Project Management Practices and Techniques

The provided assignment details a comprehensive examination of project management practices and techniques. It includes references to multiple academic sources, including books and journal articles, that discuss various aspects of project management, such as procurement, integration management, and strategic planning. The assignment also references online resources related to natural gas production in Australia and gas supply hub churn rates. This analysis is likely part of a larger study or research paper on project management, aiming to provide insights into effective practices and techniques for successful project execution.

PROJECT INTEGRATION
AND PROCUREMENT
MANAGEMENT

TABLE OF CONTENTS
MAIN BODY...................................................................................................................................1
1. Describing gas market in Australia by using statistics.......................................................1
2. Outlining sustainable procurement practices for AGL.......................................................5
3. Considering new technologies and impact on procurement, both for end customers and for
producers in the supply chain.................................................................................................6
4. Producing project integration management plans..............................................................6
REFERENCES..............................................................................................................................10

MAIN BODY
1. Describing gas market in Australia by using statistics
The Australian gas market is one of the biggest sector in terms of production and
supplying to other economies i.e. exports. The industrial trend has been quite steady and stable
and generating revenue for the country in the best possible manner and enhancing financial
growth. The retail and wholesale businesses have been major driving force in country.
Figure 1: Domestic gas consumption and LNG exports
(Source: Gas price trend review report. 2017.)
It can be interpreted from the chart that LNG (Liquefied Natural Gas) exports are injected
up to major extent. Australia is considered to be a major LNG exporter as it shipped 25 million
tonnes (Mt) equals 1,360 PJ (Peta Joules) in 2015 which signifies that growth in the future
course of action is certain and more avenues will be achieved quite effectually. The chart shows
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various consumption and exports done by various territories such as WA consumption, EA
consumption, WA exports, EA exports, NT consumption and exports where WA (Western
Territory) EA (Eastern Territory) and NT (Northern Territory). It can be interpreted that NT
consumption has been increased more in comparison to other territories in 2017 and reached to
more than 3000 PJ in 2017-18 (Gas price trend review report. 2017).
Above graph shows natural gas production in the country from 2005 to 2016 implying
gas production has effectively maximised. It is evident from fact that in 2005, figure was 39.2 (in
a billion cubic metres) which increased quite remarkably in the span of 10 years. Figure reached
to 91.2 at end of 2016 financial year (Natural gas production in Australia from 2005 to 2016 (in
billion cubic metres). 2016). This clarifies that Australian energy and natural gas sector has
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Figure 2: Natural gas production in Australia
(Source: Natural gas production in Australia from 2005 to 2016 (in billion cubic metres). 2016.)

initiated healthy growth in recent years and will continue to attain future growth directly
benefiting economy as a whole.
It can be interpreted that Wallumbilla in Queensland is one of major supply hub of gas.
Spread products are made allowing for trading between Wallumbilla and Moomba marketplaces.
The graph shows that in various quarters of 2016 and 2018, major increment in percentage is
seen in Q2 of 2018 of 6% implying growth rate of gas supply (Gas Supply Hub churn rate.
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Figure 3: Gas supply hub churn rate
(Source: Gas Supply Hub churn rate. 2018.)

