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Essentials of Project Management Applied to Case of Washburn

Q: Discuss the fundamental of project management: Case study of Washburn 

Answer

Introduction

Project management is one of the vital tasks for an organisation because proper execution and planning of the project are required in order to achieve success. Project management comprises of the tasks like introducing, planning, accomplishing, controlling as well as closing of a project. Correct management of the project helps in attaining the organisational goals and increasing the market revenue for the industries. In the given study, Washburn engineering has undertaken a new project from Pretoria Oil in order to build topsides modules. Washburn needs to complete the project within the mentioned time or else Pretoria Oil can charge penalty against the company.


Section A: Case study of Washburn

Section 1: Parameters and risks

Part 1

a) Discussing the significance of diverse iron triangle framework that is required to be managed by the project manager of Washburn. Mention in what ways they are related to each other

Business projects have to be completed in such a way where quality is highly assured by the ventures for the better operation. Moreover, cost factors have to be understood so that the execution of the project can be done accordingly. Saltz and Crowston (2017, p.557) mentioned that the attributes like cost, time and quality are measured with the help of iron triangle of the project management. Iron triangle plays a significant role in executing the project because it helps to analyse every aspect of the business before incorporating any project in their system. Washburn engineering has undertaken the project from Pretoria oil and promised to complete within the specific time. Aragonés-Beltránet al. (2017, p.455) claimed that iron triangle is helpful as it aids in organising the tasks of the project eventually so that better aftermath is guaranteed.

Washburn can try to implement various tools that can assist in enhancing the project quality within the limited time. This can be done easily with the help of iron triangle thus; iron triangle 


Risk Identification
Assessment
Reference
Event
Cause
Effect


Caniëls and Bakens   (2015, p.1355)
Lack of funding
Budget Constraints-   allocation in doubt or subject to change 
Project delayed


Mir and   Pinnington  (2014, p.202)
Delay in commencing
Lack of funding may   cause delays in commencing of the project.
Project time and costs   increased.


Hazır  (2015, p.808)
Overwork and   overburden
Employees of other   projects may be forced to work in this project
Increased employee   turnover


Ferrucci et al.(2014, p.373)
Legal Constraints
Maybe faced by the   company owing to Work in progress
Delay in the   completion process


Stark (2015, p.1)
Supplier's Weaknesses
the supplier may delay   in delivering the products
Delay in converting of   WIP to Finished Stock


Wearne (2014, p.67)
Supplier's Constraints
Suppliers may reduce   the credit period 
Increase in working   capital requirement 


Kozak-Holland, and   Procter (2014, p.242)
Rise in Raw material   Prices
The prices of raw   material may rise due to inflation effect
The cost of the project   may rise.


Lappe and Spang (2014,   p.603)
Change in the client   requirements 
The client may demand   some specified adjustments
The process of project   cycle may change.


Morris (2013, p.147)
Technological   Constraints 
The technological   Sufficiency may be affected by lack of funding 
The project may fail   to deliver quality to the client.


Ziek and Anderson  (2015, p.788).
Increase in the price   of the requisites of the project 
Due to the effect of   inflation, the price of the required inputs may rise.
The company may run   out of the project budget.



can be the beneficial part in the project management of Washburn. The three factors of iron triangle

 are interrelated upon each other because of the relation between cost, quality and time help in planning the project properly (Banihashemi et al. 2017, p.145). It is essential that Washburn analyses their market position before the initiation of project. This will help in understanding in what way the project needs to be preceded so that superior quality can be achieved in the project work.


b) Identifying the risks that are being faced by Washburn with the fabrication project of this 

Numerous risk factors like fewer funds and poor quality that need to assessed before introducing the project in the business (Niknazar and Bourgault, 2017, p.192). The project of Washburn has the major risk of lack of funding, which can affect the project completion along with the quality. Due to few funds, Washburn cannot be able to complete the project within the mentioned time that is given in the contract. This might lead Washburn to pay the penalty and suffer an immense loss in their business sector. In addition to this, Washburn can delay the project due to the issue with the budget constraint. Alotaibi and Mafimisebi (2016, p.217) stated that project quality is degraded if the organisations hurry up to complete a project. Washburn can face the risk of poor quality and thus, it will lead to the low-profit margin in the market.


