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Establishing An Enterprise and Project Management.pptx

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shrinivas kulkarni

The application of knowledge, skills, tools, and techniques to project objectives to meet stakeholder needs and expectations.

1 of 44
Establishing An Enterprise and Project Management Dr S V K
Project & Project Management  A temporary endeavor undertaken to create a unique product or service . Defined as scientifically evolved work plan devised to achieve a specific objective with the specified period of time.  The application of knowledge, skills, tools, and techniques to project objectives to meet stakeholder needs and expectations.
Characteristics and Features  Investment pattern.  Benefits of gains.  Location.  Objectives. Characteristic features  Life span.  Team work.  Interrelated.  Uniqueness.  Change.  Successive principles.  Made to order or customer specific.  Unity in diversity.  High levels of sub-contracting.  Risk and uncertainty.
Knowledge Areas  Scope Management  Time Management  Cost Management  Quality Management  Human Resources Management  Communications Management  Risk Management  Procurement Management  Integration Management
Project Classification 1. Quantifiable and Non-Quantifiable projects 2. Sector projects 3. Techno-economic projects 4. Financial institutions classification 5. Services projects
Project Classification  Quantifiable and Non-Quantifiable projects  Quantifiable projects are those in which a reasonable quantitative assessment of benefits can be made  Non-quantifiable projects are those where such an assessment not possible  Sector Projects  Agriculture Industry and mining  Transport  Social services  Techno-economic projects  Causation-oriented classification (RM based)  Factor intensity oriented classification (LLCO)  Magnitude oriented classification (Large /Small)  Financial Institutions classification  New projects  Expansion projects  Diversification projects  Services Projects  Welfare services  Service projects  Educational projects
Project Life Style Stages  Conception Stage or Project Identification  Idea germination  Project identification  Definition stage or project formulation :  In this stage the project will develop the idea generated during the conception stage. The areas examined in this stage are ( Eg ..cement plant) Raw materials, Plant size, Location, Technology, Project layout, Plant layout, Electrical works, Civil works, Utilities – fuel, power, Manpower Financial Implementation schedule  Planning and Organizing stage or project design :  Prepare project execution. Take necessary action for realization of project like, Project Infrastructure System design, Licensing, Identification of project manager  Implementation:  85% of the work done in this stage  Project Clean-up stage:  Drawing, documents, files, operation and maintenance manuals are catalogued and handed over to the customer Handing over
Project Management and Other Disciplines  Finance  HRM  Operations  Purchase and logistics  R & D  Marketing
Project Formulation  Defined as “ taking a first look carefully and critically at a project idea by an entrepreneur to build up an all round beneficial to project after carefully weighing its various components”
Phases of Project Formulation 1. Conception of an idea 2. Analysis of related aspects 3. Formulation of a project 4. Design of a project
Sequential Stages in Project Formulation  Feasibility study  Techno-economic analysis  Project Design and Network analysis  Input Analysis  Financial analysis  Social cost benefit analysis  Pre-investment analysis
Project Planning  Project Plan “Is a formal, approved document used to manage and control project execution”  Project Plan Development – Output of Planning processes in other knowledge areas:  Historic Information  Stakeholder skills and knowledge  Organizational Policies  Limitations and Assumptions  Project Planning Methodology  Project Plan  Project Scope  To whom the project is prepared  The target audience  The usefulness for the stakeholders  Project Planning Objectives  To satisfy the stakeholder  To show one’s expertise  To get the approval
Feasibility Study  A feasibility study is an analysis of the viability of an idea through a disciplined and documented process of thinking through the idea from its logical beginning to its logical end. A feasibility study provides an Investigating function that helps answer “Should we proceed with the proposed project idea? Is it a viable business venture?” A feasibility study should be conducted to determine the viability of an idea BEFORE proceeding with the development of a business.
