requirements, customer involvement, changes in technology, political climate, and even
government policies.
 o Organizational Process Assets: These are assumptions about present and future company assets
that can impact the success of the project, such as the capability of your project management
methodology, the project management information system, forms, templates, guidelines, checklists,
the ability to capture and use lessons learned data and best practices, resource availability, and skill
level.
 Project’s objectives provide an aim or desired end of the action. Objectives are described in specific terms,
are measurable, and are attainable and action-oriented, realistic, and bound by time.
 Clearly written objectives follow the SMART rule: Specific, Measurable, Attainable, Realistic or relevant,
Tangible or time-bound.

1. General Planning
Planning is determining what needs to be done, by whom, and by when, in order to fulfill one’s assigned
responsibility. There are nine major components of the planning phase:
1. Objective: a goal, target, or quota to be achieved by a certain time
2. Program: the strategy to be followed and major actions to be taken in order to achieve or exceed objectives
3. Schedule: plan showing when individual or group activities or accomplishments will be started and completed
4. Budget: planned expenditures required to achieve or exceed objectives
5. Forecast: a projection of what will happen by a certain time
6. Organization: design of the number and kinds of positions, along with corresponding duties and
responsibilities, required to achieve or exceed objectives
7. Policy: a general guide for decision making and individual actions
8. Procedure: a detailed method for carrying out a policy
9. Standard: a level of individual or group performance defined as adequate or acceptable

Factors to consider in planning:

a. Assumptions - Assumptions are items that are believed to be true, real, or certain. They are not grounded in
fact and carry some element of risk.
b. Forecasting - is customarily defined as either strategic, tactical, or operational. Strategic forecasting is
generally for five years or more, tactical can be for one to five years, and operational is the here and now of
six months to one year.
c. Project policies must often conform closely to company policies and are usually similar in nature from
project to project.
d. Procedures can be drastically different from project to project, even if the same activity is performed.
e. At the organizational or project level, standards must include:
o Recognition and resolution of group conflict on goals
o Assignment and acceptance of group responsibilities
o Increased motivation and commitment to organizational goals
o Vertical and lateral communications
o Coordination of activities between groups

Effective total program planning requires all of the necessary information to be available at project initiation.
These information requirements are:
o The statement of work (SOW)
o The project specifications
o The milestone schedule
o The work breakdown structure (WBS)

2. Life-Cycle Phases and Milestones

Project planning takes place at two levels: 1. corporate cultural approach; 2. individual’s approach.
The corporate cultural approach breaks the project down into life-cycle phases.
Benefits of life-cycle phases include monitoring, control, used for staffing deployment and
equipment/facility utilization, and also used to prepare project management policy and procedure manuals.
LIFE-CYCLE MILESTONES
Scope freeze milestones are locations in the project’s timeline where the scope is frozen and further scope changes
will not be allowed.

Design freeze milestone is a point in a project where no further changes to the design of the product came be made
without incurring a financial risk especially if the design must then go to manufacturing. The decision point for the
freeze usually occurs at the end of a specific life-cycle phase.

Customer Approval Milestones - life-cycle phases timeline milestones and the accompanying time durations for
customer approvals of the project’s schedule baseline with the mistaken belief that the approval process will happen
quickly.

3. UNDERSTANDING PARTICIPANTS’ ROLES

1) Project manager will define:
● Goals and objectives
● Major milestones
● Requirements
● Ground rules and assumptions
● Time, cost, and performance constraints
● Operating procedures
● Administrative policy
● Reporting requirements

2) Line manager will define:

● Detailed task descriptions to implement objectives, requirements, and milestones
● Detailed schedules and manpower allocations to support budget and schedule
● Identification of areas of risk, uncertainty, and conflict

3) Senior management (project sponsor) will:

● Act as the negotiator for disagreements between project and line management
● Provide clarification of critical issues
● Provide communication link with customer’s senior management
● Successful planning requires that project, line, and senior management are in agreement with the
plan.

4. ESTABLISHING PROJECT OBJECTIVES

Successful project management, whether in response to an in-house project or a customer request, must utilize
effective planning techniques. The first step is understanding the Project Objectives.
5. PROJECT SPECIFICATIONS
An abbreviated specification list is separately identified or called out as part of the statement of work (SOW).
Specifications are used for man-hour, equipment, and material estimates.
6. DATA ITEM MILESTONE SCHEDULES
Typical project milestone schedules contain such information as:

 Project start date

 Project end date
 Other major milestones
 Data items (deliverables or reports)

7. WORK BREAKDOWN STRUCTURE

A work breakdown structure (WBS) is a product-oriented family tree subdivision of the hardware, services, and
data required to produce the end product.
 The WBS is structured in accordance with the way the work will be performed and reflects the way in which
project costs and data will be summarized and eventually reported.