This will help in enhancing the project quality, therefore, bringing good market share. Sometimes, employee turnover can be a risk factor in the project management process because employee might quit if they are unable to undertake the pressure of the task (Liu et al. 2016). The various types of risks related to this project are listed hereby in the below-mentioned Risk Register.


Washburn might face the risk of employee turnover, which will affect the project very badly. The entity Washburn Engineering is also engaged in other different projects in which the employees are already employed. So in order to adhere to the requirements, the employees of the company are required to undergo overwork which might increase the level of burden on the employees. This may also intend the employees to leave the organistaion. This will finally give rise to the employee turnover and the cost of recruitment may also increase. The cost of training may also increase as a result of increased turnover. This can finally impact on company's overall profit for the accounting year.


The company may also have to face the problems related to the suppliers. These problems are mainly the problems related to delay in the delivery time as well as the reduction in the credit period which may ultimately give rise to the increase in the working capital requirement.


The company may also have to face the problem of legal constraint and the inflation effect as well as adjustments in the client specifications. These issues may finally result in the problem of rising in the project costs.


The underlying issues may also result in project undergoing out of a budget. The management of the entity needs to be cautious about all these risk-related factors in order to maintain the minimum required profitability


Part 2 - Costing and Relative Planning

Presenting a network diagram depicting critical path as well as planned duration for the project

Task schedule
Actions
Required Days
Previous activity
Task 1
Fabrication of upper and celler deck
10
-
Task 2
Turbine generation and fuel gas
10
1
Task 3
Flare boom
Cooling systems
Seawater pumping
20
1, 2
Task 4
Installation of decks and boom
Coalesce
10
2,3
Task 5
Gas dehydration systems
Water injection systems
Gas compression systems
10
3, 4
Task 6
Onshore commissioning
10
5


Total course of days
70 days



Providing a Gantt chart by adhering to the professional standards and also calibrate the time scales in weeks and thereby determine the planned completion and execution.

Project management techniques are essential to be adhered by the entities in an appropriate manner in order to ensure the maximum returns from the project (Srivannaboon and Munkongsujarit, 2016, p.2002).  Several project management techniques are followed by various entities in the context of modern day global business for the purpose of ensuring the maximum amount of cash flows from the project thereby to provide minimum expected returns to the stakeholders of the business (Turner, 2016, p. 147).


Critical Path Analysis:

In Critical Path Analysis method, the necessary and the requisite time is identified required for the completion of each of the activities and a detailed relationship existing between each of these activities is sorted out prior to the commencing of the project in order to ensure the adherence to the factors of quality work and timely completion. Various kinds of predictions is conducted in the process of Critical Path Analysis for the purpose of ensuring the effectiveness of the project (Steyn et al. 2016, p.112).


From the above provided network diagram, it is very evident that there are two possible follows of the project i.e. critical path. Now, it is important for a project manager to analyze viability of both. In the first path, there is an engagement of Task 1, 2, 3 and 6 until completion and it needs 50 days whereas the second path is connected through task 1, 2 and 4 having a total time period of 30 days. There is a possibility that second path is lesser stressful as well as easily achievable rather than the first path. Besides that, it is also a matter of evaluation according to the network diagram that some of the tasks are correlated and there is a possibility to merge some of those according to availability of workforce. 


Gantt chart:

In the context of Gantt chart, the activities are listed in a chronological sequence in order to promote the organisation of the activities. In Gantt chart, the reason behind the maintaining of the chronological sequence is to map the tasks and the related activities in a manner to ensure timely completion of the project. All the tasks are mapped in the manner of dependencies of one task over the other.

Figure 1: Gantt chart

(Source: As created by author)

Following the concept of Gantt chart it can be said that the company can progress the project in the following manner as hereinafter mentioned:

In the First step, the company needs to undergo the work of fabricating of the upper deck for four weeks and the tasks of fabricating the cellar deck for 2 weeks. On the completion of upper deck fabrication, the company needs to start the tasks of designing the turbine generators. The seawater pumping systems and the cooling systems can be thereby developed following the design of the turbine generators. Now following the completion of the fuel gas systems, both the decks can be now connected. The flare boom needs to be fabricated prior to its installation. 


