Project Management for Engineering, Business and Technology

1 Project Management forEngineering, Businessand TechnologyFOURTH EDITIONJohn M. NicholasLoyola University ChicagoHerman SteynUniversity of PretoriaIJ Routledgejjj^ Taylor & Francis GroupLONDON AND NEW YORKCONTENTSP reface xviiAcknowledgements xxiAbout the Authors xxiiiINTRODUCTION In the Beginning .. What Is a Project ? Project Management : The Need Response to Modern Society Systems Approach to Management Project Goal: Time, Cost, and Requirements Project Management : The Person, the Team, the Methodology About This Book PMBOK Study Project Assignment 13 Review Questions and Problems 15 Notes 16 /-PARTI: PHILOSOPHY AND,CONCEPTS 17 CHAPTER 1 What Is Project Management ?

2 Functions and Viewpoints of Management Project Viewpoint versus Traditional Management Evolution of Project Management Where Is Project Management Appropriate? Management by Project : A Common Approach Different Forms of Project Management Project Environments Project Management in Industrial Settings Project Management in the Service Sector Project and Program Management in the Public Sector and Government Summary 40 Review Questions and Problems 41 Questions About the Study Project 41 Case Disaster Recovery at Marshall Field's 42 Case Flexible Benefits System Implementation at ShahAlam Medical Center 43 Notes 44viiCHAPTER 2 Systems Approach and Systems engineering Systems Thinking Definition of System Systems

3 Concepts and Principles Organizations and Environment Systems Approach Systems engineering Relevancy of the Systems Approach to Project Management Summary 62 Appendix: Stages of Systems engineering 63 Stage 1: Needs Identification and Conceptual Design 63 Stage 2: Preliminary Design 68 Stage 3: Detailed Design and System Development 74 Stage 4: System Fabrication, Construction, and/or Production 75 Stage 5: System Operation and Support 75 Review Questions and Problems 77 Questions About the Study Project 78 Case Glades County Sanitary District 79 Case Life and Death of an Aircraft Development Project 79 Notes 81 PART II: SYSTEMS DEVELOPMENT CYCLE 83 CHAPTER 3 Systems Development Cycle and Project Conception Systems Life Cycle Systems Development Cycle 87' Phase A: Conception Project Feasibility The Project Proposal ^ Project Contracting Summary 115 Appendix.

4 Kinds of Contracts 115 Variables 116 Fixed Price Contract 116 Cost-Pius Contract 117 Incentive Contract 118 Review Questions and Problems 120 Questions About the Study Project 121 Case West Coast University Medical Center 122 Case X-philes Data Management Corporation: RFP Matters 122 Case Proposal Evaluation for Apollo Spacecraft 123 Notes 124viii ContentsCHAPTER 4 Project and System Definition Phase B: Definition Project Charter Project Definition System Definition Concurrent engineering Systems Development in Industry and Government Summary 149 Appendix: Quality Function Deployment 149 House of Quality 150 QFD Process 152 Review Questions and Problems 154 Questions About the Study Project 155 Case Star-Board Construction and Santaro Associates:Requirements Snafu 156 Case Revcon Products and Welbar, Inc.

5 : Client-ContractorCommunication 156 Case : Interpreting Customer Requirements 157 Case Proposed Gold Mine in Canada: Phased Project Planning 158 -Notes 159 PART III: SYSTEMS AND PROCEDURES FORPLANNING AND CONTROL 161 CHAPTER 5 Planning Fundamentals - Planning Steps The Project Master Plan Scope and Statement of Work Work Definition 169 * Project Organization and Responsibilities Scheduling Planning and Scheduling Charts Line of Balance Procurement Management Summary 191 Review Questions and Problems 191 Questions About the Study Project 193 Case Barrage Construction Company: Sean's WBS 193 Case Startrek Enterprises, Inc.

6 : Deva's Project Plan 194 Case Walter's Project Plan 195 Notes 196 CHAPTER 6 Project Time Planning and Networks Network Diagrams The Critical Path 202 Contents Gantt Charts and Calendar Schedules Management Schedule Reserve Types of Precedence Relationships Scheduling with Resource Constraints Criticisms of Network Methods Summary 225 Summary List of Symbols 225 Summary Illustration Problem 226 Appendix I: AOA Diagrams 226 Dummy Activities 227 AON versus AOA 228 Appendix II: Alternate Scheduling Method.

7 Starting theProject at Day 1 228 Review Questions and Problems 229 Questions About the Study Project 234 Case Network Diagram for a Large Construction Project 234 Notes 236 CHAPTER 7 Advanced Project Network Analyses and Scheduling CPM and Time-Cost Trade-off Variability of Activity Duration PERT Theory of Constraints and Critical Chain Method Allocating Resources and Multiple Project Scheduling TOC Method for Allocating Resources to Multiple Projects Discussion and Summary 269 Summary List of Symbols 270 Appendix: The Central Limit Theorem and its Implications 270 Theorem 270 *Application to PERT 270 The Principle of Aggregation 272 Review Questions and Problems 272 Questions About the Study Project 276 Case : Bridgecon Contractors 276 Case.

8 The LOGON Project 278 Notes 279 ^CHAPTER 8 Cost Estimating and Budgeting Cost Estimates Cost Escalation Cost Estimating and the Systems Development Cycle Life Cycle Costs Cost Estimating Process Elements of Budgets and Estimates Project Cost Accounting Systems Budgeting Using Control (Cost) Accounts Cost Summaries Cost Schedules and Forecasts Summary 314 Review Questions and Problems 315 Questions About the Study Project 317 Case Life Cycle Costs for Fleet of Tourist Spaceships 318 Case Estimated Tunnel Costs for the Chunnel Project 318 Notes 319 CHAPTER 9 Project Quality Management The Concept of Quality Processes of Project Quality Management Techniques for Quality Assurance during System Development Techniques for Quality Control Summary 343 Review Questions and Problems 344 Questions About the Study Project

9 344 Case Ceiling Panel Collapse in the Big Dig Project 345 Case FIFA 2010 World Cup South Africa 346 Notes 349 CHAPTER 10 Managing Risks in Concepts 351 Risk Identification 353 Risk Assessment 358 Risk Response Planning / 366 Risk Tracking and Response 370351 Project Management Is Risk ManagementSummary 374 Appendix: Risk Analysis MethodsExpected Value 375 Decision Trees 377 Uncertainty and Payoff TablesSimulation 380 Review Questions and ProblemsQuestions About the Study ProjectCase The Sydney Opera HouseCase Infinity & Beyond, The Nelson Mandela Bridge 385 Notes 387 CHAPTER 11 Project Execution and Control Phase C.

10 Execution Design Stage 390 Contents Production/Build Stage The Control Process Work Packages and Control Accounts Project Control Emphasis Performance Analysis Forecasting "To Complete" and "At Completion" Controlling Changes Contract Administration Problems with Controlling Projects Summary 426 Summary of Variables 427 Review Questions and Problems 428 Questions About the Study Project 430 Case The Cybersonic Project 431 Case SA Gold Mine: Earned Value After a Scope Change 432 Case Project Change Control Process at Dynacom Company 433 Notes 434 CHAPTER 12 Project Evaluation, Communication, Implementation,and Closeout Project Evaluation Project Communication Management Project Management Information Systems Implementation Stage Project Termination and Closeout Project Summary Evaluation After the Project Phase D.