Distinction between pre-feasibility study and Feasibility study Pre-Feasibility Study  No thoughts on the viability of the project from economic, social, technical, managerial, market and financial point of view Feasibility Study  Deeper knowledge on various feasibility, such as economic, social, technical, managerial, market and financial
Various Feasibility Studies 1. Socio-Economic Feasibility 2. Technical Feasibility 3. Managerial Feasibility 4. Market Feasibility 5. Financial Feasibility
Michael Porter: Aligning Strategy & Project Management  https://www.youtube.com/watch?v=CKcSzH1SvCk&list=WL &index=1
Feasibility Reports Presentation  A feasibility report provides primary economic information, financial data and technical details which serves as the basis for carrying out the project successfully. The feasibility report should cover the following important aspects all the feasibilities studies such as market, financial, economic, social etc…
Project Feasibility Report Checklist  Socio-Economic Feasibility  Technical Feasibility  Managerial Feasibility  Market Feasibility  Financial Feasibility  HR feasibility  Operational Feasibility
Sources of Finance  Short Term  Medium Term  Long Term  Bank credit  Trade credit  Installment credit  Customer advances  Issue of shares  Issue of debentures  Loans form banks and other financial institutions  Public deposits (For existing concerns)  Ploughing back of profits
Break Even Analysis  Break Even Analysis  Refers to determining the level of activity where total cost is equal to the total sale  Break even is a point of zero profit and zero loss  Utility of BE Analysis  It serves as the most useful and important managerial tool to study cost-output-relationship at varying levels of output  It is useful in reviewing pricing policies  It aids in planning capitalization of the enterprise  It provides the entrepreneur to decide whether to acquire or not assets involving additional fixed costs
Project Design  In project design, the entrepreneur is expected to design prototype & test them. Design is the new weapon and the key driver is innovation to fight out the competition. For design to become culturally embedded in an organization three forces have to be considered:  A deeper user understanding  Multiple prototyping  Strategic business design
Network Design  Network Design is a system which plans both large and small projects by analyzing the project activities. Projects are broken down into simple activities, which are then arranged in a logical sequence using network tools like PERT, CPM.
Establishing An Enterprise and Project Management.pptx
History of CPM/PERT  History of Critical Path Method (CPM)  E I Du Pont de Nemours & Co. (1957) for construction of new chemical plant and maintenance shut-down  Deterministic task times  Activity-on-node network construction  Repetitive nature of jobs  Project Evaluation and Review Technique (PERT)  U S Navy (1958) for the POLARIS missile program  Multiple task time estimates (probabilistic nature)  Activity-on-arrow network construction  Non-repetitive jobs (R & D work)
Project Network  Network analysis is the general name given to certain specific techniques which can be used for the planning, management and control of projects  Use of nodes and arrows  Arrows lead from tail to head directionally  Indicate ACTIVITY, a time consuming effort that is required to perform a part of the work.  A node is represented by a circle  Indicate EVENT, a point in time where one or more activities start and/or finish.
Activity & Event  Activity  A task or a certain amount of work required in the project  Requires time to complete  Represented by an arrow  Indicates only precedence relationships.  Event  Signals the beginning or ending of an activity  Designates a point in time  Represented by a circle (node)  Network Shows the sequential relationships among activities using nodes and arrows  Activity-on-node (AON) nodes represent activities, and arrows show precedence relationships  Activity-on-arrow (AOA) arrows represent activities and nodes are events for points in time
PERT Analysis  https://www.youtube.com/watch?v=V5FmgNCD5Rw
PERT  PERT is based on the assumption that an activity’s duration follows a probability distribution instead of being a single value  Three time estimates are required to compute the parameters of an activity’s duration distribution:  pessimistic time (t p ) - the time the activity would take if things did not go well  most likely time (t m ) - the consensus best estimate of the activity’s duration  optimistic time (t o ) - the time the activity would take if things did go well
Steps in PERT  Development of project network  Time estimation  Determination of critical path, event slacks and activity floats  Development of project schedule  Calculation of variability duration and the probability of completion in a given time
Network Diagram  Concepts • Activity • Precedence relationship • Successor • Event
Guidelines for network diagram 1. Before an activity can begin, its preceding activities must be completed. 2. Arrows indicate logical precedence. 3. Flow of the diagram is from left to right. 4. Arrows should not intersect. 5. Dangling should be avoided.
A Simple Project Activity Immediate Predecessor Expected Time A - 5 B - 6 C A 4 D A, B 2
Precedence Diagram
STEPS IN DETERMINING CRITICAL PATH • Specify the individual activities. • Determine the sequence of the activities. • Draw the network diagram. • Estimate the activity completion time. • Identify the critical path. • Update the CPM diagram.
