Technological Innovation Management and Entrepreneurship

Subject code: 21EC61

Module - 5
Syllabus:
Project Design and Network Analysis :


Introduction:
• Project:
It is defined as the combination of interrelated activities which must be executed
in a certain order before the entire task(non repetitive task) is completed.
• or Project is a collection of set of activities or collection of task which needs
to perform so as to accomplish desired outcome.
• The execution of a project follows a definite path of planning, scheduling and
controlling.
• Basic requirement of project:
1. It should be completed without any delay
2. It should use available Man-power and other resources as small as possible.
3. It should involve as small investment as possible.
Project Design and Network Analysis :


Introduction:
• Project Design:
The first and the foremost aspect of a project is the project design.
• Project design is the heart of project entity, it is defines the
individual activities and their interrelationship with each other and
how they are going to carryout so as to get desired outcome.
• Simply project design is to give the over view of the project or
frame work of the project is called project design. And it provides
different means- design, planning, scheduling, controlling of the
project or project activities.
• Project design enables to identify the flow of event which must take
place for the successful implementation of the project
Project Design and Network Analysis :


Introduction:
• Network is a graphical illustration of project activities or graphical pattern.
• Network Techniques helps the management of an organisation in performing
these function efficiently and effectively.
• together they stand concerned with the development of the project work plan
and the duration time
• The strategy selected as a result of the techno-economic analysis forms the
initiation of the project design development.
• project design is the frame work of a project formulated with detailed
sequences and develops an acceptable work plan for the project.
• it helps the entrepreneur to implement the project as scheduled without any
hindrances
 Project Design and Network Analysis :
Relation between the project Design and Network:
• we know that project is a collection of activities,
which we need to perform so as to it is carried out
by using some strategy.
• project design is the transformation some strategy.
• The strategy gives the essential details for design
of project.
• when we study the strategy of project then will get
sequential narration.
• The strategy is examined in detail and the details
are utilized to compile the sequential narration of
the constituent activities of the project.
• this compilation of the sequential narration is
known as the project Logic,
• When project logic is represented in the form of
graphical pattern (flow chart) it is known as network
• Network has the inter connection of different
activities which is called network nodes and the
interconnection signifies the relation between
different activities and when these have to be
carried out and what is the time duration so on.
• so the relation between project deign and network
is – project design has to be represented in the
form graphical pattern.
 Project Design and Network Analysis :


Importance of Network Analysis:
The Network analysis has the potential of unfolds the unknown
snags(obstacles) involved in project estimate and project design- will get
better idea of project, we can take corrective actions which impact the project
process improves and also better out come.
The Network analysis fascinate the execution of project efficiently and
effectively.
The importance of network analysis listed below.
a). i) the hole project should be considered with reference to the sequence of
activities
and events.
ii) sequence here is not a mere mathematical problem. It underline
activities that are
follow one after another leading to an event.
b) This would also require that the events should be thought of in different
streams of operations and their relationship understood clearly.
c) The whole project may be put on one network while different segments of
the project may be detailed out in separate networks for final integration in
the overall network.
 Project Design and Network Analysis :


Need for Network OR Importance of Network Analysis:
d) the time estimate may be made taking into view two discrete aspects:
i) in one aspects, projects in which previous experience does not exist at all
and time
estimates would have to be on probabilities and
ii) in other aspects, time estimate may be deterministic being based on
previous
experience of similar types of operations in different other projects
e) Cost estimate would depend on the project time estimates and the changes in
the prices of different factors of production.
f) The physical progress of the projects, individually and simultaneity of events,
jobs farmed out snags in different area of project work would all require
adequate notice and application of correctives in proper time. It is also possible
that management think it appropriate and economical to speed up completion
of projects by what is known as’ crashing ‘
Project Design and Network Analysis :

Network Design:/Network Analysis:

Every network technique uses these are the components, based on these only network is design
for particular project.
• A network comprises a set of exponents( components)connected with each other in a
sequential relationship with each step till the completion of project.
• Project design is one indicates what are the activities are their ,how they are interrelated , so
these details taken as an input for the network.
• Network analysis is a system which plans both large and small projects by analysing the
project activities.
• Projects are broken down into simple activities, which are then arranged in a logical sequence.
• it is also decided as to which task will be performed simultaneously and which other
sequentially.
• A network diagram constructed above presents the relationship between all the activities
involved see above fig.
• Time, costs and other resources are allocated to different activities.
 Project Design and Network Analysis :


