Management

Fundamentals of Project Management

Introduction

This report highlights the fundamentals of project management by focusing on two different sections in which first section discusses case study of Katanga Bay and second section defines reflective essay. This section will help in describing the case study and that will support in developing a consultancy report related to project management. In first section, this study will help in understanding and developing a project management plan in a structure and efficient manner. In concern to it, the researcher focuses on identifying the risk assessment which company NPI is facing while managing a project plan (Hendriks, et al., 2016). In addition to it, project plan will be presented on the Gantt chart as this chart will reflect the overall time the project will take to complete.

Further, this study also helps researcher in developing an in-depth understanding and knowledge related to project case study with the help of histogram and human resource budget. The Histogram and HR budget help researcher in identifying the actual requirement of project team member in order to accomplish the project on time efficiently (Beringer, et al., 2013). The researcher also analyzed critically the key differences between two different approaches i.e., CPA- based management approach and critical chain approach that are adopted in the case scenario of Katanga Bay NGL.

In second section of this report, researcher will elaborate the overall learning and experience of his/her in reflective essay. However, this research study will help the researcher in understanding and analyzing the financial data and information related to investment of NPI in project plan.

Section A: Case Study of Katanga Bay

Background of the Case Study

Katanga Bay is a small undeveloped port, which is located in African country. This place is a new site of process plant for Natural Gas Liquids (NGL). The African government did not provide the understanding on how to build and operate the plant. The government wanted to continue this plant for a long time and also had a vision of sustaining the plant by using foreign capital with expertise. The government wanted that the plant provides long term benefits to their own general public. In this case, there was an opportunity for the government and several oil companies (Kerzner, 2013). At the same time, all the interested parties visited the site in the invitation of government to find the opportunity and assess the site for the reason of infrastructural development.

After negotiation, Nevada Petroleum Inc (NPI) which was an American Oil Company secured all rights related to the Katanga Bay project. In this project the NPI has paid a single time payment to the government for the purpose of development license for this site, i.e. US$10m. The company included the overall work at site such as- port for the purpose of accommodates deep water fright vessels, construction of processing plant and roads for the vehicles etc (Hwang, et al., 2013). In addition, the government also demanded a special annual tax that was 25% of the total operating profit earn by the company. This tax was generated by the plant when the site started manufacturing. NPI agreed to pay this tax and the terms was in the licensed format that would be payable only when there is a surplus. There was nothing about loss situation that will pay the tax (Kerzner, 2013).

The project business case

The intensive analysis was carried out by the NPI economists at the time of negotiation. In this analysis, it was found that the Katanga Bay plant was designed to operate the single process module that was approximately 600 tonnes capacity of per day. The probability for the plant production took place for 250 days per year and the remaining 115 days were utilized for the upgrading, formatting of the plan, repairing and maintenance of the plant. It is expected that the predicted operation life of the plant would be five year before the ownership is taken up by the government (Pemsel and Wiewiora, 2013). The infrastructure design, construction, commissioning and other prior to production work was relatively expected that theses works will not take more than 12 months and the NPI expect that it will achieve profit of more than $740 per tonne. According to the analysis of the economists, the total construction cost was not more than $160m for the project and the additional cost of the contingency should not be more than 10% of it. The overall cost of all related facilities, once commissioned such type of operating costs will be $15.5m per year and the marine transportation costs was expected at $2.25m per year through the production stage (Burke, 2013).

There are five different major contracts which are considered after overview of the tender process effectively:

Contract KB 1:  This contract was developed with the sum amount of $4 as this involve flexible provision i.e., $1 which is discretion of NPI under supplementary design work.

Contract KB 2: This contract consists of three different parts and all three parts are awarded to MacKenzie Engineering & Construction (MEC). This company was largest construction and engineering company in the whole region.

Commissioning (for both NGL Plant and Ethylene Cracker) – cost was not more than $0.5m

Ethylene Cracker construction – Fixed cost contract for processing plant was $30m

NGL Plant construction – Fixed cost contract for the plant construction work was $48m

Contract KB 3: This contract was awarded to KPP Marine Construction SA for the development of marine terminal at Katanga Bay.

Contract KB 4: This was awarded to Okavo Building Company because this contract was give for developing a social infrastructure like school, roads, housing and so on. This type of project cost approximately $20m.

