It is the discipline of planning, organizing and managing resources to bring about the successful completion of specific project goals and objectives.

Project management

A project is a scientifically evolved work plan devised to achieve a specific objective within a specified period of time.

Examples•Setting up a factory•Building a bridge•Establishing educational institution

Allocation & consumptionof resources

Generation of resourcesGoods or services

Project

What is a Project?

Project classification

•Quantifiable projects•Non-quantifiable projects

Sectoral Projects• Agriculture and Allied sector• Irrigation and Power sector• Industry and Mining sector• Transport and Communication sector• Social Service sector•Miscellaneous sector

Project classification

Techno Economic Projects• Factor intensity oriented classification• Causation oriented classification• Magnitude oriented classification

Financial Institution classifications

Profit oriented•New Projects•Expansion projects•Modernization projects•Diversification projects

Service oriented•Welfare projects•Service projects•R & D projects•Educational projects

Project Identification

CollectionCompilationAnalysis of economic data

Possible opportunitiesfor investments

Opportunities• Additive• Complementary• Break-through

Three basic dimension of a project

Inputs

•Raw material•Energy•Manpower•Finance

Outputs

•Goods & services•Employment•Revenue

Social costs & benefits

•Demand and supply in economy•Sacrifice/Benefit from/to society

Project Objectives

Expectations Measure of performance

They should be• Specific, not general• Not overly complex• Measurable, tangible, verifiable• Realistic and attainable• Established within resource bounds• Consistent with resources available/anticipated• Consistent with organizational plans,

policies and procedures

Project Objectives

Retentive objectives Acquisitive objectives

Retention/preservation of•Money•Time•Energy•Equipment•Skills

Acquisition of•Resources •Skills

Economic objectives Social objectives

•Costs/Benefits •Impact on economy of nation

Important techniques of project identification…

Desk research

Collection/use of informationFrom published•Journals•Magazines•Reports

Techno Economic Survey

Investigation by expert teamto identify potential

Demand based industries

Resource based industries

Ex. Ancillary units to Maruti Udyog/ Hero Honda.

Ex. Rice bran oil mill near rice millSteel plants/Cement plants near mines

Project Life Cycle

Pre-investment phase

•Objective formulation•Demand forecasting•Strategy selection•Evaluation of input characteristics•Projection of financial profile•Cost benefit analysis•Pre-investment appraisal

Project Life Cycle

Construction phase

Asset building stage• Land• Plant• Machinery• Ancillary accommodation• Communication services• Control systems• Manpower resources

Project Life Cycle

Normalization phase

•Testing•Trial run•Sample production•Pilot lot production•Rework/ Finer adjustments

Project Formulation

Challenges faced by entrepreneurs..

•Selection of appropriate technology

•Influence of external economies

•Dearth of technically qualified personnel

•Resource mobilization

•Knowledge about government regulations

Project FormulationIt is the systematic development of a project idea for the eventual objective of arriving at an investment decision.

•Step by step investigation•Alerts at the early stage•Contribution from various teams

Large project team•Industrial economist•Market analyst•Technologist/Engineer•Mechanical engineer•Civil engineer•Accounting expert

Helps to get•Loan faster•Government sanctions

Elements of Project Formulation

•Feasibility analysis

•Techno-economic analysis

•Project design and network analysis

•Input analysis

•Financial analysis

•Cost benefit analysis

•Project appraisal

Project/Feasibility Report

Consolidation of various feasibility studies, reports andStatements in to one master report

It helps• Project appraisal• Decision by authorities• Financing agencies for funds

Project formulation Vs Detailed Project Report

Project Selection

Project ideas Project profiles

Criteria to select a project• Investment size• Location• Technology• Equipment• Marketing• Power & water• Other’s performance• Working capital requirements• Labor component• Economic viability

Guidelines for project reportsby Planning Commission

•General information

•Preliminary analysis of alternatives

•Project description

•Marketing plan

•Capital requirements and costs

•Operating requirements and costs

•Financial analysis

•Economic analysis

Project Design & Network Analysis

Project design• Defines the individual activities and their

interrelationship• Identifies the flow of events• Represented by network diagram

Network analysis•Detailed work plan ,with focus on time & resource profile•To identify optimal course of action with all constraints

Project logicCompilation of constituent activities of a project

Network•Graphical representation of project logic•Set of symbols connected with each other

Various network techniques•CPM•PERT•GERT•LOB•PERT/Cost•WASP

Critical Path MethodProgram Evaluation & Review TechniqueGraphical Evaluation & Review TechniqueLine Of Balance

Workshop Analysis Scheduling Program

NetworkSeries of related activities resulting in product or services

Activity•Some action consuming time to complete specific event•It is shown by an arrow•Begins and ends with an event

Event•Start or completion of some activity•Represented by circle in a network diagram

Network diagramGraphical representation of various activities and events

2

3

4 6

5

1 7

A

B

C

D

E

F

G

H

I

Network Diagram

3

4

5

4

2

8

96

8

Activity

Event

Burst

Node

Critical pathCritical activities-C/G/I

2

3

4 6

5

1 7

A

B

C

D

E

F

G

H

I

Network Diagram

3

4

5

4

2

8

96

8

Preceding activities-A/B/D/E for H Succeeding activities-D/H of H

Concurrent activities-D/E