Fundamentals of Project Management

This report provides a comprehensive understanding of project management, focusing on a case study scenario of a train manufacturing project. It covers topics such as project definition, iron triangle parameters, risk management, planning and costs, and more. The report also includes a reflective essay on the challenges faced and the characteristics of a good manager. Study material and expert guidance on project management available at Desklib.

Fundamentals of Project
Management

Contents
EXECUTIVE SUMARY.................................................................................................................3
INTRODUCTION...........................................................................................................................1
Part A - Project Management Consultancy Report..........................................................................1
Project Definition/Parameters and Risks (Question 1)....................................................................1
Importance of the iron triangle parameters in setting the Overall Project objectives and inter
relations between these parameters.............................................................................................1
Risk register with ten risks..........................................................................................................1
Planning and costs (Question 2)......................................................................................................2
Preparing a network diagram showing the critical path and planned duration of the project
along with computing the float on the non-critical tasks.............................................................2
Preparing a Gantt chart and determining the planned completion date.......................................2
Developing overall Project Budget and calculating projected Net profit for the contract..........2
Managing progress and spending (Question 3)...............................................................................2
Comparison between the planned progress against the actual progress using a Gantt chart.......2
Producing a revised Gantt chart and identifying the new completion date.................................2
Earned Value Analysis and Acceleration (Question 4)...................................................................3
Creating an Earned Value Analysis table....................................................................................3
Creating a projected completion date..........................................................................................3
Recommendations........................................................................................................................3
REFERENCES................................................................................................................................4
Part B - Reflective Essay.................................................................................................................5

EXECUTIVE SUMARY
The project report summarizes about detailed information regards to different types of
aspects regards to effective project management. The complete project is based on a
company which is automation futures (AF) PLC. This report also gives an exhaustive
description of the project's problems and difficulties and factors for total assessment.

INTRODUCTION
Project management is a process of planning and executing a plan which is required to be
controlled and directed effectively (Burke, 2013). This procedure is based on a set of aims which
are directly aligned with the completion of the project. The main aim of this report is to develop
an understanding regarding project management and various challenges which can be faced
while managing a project. For this purpose, a case study scenario is selected which is related to
an extensive project management task. The case study is based upon a fictional organisation
“Automation Futures”. This company is a technology contracting and consultancy company
which specialises in Automation and New products. This company is planning to undertake a
project a Train manufacturing process.
This report is divided into two sections, part A will be a consultancy project and on the other
hand part B will be a reflection report. In part A, project of the selected company will be
managed using iron triangle parameters and developing risk register. In this section, costs of the
project will also be planned along with development of Gantt chart and project budget. Lastly, in
this section Earned value of the project will also be computed. In the second section of this
report, a reflection is developed which will include challenges faced while completion of part A
of this report along with identifying characteristics of a good manager.
Part A - Project Management Consultancy Report
Project Definition/Parameters and Risks (Question 1)
Importance of the iron triangle parameters in setting the Overall Project objectives and inter
relations between these parameters
AF PLC is a large scale company which is planning to develop a construction and
automation plan of TTF, a train manufacturer. As a project manager of AF PLC, it is important
to analyse the various iron triangle parameters while setting the overall project objectives. These
iron triangle parameters are scope, time, cost and quality. Each of these parameter or constraint
plays an important role while managing project and its objectives. All these parameters are
analysed below along with their importance:
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Figure 1
Cost:
The first parameter of iron triangle is the cost. This parameter is considered as the financial
constraint of a project management which is related with the budget of a project. This parameter
of costs is related with the resources which are needed to be procured for the completion of
project. These resources can be both employees for the project and raw materials. In a project,
such costs can be variable, semi fixed and fixed, depending upon the nature of project. The
project AF Plc. is related with developed factory plant for TTF. As a project manager of AF Plc.,
it is important to ascertain all the costs which will be engaged in the completion of this project.
The constraint of cost is important as it project a budget restriction following which project
is required to be completed. Also, this parameter provides the lowest and highest ranges
available so that appropriate can be selected. This also helps in managing the cost fluctuations
throughout the project.
Time:
Time or schedule is the estimate amount of time which will be required to complete the
project. This parameter of the project management helps in ensuring that the project is either
completed before time or on time. As a project manager of AF Plc. handling the project of TTF,
it becomes even more crucial to manage the schedule as, if the project of TTF is not competed on
given estimated time then AF Plc. has to pay a penalty. For this Gantt chart and networks
diagram techniques will also be used (Slack, 2015).
2