Contract KB 5: This fifth contract was also awarded to Okavo Building Company for developing a high network of road within the cost of $12m.

Project team of NPI

While studying this Katanga Bay case study, it is found that NPI focused on recruiting the two key staff member for this project. The two staff member were Joe Beane and Jan de Vries, both were experienced in their respective specialization i.e., Joe Beane was American engineer and Jan de Vries was South African operational manager. For this project, both were hired at different job position as Joe Beane was responsible to serve its services for this project construction stage whereas Jan de Vries was hired for the post of operational manager. But at the same time, Jan de Vries need to report to Joe Beane for all the activities which it will perform at the construction site till project get completed (Bryman, & Bell, 2015). In like manner, Jan de Varies needed to manage or look after all other operational activities and process. On the other hand, there are other major team member such as QA manager, finance manager, contract manager and deputy project manager and so on (Martinelli and Milosevic, 2016). These all managers are required to report the Joe Beane regarding the activities which they performed for completing the project on time.

While studying, it is determined that this project plan was developed by senior staff member from MEC, Beane and Larmer. This project plan was design to support the other developing high level project. The below stated figure stated that there are seven stages through which project passes or develops within a specified time period (Heldman, 2015).

Risk Assessment

Sr. No.Description of Risk & ImpactRisk OwnerProbability ScoreImpact ScoreComposite IndexMitigation StrategyContingency Actions
1In respect to the project schedule, until April a small amount of developing road network around the area is been undertaken. During this interval, there is not much construction work at the Katanga Bay project site. Although, MEC starts to work on the Ethylene Cracker as well as the NGL plant after April. As of now, KPP also will start to work over the progress of the port. Because of this cause, the utilization of the resources will not be proper as before April it will remain busy but after April it can affect the productivity of the project as well.Project Manager5420For the movement of the project in a well ordered manner there is a need of planning the project accordingly, so that there is no less or excess wastage of time.There is a requirement of including all 12 team members and to plan the project while noticing all the five main contracts.
2The weather remains wisely good making it easy for the contractors to progress during April and June, even though there is hearsay that the project will encounter major issues (Bryman and Bell, 2015). So, for the Ethylene Cracker MEC faces challenge toward civil and ground works. Because of this, there is a possibility to put off the assigned tasks to MEC.Commissioning Manager & Contract Manager4312There is a need to predict the weather and engage techniques to control the challenges that can take place.Effectual systems should be used to plan the weather by the manager, while obtaining support from the weather forecaster.
3It is predicted that MEC will exhibit faulty performance towards the progression on the Ethylene Cracker.Project Manager & Contract Manager4416There is requirement of meetingAll tactical options should be examined by the project manager to accelerate the growth on the Ethylene Cracker.
4It is forecasted that there is an uncertainty of rise in the global price of NGL which will turn to be a threat to create risk for the overall project.Finance Manager & Planning Manager4520Project should be executed on the planned time and start production.There is a need of inspection to be done by the finance manager of the expenditure of every task as well as planning manager needs to examine that each and every action should be attained as per the plan.
5Quality parameters are a matter of concern (Svejvig and Andersen, 2015)QA Manager4416Quality check need to be inspected by QA manager from time to timeThe process and the raw materials used by the laborers needs to be inspected by the manager to ensure quality.
6Attrition of the project team members is a threatProject Manager155The team members needs appropriate control by the project manager.Healthy relations need to be developed with the team members so that it is easy to discuss their problems. There is a need of appraising the employees for their performance.
7There can be a hold-up for the overall project due to delay in even a single activity, creating a fear to fulfill the project.4520Each and every activity needs to be fulfilled on time.While scheduling the project, there is a need of involving effective acceleration alternatives to save on original estimation.
8It is a big project, so there are possibilities of dispute among the team members which create threat of executing the project on time.Project Manager5315There exists a requirement of constructing a healthy connection among the team members.During the circumstances of dispute team members need to use negotiation strategy.