After the development of the cooling systems, the Coalescer systems can be thereby developed which may take 4 weeks for completion. After that, the gas dehydration systems need to be installed which may take a period of 4 weeks. The water injection systems may take a period of 6 weeks which can be commenced after the decks are both connected. The gas compression systems may take 6 weeks for installation and can be commenced after the flare blooms are installed. After the completion of all the activities, the onshore commissioning of the tasks may be undertaken for a period of 8 weeks. Therefore, it can be concluded that the tool of Gantt chart is useful as well as effective in the context of project management. Please refer to the below screenshot for the above solution.


Please take note of the following table for the purpose of profit to be transferred 


Statement showing   profit to be transferred to the profit and loss account 
Particulars




A
100
8.15
B
100
7.2
C
100
2.56
D
100
3.18
E
100
4.43
F
75
4.29
G
35
1.67
H
90
4.03
I
20
0.78
Total expenditure


36.29
Average % of   Completion
80


Revenue recognition 


47600000
Less: Total   Expenditure


36.29


c) Showing the computation of the projected Gross Profit prior to the commencing of the project.

Check the below file for the above solution.

Statement showing the computation of Projected Gross   Profit






Enginners 








Technicians
















Task
Particulars 
Rate 
Hours per day 
No. of days  in a week
No of weeks
Number  
Total(GBP)
Rate
Hours per day 
No. of days  in a week
No of weeks
Number
Total(GBP)
Fixed Cost
Fixed Cost( in Millionms   GBP
Total( GBP)
A
Fabricate upper deck
59
8
5
4
10
94400
36
8
5
4
45
259200
8.3
8300000
8653600
B
Fabricate cellar deck
59
8
5
2
12
56640
36
8
5
2
56
161280
7.1
7100000
7317920
C
Turbine generators
59
8
5
6
8
113280
36
8
5
6
20
172800
2.5
2500000
2786080
D
Fuel gas systems
59
8
5
2
6
28320
36
8
5
2
22
63360
2.8
2800000
2891680
E
Fabricate flare boom
59
8
5
4
8
75520
36
8
5
4
32
184320
3.9
3900000
4159840
F
Cooling systems
59
8
5
8
12
226560
36
8
5
8
18
207360
4.5
4500000
4933920
G
Seawater pumping systems
59
8
5
12
12
339840
36
8
5
12
20
345600
2.5
2500000
3185440
H
Connect both decks
59
8
5
2
10
47200
36
8
5
2
46
132480
3.1
3100000
3279680
I
Install flare boom
59
8
5
6
8
113280
36
8
5
6
35
302400
2.2
2200000
2615680
J
Coalescer systems
59
8
5
4
7
66080
36
8
5
4
14
80640
2.2
2200000
2346720
K
Gas dehydration systems
59
8
5
4
7
66080
36
8
5
4
10
57600
2.7
2700000
2823680
L
Water injection systems
59
8
5
6
6
84960
36
8
5
6
12
103680
3.1
3100000
3288640
M
Gas compression systems
59
8
5
6
6
84960
36
8
5
6
14
120960
3.2
3200000
3405920
N
Onshore commissioning
59
8
5
8
12
226560
36
8
5
8
24
276480
1.1
1100000
1603040






























Total Cost
53291840






























































Gross Profit/ Loss


-47341840


























Fixed Price Contract   Revenue




5950000


Part 3- Tracking of the work in progress and related costing 

Giving a copy of the Gantt chart for the assessment as done in part 2 and thereby determine the percentage of planned progress.


 From the above calculation and the screenshot, it is visible for the management of the entity that in the course of completion of the project the overall stage of completion of the requisite tasks is about 80 %.

From the above screenshots, it is also visible that the percentage of the planned completion amounts to 100 % by the end of the 16th week for all the activities except for installation of cooling systems which is 75 % means near to completion and seawater pumping systems which are 50% completed. Two- third of the work related to the installation of the flare bloom is completed by the end of the period ending the 16th week. 


Part 4 - Presentation of the related tactics and the predictive outcomes

Preparing an EVA analysis table depicting the BCWP, BCWS and ACWP for each of the tasks and thereby determine the percentage of planned completion and also present the comparison between the actual and the budgeted figures.