Origin of PERT(Project Evaluation and Review Technique) and CPM(Critical Path Method):
• PERT and CPM are two of 40 different names given to network analysis.
• PERT and CPM are extension of Gantt milestone chart
• PERT and CPM are Network Techniques were developed in the U.S. independently.
• CPM came into focus about 1957 as an offshoot of collaboration between Due
Point and Remington Rand.
• CPM is mainly focused on the activities themselves and the cost associated with
completion of each activity and optimum plan for project as a hole.
• PERT was developed in 1958 as a result of collaboration between the
Operational Research Division of the United States Navy and a firm of business
consultants. It had a emphasis on the events rather than the activities leading to
events.
• PERT was applied to help solve problems of producing the Polaris Missile system
to a very tight schedule.
• Application of PERT has been based on probability estimates covering those
pessimistic, those optimistic and those considered normal.
Project Design and Network Analysis :


Network Techniques:
• Symbolic representation of essential characteristics of a project is
called network Techniques.
• there are more than 40 Network Techniques used in entire world.
• earlier Bar chart , Gantt Milestone chart were used, due to some
draw back of these chart , most widely used techniques are PERT
and CPM which are extension of Gantt Milestone chart.
Needs for Network Techniques:
• Network analysis helps in designing, planning, coordinating,
controlling and decision –making in order to accomplish the project
economically in the minimum available time with the limited
available resources.
 Project Design and Network Analysis :


• bar chart has the following disadvantages:
a) A bar chart becomes too cumbersome while dealing with big and complex
projects when the activities are to be considered in detail and their interaction or
interdependencies are to be studied clearly.
b) a bar chart does not point out which tasks should be given priority as regards
resources (ie men, money, materials and machinery ).
c) the effect of changes in schedule cannot be evaluated with the help of a bar
chart.
d) a bar chart neither satisfactorily tells the time at which the activities begin
and end nor does indicates tolerances in activity timing.
• Due to these draw back , , most widely used techniques are PERT and CPM
• PERT and CPM concerned with two concepts.
1) Events : An event is a specific accomplishment that occurs at a recognisable
point of time and does not call for either the need of time or resources
2) Activities: An activity is the work required to complete a specific event.
 Project Design and Network Analysis :


• Activities: An activity is the work required to complete a specific event.
• or it is the task that requires time and resources for its execution
• an activity is represented by an arrow , the tail represent the start and head
represents the finish of an activities.
• the length , shape, direction of arrows has no relation to the size of activity
Events or nodes : An event is a specific accomplishment that occurs at a
recognisable point of time and does not call for either the need of time or
resources
• or It is the beginning and end point of an activity
• it is a point in time
• it does not consume any resources
• represented by a circle
• Tail event i event
th

• head event – j event

th

• j>i
Project Design and Network Analysis :


3. Path:
It is a unbroken chain of activity arrows connecting the initial event to
some other event
4, Network:
• Arrow diagram
• Graphical representation of sequentially connected arrow and nodes
representing activities and events of a project
Project Design and Network Analysis :


Project: It is defined as the combination of interrelated activities
which must be executed in a certain order before the entire task(non
repetitive task) is completed.
CPM( Critical Path Method ):
• It uses activity oriented network which consists of a number of well
recognised tasks or activities.
• Each activity is represented by arrow and the activities are joined
together by events.
• CPM is generally used for simple, repetitive types of projects for
which activity times and costs are certainly and precisely known.
• It is a deterministic model.
• ex: construction of a bridge, road , building etc.
Project Design and Network Analysis :


PERT( Program Evaluation and Review Technique ):
• It uses event oriented network in which successive events are
joined by arrows.
• It is preferred for projects that are non repetitive and in which time
for various activities cannot be precisely predetermined
• It is a probabilistic model
• there are three time estimates associated with each and every
activity
1. Optimistic time (to )
2. Pessimistic time ( tp )
3. the most likely time (tm)
ex: Launching of a satellite, R and D of a new product
Project Design and Network Analysis :


PERT( Program Evaluation and Review Technique ):
• It uses event oriented network in which successive events are
joined by arrows.
• It is preferred for projects that are non repetitive and in which time
for various activities cannot be precisely predetermined
• It is a probabilistic model
• there are three time estimates associated with each and every
activity
1. Optimistic time (to )
2. Pessimistic time ( tp )
3. the most likely time (tm)
ex: Launching of a satellite, R and D of a new product
Project Design and Network Analysis :


PERT( Program Evaluation and Review Technique ):
• PERT is a statistical tool used in project management, which was
designed to analyse and represent the task involved in completing a
given project.
• It works as a method of minimising production delays, interruptions, and
conflicts; of coordinating and synchronising the various parts of the
overall job;
• It uses event oriented network in which successive events are joined by
arrows.
• It is preferred for projects that are non repetitive and in which time for
various activities cannot be precisely predetermined
• It is a probabilistic model
• there are three time estimates associated with each and every activity
1. Optimistic time (t )
o