From the above table, it can be determined that there are various risks that are faced and involved in the successful accomplishment of the project. So, in order to overcome this risk and to successful accomplishment of the project, there are different ways that can be used by the project manager to manage the project and to make it successful. The above table also shows that the scheduling the effective project plan is one of the major risks that indicates that there are not many possibilities to busy the site (Hendriks et al., 2016).  But at the same time, the delay in single activity can affect the overall project and its successful accomplishment. In order to overcome this issue and to complete the project on time successfully, there is a need in this project to include some extra days that will help to overcome the risks and to complete the assign work on time successfully (Walker, 2015). Apart from this, there are also some other risks such as increase in price, poor performance, natural disaster, attrition rate, conflict, quality, etc that can also affect the project and the successful accomplishment of the project. So, in order to overcome these issues and to successful accomplish the project on time, there is a need of the project management to use risk management plan, contingency plan, risk matrix, etc that will help the firm to overcome these risks and to compete the project on time successfully (Verzuh, 2015).

Project Plan (Gantt Chart)

Above the above Gantt chart, it can be stated that there are seven stages that are accomplsihed. From this Gantt chart, it can also be analyzed the starting date of this project will be 8/1/18 and will accomplish in 16/2/18.

Resource Histogram

From the discussion of the above case, it is determined that the overall project has been divided into seven sub categories of the task under the Commissioning stage. So, below the some major steps that will be taken by the project manager in the successful accomplishment of the commissioning stage (Hornstein, 2015).

NGL Process system

 

NGL Control system

 

NGL Fire safety system

 

Cracker Process system

 

Cracker Control system

 

Cracker Fire safety system

 

Commissioning entire plant

From the above table, it can be stated that the first activity will be the NGL control system and cracker process that are remained for 2w and 3w. At the same time, after this, the above discussed both systems like NGL control system and cracker process has been replaced and took place within only 1w. The place of the commissioning entire plant has been under the CM3 and CM4.  After this, the fire safety system like cracker got the position last for 1w and after this again the commissioning entire plant has taken its last place (Hwang, and Ng, 2013). In order to accomplishment of the every stage of commissioning and commissioning engineers required. But at the same time, there is a need for the project manger to have the maximum number for accomplishment of each and every stage on week basis that is presented in the histogram.

From the above graph, it can be interpreted that in order to accomplish the project successfully and it took only 3 weeks. Along with this, in the first week, it is required 39 commissioning engineers and after this, 17 engineers required in a week and in the last third week, 11 are required for the successful accomplishment of this project.

Human Resources Budget

During the contract strategy, there is a project management that is designed by Beane at Katanga Bay. Additionally, this team is limited that mean there were six managers who directly reported the Beane (Kerzner, 2013). Below are the details of these managers.

Job DesignationEmployees
Contract ManagerJerry Weinberg
Finance ManagerBarbara Welsh
Planning ManagerTom Larmer
QA ManagerGeorge Muller
Commissioning ManagerPete Patten
Deputy Project ManagerJan de Vries

Below chart will be helpful in order to get the understating about the hierarchical order of the human resource:

Job PositionRemuneration per month (in $)Business expenses per month (in $)
Project Manager  10,0001,500
All other managers  7,0001,000
Assistant managers  4,000500
Project coordinators 2,500500
Sr. No.Job DesignationEmployeesRemuneration per month (in $)Business expenses per month (in $)
1Contracts managerJerry Weinberg70001000
2Deputy Project ManagerJan de Vries70001000
3Assistant ManagerFirst Assistant4000500
4Assistant ManagerSecond Assistant4000500
5Assistant ManagerThird Assistant4000500
6Finance managerBarbara Welsh70001000
7Planning managerTom Larmer70001000
8QA managerGeorge Muller70001000
9Commissioning managerPete Patten70001000
10Contract EngineerJoe Beane100001500
11Project Co-OrdinatorsFirst Project Coordinator2500500
12Project Co-OrdinatorsSecond Project Coordinator2500500
Total12 Team Members 6900010000

From the above table, it can be stated that there are twelve members in this project. There are different projects members such as 3 assistant managers, 1 project manager, 2 project coordinators and the 6 managers. Along with this, 69,000$ was the total remuneration per month for 12 team members and10, 000 $ were for the business expenses per month.  At the same time, it can also be determined that there are also some costs like housing costs and flight costs that are also involved. The expanses are totally different from the single status for the accomplishment of the status (Larson, and Gray, 2013). Nevertheless, the other members of the team choose the single status. Below are the single expanses:

