Project Engineering

Chapter : One
1.1 Definition of Project , its characteristics and example of project
1.2 Classification of Project
1.3 Project Objectives and Goal
1.4 Project Life Cycle Phases
1.5 Project Environment
1.6 Introduction to Project Management
Contd.

 Chapter Two: Project Appraisal & Project Formulation

 Chapter Three:Project Planning and Scheduling
 Chapter Four:Project Implementation and Controlling
 Chapter Five: Project Risk Analysis and Management
 Chapter Six: Introduction to Project Finance
 FM 100 (80/20), Final Exam: Time 3 Hrs.
 Internal Assessment: 20 Marks
 1.1 Definiton of Project, its characteristics and
example of project

Definition of Project
 A project is a series of tasks that need to be completed in order to reach a
specific outcome. A project can also be defined as a set of inputs and outputs
required to achieve a particular goal. Projects can range from simple to complex
and can be managed by one person or a hundred.
By Clealand and king
 “Project is a combination of human and non-human resources pulled together
into a temporary organization to achieve a specific purpose.”
The Project Management Institute in USA(PMI) defines project as “A one shot, time
limited, goal directed, major undertaking, requiring the commitment of varied skills
and resources. It is combination of human and non-human resources polled together
in a temporary organization to achieve a specific purpose.”
Project Definition Cont.
 A project is a time bound activity designed to achieve a specific goal through planning, control and
temporary organization to create a product or service by overcoming time and resource constraints.
The success of a project depends on sound planning , clearly defined objectives , judicious utilization
of resources, logical coordination of activities and effective implementation , periodic comparisons of
planned and actual performance and taking corrective steps to ensure timely completion.
 A project is a temporary task undertaken to create a unique product , service or result. A project is
temporary in that it has a defined beginning and end in time, and therefore defined scope
and resources
 Simply project may be defined as planned setup interrelated task to be executed over a fixed
period and within cost, resources and other limitations.
 A project
 is a unique task
 is designed to attain a specific result
 requires a variety of resources (Human and Nonhuman)
 is limited in time
 Uncertain (Risk associated)
 one time job (Temporary)
Model of a Project

Time

Environment Environment

Objectives

Cost Quality

Figure: Model of a Project

Characteristics of Project
1) A defined (specific) goal or objectives: SMART
2) Temporary organization (Definite beginning and end)
3) Constraints (Time , Cost , Quality and Limited set of resources)
4) Unique (No Two projects are similar in all aspects)
5) Specific task, not routinely performed
6) Team work
7) Rapid expenditure
8) Risk and uncertainties
9) Planning and control (Compare with actual performed and targeted)
10)Defined deliverables
11)Contracting and sub-contracting
Deliverable
 A deliverable is a tangible or intangible good or service produced as a result of a project that
is intended to be delivered to a customer. A deliverable could be a report, a document, a
software product, a server upgrade or any other building block of an overall
project. Wikipedia
Components of Deliverable
 Engineering report/Proposal
 Design drawings/Design documents
 Completed product (building, bridge, etc.)
 Tender document
 New equipment or tools
 Service report
 Improved process efficiency
 Better customer service
 Marketing study
 Product prototype etc.
Example of Project

 Developing a new product or service

 Constructing a factory building or infrastructure
(Road/Irrigation/Hydropower/Fast Track/Airport)
 Implementing a new business/factory, process or procedure
 R&D
 Writing a book, thesis etc.
 Developing or acquiring a new or modified information system (3G to 4G)
 Replacement of old machine to new/Modify existing
 Maintenance of major equipment/Plant
1.2 Classification of Project
 Project can be classified on the basis of followings
1.0 Source of Investment
Private Sector Project Grant Project
Government Sector Project
a. 2.0 Size and Scal
Loan Project

2.0 Size and Scale

Mega Project > Several Yrs. Major Project Upto 5Yrs/> $1 Million
Large Investment > $ 1 Billion (Need EIA) (Needs to do EIA)
Medium Project Less Than 5 yrs./IEE Small Project Less than 1 Yrs
3.0 Orientation