Mir and Pinnington (2014, p.202) Stated that Earned Value Analysis refers to a technique of project management whereby the project performance and the related progress is measured. Under the tool of project management, all the activities are combined by taking into consideration the factors of the project management triangle i.e. time, scope and costs. Under the technique of project management, forecasting of the problems related to project performance is conducted in an orderly manner for the purpose of ensuring the timely completion and quality requirements of the project.


The results of the Earned Value Management it has been observed that project planning, as well as the control standards, are significantly impacted by the use and utilisation of the related methodology.

The essential characteristics of the EVA analysis are stated as hereinafter mentioned:

  • Identification of the tasks to be completed under the control of the project plan.
  • A critical evaluation and the analysis of the work planned termed as PV or the computing the budgeted cost in relation to the scheduled work.
  • Evaluating the predefined set of learning rules which can also be termed as Metrics for the purpose of quantifying the completed work can also be termed as Earned Value or Budgeted expenditure of work already performed (Mir et al. 2014, p.202).


According to (Grefen et al. 2012, p.771) there exists a large number of complex projects in the context of implementing the concept of EVA analysis consisting of lot many number of features and indicators of cost implications.

Some of the elements of the tool of Earned value Analysis are discussed as hereinafter mentioned:

  • ACWP (Actual Cost of Work Performed): ACWP or Actual Cost of Work Performed refers to the actual of the aggregate amount of expenditure incurred in the context of the project completion or the actual amount of cost incurred till date related to the progress of the project.  Under the tool of ACWP the analysis, the percentage of the completion of the work is computed in order to analyse the amount to be carried forward to the balance of the Profit and Loss Account. The tool of ACWP is best suited for computing of the cost variances. 
  • BCWP: The term BCWP can be abbreviated as Budgeted Cost of Work Performed in the context of project management. Budgeted cost of task performed refers to the budgeted cost of the tasks that has already been performed during the course of the project. The figures of the BCWP are required in order to facilitate the comparison between the actual and the planned results in the process of completion of the project. Under the technique of project management, the related items are identified in the structure of work breakdown which includes all the overhead costs and the other related costs of the project (Wells, 2012, p. 43). The calculation of the BCWP is done by taking into consideration cost of the cumulative baseline. In the process of BCWP, all the estimated time for completion of the project is also computed in order to set the predetermined standards of completion. The figures as derived from the BCWP analysis is compared with the figures of ACWP (Actual Cost of Work Completed) in order to facilitate the variance analysis of the project so that the corrective steps can be undertaken (Meng, 2012, p.188).
  • BCWS: The concept of BCWS can be referred to as the aggregate of the budgets for all the related expenditure that is planned to be incurred in a particular scheduled period which may constitute the related overheads and the prime costs needed for the purpose of completion of the project. BCWS reveals the amount of how much of the budget needed to be spent in the course of the project in the given duration. BCWS helps the company to accordingly plan the expenditures so that the project might be completed in an orderly manner in order to maximise the returns (Hwang and Ng, 2013, p.272). 


Please see the below table for the EVA analysis.

Statement showing planned analysis
Particulars
% of completion
ACWP
BCWP
BCWP
BCWP Based on   completion
Varriance
Varriance%
A
100.00%
8.15
8653600
8.6536
8.6536
0.5036
5.81954331
B
100.00%
7.2
7317920
7.31792
7.31792
0.11792
1.61138684
C
100.00%
2.56
2786080
2.78608
2.78608
0.22608
8.114627
D
100.00%
3.18
2891680
2.89168
2.89168
-0.28832
-9.9706745
E
100.00%
4.43
4159840
4.15984
4.15984
-0.27016
-6.4944806
F
75.00%
4.29
4933920
4.93392
3.70044
-0.58956
-15.932159
G
35.00%
1.67
3185440
3.18544
1.114904
-0.555096
-49.788681
H
90.00%
4.03
3279680
3.27968
2.951712
-1.078288
-36.530935
I
20.00%
0.78
2615680
2.61568
0.523136
-0.256864
-49.100807


 b) Presenting the projected date for the completion of the entire project by using the EVA analysis.