Preparation of the WBS also considers other areas that require structured data, such as scheduling, configuration
management, contract funding, and technical performance parameters.

WBS acts as a vehicle for breaking the work down into smaller elements, thus providing a greater probability that
every major and minor activity will be accounted for.

A work package is a low-level task or job assignment. It describes the work to be accomplished by a specific
performing organization or a group of cost centers and serves as a vehicle for monitoring and reporting the
progress of work. Work package descriptions must permit cost account managers and work package supervisors
to understand and clearly distinguish one work package effort from another.

The WBS is a communications tool providing detailed information to different levels of management.

Examples of WBS:

Simple work breakdown structure with the associated numbering system following the work breakdown. The first
number represents the total program (in this case, it is represented by 01), the second number represents the project,
and the third number identifies the task. Therefore, number 01–03–00 represents project 3 of program 01, whereas
01–03–02 represents task 2 of project 3.

WBS can be constructed as a “tree diagram” or according to the logic flow.

Three most common methods for structuring the WBS:
1. The flow method breaks the work down into systems and major subsystems. This method is well suited for
projects less than two years in length.
2. For longer projects, we use the life-cycle method, which is similar to the flow method.
3. The organization method is used for projects that may be repetitive or require very little integration between
functional units.

WBS dictionary
- provides a brief description of each element in the WBS, the name of the person or cost center responsible
for those elements such as in a responsibility assignment matrix, the element’s milestones, and the final
deliverable.
- identifies the cost associated with that element, the charge number to be used, and the required resources by
name or skill level.
- provides a detailed technical description of each element and cross-listing to other WBS elements, quality
requirements, and contractual documentation.
- cross-listed to the project’s work authorization form.
- supports the scope verification process.
- support communications between the project manager, project team, sponsor(s) and stakeholders regarding the content
and completion criteria for the project deliverables.

8. PROJECT SELECTION

There should be a valid reason for selecting the project.

Project selection process:
1. Feasibility study - to determine whether the project can be done. It validates that the project meets the
feasibility of cost, technological, safety, marketability, and ease of execution requirements.
2. Cost-benefit analysis - to see whether the company should do it.
9. THE ROLE OF THE EXECUTIVE IN PLANNING

 Executives are responsible for selecting the project manager.

 They must take an active role during project planning activities, especially if they also function as project
sponsors.
 They must set realistic milestones.
 They should interface with project and line personnel during the planning stage to define the requirements
and establish reasonable deadlines.

10. MANAGEMENT COST AND CONTROL SYSTEM (MCCS)

Phases of a management cost and control system:

1) Planning
2) Work authorization and release
3) Cost data collation and reporting
4) Cost accounting
5) Customer and reporting

The Planning cycle of management cost and control system:

1) Work breakdown structure
2) Work planning authorization
3) Master production schedule
4) Detailed schedule’
5) Program Plan
6) MCCS budget

11. WORK PLANNING AUTHORIZATION

 Work planning authorization releases funds (primarily for functional management) so that scheduling, costs,
budgets, and all other types of plans can be prepared prior to the release of operational cycle funds, which
hereafter shall be referred to simply as work authorization. This work authorization is identified as
a subdivided work description (SWD).

 The subdivided work description (SWD) specifies how the work will be performed, which functional
organizations will be involved, and who has what specific responsibilities, and authorizes the utilization of
resources within a given time period.

12. STOPPING PROJECTS

Nine reasons for stopping are:
1) Final achievement of the objectives
2) Poor initial planning and market prognosis
3) A better alternative is found
4) A change in the company interest and strategy
5) Allocated time is exceeded
6) Budgeted costs are exceeded
7) Key people leave the organization
8) Personal whims of management
9) Problem too complex for the resources available

Ways to stop the project are:

● Orderly planned termination
● The “hatchet” (withdrawal of funds and removal of personnel)
● Reassignment of people to higher priority tasks
● Redirection of efforts toward different objectives
● Burying it or letting it die on the vine (i.e., not taking any official action)