Scope:
This is the third parameter of project manager which defines the tasks and activities
which are required to be done by the employees of project. This parameter is important to
manage a project as it helps prioritising the task and also assist in optimally utilizing the
resources.
Quality:
The fourth and most important parameter is quality. It is important to ensure delivery of
promised quality in the process of project management (Kerzner, 2017). As a project manager of
AF Ltd., it becomes even more important to maintain the quality of the project otherwise
rectification of any faults will levy additional cost for the company.
All the above parameters are related to each other. As in situation of elimination of time no
other parameter can be done and in case of elimination of quality, no parameter will be worth
delivering. By this way, each constraint is related to each other.
Risk register with ten risks
Risk Category of
the risk
Likelihood
of
occurrence
of the risk
(Out of 5; 5
being high
likely
occurrence)
Impact of
the risk
(Out of
5; 5
being
high
impact)
Causes Mitigation
strategies
1 Increased
costs rate of
labour
Financial 3 3 Changes in labour
wage government
policy and
variation in
labour rate by
trade union.
Hire labour on
contract basis
with a uniform
labour rate
(Ojiako and
et.al, 2011).
2 Increased cost
of raw material
Financial 3 3 Environmental
factors, higher
Store all
required raw
3

price demand
from suppliers
and lack of
available
resources in
market.
material in
warehouse.
3 More wastage
of raw material
than anticipated
Financial 1 2 Negligence of
supervisor and
technical issues in
machinery.
Ensure monthly
audit of the
project.
4 More utility
cost than
anticipated
Financial 2 2 More usage of
water, electricity,
gas etc.
Keep a reserve
for additional
utility expenses
(Portny, 2017).
5 Labour strike Operational 1 5 Trade union
discussions and
high demands of
labours.
Hire employees
with a contract
involving a no
strike clause.
6 Layoffs Operational 1 5 Political
emergency and
change in
government
regulations.
Procure pre
approved
permission
from
governmental
authorities.
7 On site
accident
Human
resource
1 5 Negligence of
labour,
employees or
supervisor and
technical issues in
machinery.
Ensure
emergency
equipment at
site and
medical
insurance of all
4

the staff.
8 Resignation
of multiple
employees
Human
resource
2 4 Lower retention
history of the
company and low
satisfaction of
employees.
Develop
strategies of
reward and
recognition so
that satisfaction
of employees
can be
maintained.
9
Communication
issues
Technical 4 2 Inability of
employees,
unskilful
technicians and
network errors
Hire additional
staff to
maintain
constant
communication.
10 Issues in
automation
Technical 4 2 Lack of
knowledgeable
employees.
Before hiring
employees for
automation,
ensure their
skills and
capabilities to
match with
requirements
for this project
(Chatterji and
Fabrizio, 2014).
From the above analysis, it has been analysed that the issue of communication is most
likely to occur but it will not impact highly on the project operations. It has been also analysed
that the issues related with human resource will levy high impact on the organisation as in
absence of employees, project cannot be completed on time. For additional mitigation, AF Plc.
must develop reserves of money and employees for such type of contingencies.
5