Please take note of the following figures for the purpose of above solution 

Statement showing the required time for completion 
Particulars 
Time Required
Fabricate upper deck
5
5
5
5
5
5
5
5
5
5
5
5
5
5
70
Fabricate cellar deck
Turbine generators
Fuel gas systems
Fabricate flare boom
Cooling systems
Seawater pumping systems
Connect both decks
Install flare boom
Coalescer systems
Gas dehydration systems
Water injection systems
Gas compression systems
Onshore commissioning



c) Suggesting the recommendations regarding the acceptable options and thereby provide the justifications regarding your recommendations. Also suggesting the implications of the plan on the project profitability

The following are the recommendations regarding the project plan to maximize the profitability

  1. To increase the number of labourers
  2. To minimize the cost of overheads.
  3. To Follow the plan of Critical Chain Project Management.


Section B

Presenting a comparative analysis between the two tools of project management i.e. The CPA and the CCPM

CPA or critical path analysis can be referred to as the type of planning in the context of modern business carried out in relation to delivering a project for the purpose of evaluating the outcomes of the project prior to the commencing of the project. The CPA analysis helps the entity to maximise the returns (Pemsel and Wiewiora, 2013, p.31). 


CCPM can be abbreviated as Critical Chain Project Management. The concept of Critical Chain Project Management can be described as the method used for the purpose of planning as well as for managing of the projects and the emphasis is on the essential resources. Under the method of CCPM, the emphasis is put on the essential and the requisite resources for the completion of the project i.e. the people, equipment and the physical resources. The concept of CCPM was developed by professor E.M. Goldratt in the late 20the century. The concept of Critical Chain Project management is distinct from many of the traditional methods of project management like PERT, CPM, etc. The Method of CCPM is much more flexible as compared to the other methods of project and business management (Rozenes, 2013, p.14).


The concept of CCPM is based on the various methods of Algorithms and Constraint theory in relation to project management. Adherence to the policies of Critical Chain Project Management tool assists the management of the entity to achieve the results  20 to 50 % faster than the other methods of Project Management. 


The distinction between the Critical Path Analysis and the Critical Chain Project Management can be discussed as hereinafter mentioned: 

  1. The method of Critical Path was developed in the late 1950s whereas the critical chain management method was developed in the late 1990s.
  2. In Critical Path all the requisite activities needed to accomplish the project is put in an organised sequence in order to facilitate appropriate visualisation of these activities whereas in the context of Critical Chain Project Management all the sequence of the activities are put together in an orderly chain by taking into consideration the minimum of the time (Marle et al. 2013, p.225)
  3. In the method of Critical Path Analysis, all the activities are framed in straightforward sequence in order to promote the familiarity of the tasks. On the other hand in CCPM all the activities are put into an organized chain in order to promote the level of efficiency in the operations.


4.      No kind of project buffers is provided for under the plan of critical path analysis. On the other hand, under Critical Chain Project Management an overall project buffer is provided for and all the requisites are added to in each of the related chains to ensure the necessary protection in the course of the project (Marcella and Rowley, 2015). 

  1. The constraints in the plan of Critical Path Analysis are more than that of the CCPM technique due to the non-availability of the feasible resources under the plan of CPA analysis. 

The reasons for preference of Critical Chain Project Management over the Critical Path Analysis can be discussed as we proceed through the assignment.


Under the method of critical path analysis there is an existence of the Overutilization or over dependencies on the resources which creates a problem in the project network and thereby cause unnecessary delays in completion whereas under the method of CCPM all the resources are organised according to the specified requirements (Pemsel and Wiewiora, 2013, p.31). It has also been observed that under the system of Critical Path Analysis there exists the lack of available optimum solutions due to the reason of the absence of the analytical method for identifying the optimum course of action. Another noticed another the method of Critical Path is that there are high chances of estimates going above the requisite level as compared to the method of CCPM the estimates of the budget are accurate to the point and are also specific to the requirements.


Under the context of CPA analysis, there also exists the problem of lack of project buffer whereas under the plan of CCPM there the ample number of buffers required to accomplish the tasks in an effective manner. It has also been observed that the concept of monitoring is also more effective under the system of Critical Chain Project Management (Uhl and Gollenia, 2016). 


If the management of the entity Washburn Engineering it can be said that the company could benefit if instead of following the method of CPA analysis it would have adhered to the principles of CCPM. The company could have completed the project much earlier and the there would also be no kind of gross loss or revenue leakage.