13. DETAILED SCHEDULES AND CHARTS

 Activity scheduling is probably the single most important tool for determining how company resources
should be integrated. Activity schedules are invaluable for projecting time-phased resource utilization
requirements, providing a basis for visually tracking performance and estimating costs.
 The schedules serve as master plans from which both the customer and management have an up-to-date
picture of operations.
  The primary objective is usually to coordinate activities to complete the project with the:
o Best time
o Least cost

14. MASTER PRODUCTION SCHEDULING

A master production schedule is a statement of what will be made, how many units will be made, and when they
will be made. It is a production plan. It directly ties together personnel, materials, equipment, and facilities,

15. PROJECT PLAN

 The project plan serves as a management guideline for the lifetime of the project and may be revised as
often as once a month, depending on the circumstances and the type of project (i.e., research and
development projects require more revisions to the project plan than manufacturing or construction
projects).
 The project plan must identify how the company resources will be integrated. The process is similar to the
sequence of events for schedule preparation.
 The project plan is a standard from which performance can be measured by the customer and the project
and functional managers.
 It contains a description of all phases of the project. It provides project direction.

16. MANAGEMENT CONTROL

Configuration management is a control technique, through an orderly process, for formal review and approval of
configuration changes.

Configuration management provides

 Appropriate levels of review and approval for changes
 Focal points for those seeking to make changes
 A single point of input to contracting representatives in the customer’s and contractor’s office for
approved changes

17. ENTERPRISE PROJECT MANAGEMENT METHODOLOGIES

Enterprise project management methodologies can enhance the project planning process and provide some degree of
standardization and consistency.
18. PROJECT AUDITS
Common audit types include:
 Performance audits: Used to appraise the progress and performance of a given project. The project manager,
project sponsor, or an executive steering committee can conduct this audit.
 Compliance audits: Usually performed by the project management office (PMO) to validate that the project
is using the project management methodology properly. Usually the PMO has the authority to perform the
audit but may not have the authority to enforce compliance.
 Quality audits: Ensure that the planned project quality is being met and that all laws and regulations are
being followed. The quality assurance group performs this audit.
 Exit audits: Usually for projects that are in trouble and may need to be terminated. Personnel external to the
project, such as an exit champion or an executive steering committee, conduct the audits.
 Best practices audits: Conducted at the end of each life-cycle phase or at the end of the project. Project
managers may not be the best individuals to perform the audit. Professional facilitators trained in conducting
best practices reviews are used.

19. NETWORK FUNDAMENTALS

Interdependencies are shown through the construction of networks. Network analysis can provide valuable
information for planning, integration of plans, time studies, scheduling, and resource management. The primary
purpose of network planning is to eliminate the need for crisis management by providing a pictorial representation of
the total program.

Networks are composed of events and activities.

 Event: Equivalent to a milestone indicating when an activity starts or finishes.
 Activity: The element of work that must be accomplished.
 Duration: The total time required to complete the activity.
 Effort: The amount of work that is actually performed within the duration. For example, the duration of
activity could be one month but the effort could be just a two-week period within the duration.
 Critical path: This is the longest path through the network and determines the duration of the project. It is
also the shortest amount of time necessary to accomplish the project.
 PERT is basically a management planning and control tool. It can be considered as a road map for a
particular program or project in which all of the major elements (events) have been completely identified,
together with their corresponding interrelations. PERT is Program Evaluation Review Technique
PERT uses three-time estimates (optimistic, most likely, and pessimistic to derive an expected time. CPM uses one
time estimate that represents the normal time (i.e., better estimate accuracy with CPM).

20. GRAPHICAL EVALUATION AND REVIEW TECHNIQUE (GERT)

Graphical evaluation and review techniques are similar to PERT but have the distinct advantages of allowing for
looping, branching, and multiple project end results.

21. NETWORK REPLANNING

PERT/CPM charts provide the framework from which detailed planning can be initiated and costs can be controlled
and tracked.
Two network replanning techniques based almost entirely upon resources: resource leveling and resource allocation.
1) Resource leveling is an attempt to eliminate the manpower peaks and valleys by smoothing out the period-to-period
resource requirements.
2) Resource allocation (also called resource-limited planning) is an attempt to find the shortest possible critical path
based upon the available or fixed resources.