Activit y Preceden ce Normal time (week) Normal Cost (Rs) A - 3 300 B A 3 30 C A 7 420 D A 9 720 E D 5 250 F B,C,E 6 320 G F 4 400 H F 13 780 I G 10 1000 Total 4220
1 8 7 6 3 5 4 2
Overhead cost as per the given data- Rs.50 Paths in the network diagram : A-D-F-G-I = 32 A-D-F-H = 31 A-C-F-H = 29 A-C-F-G-I = 30 A-B-E-F-H = 30 A-B-E-F-G-I = 31
Difference between CPM & PERT CPM PERT • CPM works with fixed deterministic time • PERT works with probabilistic time •CPM is useful for repetitive and non complex projects with a certain degree of time estimates. •PERT is useful for non repetitive and complex projects with uncertain time estimates. • CPM includes time-cost trade off. •PERT is restricted to time variable. • CPM- for construction projects. • PERT- used for R&D programs.
Location of an Enterprise  Location considerations for the establishment of manufacturing plants is critical to the operation of the setup in an uninterrupted and least resistant manner.  An ideal site is certainly contributes to the smooth and efficient functioning of an enterprise.
Steps in selection of Enterprise Location I. Selection of region II. Selection of the locality or Community III. Selection of the exact site; and IV. Selection of the optimum site
Factors to be consider in studying the location for an Enterprise  Location. . .  Deciding a suitable area/place, etc. where the plant/factory will start functioning.  It involves 2 major activities: 1. To select a proper Geographic region 2. Selecting the specific site within the region.
1. Nearness to raw materials 2. Transport Facilities 3. Nearness to Market 4. Availability of labour 5. Availability of Fuel and Power 6. Availability of Water 7. Climatic Conditions 8. Financial and other Aids
9. Land topography 10. Community attitude 11. Presence of related industries 12. Existence of Hospitals, Schools, Banks, Clubs, Post offices etc. 13. Local bye-laws, taxes, etc 14. Housing Facilities 15. Security 16. Facilities for Expansion
Thank you…

More Related Content

Establishing An Enterprise and Project Management.pptx

  • 1. Establishing An Enterprise and Project Management Dr S V K
  • 2. Project & Project Management  A temporary endeavor undertaken to create a unique product or service . Defined as scientifically evolved work plan devised to achieve a specific objective with the specified period of time.  The application of knowledge, skills, tools, and techniques to project objectives to meet stakeholder needs and expectations.
  • 3. Characteristics and Features  Investment pattern.  Benefits of gains.  Location.  Objectives. Characteristic features  Life span.  Team work.  Interrelated.  Uniqueness.  Change.  Successive principles.  Made to order or customer specific.  Unity in diversity.  High levels of sub-contracting.  Risk and uncertainty.
  • 4. Knowledge Areas  Scope Management  Time Management  Cost Management  Quality Management  Human Resources Management  Communications Management  Risk Management  Procurement Management  Integration Management
  • 5. Project Classification 1. Quantifiable and Non-Quantifiable projects 2. Sector projects 3. Techno-economic projects 4. Financial institutions classification 5. Services projects
  • 6. Project Classification  Quantifiable and Non-Quantifiable projects  Quantifiable projects are those in which a reasonable quantitative assessment of benefits can be made  Non-quantifiable projects are those where such an assessment not possible  Sector Projects  Agriculture Industry and mining  Transport  Social services  Techno-economic projects  Causation-oriented classification (RM based)  Factor intensity oriented classification (LLCO)  Magnitude oriented classification (Large /Small)  Financial Institutions classification  New projects  Expansion projects  Diversification projects  Services Projects  Welfare services  Service projects  Educational projects
  • 7. Project Life Style Stages  Conception Stage or Project Identification  Idea germination  Project identification  Definition stage or project formulation :  In this stage the project will develop the idea generated during the conception stage. The areas examined in this stage are ( Eg ..cement plant) Raw materials, Plant size, Location, Technology, Project layout, Plant layout, Electrical works, Civil works, Utilities – fuel, power, Manpower Financial Implementation schedule  Planning and Organizing stage or project design :  Prepare project execution. Take necessary action for realization of project like, Project Infrastructure System design, Licensing, Identification of project manager  Implementation:  85% of the work done in this stage  Project Clean-up stage:  Drawing, documents, files, operation and maintenance manuals are catalogued and handed over to the customer Handing over
  • 8. Project Management and Other Disciplines  Finance  HRM  Operations  Purchase and logistics  R & D  Marketing
  • 9. Project Formulation  Defined as “ taking a first look carefully and critically at a project idea by an entrepreneur to build up an all round beneficial to project after carefully weighing its various components”