2. Pessimistic time ( t )
p

3. the most likely time (t )

m

ex: Launching of a satellite, R and D of a new product

Project Design and Network Analysis :


Steps in the development of PERT Network:
1. Establishment of objectives: There will be a major objectives to
be accomplished, linked by supporting objectives.
2. schedule work breakdown in great detail
3. Both technical and managerial persons should begin to work
together
4. Each person who participates in the applications of PERT to the
control of the project should have some basic familiarity with the
general nature of the work and with the ultimate objective desired.
Project Design and Network Analysis :


Steps involved in PERT Analysis:
1. Development of project network.
2. Time estimation.
3. Determination of critical path, event slacks, and activity floats.
4. Development of project schedule.(List the milestone or events)
5. Calculation of variability duration and the probability of completion in a given
time.
 Project Design and Network Analysis :


Three time estimate used in PERT:
1. The optimistic time:
• It is the shortest time possible if everything goes perfectly well with no
complications,
• the chance of the optimum actually occurring might be one in hundred.
2. The Pessimistic time:
• It is the longest time conceivable; it includes time for unusual delays and
• thus the chance of its happening might be only one in a hundred.
3. The most likely time:
• It would be the best estimate of what normally would occur.
The difference in these three time give a measure of the relative uncertainty
involved in the activity.
Project Design and Network Analysis :


Advantages of PERT:
1. This technique gives the management the ability to plan the best
possible use of resources to achieve a given goal within the
overall time and cost limitations.
2. It helps the management to handle the uncertainties involved in
projects where no standard time data are available
3. It insists for the right action, at the right point, and at the right
time in the organisation.
Project Design and Network Analysis :


Limitations of PERT:
1. The basic difficulty comes in the way of time estimates for the
completion of activities because activities are of non-repetitive
type.
2. This technique does not consider resources required at various
stages of the project.
3. Use of this technique for active control of a project requires
frequent updating and revising the PERT calculations and this
provides to be costly.
Project Design and Network Analysis :


Limitations of PERT:
1. The basic difficulty comes in the way of time estimates for the
completion of activities because activities are of non-repetitive
type.
2. This technique does not consider resources required at various
stages of the project.
3. Use of this technique for active control of a project requires
frequent updating and revising the PERT calculations and this
provides to be costly.
Project Design and Network Analysis :


Critical Path Method (CPM):
• The critical path method(CPM) is a project modelling technique
that’s used by project managers to find important deadlines and
deliver a project in time.
• In a project , the critical path is the longest distance between the
start and the finish, including all the tasks and their duration.
• The CPM for planning and controlling projects has enjoyed the
widest use among all the systems that follow the networking
principles.
• The CPM has two time-cost estimates for each activity( one time-
cost estimate for the normal situation and the other estimate for the
crash situation) but does not incorporate any statistical analysis in
determining such time estimates.
• CPM operates on the assumptions that there is a precise known
time that each activity in the project will take.
Project Design and Network Analysis :


Steps in Critical Path Method (CPM):
• There are six steps in the CPM
1. Specify each activity
2. Establish Dependency (Activity Sequence )
3. Draw the Network Diagram
4. Estimate Activity Completion Time
5. Identify the Critical path
6. Update the Critical Path Diagram to show progress.
Project Design and Network Analysis :


Advantages of (CPM):
1. It helps in ascertaining the time schedule
2. With its aid, control by the management is made easy
3. It makes better and detailed planning possible
4. It provides to be a standard method for communicating project
plans, schedules time and cost performance
5. It identifies most critical elements and thus more attention can be
paid to these activities.
Project Design and Network Analysis :


Limitations of (CPM):
1. CPM falls to incorporate stastical analysis in determining the time
estimates.
2. It operates on the assumption that there is a precise known time
that each activity in the project will take but thus may not be true
in reality.
3. It is difficult to use CPM as a controlling device for the simple
reason that one must repeat the entire evaluation of the project
each time when charges are introduced into the network
 Project Design and Network Analysis :


Difference between PERT and CPM:
PERT CPM
1. The origin is military (naval) The origin is industrial
2. It is an event-oriented approach It is an activity-oriented system
3. There is allowance for uncertainty No such allowance
4. It has three times estimates There is only one single estimate of time and the emphasis
in one cost
5. It is probabilistic model with uncertainty in activity It is a deterministic model with well-known activity (single)
duration time based upon past experience
6. It does not demarcate between critical and non-critical It marks critical activities.
activities
7. It is especially suitable when high precision is required It is suitable when reasonable precision is required. Ex: civil
in time estimates, ex:Defence project construction projects, industrial expansion schemes etc.
8. Time is averaged No average of time is involved
9. The concept of crashing is not applied The concept of crashing is applied
10 It is time based It is cost based