22. ESTIMATING
a. Activity Time
Three possible completion assumptions:
1) Optimistic completion time: This time assumes that everything will go according to plan and with minimal
difficulties. This should occur approximately 1 percent of the time.
2) Pessimistic completion time: This time assumes that everything will not go according to plan and
maximum difficulties will develop. This should also occur approximately 1 percent of the time.
3) Most likely completion time: This is the time that, in the mind of the functional manager, would most often
occur should this effort be reported over and over again.
b. Total Project Time
In order to calculate the probability of completing the project on time, the standard deviations of each
activity must be known. This can be found from the expression:
 where σte is the standard deviation of the expected time, te. Another useful expression is the variance, υ, which
is the square of the standard deviation. The variance is primarily useful for comparison to the expected
values.
23. PERT/CPM
a. Planning
PERT scheduling is a six-step process.
Steps one and two begin with the project manager laying out a list of activities to be performed and then
placing these activities in order of precedence, thus identifying the interrelationships. These charts drawn by
the project manager are called either logic charts, arrow diagrams, workflow, or simply networks.
Step three is reviewing the arrow diagrams with the line managers (i.e., the true experts) in order to obtain
their assurance that neither too many nor too few activities are identified and that the interrelationships are
correct.
In step four the functional manager converts the arrow diagram to a PERT chart by identifying the time
duration for each activity. It should be noted here that the time estimates that the line managers provide are
based on the assumption of unlimited resources because the calendar dates have not yet been defined.
Step five is the first iteration on the critical path. It is here that the project manager looks at the critical
calendar dates in the definition of the project’s requirements. If the critical path does not satisfy the calendar
requirements, then the project manager must try to shorten the critical path using methods explained in
Section 12.3 or by asking the line managers to take the “fat” out of their estimates.
Step six is often the most overlooked step. Here the project manager places calendar dates on each event in
the PERT chart, thus converting from planning under unlimited resources to planning with limited resources.

b. Problem Areas
Many companies have a difficult time incorporating PERT systems because PERT is end-item oriented.
Many upper-level managers feel that the adoption of PERT/CPM removes a good part of their power and
ability to make decisions. This is particularly evident in companies that have been forced to accept
PERT/CPM as part of contractual requirements.
Cost control problems arise when the project cost and control system is not compatible with company
policies. Project-oriented costs may be meshed with non-PERT-controlled jobs in order to develop the
annual budget. This becomes a difficult chore for cost reporting, especially when each project may have its
own method for analyzing and controlling costs.

c. Alternatives
Companies began reconstructing PERT/time into PERT/cost and PERT/performance models.
PERT/cost is an extension of PERT/time and attempts to overcome the problems associated with the use of
the most optimistic and most pessimistic time for estimating completion.
PERT/cost can be regarded as a cost accounting network model based on the work breakdown structure and
capable of being subdivided down to the lowest elements, or work packages.
The advantages of PERT/cost are that it:
● Contains all the features of PERT/time
● Permits cost control at any WBS level

24. SCHEDULING PROBLEMS

 Using unrealistic estimates for effort and duration

 Inability to handle employee workload imbalances
 Having to share critical resources across several projects
 Overcommitted resources
 Continuous readjustments to the WBS primarily from scope changes
 Unforeseen bottlenecks
25. PROJECT MANAGEMENT SOFTWARE

Most packages offer the following features:

1. Planning, tracking, and monitoring. These features provide for planning and tracking the projects’ tasks,
resources, and costs. The data format for describing the project to the computer is usually based on standard
network typologies such as the CPM, PERT, or Precedence Diagram Method (PDM). Task elements, with
their estimated start and finish times, their assigned resources, and actual cost data, can be entered and
updated as the project progresses. The software provides an analysis of the data and documents the technical
and financial status of the project against its schedule and original plan. Usually, the software also provides
impact assessments of plan deviations and resource and schedule projections. Many systems also provide
resource leveling, a feature that averages out available resources to determine task duration and generates a
leveled schedule for comparison.
2. Reports. Project reporting is usually achieved via a menu-driven report writer system that allows the user
to request several standard reports in a standard format.

Assignment:

1. Should a PERT/CPM network become a means of understanding reports and schedules, or should it be vice versa?
Explain your answer.
2. Should PERT networks follow the work breakdown structure? Explain your answer.
3. Below are twelve instructions. Which are best described as planning, and which are best described as forecasting?
a. Give a complete definition of the work.
b. Lay out a proposed schedule.
c. Establish project milestones.
d. Determine the need for different resources.
e. Determine the skills required for each WBS task or element.
f. Change the scope of the effort and obtain new estimates.