  • 10. Phases of Project Formulation 1. Conception of an idea 2. Analysis of related aspects 3. Formulation of a project 4. Design of a project
  • 11. Sequential Stages in Project Formulation  Feasibility study  Techno-economic analysis  Project Design and Network analysis  Input Analysis  Financial analysis  Social cost benefit analysis  Pre-investment analysis
  • 12. Project Planning  Project Plan “Is a formal, approved document used to manage and control project execution”  Project Plan Development – Output of Planning processes in other knowledge areas:  Historic Information  Stakeholder skills and knowledge  Organizational Policies  Limitations and Assumptions  Project Planning Methodology  Project Plan  Project Scope  To whom the project is prepared  The target audience  The usefulness for the stakeholders  Project Planning Objectives  To satisfy the stakeholder  To show one’s expertise  To get the approval
  • 13. Feasibility Study  A feasibility study is an analysis of the viability of an idea through a disciplined and documented process of thinking through the idea from its logical beginning to its logical end. A feasibility study provides an Investigating function that helps answer “Should we proceed with the proposed project idea? Is it a viable business venture?” A feasibility study should be conducted to determine the viability of an idea BEFORE proceeding with the development of a business.
  • 14. Distinction between pre-feasibility study and Feasibility study Pre-Feasibility Study  No thoughts on the viability of the project from economic, social, technical, managerial, market and financial point of view Feasibility Study  Deeper knowledge on various feasibility, such as economic, social, technical, managerial, market and financial
  • 15. Various Feasibility Studies 1. Socio-Economic Feasibility 2. Technical Feasibility 3. Managerial Feasibility 4. Market Feasibility 5. Financial Feasibility
  • 16. Michael Porter: Aligning Strategy & Project Management  https://www.youtube.com/watch?v=CKcSzH1SvCk&list=WL &index=1
  • 17. Feasibility Reports Presentation  A feasibility report provides primary economic information, financial data and technical details which serves as the basis for carrying out the project successfully. The feasibility report should cover the following important aspects all the feasibilities studies such as market, financial, economic, social etc…
  • 18. Project Feasibility Report Checklist  Socio-Economic Feasibility  Technical Feasibility  Managerial Feasibility  Market Feasibility  Financial Feasibility  HR feasibility  Operational Feasibility
  • 19. Sources of Finance  Short Term  Medium Term  Long Term  Bank credit  Trade credit  Installment credit  Customer advances  Issue of shares  Issue of debentures  Loans form banks and other financial institutions  Public deposits (For existing concerns)  Ploughing back of profits
  • 20. Break Even Analysis  Break Even Analysis  Refers to determining the level of activity where total cost is equal to the total sale  Break even is a point of zero profit and zero loss  Utility of BE Analysis  It serves as the most useful and important managerial tool to study cost-output-relationship at varying levels of output  It is useful in reviewing pricing policies  It aids in planning capitalization of the enterprise  It provides the entrepreneur to decide whether to acquire or not assets involving additional fixed costs
  • 21. Project Design  In project design, the entrepreneur is expected to design prototype & test them. Design is the new weapon and the key driver is innovation to fight out the competition. For design to become culturally embedded in an organization three forces have to be considered:  A deeper user understanding  Multiple prototyping  Strategic business design
  • 22. Network Design  Network Design is a system which plans both large and small projects by analyzing the project activities. Projects are broken down into simple activities, which are then arranged in a logical sequence using network tools like PERT, CPM.
  • 24. History of CPM/PERT  History of Critical Path Method (CPM)  E I Du Pont de Nemours & Co. (1957) for construction of new chemical plant and maintenance shut-down  Deterministic task times  Activity-on-node network construction  Repetitive nature of jobs  Project Evaluation and Review Technique (PERT)  U S Navy (1958) for the POLARIS missile program  Multiple task time estimates (probabilistic nature)  Activity-on-arrow network construction  Non-repetitive jobs (R & D work)
  • 25. Project Network  Network analysis is the general name given to certain specific techniques which can be used for the planning, management and control of projects  Use of nodes and arrows  Arrows lead from tail to head directionally  Indicate ACTIVITY, a time consuming effort that is required to perform a part of the work.  A node is represented by a circle  Indicate EVENT, a point in time where one or more activities start and/or finish.
