Project Management

It is a specialized branch of
management capable of
differentiation from others based on
a variety of factors which includes
the organization structure, the
process of planning and control,
human relation
 References
Project management- Harold
Kerzner
Project Management – Vasant Desai
Quantatitive Techniques in
Management- N.D. Vohra
Project Management – Prasanna
Chandra
Project Management – K Nagrajan
 Project is accomplished by
performing a set of activities
Character sticks of Project
Objectives
Life cycle
Definite time limit
Uniqueness
Team work
Complexity
Sub-contracting
Risk & Uncertainity
Character sticks of Project
Customer Specific nature
Change
Response to environment
Forecasting
Rational choice
Principle of succession
Optimality
Control mechanism
Multidisciplinary
Conflicts
Parts of Large Program
 Attributes of good Project
manager
Planning & organizational skills
Personal Mgmt skills
Communication skills
Change orientation
Ability to solve problems in totality
High energy levels
Ambition for achievement
Ability to take suggestion
 Taxonomy of Projects
Activity- industrial , non-industrial
Location – national , international
Project Completion Time – normal, crash
Ownership – private sector, public, joint sector
Size – small , medium , large
Need
– New Project
– Balancing Project
– Expansion Project
– Modernization Project
– Replacement Project
– Diversification project
– Backward Integration project
– Forward Integration Project
 Government Regulator
Major role in industrial development
Individual entrepreneurs search for
profitable ventures and function
according to government framework
Lays down industrial priorities for
country development
Adopts Industrial licensing policy to
control new investments in such
areas where growth has attained
stauration
Fiscal Policy – influence economic
activity of country through the
medium of budget. Govt presents
details of public revenue and
expenditure.
Monetary policy – concerned with
qty of money and its regulations. RBI
regulates the volume of money and
its main objective is to control
inflation and deflation
Other regulatory measures
Industrial licensing
Control over capital issues
Control over foreign exchange
Export promotion and import controls
Control over monopolies and
restrictive trade practices
Control over pricing and distribution
of commodities
Phases of a Project Mgmt
Identification

Formulation

Appraisal

Selection

Implementation

Management
 Project Identification
Performance of existing industries
Availability of raw material
Availability of skilled labor
Import / export statistics
Price trend
Data from various sources
Research laboratories
Consumption abroad
Plan outlays & govt. guidelines
Analysis of economic and social trends
Reviving sick units
 Project Formulation
Pre Feasibility study
Functional studies- mkt study , raw
material , project location, plant size,
equipment selection
Feasibility study
– Technical
– Economic
– Commercial
– financial
Detailed Project Analysis (DPR)
 Detailed Project Analysis
(DPR) the project promoter’s
It is a report to formally communicate
decision of venturing a new project to financial institutions for
their perusal and to government departments for getting their
approvals
– General info
– Background and experience of project promoters
– Details of proposed project
– Schedule of implementation
– Project cost
– Means of financing project
– Working capital requirements
– Marketing and selling arrangements
– Profitability and cash flow estimates
– Mode of repayment of term loan
– Govt approvals
– Collateral security
 Feasibility Report
Market Analysis
– Consumption trends in the past and present
consumption level.
– Past and present supply position.
– Production possibilities and constraints.
– Imports and exports
– Structure of competition
– Cost structure
– Elasticity of demand
– Consumer behavior
– Distribution channels and marketing policies
– Administrative, technical and legal constraints
 Technical Analysis
Preliminary tests and studies
Availability of raw materials
Selected scale of operation is optimal
Production process chosen is suitable
Machinery is appropriate
Supplementary engineering work to be
provided
Proposed layout of site and bldg
Work schedules to be realistically drawn
Appropriate technology
 Financial Analysis
Investment outlay and cost of project
Means of financing
Cost of capital
Projected profitability
Break even point
Cash flows of the project
Investment worthwhileness
Projected financial position
Level of risk
Social Profitability Analysis
(Economic Analysis)
Economic cost and benefit of project
Impact of project on distribution of
income in society
Impact of project on the level of
savings and investment in the
society
Contribution towards self-sufficiency,
employment and social order
 Ecological Analysis
Environmental damage
Restoration measures
 Criteria for selecting a
particular Project
☀ Investment Size
☀ Location
☀ Technology
☀ Equipment
☀ Marketing
 Importance of Project
Identification
Economic Development
Employment and Income generation
Substantial Financial Outlays
Basic Infrastructure and
Environment
 Establishing the Project
Initiating
Planning
Organizing
Executing
Directing and Controlling
 Skills required of a project
Manager
Leadership skills
Team Building Skills
Conflict Resolution Skills
Technical skills
Managerial skills

Organizing Human
Resource
 Project Control
Cost
Time
Quality / technical performance
Examples of control systems
 Work breakdown structure
 Bar chart
 Program progress chart
 Monthly status reports
 Earned value analysis
 Pert cost system
 PERT CPM networks
 Network Simulations