Introduction

Project management is one of the vital tasks for an organisation because proper execution and planning of the project are required in order to achieve success. Project management comprises of the tasks like introducing, planning, accomplishing, controlling as well as closing of a project. Correct management of the project helps in attaining the organisational goals and increasing the market revenue for the industries. In the given study, Washburn engineering has undertaken a new project from Pretoria Oil in order to build topsides modules. Washburn needs to complete the project within the mentioned time or else Pretoria Oil can charge penalty against the company.


Section A: Case study of Washburn

Section 1: Parameters and risks

Part 1

a) Discussing the significance of diverse iron triangle framework that is required to be managed by the project manager of Washburn. Mention in what ways they are related to each other

Business projects have to be completed in such a way where quality is highly assured by the ventures for the better operation. Moreover, cost factors have to be understood so that the execution of the project can be done accordingly. Saltz and Crowston (2017, p.557) mentioned that the attributes like cost, time and quality are measured with the help of iron triangle of the project management. Iron triangle plays a significant role in executing the project because it helps to analyse every aspect of the business before incorporating any project in their system. Washburn engineering has undertaken the project from Pretoria oil and promised to complete within the specific time. Aragonés-Beltránet al. (2017, p.455) claimed that iron triangle is helpful as it aids in organising the tasks of the project eventually so that better aftermath is guaranteed.


Washburn can try to implement various tools that can assist in enhancing the project quality within the limited time. This can be done easily with the help of iron triangle thus; iron triangle 


Risk Identification
Assessment
Reference
Event
Cause
Effect


Caniëls and Bakens   (2015, p.1355)
Lack of funding
Budget Constraints-   allocation in doubt or subject to change 
Project delayed


Mir and   Pinnington  (2014, p.202)
Delay in commencing
Lack of funding may   cause delays in commencing of the project.
Project time and costs   increased.


Hazır  (2015, p.808)
Overwork and   overburden
Employees of other   projects may be forced to work in this project
Increased employee   turnover


Ferrucci et al.(2014, p.373)
Legal Constraints
Maybe faced by the   company owing to Work in progress
Delay in the   completion process


Stark (2015, p.1)
Supplier's Weaknesses
the supplier may delay   in delivering the products
Delay in converting of   WIP to Finished Stock


Wearne (2014, p.67)
Supplier's Constraints
Suppliers may reduce   the credit period 
Increase in working   capital requirement 


Kozak-Holland, and   Procter (2014, p.242)
Rise in Raw material   Prices
The prices of raw   material may rise due to inflation effect
The cost of the project   may rise.


Lappe and Spang (2014,   p.603)
Change in the client   requirements 
The client may demand   some specified adjustments
The process of project   cycle may change.


Morris (2013, p.147)
Technological   Constraints 
The technological   Sufficiency may be affected by lack of funding 
The project may fail   to deliver quality to the client.


Ziek and Anderson  (2015, p.788).
Increase in the price   of the requisites of the project 
Due to the effect of   inflation, the price of the required inputs may rise.
The company may run   out of the project budget.



can be the beneficial part in the project management of Washburn. The three factors of iron triangle

 are interrelated upon each other because of the relation between cost, quality and time help in planning the project properly (Banihashemi et al. 2017, p.145). It is essential that Washburn analyses their market position before the initiation of project. This will help in understanding in what way the project needs to be preceded so that superior quality can be achieved in the project work.


b) Identifying the risks that are being faced by Washburn with the fabrication project of this 

Numerous risk factors like fewer funds and poor quality that need to assessed before introducing the project in the business (Niknazar and Bourgault, 2017, p.192). The project of Washburn has the major risk of lack of funding, which can affect the project completion along with the quality. Due to few funds, Washburn cannot be able to complete the project within the mentioned time that is given in the contract. This might lead Washburn to pay the penalty and suffer an immense loss in their business sector. In addition to this, Washburn can delay the project due to the issue with the budget constraint. Alotaibi and Mafimisebi (2016, p.217) stated that project quality is degraded if the organisations hurry up to complete a project. Washburn can face the risk of poor quality and thus, it will lead to the low-profit margin in the market.


This will help in enhancing the project quality, therefore, bringing good market share. Sometimes, employee turnover can be a risk factor in the project management process because employee might quit if they are unable to undertake the pressure of the task (Liu et al. 2016). The various types of risks related to this project are listed hereby in the below-mentioned Risk Register.