Expat expensesAccommodation per month (in $)Flights each trip home(in $)
Single status 2,5002,000
Accompanied status  4,0007,500
Sr. No.Job DesignationEmployeesSingle Status/Accompanied StatusAccommodation per month (in $)Flights each trip home(in $)
1Contracts managerJerry WeinbergSingle status25002000
2Finance managerBarbara WelshAccompanied status40007500
3Deputy Project ManagerJan de VriesSingle status25002000
4Assistant ManagerFirst AssistantSingle status25002000
5Assistant ManagerSecond AssistantSingle status25002000
6Planning managerTom LarmerSingle status25002000
7QA managerGeorge MullerSingle status25002000
8Assistant ManagerThird AssistantSingle status25002000
9Commissioning managerPete PattenSingle status25002000
10Contract EngineerJoe BeaneAccompanied status40007500
11Project Co-OrdinatorsFirst Project Co-OrdinatorsSingle status25002000
12Project Co-OrdinatorsSecond Project Co-OrdinatorsSingle status25002000
Total3300035000

From the above table, it can be determined that 33000$ was the total expenditure of the accommodation and 35000$ was the per trip accommodation.

Value Analysis

From the above Gantt chart, it is analyzed that this project will take 25 weeks to complete. After this, sweetening system and the system testing were used in this; the Sweetening system took the time approx 7 weeks, while system testing took the 3 weeks time (Todorović et al., 2015). At the same time, from the Gantt chart, it can be determined that the starting data of this project will be 8/1/18 and it will finish on 27/7/18. So, it can be stated that this project will take 201 days to complete.

From the above table, it can be determined that there are different activities of the budget

To evaluate the EVA- (the total project budget multiply by the % complete of the project)

So, in order to evaluate the total cost, below is the formula that will be used

EVA = Budget total for project * Percentage completed of the Project (Martinelli, & Milosevic, 2016)

Katanga BayActual expenditure to date ($m)Budget total for project ($m)Percent of Complete projectEVA
Design work4.251.190476195.952381
NGL plant22.1502.262443439113.1222
Ethylene cracker16603.75225
Port development14.7251.70068027242.51701
Social infrastructure6.6203.0303030360.60606
Road network5.7122.10526315825.26316
Commissioning00.5

 

From the above table, it can be stated that as per the EVA, the actual % progress of ethylene cracker will be on the top in the end of the June. Additionally, the as per the actual % progress, the NG plant will be second. In addition, for showing the progress, the social infrastructure will be shown and after this design work, road network, and port development will be taken place (Pemsel, and Wiewiora, 2013). Nevertheless, there is no progress that will be shown in the commissioning.

 

Acceleration options

Network Diagram

From the above network diagram, it can be determined that ethylene cracker plant is in a good way.

Acceleration Options

From the analysis of network diagram, all acceleration options are given. In this, it is determined that there is a need for the MEC and NPI to give their attention to the all extra cost. Additionally, this accommodation will increase the extra cost 100000$ that will help to save the 2 weeks. There are also different aspects like commence work on chilling system will also be helpful to save the 3 weeks for saving the charge approx 50000$ (Riol, and Thuillier, 2015). Additionally, Fractionation system and accelerate production will charge extra cost 175000$.  In like manner, it can also be stated that recruit two additional engineers system testing will only 1 week on original estimation. Additionally, extra total cost of 50000$ save 1 week and the charge will extra cost 50000$. But at the same time, to select the labor/subcontractors will be helpful to enable to save the 3 weeks on original but charging cost of  80000$ (Roghanian et al., 2017).

Section B: Reflective Essay

In today’s competitive business environment, the project management is facing higher growth in the field of management study as every organization is using and implementing the conceptual framework for maximizing the business profit. Under this project case study, I used two different approaches such as critical chain approach and critical path based approach which helped me in completing my overall study on time successfully. In this study, I can easily state that critical path approach is adopted by Katanga Bay NGL as per case scenarios. This approach helped me in developing understanding under which it used different set of steps related to project management so that project objective get accomplish successfully. This critical path based approach is effective technique which helped me in representing the different activities in a presentable format (flowchart and diagram) and also this approach provide support in establishing the positive relationship with each other in particular project.

At the same time, network diagram helped me in representing the preceding activities and other start and end point of the path through which I was able to determine the critical path of the project efficiently and effectively. For calculating the completion days of the project, I used critical path approach as a tool because it helped in demonstrating the earliest date for completion of work by minimum utilization of the available resources. On the other hand, it was also noticed by me that there are various advantages of using the critical path method for this project completion as it help the project manager in achieving the maximum profit margin effectively and efficiently. The use of critical path method encourages the project manager in project planning, activities scheduling, controlling the activities and measuring the time and cost of the project activities. With the help of critical path method, I was able to complete the in-depth study and develop plan and evaluated the project activity performance.

