PROJECT CONTROL

MASTER OF TECHNOLOGY
IN
PLANNING

PREPARED BY: GUIDED BY:

SHAH NIKUNJ (P08PL410) SHRI D.A PATEL

YEAR: 2009

P.G CENTRE IN TOWN PLANNING

DEPARTMENT OF CIVIL ENGINEERING

SARDAR VALLABHBHAI NATIONAL INSTITUTE OF TECHNOLOGY

CONTENTS
1. INTRODUCTION

2. TIME AND COST CONTROL

2.1 PROJECT COST CONTROL

3. THE EARNED VALUE CONCEPT (EVC) METHOD OF

PERFORMANCE REPORTING

4. PROJECT QUALITY CONTROL

4.1 SELECTION OF TECHNOLOGY

4.2 DESING CONTROL

4.3 VENDOR QUALITY AND CONTRACTOR QUALITY

4.4 QUALITY EQUIPMENT AND MATERIALS

 4.5 OPERATION AND MAINTENANCE INSTRUCTION
AND TRAINING

4.6 QUALITY CONTROL THROUGH “QUALITY

CIRCLE”

4.7 QUALITY AND CORRUPTION

1 INTRODUCTION

The basic control process in any industrial activity is a three-step function of

following standards.

1. Establishing performance standards.

2. Measuring the performance against the standards.

3. Correcting deviation, if any, from the standards.

Controlling the factors of time, cost, and quality leading to project success
calls for a great deal of seriousness on the project of the management. It also
required the involvement of people at all organizational levels of the enterprise.

The total control system shall include also a well designed management
information system, a well planned communication system, a total risk
management system, and an independent senior audit system, reporting directly to
the top management.
 As project time and cost are interdependent to each other, we will discuss
time and cost control (TC) together and quality control (QC) separately.

2 TIME AND COST CONTROL

Numerous tools and techniques are available for TC control, all aimed at
ensuring that the project is successfully executed without time and cost over runs

The first major task in TC control is to plan and breakdown the project into
WBS and develops from them the master schedule and milestone network on the
one side and the master budget on the other. These two are the major tool to
control the time and cost factors of the project performance.

From the master schedule and the master budget, detailed schedule of time
and resources are prepared and they are integrated with OBS with relevant
responsibilities and authorities given to the project team, functional department,
and individual agencies.

Detailed schedule used for TC control shall include the following:

1. Master time schedule

2. Engineering time schedule

3. Procurement time schedule

4. Fabrication time schedule

5. Construction time schedule

6. Commissioning time schedule

7. Schedule of engineering man hours

8. Schedule of Procurement man days

9. Schedule of project team man days

10. Schedule of Construction supervision man days

11. Schedule of Direct field labour days

 12.Schedule of highly skilled craft hours

13. Schedule of indirect field man days

14.Schedule of contracting

All these tools and information shall be used as per requirement in the
control function. Several techniques and approaches are available to exercise
project controls. Basically, all techniques go to break down the project into
numerous short-term measurable targets built on logical baseline: watch and
measure their achievement at short intervals; ascertain also the root causes of the
variances: and take action to offsets the ill effect of past variances and at the same
time prevent future potential variances.

2.1 PROJECT COST CONTROL

Project cost has to be controlled on two different bases

1. BY COMMITMENT AND

2. BY ACTUAL SPENDING

Cost control by commitment is necessary to control the cost at the

commitment stage of purchases and contracting, and to ward off the danger of
committing to spend beyond budget provision. Especially in the case of materials
purchases and construction contracts, the effective control point is the commitment
stage. If control is exercised only on the basis of actual spending on these major
cost components, then the recommending authority are the most likely to be
misguided.

For overhead, however, a control by ‘actual versus expendables’ linked with

proportionate percentage progress and, in some cases, the lapse of proportionate
project time may be sufficient.
 The commonplaces project costing method is not intended to be discussed
here. The type of simple cost commitment control account to be maintained is
indicated by the cost sheet. An effective cost control by commitment on purchases
and contracting will take care of about 70% of total project cost. A further 10-15
percent approximately will be controlled by the project engineering department
through engineering man hours. The remaining 15-20 percent overhead cost shall
be controlled as follows:

1. Salaries by cost-related man days control. If any man days or the project
time overruns, then the manpower’s cost would correspondingly exceed the
budget.

2. Other expenses, by cost- related project- months elapsed. If the project time
overrun. Then the time related overheads also would overruns.

3 THE EARNED VALUE CONCEPT (EVC) METHOD OF

PERFORMANCE REPORTING

There are many elaborate forms for reporting on performance. Any report made to
top management on the project performance should be quick-hitting and capable of
drawing immediate attention to all significantly variances and their causes capable
of leading the project overruns. Frequently made exception reports can serve as
good control tools in the hands of the top management should be no longer then
one page, so that busiest executive reads it and retains its contents in his memory.
It is desirable to present project performance report in curves or charts, as pictures
stick to memory more easily than words and number.

The EVC method of performance reporting is an effective control technique

developed by the U.S department of defense. It is based on the concept that
quantitative performance can be evaluated in terms of earned financial value, and
be used as the single yardstick to measure the project performance efficiency. The
value of the work performed at the budgeted rate is the earned value.