2018). It was below 2% in 2016 Q4 and 4% was achieved in Q1 2018 leading to maximum of
6% in 2018 Q2.
Figure 4: Small customers on standard and market retail contracts—by jurisdiction
(Source: Small customers on standard and market retail contracts—by jurisdiction. 2018.)
From the above gas market analysis of Australia, private and business customers can be
carried out. Various retailers supply gas to small customers in Queensland, New South Wales
and South Australia have different market retail contracts (Small customers on standard and
market retail contracts—by jurisdiction. 2018). The purchasing power of suppliers are based on
contracts done on behalf of legal rules and jurisdictions. Regulated prices are provided and
protection to customers is given. Standing offer tariffs are higher than market retail contracts.
The agreements of corporate power purchasing are currently in markets so that renewable energy
can be attained at agreed contract rate.
The projected consumption rates are expected to meet demand in coming future. The
customers now purchase energy on basis of contracts governed by Australian Energy Regulator
(AER). On the other hand, in future, standard and market retail contracts will undergo change
(Nicholas and Steyn, 2017). Melbourne Renewable Energy Project (MREP) will be supported by
local governments, cultural institutions and completely new build facility would be made. The 39
turbine 80 MW capacity wind farm would be made in Western Victoria. The purchase agreement
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is being done by members committed to purchase 88 GWh per year of electricity. Thus, it will
change future of Australia.
2. Outlining sustainable procurement practices for AGL
AGL Energy Ltd is one of the biggest and oldest energy producer and retailer listed on
ASX. It means that company needs to maintain variety of activities and tasks in a way so that it
may be able to sustain in long-run. The Sustainable Procurement practices are provided by
organisation which will be helpful in protecting the environment from purchases made by it and
proper buying from suppliers so as to reduce impact of harmful effects on nature from practices
of firm. In 2014, AGL had developed Supplier Code of Conduct while engaging in business with
AGL. It had provided guideline in which all the suppliers trying to connect with AGL should
adhere to set of requirements. This code includes corporate governance and business ethics,
labour policies, discrimination and human rights, health and safety at workplace. Moreover, it
also includes supply chain strategies (Kerzner and Kerzner, 2017).
Another practice includes providing training to staff and effectively indulge them in set
of principles for easing off procurement practices. The sourcing activities form a major part in it.
Operating activities are those which are used in daily tasks and are essential from perspective of
company in the best possible manner. In this way, operating activity in AGL is to promote
supplier diversity because they collaborate with not-for-profit companies which will provide
AGL with suppliers who are not doing business with company and direct link would be set
between organisation and supplier hence, cutting the middlemen costs. This will lead to
procurement of new contracts and employment opportunities will be provided to suppliers.
Maintenance activities are required so that procurement can be done in a better way. The
tasks that include in AGL Energy Ltd is to do inspections, checking for leakage of oil and gas,
lubrication. These are common activities undertaken in organisation and preventive measures are
adopted so as to reduce the impact of any leakages (Harrison and Lock, 2017). On the other
hand, project and operations are two interdependent factors which influences organisation's
operations. Projects have definite start and end of which AGL has taken several initiatives in the
form of activities which are to be done for achieving goals. While, operating activities are of
repetitive nature or ongoing such as accounting, inspections etc.
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3. Considering new technologies and impact on procurement, both for end customers and
producers in the supply chain
The new technologies and impact on procurement to producers and end users are as
follows-
TEG (Tri Ethylene Glycol) dehydrator emission controls-
This will reduce emission of methane caused by TEG by removing moisture from natural
gas just before transportation of the same takes place. It is done by utilising additional equipment
and optimisation process. Producers will be benefited as methane emissions will be controlled.
End users will also be benefited as they can purchase from producers with reduced
environmental impacts (Banihashemi and et.al, 2017).
Industry 4.0-
It is an emerging technology which is used for transforming manufacturing by
converging physical-digital systems for enhancing quality, lowering costs, thereby, maximising
efficiency. Procurement will be conducted in effective manner and impact will be positive for
manufacturer as lower costs would be there. Thus, end-users will be benefited as items will be
less priced.
IIOT (Industrial Internet of Things)-
It is another oil and gas industry transformation by which physical devices are embedded
with networks, electronic devices on computer system. This will lead to lower costs and
enhanced procurement management (Papke-Shields and Boyer-Wright, 2017).
By analysing new and emerging technologies, it can be stated that future of gas industry
will outreach from difficulties particularly faced in production of natural gases. Moreover, firms
like AGL are already focusing on environment and suppliers are approached accordingly so that
reputation of organisation may not be affected and results must be in favour of environment.
Thus, dual benefits will be aroused in the future to industry in form of higher profits and less
impact on nature, thus, sustaining in long-run.
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4. Producing project integration management plans
Introduction-
The project integration management plan will list down activities which AGL has to
perform in order to enhance its supply chain and procurement management (Javed and Liu,
2017). Contracts required, risk related to procurement, costs determination and performance
metrics will be discussed.
Procurement Management approach-
Organisation will implement 'Procure to Pay' policy guiding on procurement activities. It