  • 26. Activity & Event  Activity  A task or a certain amount of work required in the project  Requires time to complete  Represented by an arrow  Indicates only precedence relationships.  Event  Signals the beginning or ending of an activity  Designates a point in time  Represented by a circle (node)  Network Shows the sequential relationships among activities using nodes and arrows  Activity-on-node (AON) nodes represent activities, and arrows show precedence relationships  Activity-on-arrow (AOA) arrows represent activities and nodes are events for points in time
  • 28. PERT  PERT is based on the assumption that an activity’s duration follows a probability distribution instead of being a single value  Three time estimates are required to compute the parameters of an activity’s duration distribution:  pessimistic time (t p ) - the time the activity would take if things did not go well  most likely time (t m ) - the consensus best estimate of the activity’s duration  optimistic time (t o ) - the time the activity would take if things did go well
  • 29. Steps in PERT  Development of project network  Time estimation  Determination of critical path, event slacks and activity floats  Development of project schedule  Calculation of variability duration and the probability of completion in a given time
  • 30. Network Diagram  Concepts • Activity • Precedence relationship • Successor • Event
  • 31. Guidelines for network diagram 1. Before an activity can begin, its preceding activities must be completed. 2. Arrows indicate logical precedence. 3. Flow of the diagram is from left to right. 4. Arrows should not intersect. 5. Dangling should be avoided.
  • 32. A Simple Project Activity Immediate Predecessor Expected Time A - 5 B - 6 C A 4 D A, B 2
  • 34. STEPS IN DETERMINING CRITICAL PATH • Specify the individual activities. • Determine the sequence of the activities. • Draw the network diagram. • Estimate the activity completion time. • Identify the critical path. • Update the CPM diagram.
  • 35. Activit y Preceden ce Normal time (week) Normal Cost (Rs) A - 3 300 B A 3 30 C A 7 420 D A 9 720 E D 5 250 F B,C,E 6 320 G F 4 400 H F 13 780 I G 10 1000 Total 4220
  • 37. Overhead cost as per the given data- Rs.50 Paths in the network diagram : A-D-F-G-I = 32 A-D-F-H = 31 A-C-F-H = 29 A-C-F-G-I = 30 A-B-E-F-H = 30 A-B-E-F-G-I = 31
  • 38. Difference between CPM & PERT CPM PERT • CPM works with fixed deterministic time • PERT works with probabilistic time •CPM is useful for repetitive and non complex projects with a certain degree of time estimates. •PERT is useful for non repetitive and complex projects with uncertain time estimates. • CPM includes time-cost trade off. •PERT is restricted to time variable. • CPM- for construction projects. • PERT- used for R&D programs.
  • 39. Location of an Enterprise  Location considerations for the establishment of manufacturing plants is critical to the operation of the setup in an uninterrupted and least resistant manner.  An ideal site is certainly contributes to the smooth and efficient functioning of an enterprise.
  • 40. Steps in selection of Enterprise Location I. Selection of region II. Selection of the locality or Community III. Selection of the exact site; and IV. Selection of the optimum site
  • 41. Factors to be consider in studying the location for an Enterprise  Location. . .  Deciding a suitable area/place, etc. where the plant/factory will start functioning.  It involves 2 major activities: 1. To select a proper Geographic region 2. Selecting the specific site within the region.
  • 42. 1. Nearness to raw materials 2. Transport Facilities 3. Nearness to Market 4. Availability of labour 5. Availability of Fuel and Power 6. Availability of Water 7. Climatic Conditions 8. Financial and other Aids
  • 43. 9. Land topography 10. Community attitude 11. Presence of related industries 12. Existence of Hospitals, Schools, Banks, Clubs, Post offices etc. 13. Local bye-laws, taxes, etc 14. Housing Facilities 15. Security 16. Facilities for Expansion

Editor's Notes

  1. https://www.slideshare.net/DrMahmoudAlNaimi1/aoa-and-aon-networks-69802018