But at the same time, I also faced problem by the manager while using the critical path approach in order to complete the project on time. The completion time of particular project which is estimated sometimes occurs wrong and that develops problem for manager to maintain the other activities on time. This wrong estimation related to time framework result because for not using a statistical analysis for determining the actual time. At the same time, this method will not be used for controlling the activities of the project under the dynamic changing environment of the business. Through this study, I determined that a delay in particular activity or task will create impact on the overall performance as well as increases the time of completion of the project effectively and efficiently.

But on the other hand, I learned that critical chain path approach will be useful for Katanga Bay NGL as it will support the indentifying the project barriers which company faced while managing a project. By using this approach, the all barriers are eliminated by developing a safety measures. This approach helped me in evaluating the effectiveness and performance of the project with the help of earned value management.  The use of EVM will not be much effective for carrying out the activities of project of the company properly. Because of this study, I identified that earned value management technique sometimes manipulates the result and that affects the progress or performance of the project in terms of time constraint and cost constraints. In like manner, there are some disadvantages and advantages of using earned value management which I observed while studying and using this technique in this project planning.

In the critical chain management technique, there is proper commitment s made among the project manager and project stakeholders in order to complete the project on time successfully and effectively. This study reflects my learning and helped in developing a skill and knowledge as this study highlighted different approaches and techniques which supported me in measuring and predicting a time and cost which will incur in completion of this project. Thus, this project study reflects the overall learning which I developed while analyzing and measuring the project activity and the time which need to be calculated for completing the task.

References

Beringer, C., Jonas, D. and Kock, A. (2013) Behavior of internal stakeholders in project portfolio management and its impact on success. International Journal of Project Management31(6), 830-846.

Bryman, A., & Bell, E. (2015) Business research methods. USA: Oxford University Press.

Burke, R. (2013) Project management: planning and control techniques. New Jersey, USA: John Wiley & Sons.

Heldman, K. (2015) PMP project management professional exam deluxe study guide: updated for the 2015 Exam. John Wiley & Sons.

Hendriks, M., Verriet, J., Basten, T., Theelen, B., Brassé, M., & Somers, L. (2016) Analyzing execution traces: critical-path analysis and distance analysis. International Journal on Software Tools for Technology Transfer, pp. 1-24.

Hornstein, H. A. (2015) The integration of project management and organizational change management is now a necessity. International Journal of Project Management33(2), 291-298.

Hwang, B. G. and Ng, W. J. (2013) Project management knowledge and skills for green construction: Overcoming challenges. International Journal of Project Management31(2), 272-284.

Kerzner, H. (2013) Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.

Kerzner, H. (2013) Project management: a systems approach to planning, scheduling, and controlling. USA: John Wiley & Sons.

Larson, E. W. and Gray, C. (2013) Project Management: The Managerial Process with MS Project. McGraw-Hill.

Martinelli, R. J., & Milosevic, D. Z. (2016) Project management toolbox: tools and techniques for the practicing project manager. USA: John Wiley & Sons.

Pemsel, S. and Wiewiora, A. (2013) Project management office a knowledge broker in project-based organisations. International Journal of Project Management31(1), 31-42.

Riol, H. and Thuillier, D. (2015) Project management for academic research projects: balancing structure and flexibility. International Journal of Project Organisation and Management7(3), 251-269.

Roghanian, E., Alipour, M., & Rezaei, M. (2017) An improved fuzzy critical chain approach in order to face uncertainty in project scheduling. International Journal of Construction Management, pp. 1-13.

Svejvig, P. and Andersen, P. (2015) Rethinking project management: A structured literature review with a critical look at the brave new world. International Journal of Project Management33(2), 278-290.

Todorović, M. L., Petrović, D. Č., Mihić, M. M., Obradović, V. L. and Bushuyev, S. D. (2015) Project success analysis framework: A knowledge-based approach in project management. International Journal of Project Management33(4), 772-783.

Verzuh, E. (2015) The fast forward MBA in project management. USA: John Wiley & Sons.

Walker, A. (2015) Project management in construction. USA: John Wiley & Sons.

 

 

 

 

 

 

 

 

 

 

 

Leave a Comment