lists down requirements for maximising sustainability and reducing overall environmental
impacts and contributing towards business ethics and streamlining supply chain.
Procurement-
It is a process to purchase needed materials in the manufacturing such as equipment’s and
supplies. An agreement is done from external source, usually bidding process takes place.
Item/Service Justification Needed By
Item A Manufacturing purpose only 10/09/18
Item B Required for processing and anticipation of costs 20/09/18
Item C Transferring the data into complete new system 30/09/18
Contract type-
Firm-fixed price contract will be used because minimum burden is faced by contracting
parties i.e. company in this context but maximum risk is on contractor who undertakes contract
and cost escalations may prevail leading to loss to the party. It is suitable for organisation.
Procurement Risks-
There are various risks which can hamper firm's procurement management. These are
conflicts with suppliers in current contracts affecting future and present relationships, delays in
shipping of ordered items, improvement needed in technologies etc.
Procurement Risk Management-
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The purpose of procurement risk management is to alleviate risks which could evolve
because of purchases made or agreements made with competitive parties. The risks stated above
will be managed in accordance to prescribed manner (De Araújo, Alencar and de Miranda Mota,
2017). Project team will include sponsor and other representatives designated in contracting
department and meetings would be presided by Project sponsor and in absence of him, Vice
President will be appointed.
Cost Determination-
The bids will be entertained from suppliers and RFP will be required. In this proposal,
WBS is needed in order to get clarity about roles and responsibilities of workers and project will
be delivered at schedule accordingly. Hence, seeking bids and roles, costs can be easily
determined (Pheng, 2018).
Standardized Procurement Documentation-
The documentation to be used in procurement are standard request such as Background,
proposal process, timelines, pricing forms, terms and conditions, type of contract i.e. firm-fixed,
intent letter, procurement process evaluation form, audit form etc.
Procurement Constraints-
The constraints are cost, scope, resources and technology which will impact on
organisation. These constraints are needed to be strategically analysed so that project schedule
may not get disturbed and timely completion may be done (Lo, Shen and Chen, 2017).
Contract Approval Process-
Formal approval will be done as big purchases are required. Established bidding process
is made, then by mutual considerations, selection and approval is made. The team will analyse
vendor proposals and larger purchases will be approved by Contract Review Board.
Decision Criteria-
The decision-making is vital element in finalising deal with respective supplier. The
quality, cost, vendor's ability to provide on-time delivery of goods, past performance are to be
analysed so that deal may be beneficial for firm.
Vendor Management-
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It is termed as a discipline enabling firm to initiate control on costs, mitigating risks to
gain value from vendors throughout deals made between them and company. Meetings needs to
be done with selected vendors at regular intervals. It is required to know progress of project and
completion of the same within stipulated time (Havranek, 2017).
Performance Metrics for Procurement Activities-
Vendor Product
Quality
On Time
Delivery
Documentati
on Quality
Development
Costs
Development
Time
Cost per Unit Transactional
Efficiency
Vendor #1 2 2 1 1 2 2 2
Vendor #2 3 2 2 2 1 2 2
On the basis of rankings, Vendor 2 will be selected on higher and acceptable rank order
in comparison to Vendor 1.
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REFERENCES
Books and Journals:
Banihashemi, S. and et.al, 2017. Critical success factors (CSFs) for integration of sustainability
into construction project management practices in developing countries. International
Journal of Project Management. 35(6). pp.1103-1119.
De Araújo, M.C.B., Alencar, L. H. and de Miranda Mota, C. M., 2017. Project procurement
management: A structured literature review. International Journal of Project
Management.35(3). pp.353-377.
Harrison, F. and Lock, D., 2017. Advanced project management: a structured approach.
Routledge.
Havranek, T., 2017. Modern project management techniques for the environmental remediation
industry. Routledge.
Javed, S. A. and Liu, S., 2017, August. Evaluation of project management knowledge areas using
grey incidence model and AHP. In Grey Systems and Intelligent Services (GSIS), 2017
International Conference on (pp. 120-120). IEEE.
Kerzner, H. and Kerzner, H. R., 2017. Project management: a systems approach to planning,
scheduling, and controlling. John Wiley & Sons.
Lo, S. M., Shen, H. P. and Chen, J. C., 2017. An integrated approach to project management
using the Kano model and QFD: an empirical case study. Total Quality Management &
Business Excellence.28(13-14). pp.1584-1608.
Nicholas, J. M. and Steyn, H., 2017. Project management for engineering, business and
technology. Routledge.
Papke-Shields, K. E. and Boyer-Wright, K. M., 2017. Strategic planning characteristics applied
to project management.International Journal of Project Management. 35(2). pp.169-179.
Pheng, L. S., 2018. Project Integration Management. In Project Management for the Built
Environment (pp. 47-61). Springer, Singapore.
Online:
Natural gas production in Australia from 2005 to 2016 (in billion cubic metres). 2016. [Online].
Available Through: <https://www.statista.com/statistics/667147/australia-natural-gas-
production/>
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Gas price trend review report. 2017. [Online]. Available Through:
<https://www.energy.gov.au/sites/g/files/net3411/f/gas-price-trends-review-report-
revision2-mar-2017_pdf_5913_kb.pdf>
Gas Supply Hub churn rate. 2018. [Online]. Available Through:
<https://www.aer.gov.au/wholesale-markets/wholesale-statistics/gas-supply-hub-churn-
rate>
Small customers on standard and market retail contracts—by jurisdiction. 2018. [Online].
Available Through: <https://www.aer.gov.au/retail-markets/retail-statistics/2017-18-q2-
gas-contract-types-by-jurisdiction >
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