Abridged Basics for

Career Development

MODULE 01

PROJECT
MANAGEMENT

GO.ASME.ORG/FUTUREME
@ASMEFUTUREME

The American Society of Mechanical Engineers®

ASME®
 PROJECT MANAGEMENT

AN INTRODUCTION TO PROJECT MANAGEMENT

As engineers, we are involved in a wide variety of industrial development activities,
from design of components, equipment, systems or facilities through various phases of
manufacturing, construction or operation. In the context of business, we apply our skills
to help our organizations provide a competitive benefit or develop a solution to a unique
challenge.

“Houston, Tranquillity Base here, the Eagle has landed.” These words of astronaut Neil
Armstrong demonstrate not only the technical achievements of 20th Century, but also the
successful application of a complex project management process.

Any development activity (“project”) requires that unique tasks be performed, resources
allocated, and a time frame established. In order that all involved apply their talents in the
best ways and at the appropriate times, it is generally necessary to implement some form of
project management.

ABOUT PROJECTS PROJECT MANAGEMENT FUNCTIONS

Project Management helps us to achieve the end Effective project management may be summed-
objectives in the face of all the risks and problems up with the acronym POWER. This stands for Plan,
encountered along the way. Success depends largely Organize, Work, Evaluate, and Revise the plan. Also,
on careful planning, carrying out the constituent tasks reporting is very important to keep the client/customer
in a sensible sequence, and deploying resources to informed that the project is on track.
best advantage.
A typical project is broken into several phases in
The nature of a project requires focus on three order to develop the concept scope, quality and
basic goals: quality, cost, and time. A successfully complete the work. These phases are typically used
managed project is one that is completed at the by businesses to define and control project activities
specified level of quality, on or before the deadline, and allocate resources before costs are well defined.
and within budget. Each of these goals is specified in Each project phase must be POWERed and integrated
detail and constitutes the plan of the project. These into an overall budget and schedule.
specifications then form the basis for project control.

While it is possible to strive to meet all three of these

basic goals, it has been said that one can only specify
two of them. For instance, if you have a critical set of
features to implement, and a fixed set of resources, it
may not be possible to fix the duration of the project.

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 FutureME Abridged Basics for Career Development (ABCD)

PLANNING CYCLE
Planning is critical in project management. Planning means listing, in detail, what is required to successfully
complete the project and meet the three critical goals of scope, time and cost. The five basic elements of project
planning are shown pictorially on the right. The project justification specifies the reason for pursuing the project
and is expressed in quantitative or measurable terms.

Customer
Requirements

Project
1. Scope
Objectives

Work Breakdown
2. Scope/Time
Structure (WBS)

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Recycle
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Project
Organization 3. $$$/Time $$$

Project
Schedule 4. Time

Project
Baseline (Budget) 5. $$$

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 PROJECT MANAGEMENT

PLANNING STEPS WORK BREAKDOWN STRUCTURE (WBS)

Establishing clear project objectives and goals is The WBS is a project management tool for defining the
critical at the outset. The project justification specifies project deliverables to be provided and the tasks to be
the reason for pursuing the project and is expressed in accomplished. The basic idea of the work breakdown
quantitative or measurable terms. structure is to divide the total work of the project into
major groups, then to subdivide these groups into
The project justification should relate to a Business tasks, and then if necessary divide these tasks into
Plan, and is typically developed not by Engineering but sub-tasks, to a level where a specific organization, sub-
by Marketing or Product Management. team or individual can be identified to be responsible
for completing the particular activity. The lowest level
Completion of the first phase of the Business Plan of subdivided work should be small enough to permit
lets engineers move ahead with planning the project adequate control and visibility without creating an
development/design. Typical steps are to: unwieldy administrative burden.

1. Break the project down into sub-units or steps PROJECT SCHEDULE

(“work breakdown structure” or “wbs”).
2. Determine the performance standards for each Any project without a schedule understood by all
sub-unit (deliverables). is doomed to fail. Thinking in terms of sequential
phases ensures that all decisions are made and all
3. Determine how much time is required to complete
resources are allocated for efficiently moving into each
each sub-unit (resources and schedule).
succeeding phase.
4. Determine the proper sequence for completing
the sub-units and aggregate the information into a Here are some key steps to creating a schedule:
schedule for the total project (critical path method).
5. Identify codes and standards which apply. (Some • Identify all major events and dates.
of these should be in the business plan). • Decide in detail and in what sequence WBS
6. Develop the cost of each sub-unit and aggregate tasks need to be done, and develop a network or
costs into the project budget. interrelationship of tasks.
7. Design the necessary staff organization, including • Estimate the duration of each separate activity.
the number and kind of positions, and the duties • Activities should be relatable to the WBS.
and responsibilities of each, within the project
• Use the activity duration estimates to calculate the
team.
estimated project duration.
8. Determine what training, if any, is required for
• Identify the time constraints and relate the
project team members.
significance of each activity to the timetable and
9. Develop the necessary policies and procedures. major events.
A good project plan is understandable to all users to • Identify resource constraints and include them in
facilitate inputs on scope (quality), schedule (time) and the plan
budget (cost).