Product Oriented Project

Service Oriented Project

Classification of Project Cont.
4.0 Nature
Simple Project Complex Project
Innovative Project Emergency Project
5.0 Time Frame Project
Normal Project Crash Project
6.0 Source Funding Project
Joint Venture Project Bilateral project
Multilateral Project
7.0 Functions
Disaster Prevention Project Development Project
Service Project Environment Friendly Project
8.0 Use of Technology
Labour Intensive Project Capital Intensive Project
Add Others ……………..
Classification of Project Cont.
9.0 Measurements
Quantifiable Noncouantifiable
Innovative Project Emergency Project
10.0 Sectoral Project
Normal Project Irrigation & Power Sector
Industry & Mining sector Transport & Communication Sector

11.0 Based On need

New Project Balancing Project
Expansion Project Modernization Project
Replacement Project
12. Based on Location International Project
National Project

Add Others ……………..

 Joint Venture Project:
o This project is funded through collaboration of foreign and local investors. They involve
transferring of capital, technology, management. They are based on the ownership sharing.
Example: Maruti Suzuki, Everest bank (JV with bank of Punjab) etc.
 Bilateral Project:
o This project is funded from the financial resources of a friendly donor country, generally
through grants under an agreement. Example : JICA, KOICA, GTZ etc.
o Funding from both donor and government.
 Multilateral project :
o Funding from multi donors and government
o This project is funded from the financial resources of multilateral agencies such as world
bank and Asian development bank. They are generally funded through loans.
o However subsidy and grant are also provided by these agencies. All UN Agencies are also
multilateral (eg. UNDP, DFDP).
Comparison between labor intensive and
capital intensive projects
 Labor Intensive Project
 Specially semi-skilled and unskilled manpower
 to generate maximum employment opportunities to all categories of
people in society
 to bring social equality and justice by equal distribution of income in
society
 Suitable for high availability of manpower, cheap manpower, low
capital, low technology
 Advantages & Disadvantages of Labour Intensive Project
Suitable for
M/C or automatic tech. not available area/Low Budget
Higher Unemployment rate with low labor cost region
Advantage Disadvantage
It provides high employment opportunities. It gives less priority to technology innovation and
(Unemployment Problem is solved) development due to labor based project.
It helps to maintain economic stability, It is time consuming that lengthens the project life
Social Peace and positive attitude towards cycle.
project
It ensures optimum utilization of scarce It is unable to handle complexities
resources.
Its impact on environment is low. It lacks improved and advanced skills.
Low Economic Growth Rate
It requires less capital and use indigenous Production Cost Increase
technology.
It also reduces [Link] $ Uniformity lacks in production (Quality)
 Advantages & Disadvantages of Capital Intensive Project
Suitable for: High level capital Investment
Highly Automated / Long Term Investment
High Skilled Manpower/Mass Production/Profit Motive
Project
Advantage Disadvantage

Increase Productivity May Create Unemployment

More profit in long term Required Large Investment/Depreciation

Technology Transfer Unsuitable for small project

Uniformity in Production Adverse Effect on Environment

Production Cost Decreases Ignores human factors.

Project Completed on time Unequal distribution of income in society.

 1.3 Project Objective & Goals

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Project Objective and Goal
 Goals and objectives are statements that describe what the project
will accomplish, or the business value the project will achieve.
 Goals are high level statements that provide overall context for
what the project is trying to achieve, and should align to business
goals.
 Objectives are lower level statements that describe the specific,
tangible products and deliverables that the project will deliver.
 The definition of goals and objectives is more of an art than a
science, and it can be difficult to define them and align them
correctly.
SMART Goals/Objectives

 S: Specific, clearly defined, not vague.