Washburn might face the risk of employee turnover, which will affect the project very badly. The entity Washburn Engineering is also engaged in other different projects in which the employees are already employed. So in order to adhere to the requirements, the employees of the company are required to undergo overwork which might increase the level of burden on the employees. This may also intend the employees to leave the organistaion. This will finally give rise to the employee turnover and the cost of recruitment may also increase. The cost of training may also increase as a result of increased turnover. This can finally impact on company's overall profit for the accounting year.


The company may also have to face the problems related to the suppliers. These problems are mainly the problems related to delay in the delivery time as well as the reduction in the credit period which may ultimately give rise to the increase in the working capital requirement.


The company may also have to face the problem of legal constraint and the inflation effect as well as adjustments in the client specifications. These issues may finally result in the problem of rising in the project costs.


The underlying issues may also result in project undergoing out of a budget. The management of the entity needs to be cautious about all these risk-related factors in order to maintain the minimum required profitability


Part 2 - Costing and Relative Planning

Presenting a network diagram depicting critical path as well as planned duration for the project

Task schedule
Actions
Required Days
Previous activity
Task 1
Fabrication of upper and celler deck
10
-
Task 2
Turbine generation and fuel gas
10
1
Task 3
Flare boom
Cooling systems
Seawater pumping
20
1, 2
Task 4
Installation of decks and boom
Coalesce
10
2,3
Task 5
Gas dehydration systems
Water injection systems
Gas compression systems
10
3, 4
Task 6
Onshore commissioning
10
5


Total course of days
70 days



Providing a Gantt chart by adhering to the professional standards and also calibrate the time scales in weeks and thereby determine the planned completion and execution.

Project management techniques are essential to be adhered by the entities in an appropriate manner in order to ensure the maximum returns from the project (Srivannaboon and Munkongsujarit, 2016, p.2002).  Several project management techniques are followed by various entities in the context of modern day global business for the purpose of ensuring the maximum amount of cash flows from the project thereby to provide minimum expected returns to the stakeholders of the business (Turner, 2016, p. 147).


Critical Path Analysis:

In Critical Path Analysis method, the necessary and the requisite time is identified required for the completion of each of the activities and a detailed relationship existing between each of these activities is sorted out prior to the commencing of the project in order to ensure the adherence to the factors of quality work and timely completion. Various kinds of predictions is conducted in the process of Critical Path Analysis for the purpose of ensuring the effectiveness of the project (Steyn et al. 2016, p.112).


From the above provided network diagram, it is very evident that there are two possible follows of the project i.e. critical path. Now, it is important for a project manager to analyze viability of both. In the first path, there is an engagement of Task 1, 2, 3 and 6 until completion and it needs 50 days whereas the second path is connected through task 1, 2 and 4 having a total time period of 30 days. There is a possibility that second path is lesser stressful as well as easily achievable rather than the first path. Besides that, it is also a matter of evaluation according to the network diagram that some of the tasks are correlated and there is a possibility to merge some of those according to availability of workforce. 


Gantt chart:

In the context of Gantt chart, the activities are listed in a chronological sequence in order to promote the organisation of the activities. In Gantt chart, the reason behind the maintaining of the chronological sequence is to map the tasks and the related activities in a manner to ensure timely completion of the project. All the tasks are mapped in the manner of dependencies of one task over the other.

Figure 1: Gantt chart

(Source: As created by author)

Following the concept of Gantt chart it can be said that the company can progress the project in the following manner as hereinafter mentioned:

In the First step, the company needs to undergo the work of fabricating of the upper deck for four weeks and the tasks of fabricating the cellar deck for 2 weeks. On the completion of upper deck fabrication, the company needs to start the tasks of designing the turbine generators. The seawater pumping systems and the cooling systems can be thereby developed following the design of the turbine generators. Now following the completion of the fuel gas systems, both the decks can be now connected. The flare boom needs to be fabricated prior to its installation. After the development of the cooling systems, the Coalescer systems can be thereby developed which may take 4 weeks for completion. After that, the gas dehydration systems need to be installed which may take a period of 4 weeks. 


The water injection systems may take a period of 6 weeks which can be commenced after the decks are both connected. The gas compression systems may take 6 weeks for installation and can be commenced after the flare blooms are installed. After the completion of all the activities, the onshore commissioning of the tasks may be undertaken for a period of 8 weeks. Therefore, it can be concluded that the tool of Gantt chart is useful as well as effective in the context of project management. Please refer to the below screenshot for the above solution.