Planning and costs (Question 2)
Preparing a network diagram showing the critical path and planned duration of the project along
with computing the float on the non-critical tasks
Network diagram is a technique of analysing time (schedule) parameter of a project
(Heagney, 2016). A network diagram assist in analysing which activities are critical to be
completed and in what amount of the time, project will be completed. As a project manager of
AF Plc, a network diagram for the project of TTF is developed which is new engineering
Automation plant.
From the above image, the tasks which are marked in red are critical tasks which together
form a critical path. A critical path of a project is the longest distance between start task and end
task. It is important in a project to calculate critical path as it provides the maximum time which
can be taken to complete the project. The critical path for this project includes tasks (1, 3, 6, 7, 8,
11, 12, 13, 14, 15, 16, 17, and 18). In order to complete all the tasks, AF Plc. will require 92
weeks.
In addition of the critical tasks, there are few non critical tasks as well which has the float
of; Task 2 with 3 weeks float, task 4 with 1 week, task with 8 weeks, task 9 with 9 weeks and
task 10 with 8 weeks float. This value of float is calculated by subtracting early finish time with
late finish time.
6

Preparing a Gantt chart and determining the planned completion date
A Gantt chart is tool of recording tasks according to their durations. Such type of chart
includes start date and finish dates (Walker, 2015). As it can be seen in below Gantt chart, AF
Plc. has started the project of TTF Limited that is new engineering Automation plant. The first
activity of this project is the project initiation which is planned to be started at 8 July, 2019 and
will require one week to be completed. Preceding to this activity, various activities are planned
to be competed one by one. According to the below developed Gantt chart the project of TTF
will be completed by 6 July 2020.
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8

Developing overall Project Budget and calculating projected Net profit for the contract
Project budget refers to an estimation of all the expenditures which company will spend in
order to complete the project (Pinto, 2013). AF Plc. has total of 58.5 million pounds to complete
the project of TTF’s automation plant. As it can be seen in below budget, the total of all costs is
48.7 million. If the project is completed on time that on 25 September then company will earn
profit of 13.85 but according to the planned schedule using Gantt chart, this project will be
completed 81 days earlier, leaving an additional profit of 4.05 million.
Due to contingencies and other issues, there is a high possibility that company will face the
issue of delayed work due to which they have to pay penalty as 100k for each delayed day or part
day (Leach, 2014). There are certain activities or tasks which can result into delay in overall
completion of the project. These activities or budget constraints are Manufacture Automation
equipment, Transport Automation equipment to New Factory and Transport and Construct
Modular Factory on site in Germany. The reason behind including these activities is their nature
which can easily be impacted due to external factors. Internal factors are in control of the
company but external factors can only be controlled up to a limit.
Particulars
All amount in
million pounds
Initial investment 58.5
Project Initiation 0.2
Commission Design of Factory 2.8
Commission outline Design of Automation Equipment 1.6
Commission outline Design - Inverter Product 1.5
Detailed design of Factory 3.8
Detailed design of Automation Equipment and Inverter Product 5.4
Commission and develop Software for Automation equipment and Inverter
Product 3.4
Manufacture Automation equipment 6.5
Manufacture Modular Factory Units 4
Transport and Construct Modular Factory on site in Germany 3.5
Test Automation equipment 2.2
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Transport Automation equipment to New Factory 2.5
Install Automation equipment in New Factory 3.1
Install Software for Automation equipment 2.2
Install software for Inverter Product Line 2.7
Test Inverter Production line 2.1
Handover and Train TTF engineers in Automation process and Product
production 1.2
Project Close out 0
Total costs 48.7
Planned profit 9.8
Bonus for early completion 4.05
Net profit 13.85
Managing progress and spending (Question 3)
Comparison between the planned progresses against the actual progress using a Gantt chart
After 17 weeks of the project, a project review in AF Plc. was conducted from which it has
been analysed that there is a variation between the planned and actual project. Consideration the
actual progress of the tasks till 17th week, a comparison table is developed which is
distinguishing between the project actual progress in percentage and planned progress in
percentage.
Tasks Planned progress (%) Actual progress (%)
PI 100 100
A 100 100
B 100 100
C 100 100
D 100 80
E 100 100
F 60 35
G 60 35
10

