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In major or critical projects, the minimal set of

choices from the menu is specified by corporate staff (the definition of a "major" or "critical" project is a part of the PM&C procedure). For "routine" projects, the choice from the menu is left to the project manager.

choices from the menu is specified by corporate staff (the definition of a "major" or "critical" project is a part of the PM&C procedure). For "routine" projects, the choice from the menu is left to the project manager.

In the PM&C plan, items 6 and 7, Schedule and Resource Allocation, were combined into one section for reasons which will be described as part of the detailed discussions of the individual sections which follow.

Introduction

In this PM&C system, the Introducton is an executive summary, with emphasis on the justification of the project. This can be seen from the PM&C Program Introduction shown in Figure 3. It is to the advantage of everyone concerned with a project to be fully aware of the reasons for its existence. It is as important to the technicians as it is to the engineers or the corporate financial department. When the project staff clearly comprehends the reason for the project's existence it is much easier to enlist and maintain their support and wholehearted efforts. In the Heublein PM&C system, it is expected that the introduction section of a project plan will include answers to these questions: What type of project is involved? What is the cost-benefit relationship? What are the contingency plans? Why is it being done this way (that is, why were alternatives rejected)? Figure 3 not only illustrates this approach, but is the executive summary for the Heublein PM&C system.

Objectives

Both anecdotal and research inputs have established the importance of clearly stated objectives: von Clauswitz' "Principles of the Objective: A clearly defined, attainable goal" (On War, the Modern library, 1943), holds for projects in business. Goals for a project at Heublein must be stated in terms of deliverable items. To so state a project objective forces the definition of a clear, comprehensible, measurable and tangible objective. Often, deliverable items resulting from a project are documents. In constructing a residence, is the deliverable item "the house" or is it "the certificate of occupancy "? In the planning stages of a project (which can occur during the project as well as at the beginning), asking this question is as important as getting the answer. Also, defining the project in terms of the deliverables tends to reduce the number of items which are forgotten. Thus, the Heublein PM&C concept of objectives can be seen to be similar to a "statement of work" and is not meant to encompass specifications (detailed descriptions of the attributes of a deliverable item) which can be included as appendices to the objectives of the project.

Figure 4 shows the objectives stated for the Heublein PM&C program. It illustrates one of the principles set for objective statement: that they be hierarchically structured, starting with general statements

External and internal factors make it urgent to ensure most efficient use of capital funds. Implementation of a project management and control ("PM&C") system has been chosen as one way to improve the use of capital funds. In March 1979, the Corporate Management Committee defined this need.

Subsequently, Corporate Facilities and Manufacturing Planning performed a feasibility study on this subject. A major conclusion of the study was to develop the system internally rather than use a "canned" system. An internally developed system can be tailored to the individual Groups, giving flexibility which is felt to be essential to success. Another conclusion of the study was to involve Group engineering managers in the design and implementation of the system for better understanding and acceptance.

This is the detailed plan for the design and implementation of a corporate-wide PM&C System. The short term target of the system is major capital projects; the long term target is other types of projects, such as new product development and R&D projects. The schedule and cost are: Completion Date: lune 1980. Cost: $200,000, of which $60,000 is out of pocket.

Figure 3: Introduction to PM&C program project plan.

General Objetives

1. Enable better communication between Group and Corporate management with regard to the progress of major projects.

2. Enable Group management to more closely monitor the progress of major projects.

3. Provide the capability for Group personnel to better manage and control major projects. Specific Objectives"

1. Reporting and Control System

• For communication of project activity within Group and between Group and Corporate.

• Initially for high-cost capital projects, then for "critical," then all others.

2. Procedures Manual

• Document procedures and policies.

- • Preliminary manual available by October 20, 1979, for use in general educational seminars.

3. Computer Support Systems

• Survey with recommendations to establish need for and value of computer support.

4. General Educational Package

• Provide basic project planning and control skills to personnel directly involved in project management, to be conducted by academic authority in field.

• Technical seminars in construction, engineering, contract administration, and financial aspects of project management.

"Defined at the luly 1979 PM&C Workshop, attended by representatives of Operating Groups. Figure 4: Objectives of PM&C program.

and moving to increasingly more detailed particular statements. When both particular and general objectives are defined, it is imperative that there be a logical connection; the particular must be in support of the general. Ambiguity and confusion at this point is not unusual and where they exist, they are a source of considerable conflict among client, project management, and staff,

A project (the PM&C Program) satisfying the broadly expressed needs of the Introduction (Figure 3) 's more precisely defined in Figure 4. Here we see first that the primary thrust of this system is General Objectives item number 3, to provide Group personnel w'th the ability to do their jobs better. We believe it is "nportant that these general objectives, which were set in a Corporate Management Committee meeting, are not concerned with assigning blame or setting the «age for tighter corporate control, but are in fact posi-tlve ioals which not only answer desires of Corporate ar>d Group management, but also resolve issues often raised by the operational level personnel.

The specific objectives follow the general objec-es in Figure 4, which is largely in accord with our own standards for expression of specific objectives in terms of deliverables. It is now apparent that this could have been carried further; but the success of the program supports the view that these objectives were good enough for their purpose.

Project Structure

Having a definition of deliverables, the project manager needs explicit structuring of the project to:

Relate the specific objectives to the general. Define the elements which comprise the deliverables.