 M: Measurable, so that the project achievement can be measured, compared
and controlled.
 A: Agree, by all the members of the team. Agreed goals raise the sense and
commitment.
 R: Realistic considering the given possible resources, experience, knowledge
and time available.
 T: Time bound, if there is no time to complete the process it will never be
completed.
Goals Objectives

Goals are the final result or outcome of Objectives are specific results that help
the project to achieve the final goal
It is what you want to achieve (Long It is how you are going to achieve the
term) goal (Short time frame)
A series of smaller steps, often along
the way to achieve a long term goal
Broader than objectives More Specific (Subgoals)

Purpose of action: Strategy (Large Certain task achieved by objectves

Purpose)
Goals are general intensions towards Objectives are precise actions for
the attainment of something accomplishment of a specific task
(Desired Outcomes) (Completing Certain Task)
Example ????? Example ?????

See class note

Project Manager
 A Project Manager is a person who has the overall responsibility for the
successful initiation, planning, design, execution, monitoring, controlling and
closure of a project. A project manager is a person who is responsible for
making decisions, both large and small.
 The Project Manager serves as a single responsibility centre to achieve project
objective within the constraint of time, cost and quality. His action “Make or
Break” the project. He occupies a focal position in project management. He
assumes total responsibility and accountability for the project from inception to
completion.
 A Project Manager must manage key project stockholders, customers,
contractors, consultant, suppliers, government, labour unions , competitors and
financers.
What to Manage
 Time Time
 Cost
 Quality

Cost Quality
What a PM Should Know?
 What the priorities are?
 What authority he has?
 Opportunity and facilities to do the job.
 Feedback- to know how he is getting in.
 What extent of guidance and support from the superiors?
 Recognition for good program.
 Skill requirements of PM
1. Technical Skills:
 Understanding of the technology involved.
 Evaluation of technical concepts and solutions.
 Communication in technical terms.
 Assessment of technical risks , trends and innovations.

2. Managerial Skills
 Planning and control skills.
 Organization skills.
 Decision making skills.
 Human resource management skills
 Leadership skills.
3. Human relation skills
 Communication skills.
 Motivation skills.
 Negotiation and bargaining skills.
 Conflict management skills.

4. Conceptual skills
 They are able to relate the project to environmental forces.
 The project manager should have vision , foresight , judgement and intuition.

5. Team building skills

 They are able to integrate people from many disciplines and departments into
an effectives team
Roles of PM
1. Diplomatic
 Maintain better relationship between project and environment.
 Ensure political support.
 Tackle new threats, if any.
 Have high level of sensitivity.
 Good negotiating skills.
2. Chief Executive
 Responsible for all action of project personnel
 Make things happen by active intervention (Involvement)
 Make changes if necessary
 Coordinate the team
 Coordinating and allocating resources
Roles of PM

6.0 Leader
 Authority & influence
 Define ethics, norms and values of he team
 Motivating Capacity
 Drive- be a leader
 Team Spirit- team work
Responsibility Of Project Manager
Responsibility is the obligation to perform duties and carry out tasks, It flows from
authority. It cannot be delegated. The specific responsibilities consists of:
i. Defining and maintaining project integrity
ii. Selecting the project team
iii. Identifying and managing stakeholders
iv. Planning the project implementation
v. Project organization
vi. Project implementation
vii. Project control and progress tracking
viii. Financial Management
ix. Change & conflict Management
Few Important Tips for PM

 Money Makes things possible, people make things happen

 We are not looking for fire-fighting managers. We need managers to
prevent fire
 If you want every thing, You may get nothing
 If you don't know where you have to go, any road will lead you there
 Those who have no place and work in the project should not be in the
project.
 Being a project manager, don't overly defensive, keep yourself cool,
conceal your frustrations.
Why do Projects Fail
 Poor project and program management discipline
 Lack of executive – level support
 Wrong team members
 Poor Communication
 No measures for evaluating the success of project
 No risk Management
 Inability to manage change
 Political Influence
 Natural Calamities condition
1.4 Project Life Cycle Phases
[Link]
on/[Link]
 Project Life Cycle Phases