H 55.55 50
From the above analysis, it has been observed that task PI, A, B, C, D and E are fully
completed in reality as it was planned. But the F, G and H tasks are lacking behind. Task F was
supposed to be completed 60% till the week 17th but in reality it has only completed 35% which
is approximately half of the expectations. This same case has been repeated for G task. The task
“H” was supposed to be completed 55.55% but it has only completed by 50% till 17th week. The
delay in tasks can be because of external factors and lack of internal capabilities.
Producing a revised Gantt chart and identifying the new completion date
Using the revised actual progress of the task, a revised Gantt chart is developed (Larson
and Gray, 2011). Below is the representation of revised activities duration along with Gantt chart
and network diagram.
Task Description
Duration
(weeks)
PI Project Initiation 1
A Commission Design of Factory 3
B Commission outline Design of Automation Equipment 2
C Commission outline Design-Inverter Product 1
D Detailed design of Factory 8
E
Detailed design of Automation Equipment and Inverter
Product 8
F
Commission and develop Software for Automation
equipment and Inverter Product 13
G Manufacture Automation equipment 7
H Manufacture Modular Factory Units 9
I Transport and Construct Modular Factory on site in Germany 6
J Test Automation equipment. 6
K Transport Automation equipment to New Factory 4
L Install Automation equipment in New Factory 6
M Install Software for Automation equipment 4
N Install software for Inverter Product Line 4
O Test Inverter Production line 6
P Handover and Train TTF engineers in Automation process 4
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and Product production
PC Project Close out 0
Total
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From the above Gantt chart, it has been seen that overall project will be completed by 144
August. This delay in work will impact the project of the AF Ltd as they will not be entitled to as
much bonus as they have anticipated in their plan.
13