Define the activities which yield the elements and deliverables as their output. Show the hierarchical relationship among objectives, elements, and activities.

The WBS is the tool used to meet these needs. While the WBS may be represented in either indentured (textual) or tree (graphical) formats, the graphic tree format has the advantage of easy comprehension

Work Breakdown Structure

HEUBLEIN PM&C PROGRAM 1000 Program Plan 2000 PM&C System

2100 Design-Phase Reports

2101 Analyze Project Scope

2102 Define Performance Reports

2103 Define Project Planning

2104 Define Revision Procedure

2105 Define Approval/Signoff Procedure

2106 Define Opening/Closing Procedure

2107 Define Authority/Responsibility Procedure

2108 Define Record-keeping Requirements

2109 Define Estimating Requirements

2110 Define Reporting and Control System

2111 Determine Accounting Support Capabilities

2112 Define Estimating Procedures

2113 Define Record-keeping Procedures

2114 Prepare Organization Impact Analysis (Include Ongoing training)

2115 Define Policy Requirements

2116 Define Public Relations Policy

2117 Define Legal Policies—Environmental, OSHA, EEO, Government Agencies, Land Use

2118 Define Personal Liability Policy

2119 Define Financial Policy—Capital Expense, Cash Flow

2120 Define Purchasing Policy—Contracts vs PO, Contractor Qualification, $ Approvals

2121 Define Record Retention Policy

2122 Define Computer Support Systems Requirements 2200 Procedures Manual

2201 Preliminary Manual

2202 Final Manual

2300 Reporting and Control System 2400 Computer Support Survey

2401 PERT/CPM

2402 Scheduling

2403 Accounting

3000 General Training

3100 Project Planning and Control Seminar

3101 Objective Setting

3102 WBS

3103 Networks

3104 Scheduling

3105 Cost Estimating

3106 Record Keeping

3107 Control

3200 Technical Seminars

3201 Construction Engineering

3202 Contract Administration

3203 Financial Aspects 3300 Ongoing Training

Figure 5: Project structure.

at all levels. The tree version of the WBS also has the considerable advantage that entries may be made in the nodes ("boxes") to indicate charge account numbers, accountable staff, etc.

Figure 5 is the WBS for the PM&C Program, showing the nature of the WBS in general and the structure of the PM&C Program project in particular. At this point we can identify the component elements and the activities necessary to achieve them. A hierarchical numbering system was applied to the elements of the WBS, which is always a convenience. The 22 Design Phase Reports (2100 series in Figure 5) speak for themselves, but it is important to note that this WBS is the original WBS: All of these reports, analyses, and determinations were defined prior to starting the program and there were no requirements for additional items. In this area, there was no change of scope problem because the cooperation of all involved functions was obtained at the start of the program. The breadth of the definition task for this company, which does not contract or subcontract to public agencies (with their own special requirements), gives some idea of the considerations that must be taken into account when setting up a PM&C System. The rest of the WBS is self-explanatory and it is hoped that it can serve as a starting point for others wishing to implement similar programs.

Project Costs

The WBS provides a listing of the tasks to be performed to achieve the project objectives; with only the WBS in hand it is possible to assemble a preliminary project estimate. The estimates based only on the WBS are preliminary because they reflect not only uncertainty (which varies considerably among types of projects), but because the allocation of resources to meet schedule difficulties cannot be determined until both the network and the schedule and resource evaluations have been completed. However, at this time the project planner can begin to hierarchically assemble costs for use at any level. First the lowest level activities of work (sometimes called "work packages") can be assigned values. These estimates can be aggregated in accordance with the WBS tree structure to give higher level totals. At the root of the tree there is only one element—the project—and the total preliminary estimated cost is available.

Figure 6 shows the costs as summarized for the PM&c program plan. This example is supplied to give •he reader an idea of the nature of the costs to be ex pected in carrying out such a PM&C program in this type of situation. Since a project-oriented cost accounting system does not exist, out-of-pocket costs are the only incremental charges. Any organization wishing to cost a similar PM&C program will have to do so within the framework of the organizational approach to costing indirect labor. As a guide to such costs, it should be noted that in the Heublein PM&C Program, over 80 percent of the costs—both out-of-pocket and indirect—were in connection with the General Training (WBS code 3000).

Seminars were limited to two and two-and-a-half days to assure that the attendees perceived the educational process as efficient, tight, and not unduly interfering with their work, it was felt that it was much better to have them leaving with a feeling that they would have liked more rather than the opposite. Knowing the number of attendees, it is possible to determine the labor-days devoted to travel and seminar attendance; consultant/lecturer's fees can be obtained (expect preparation costs) and the incidentals (travel expenses, subsistence, printing, etc.) are easily estimated.

Network

The PM&C system at Heublein requires networks only for major projects, but encourages their use for all projects. The project manager is allowed the choice of whatever type of network (activity-on-node or event-on-node) he or she prefers to use. For this reason, all educational activities provided instruction in both types of network.

Figure 7 shows a segment of the network for the PM&C Plan. All the usual principles of network cre-

Labor costs

Development & Design

$ 40,000

Attendees' time in sessions

60,000

Startup time of PM&C in Group

40,000

Basic Educational Package

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Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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