4 PROJECT QUALITY CONTROL

The tools and technique used for achieving quality control are described below.

1. Project specification
 2. Strategy of management as regard quality and cost, the project team, the QC
cell and individual officer’s responsible for quality assurance will be guided
by this strategy.

3. Regulatory bodies and/or internally developed procedures for quality

practices.

4. Checks and audit by external inspecting agencies and internal QC personnel.

5. Continuous improvement achieved by keeping off variability, through

efficient practice and by training and involving the people concerned with
the performance, making “ quality” a culture of the enterprise.

6. Achievement/ assurance report and documents.

The application of this tools are described briefly below

4.1 SELECTION OF TECHNOLOGY

The technology selected for the project should be a tried out and mature one
whose performance in your plant need not have to be doubted, as long as you use
the stated raw materials and inputs. It should be competitive, product-oriented,
renewable and cost effective. You should not acquire a cheap, untried technology.

4.2 DESING CONTROL

The function of design control is to assure that the design meets the stated
requirement of the project. The project engineering(PE) department shall ensure
that project designs, whether done by itself or the consultant is right and done the
right way the first time without any need for revision and changes. They shall
achieve this through a set of meticulously observed design office practices,
regulatory requirements, standards for documents identification, documents
approval and distribution arrangements, discipline checks, inter-discipline checks,
internal-external design review, charge control and corrective action. Design
quality take care of such important aspect as energy conservation reduction in
weight and materials input, minimum process time, improved layout, improved
maintainers facilities, plant reliability and maintainability.

4.3 VENDOR QUALITY AND CONTRACTOR QUALITY

Vendors or manufactures of equipment and materials should have the necessary
qualification from the point of view of capability to produce quality goods, and to
supply them in time. Vendor’s quality is ensured through prequalification
application, a visit to his factory, inspection of production and testing facilities,
interviewing his staff, looking into the type of customers he has been serving
examination of his technical capabilities, professionalism in section and finical
stability, his present order level, and so on. Order for manufacture and fabrication
should be given to qualified venders only. Equally important is contractor
quality. A contractor of the prescribed quality and capability will usually do a good
quality job.

4.4 QUALITY EQUIPMENT AND MATERIALS

Assuring vender’s quality is not sufficient. Through well written

specification, complete and clear drawings, equipment description, order condition,
inspection and testing of raw material, materials handling facility, production
process, production equipment, testing arrangement, etc., your project team must
ensure that good quality equipment is produced and delivered, on schedule. There
should be inspection at all essential stages of manufacture. In case of bulk
materials they should be approved in advanced of ordering and again tested in the
prescribed manner before delivery.

4.5 OPERATION AND MAINTENANCE INSTRUCTION AND TRAINING

Operation and maintenance instruction for the plant as a whole and the
individual equipment separately from part of the engineering documents. These
have to be considered also as a part of quality assurance document. They should be
clear and complete and be made available much before starting the commissioning
activities so that the commissioning and quality control personally get sufficient
time to study them and seek clarification and/or correction rather than rushing
through them at the last minute, with the possibility of overlooking any potential
dangers to the plant or product.

Training of the O&M personnel of various levels is strictly a quality

assurance measure. Sufficient number of men of different levels shall be given
intensive training in similar operating plants. Their proficiency shall be tested
before they are given independent responsibility, so that they do not first fill the
furnace with gas and then insert the lighted torch.
 By the time the project is ready for commissioning, the permanent operation
and maintenance quality control system should also be ready for introduction.

4.6 QUALITY CONTROL THROUGH “QUALITY CIRCLE”

Quality circles are groups belonging to different function who meet, discuss, and
solve work-related problems through discussion and consolation, and achieve
quality improvement in performance and enrichment of the quality of the work life.
An enterprise can have several quality circles, one for each plant segments, or a
department or a unit.

Quality control in a large project is not a single function area’s sole

responsibility. The QC cell which is usually attached to the PE department may do
the co ordination, but the quality controlling has to be a companywide function,
cutting across all functional departments, with everybody’s serious involvement,
treating as an essential requirement for the enterprise’s survival. The circles may
succeeds easily in bringing about an awareness in all individual of this essential
requirement and make it an organizational culture. People should be made to think,
to innovate. They should be encouraged to come up with suggestion on almost
everything concerning quality, and with that, reduction of cost and time.
Everybody should ensure good quality in every piece of work he does for the
project, regardless of the discipline on which he is employed and the level at which
he works. Quality should be the individual performance first and collective
performance next.

4.7 QUALITY AND CORRUPTION

Owners and consultants executives vested with decision making authority

and political bosses who do high level liaison, taking bribes or undue favors from
vendors and contractors is not an unheard of practice. In some contract experienced
vendors and contractors make a small provision for such pay-offs in their pricings.
But if people try to make money beyond such provision, such extra money making
will be the cost of quality. Use of insufficient cement and other costly inputs,
incorporation of inferior quality materials, non- observances of specification under
building, over statement of quality and quantities, and the like are corrupt practices
indulged in for misappropriation of funds at the cost of project quantity.