Earned Value Analysis and Acceleration (Question 4)
Creating an Earned Value Analysis table
Earned value analyses is the technique of using progress in a project and then calculate
budgeted and actual values of the work scheduled. For AF Plc., percentage completion of work is
already provided along with ACWP and BCWP. Using all these values, earned value and
Budgeted Cost of Work Scheduled is calculated. Earned value is the value which AF has earned
against their actual cost till date and budgeted cost of work scheduled is the cost which AF Plc.
has incurred against their budgeted work performed till date.
Tasks % of work
completion
Budgeted Cost of Work
Performed (BCWP) or
Earned value
Actual Cost of
Work Performed
(ACWP)
Budgeted Cost of
Work Scheduled
(BCWS)
PI 100 20 0.2 0.2
A 100 280 2.91 2.8
B 100 160 1.72 1.6
C 100 150 1.53 1.5
D 80 304 4.08 3.8
E 100 540 5.97 5.4
F 35 119 1.32 3.4
G 35 227.5 2.76 6.5
H 50 200 2.75 4
Total 2000.5 23.24 29.2 (BAC)
Budgeted Cost of Work = Budgeted Cost of Work Scheduled * % of work completion
(Levitt, 2011)
Earned value = Actual Cost of Work Scheduled * % of work completion (Schwalbe,
2015)
Cost Variance (CV = EV - AC) -$32,35,000.00
Cost Performance Index (CPI = EV/AC) 0.86
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Schedule Variance (SV = EV - PV) $1,95,05,000.00
Schedule Performance Index (SPI = EV/PV) 40.01
Cumulative Planned
Value (PV)
200
000
300
000
0
460
000
0
610
000
0
990000
0
153000
00
187000
00
252000
00
292000
00
Actual Cost and Earned Value
Cumulative Actual Cost
(AC)
200
000
311
000
0
483
000
0
636
000
0
104400
00
164100
00
177300
00
204900
00
232400
00
Cumulative Earned
Value (EV)
200
000
300
000
0
460
000
0
610
000
0
914000
0
145400
00
157300
00
180050
00
200050
00
Project Performance Metrics
Cost Variance (CV =
EV - AC) 0
-
110
000
-
230
000
-
260
000
-
130000
0
-
187000
0
-
200000
0
-
248500
0
-
323500
0
Schedule Variance (SV
= EV - PV) 0 0 0 0 -760000 -760000
-
297000
0
-
719500
0
-
919500
0
Cost Performance Index
(CPI = EV/AC) 1.00 0.96 0.95 0.96 0.88 0.89 0.89 0.88 0.86
Schedule Performance
Index (SPI = EV/PV) 1.00 1.00 1.00 1.00 0.92 0.95 0.84 0.71 0.69
Using values of earned value and actual value, variance in the project cost is calculated
which is computed as 32,35,000. Besides variance, values of CP and SP are also calculated. The
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Cost Performance Index is calculated as 0.86 which is the comparative value of actual and
earned cost.
The Schedule Performance Index is also calculated which is 40.01. This value is calculated
using earned and planned value of the entire project.
Creating a projected completion date
Estimate at completion is the procedure or a method to calculate the completion date and
cost at completion date of the project (Larson and Gray, 2013). Due to 17th week project review,
the completion date of this project has been changed to 14 August 2020. Due to this delay, the
profit of the project will get impacted as AF Plc. will not get estimated bonus for their early work
completion. The Estimate at completion is a method which helps in calculating the overall cost
of the project. Previous calculated cost through the budget was 48.7 million.
Estimate at completion (EAC) = Actual cost (AC) + ((Budget at completion (BAC) – Earned
value (EV)) / (Cost performance index (CPI) * Schedule performance index (SPI)))
Estimate at completion (EAC) = 2,32,40,000 + (2,92,00,000 - 2,00,05,000) / 0.86 * 40.01
2,32,40,000 + 9195000/ 0.86 * 40.01
32435000 / 0.86 * 40.01
32435000 / 34.4086
= 942642.24
Using the method of Estimate at completion, costs for activities PI to H is calculated as
942642.24.
In order to compare between actual and budget costs it has been seen that budgeted costs for
the activities for PI to H was 25.2 million whereas actual cost is 942642.24 which is higher than
budgeted costs. In order to mitigate the risk of higher cost expenses. AF Ltd should retain
reserves so that no contingency can turn expected profit of this company into losses
(Marchewka, 2016).
Recommendations
There are different types of options available in order to avoid any penalty charges.
Different types of options have some issues and benefits. On the basis of above mentioned
analysis, this can be recommend that contractor of transport option should be chosen. This is
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so because it can be helpful to save cost of 75000 pounds. Thus they should focus on above
mentioned option. If above company will choose this option then there will be positive
impact on profitability which is as follows:
Lower cost- This option has lower cost of processing and due to which it will be easier for
above company to minimize additional cost. As a result if cost will be lower than
profitability will be higher. Though, other options are also suitable but none of them are
highly effective and able to save higher cost.
Suitable- Along with the above mentioned benefit of chosen option, another positive impact
of this option is that it is suitable in the context of above mentioned companies’ project.
Thus they should consider this option.
As these benefits indicate that if they will adopt this option then it will result in effective
outcome in the progress of project. Analysis of many options or key projects suggested that
the whole project model would be feasible for the company unless alternatives were
considered. The completion deadline is projected to be 14 Aug 2020 after alternatives are
added, with the beginning point being 6 July 2020. This is clear that in the budget deal a cost
provision line was written up. AF PLC needed to make up for the TTF at the end of a period,
i.e. 25/09/2020, and was forced to compensate 100 K pounds a day for a whole day's rest.
Early on the production day, the company gets a £50 K incentive every day. Complementary
solutions can enable the client finish the project sooner, so the client can complete the
project early if the business follows the original approach.
So these are some key recommendations which need to be implemented by project manager
of above company’s project. If they will do so then it will be beneficial for them to get
higher amount of profits and better outcome of project. In the absence of applying
recommended aspects, it will be difficult for AF plc to manage project in an effective
manner.
17