Initiation Phase

Termination Phase Planning Phase

Implementation Phase Engineering & Design Phase

 Initiation Phase
 Document Outlining The project in details
 Goal Created
 Project Feasibility Report
 Project Manager and Team Assign
 Deliverables
 Planning Phase
 Review the project scope & Revised the Scope if any
 Project Decomposition (WBS)
 Organization Breakdown Structure
 Resource allocation
 Project Schedule & Budget
 Perform Risk Assessment
 Finalize the project Plan
 Engineering & Design Phase
 Preliminary Design : Emphasis on Civil, Mechanical , Arch. Design, Time , Cost , Quality, Test
 Final Design
 Detailed Drawing/Component
 Accurate Estimation
 Accurate Scheduling
 Define Material/Eqpt.
 Manpower Specifications

 Implementation Phase
 Project Team Used all the resources
 Change Paper work to Physical Environment
 Manage Quality Control on Works
 Monitoring the Project Risk

 Termination or closing phase

 Support Settlement of open claims
 Prepare final presentation/Test (To satisfy Customer)
 Get final acceptance of final results
 Handover the project to the customer/Client
 Release Resource
 Close all the project accounts and carryout the final project calculation
Project Risk & Resources On Diff. Phases

 Risk Resources

Start End
Initiation Planning Engineering Design. Implementation Termination
1.5 Project Environment

 Project encounters difficulty during implementation. Project should

continually perform and adapt a rapidly changing environment.
Environment consists of forces that influences project’s performance in
achieving objectives. Environmental influences on project’s
performance may be complexity, uncertainty, competition for resources,
flexibility, and rapid technological changes.
 Project Environment can be classified as:
1. Internal Environment
2. Task Environment (Stakeholders)
3. External Environment
Project Environment
Project Environment classification:

Internal Environment Task Environment External Environment

Project Objectives Client: Investor Political Environment
Constraints Contractor Legal Environment
Structure Consultants Economic Environment
Resources Suppliers Social Environment
Government Pressure Groups
Financers Cultural Environment
Competitors Technological Environment

Labour Unions R&D

Project Engineering Class IV
BME
2078/09/07
Er. Rajesh Bhattarai
 1.6 Project Management Introduction
“Project management is the application of knowledge, skills, tools,
and techniques to project activities to achieve project requirements.
Project management is accomplished through the application and
integration of the project management processes of initiating,
planning, executing, monitoring and controlling, and closing.” —
PMBOK® Guide
According to Harold Kerzner : Project Management is the
planning, organizing, directing and controlling of company
resources for a relatively short objective that has been established
to complete specific goals and objectives.
PM is designed to manage or control company resources on a given
activity/task, within cost, within time and within performance and
with good customer relations.
Key Objectives of Project Management
 Any project must meet several objectives in order to be considered
successful. Each objective is made up of many concerns or constraints that
must be addressed. PM should have a document that has all of the details of
each concern spelled out.
Objective Document Concerns/Constraints
Quality requirements Specifications (TOR) Definition of end product
Form, fit & function
Deadlines (Time limits) Project Schedule Must Complete by…
Must Start by………
Cannot Start before…..
Cost limits Project Budget We can only spend…..
Bring it under….
Your minimum profit margin is….
High levels of Team Project Charter/Team We understand the purpose
Commitment Commitment Each person’s role is clear
Mutual respect and trust
Self motivated
The Main characteristics of Project
Management are
 Objectives-oriented
 Change-oriented
 Single responsibility center
 Multi-disciplined
 Functional coordination
 Planning and Control
 Constraint
[Link]
Chapter One: Tutorial
1. Define a project and classify it? What do you mean by temporary
team/organization of a project?
2. Write the characteristics of a project. Explain the life cycle phases of a project.
3. What do you mean by Project Development life cycle? Explain how you set
goals in a project by giving example of one goal and verifying the same with
the criteria of goal setting.
4. Define project Management. Explain SMART objectives with examples.
5. What are the essential interpersonal and managerial skills to be a successful
manager?
6. Differentiate between labor intensive and capital intensive projects with
example.
7. Differentiate between Bilateral, Multilateral and Joint Venture project with
example. Discuss the project environment in which a project is operated.
Thank You