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 FutureME Abridged Basics for Career Development (ABCD)

SCHEDULING TOOLS PROJECT CONTROLS

Program Evaluation and Review Technique (PERT) and Just having a schedule and budget is not sufficient. As
Critical Path Method (CPM) are planning and control the project work proceeds, it is necessary to constantly
methods for defining the parts of a project and putting manage performance to the schedule and budget.
them together in a network form so that the person Performance will not always be perfect; work will slip
responsible for each element of work knows what is and costs may increase. But by constant monitoring
supposed to happen and when in relation to other and applying corrections whenever possible, it
project activities. is usually possible to stay very close to both the
schedule and the budget. This is often called “Variance
The basic difference in PERT and CPM methods is Control.”
the reliability of the estimate of the duration of each
activity. PERT is used when durations are based on Schedule variances are identified when completion
stochastic (probabilistic) data. CPM, on other hand, progress is regularly incorporated into the baseline
is utilized when durations are known or can be schedule. Negative variances (increases in project
reasonably estimated. In most of the applications, CPM duration) require resequencing or additional resources
is utilized, although PERT is often used in government to minimize the variance from the baseline. Completion
sponsored projects. progress must be related to “physical progress” (i.e.,
quantities actually installed) and not the percentage of
A wide range of commercial planning tools are resources consumed.
available for management of simple and complex
projects. Controls in a project are achieved through efficient
Project Risk Management which encompasses
PROJECT BUDGET activities including scheduling control, budget control,
change management, risks & issues management, risk
Every project needs a budget against which to mitigation and contingencies. The focus of controls
measure costs that are expended. The overall project is not only on issues, but also on the timeliness of the
budget requires buy-in from management and from decision-making process. To avert costly delays, issues
the owners of the Business Plan. Breaking this overall must be resolved as soon as possible within a phase,
budget into WBS-related parts permits the project and certainly prior to moving to the succeeding phase.
manager and each task leader to control their own This is shown via the dotted line “loop” below.
performance. You cannot estimate the cost of a project
until you know how long it will take (labor, inflation,
etc.). Therefore, the WBS and project schedule are the
key supporting documents for developing a project
budget.

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 PROJECT MANAGEMENT

PROJECT RISK MANAGEMENT PROCESS

I. PLANNING PHASE
Key Issues:
• Contact Method
• Site/Environment
• Regulatory
• Scope Analysis
• Schedule
• Cost
• Risk Transfer
Attenuation
• Risk Sharing

II. ENGINEERING/DESIGN PHASE

Key Issues:
• Contract Method
• Scope
• Schedule
• Value Engineering
Analysis
• Cost
• Quality
• Constructability
• Bid Basis Attenuation
• Change Management

III. CONSTRUCTION/COMMISSIONING PHASE

Key Issues:
• Contract Method
• Scope Deviations
• Schedule
• Cost
• Staffing/Resources Analysis
• Subcontract Plans
• Quality
• Safety
Attenuation
• Regulatory/Inspections
• Change Management

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 FutureME Abridged Basics for Career Development (ABCD)

PROJECT TRIANGLE
Cost variances are identified as costs that are committed
(intent to purchase or commit resources). By comparing
with the corresponding cost in the baseline budget,
variances can be identified. Negative variances (increases
above budgeted amount) can only be mitigated by cost
savings from another item or utilization of an allowance for
uncertainty (contingency).