REFERENCES
Books and Journals
Burke, R., 2013. Project management: planning and control techniques. New Jersey, USA. 26.
Chatterji, A. K. and Fabrizio, K. R., 2014. Using users: When does external knowledge enhance
corporate product innovation? Strategic Management Journal 35 This might be helpful in
supporting the need for RCC to understand their customers
Heagney, J., 2016. Fundamentals of project management. Amacom.
Kerzner, H., 2017. Project management: a systems approach to planning, scheduling, and
controlling. John Wiley & Sons.
Larson, E. and Gray, C., 2013. Project management: The managerial process with MS project.
McGraw-Hill Education.
Larson, E.W. and Gray, C.F., 2011. Project management: The managerial process.
Leach, L.P., 2014. Critical chain project management. Artech House.
Levitt, R.E., 2011. Towards project management 2.0. Engineering project organization
journal. 1(3). pp.197-210.
Marchewka, J.T., 2016. Information technology project management: Providing measurable
organizational value. John Wiley & Sons.
Ojiako, U., Ashleigh, M., Chipulu, M. and Maguire, S., 2011. Learning and teaching challenges
in project management. International Journal of Project Management. 29(3). pp.268-278.
Pinto, J.K., 2013. Project management: achieving competitive advantage (No. s 57). Upper
Saddle River, NJ: Pearson.
Portny, S.E., 2017. Project management for dummies. John Wiley & Sons.
Schwalbe, K., 2015. Information technology project management. Cengage Learning.
Slack, N., 2015 Operations Strategy, Pearson Education, Harlow
Walker, A., 2015. Project management in construction. John Wiley & Sons.
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Part B - Reflective Essay
 Challenges encountered throughout the Module- I faced a range of challenges in the
technical project as project manager of the AF PLC that raised big problems throughout
the completion of the project. I had a few difficulties as a huge team undertook the
project while none were directly responsible for the project tasks in the management
process. These layout shifts produced significant uncertainty in the project as no team
leader had specific role requirements. The reason is these issues are that during my role
as project manager expectations were the big. This is so because AF PLC is a famous
company, workers in any case are more accountable than ever.
 Difficulties producing the assessment- During producing assessment I faced some
difficulties which resulted as mentally stress at that time. Mainly I faced problem of
allocating roles and responsibilities to the different team members. Due to which, I was
unable to know potential of workers. As well as resources were not used in an effective
manner. Another issue for me was compilation of project on time because due to
unbalanced allocation of task, it was difficult for me to complete all the task on given
time frame and cost. So these are some key difficulties which occurred during producing
the assessment. In addition, I was working as project manager thus; it was my duty to
assign work effectively to all members of team and to review performance of each
member of team. Though, from these issues I learnt a lot of things about how to deal in a
critical situation. These obstacles will surely help me in upcoming time to deal with
various aspects of better project management.
 Clear personal development goals- After the end of project of AF Plc, I determined some
key personal goals which are based on my experience as project manager. Herein, below
description of these personal development goals is done in such manner:
I will focus on time management. This is so because it is essential for a project manager
to be punctual so that rest of team members can motivated. During above company’s
project I was not aware for time management which resulted in many issues.
Along with I will focus on enhancing own speaking skills. As I do not have better
speaking skills with those who are new. Due to which I faced issues during project of
above AF plc.
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 Characteristics of a Good Project Manager- A good project manager should have below
mentioned skills:
Better communication skills- At the beginning of the project is crucial the strong
communication allow any task to achieve the right choice. Due to effective
communication, different types of activities of a project becomes easier to understand.
Thus, it is essential for a project manager to have effective communication skills. In AF
PLC, problems can be identified among team members through strong communication
skills. In addition, as a project manager I will make clear and effective communication
with all members of team so that overall objective can be achieved in limited time and
resources.
Good decision maker- I shall take all actions in a corrective manner regards to decision
making in AF PLC project as project manager. When an action is made in due time, the
problem is viewed as good and better handled. As a project manager, the proactive
research would improve my abilities to make good choices and deliver positive outcomes
for overall goal of a project.
Technical Expertise- Though AF PLC is a construction consultancy company, a project
manager with technical expertise is important to the organization. Management decisions
are achievable if they are made practicable with the right resources and technological
know-how is key to project completion. Hence, as a project manager it is essential for me
to have enough knowledge regards to technical expertise.
Leadership skills- A project manager is a team leader who decides on the mission and
carries out each work to accomplish the targets. These management practices should be
improved to insure that all project team leaders follow my instructions and duties as
legislators. It is particularly valuable to take the initiative that creates the company's
reputation in the competitive market.
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