Referring to the project triangle below, the impact of

variances can be visualized. Usually, by providing sufficient
budget and schedule allowances, one or two of the three
project goals can be maintained. After variances are
identified and recovery efforts have not been successful,
timely forecasting of the change in project goals (cost or

Tim
Tim
time) is important. It is essential to keep management and
op

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the owner informed. Sc

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In any project, variance from the project plan is to be
expected. But all successful projects have procedures $$$ $$$
in place, from the beginning, to deal with anticipated
variances. The most successful projects minimize variances Increases in scope (quality) may result in an
by anticipating or evaluating potential risks and addressing increase in cost or time to complete, or both.
them as early as possible.
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Tim
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$$$ $$$ $$$

Increases in time (project duration) usually Increases in the costs of elements of a project
results in an increase in cost to complete, or require a decrease in scope to maintain the
requires a decrease in scope to maintain costs. overall budgeted cost and time.

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 PROJECT MANAGEMENT

in summary
The integration of scope, schedule and budget into a project plan is not an easy task.
Engineering education has prepared you with the requisite skills to develop the technical part
(scope) of the plan. The other elements, scheduling and budgeting, and contracting methods
for services, will require additional information and experience. In addition to the “mechanics”
of project management, there is a human dimension, that of team “players” and leaders. A
successful project benefits all participants.

Some people view project management as a tool for forcing people into meeting schedules and
keeping to budgets. It is easy to envision this scenario: “Our data shows that you are late! Get
back on schedule!”

A far more effective scenario is for the project manager to approach an owner, who appears to
be at risk of missing a scheduled commitment, and keep asking “is there any help you could use
that would enable you to meet this upcoming commitment?”

Even though there are established methods and tools for Project Management, success in a
project is always dependent on effective leadership and team work.

frequently asked questions

1. What are PERT and CPM?
PERT – Program Evaluation and Review Technique is a widely used project management tool. It consists of
identifying critical activities of the project and visually depicting them using network diagrams. This technique
therefore gives a broad visibility of the project activities that help in planning and coordination.

CPM- Critical Path Method is a project modelling tool that gives the shortest/longest duration of the project. The pre-
requisite to a successful application of CPM is the listing of all project milestones, their sequence and durations.

2. What are commercial planning tools?

Commercially available software tools like PRIMAVERA, Microsoft Projects etc. apply PERT and CPM principles for
efficient planning and risk management of projects.

3. What is Variance Control?

Variance may be positive or negative based on the planned value. Variances in project do happen in terms of
scope, schedule or cost. A negative or zero variance is what all aim for (i.e. achieving the project in minimum
resources). However, in real life positive variances do happen, and then the project manager’s objective is to keep
variance at minimum.

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 FutureME Abridged Basics for Career Development (ABCD)

4. What is Physical Progress?

Physical progress is the actual (visible) progress of the project in comparison to the planned milestones. Examples
of physical progress are percentage of construction complete, percentage of production complete etc.

5. What is a critical path?

The critical path is the longest sequence of activities in a project plan which must be completed on time for the
project to complete on due date. An activity on the critical path can’t be started unless its preceding activity is
completed, if the previous activity gets delayed by one month say, the entire project will be delayed by one month,
unless risk recovery actions are applied.

6. What is Project Reporting?

Project Reporting is the periodic status descriptions of the project in terms of schedule, scope and cost. Physical
progress, Budget spent & available, Scheduling, Risk Management are the essential elements of Project Reporting.

7. What is Project Risk Management?

In any project, there are risks with respect to scope, schedule and cost. Project Risk Management is the process of
recording such risks, monitoring them and taking the needful corrective actions. The corrective actions (also called
as risk mitigation) are very essential to implement before the risk happens. If you can manage the project risks
efficiently, you can manage the whole project efficiently.

8. What is the role of a Project Manager?

A Project Manager an experience professional and acts the main point of contact and the main coordinator/
manager of a project. The Project Manager is responsible for the deliverables from his/her team and any
consequences thereof. Large projects can have several project managers under a project director/chief manager
depending on the kind of expertise involved. In Industry, the roles of project manager can be in the positions of
Chief Engineer, Engineering Manager, Technology Manager, Project Director etc.

IF YOU HAVE MORE QUESTIONS, PLEASE FEEL FREE TO ASK ON OUR ONLINE FORUM
Credits & References:
This module is the abridged version of ASME Professional Practice Curriculum (PPC) Volume-1
Project Management. The ASME PPC was a joint project of the former Board on Student
and Early Career Development and the Board on Education and was funded by the ASME
Foundation.

The FutureME Abridged Basics for Career Development (ABCD) is a series of abridged and updated versions of the PPC
modules and provide abridged theoretical knowledge supplemented by real case examples. FutureME ABCD is a project of
the ASME Early Career Engineers Programming Committee (ECEPC) and is funded by the ASME Student and Early Career
Development Council (SECD).