Please take note of the following table for the purpose of profit to be transferred 

Statement showing   profit to be transferred to the profit and loss account 
Particulars




A
100
8.15
B
100
7.2
C
100
2.56
D
100
3.18
E
100
4.43
F
75
4.29
G
35
1.67
H
90
4.03
I
20
0.78
Total expenditure


36.29
Average % of   Completion
80


Revenue recognition 


47600000
Less: Total   Expenditure


36.29


c) Showing the computation of the projected Gross Profit prior to the commencing of the project.

Check the below file for the above solution.

Statement showing the computation of Projected Gross   Profit






Enginners 








Technicians
















Task
Particulars 
Rate 
Hours per day 
No. of days  in a week
No of weeks
Number  
Total(GBP)
Rate
Hours per day 
No. of days  in a week
No of weeks
Number
Total(GBP)
Fixed Cost
Fixed Cost( in Millionms   GBP
Total( GBP)
A
Fabricate upper deck
59
8
5
4
10
94400
36
8
5
4
45
259200
8.3
8300000
8653600
B
Fabricate cellar deck
59
8
5
2
12
56640
36
8
5
2
56
161280
7.1
7100000
7317920
C
Turbine generators
59
8
5
6
8
113280
36
8
5
6
20
172800
2.5
2500000
2786080
D
Fuel gas systems
59
8
5
2
6
28320
36
8
5
2
22
63360
2.8
2800000
2891680
E
Fabricate flare boom
59
8
5
4
8
75520
36
8
5
4
32
184320
3.9
3900000
4159840
F
Cooling systems
59
8
5
8
12
226560
36
8
5
8
18
207360
4.5
4500000
4933920
G
Seawater pumping systems
59
8
5
12
12
339840
36
8
5
12
20
345600
2.5
2500000
3185440
H
Connect both decks
59
8
5
2
10
47200
36
8
5
2
46
132480
3.1
3100000
3279680
I
Install flare boom
59
8
5
6
8
113280
36
8
5
6
35
302400
2.2
2200000
2615680
J
Coalescer systems
59
8
5
4
7
66080
36
8
5
4
14
80640
2.2
2200000
2346720
K
Gas dehydration systems
59
8
5
4
7
66080
36
8
5
4
10
57600
2.7
2700000
2823680
L
Water injection systems
59
8
5
6
6
84960
36
8
5
6
12
103680
3.1
3100000
3288640
M
Gas compression systems
59
8
5
6
6
84960
36
8
5
6
14
120960
3.2
3200000
3405920
N
Onshore commissioning
59
8
5
8
12
226560
36
8
5
8
24
276480
1.1
1100000
1603040






























Total Cost
53291840






























































Gross Profit/ Loss


-47341840


























Fixed Price Contract   Revenue




5950000

Part 3- Tracking of the work in progress and related costing 

Giving a copy of the Gantt chart for the assessment as done in part 2 and thereby determine the percentage of planned progress.


 From the above calculation and the screenshot, it is visible for the management of the entity that in the course of completion of the project the overall stage of completion of the requisite tasks is about 80 %.

From the above screenshots, it is also visible that the percentage of the planned completion amounts to 100 % by the end of the 16th week for all the activities except for installation of cooling systems which is 75 % means near to completion and seawater pumping systems which are 50% completed. Two- third of the work related to the installation of the flare bloom is completed by the end of the period ending the 16th week. 


Part 4 - Presentation of the related tactics and the predictive outcomes

Preparing an EVA analysis table depicting the BCWP, BCWS and ACWP for each of the tasks and thereby determine the percentage of planned completion and also present the comparison between the actual and the budgeted figures.

Mir and Pinnington (2014, p.202) Stated that Earned Value Analysis refers to a technique of project management whereby the project performance and the related progress is measured. Under the tool of project management, all the activities are combined by taking into consideration the factors of the project management triangle i.e. time, scope and costs. Under the technique of project management, forecasting of the problems related to project performance is conducted in an orderly manner for the purpose of ensuring the timely completion and quality requirements of the project.


The results of the Earned Value Management it has been observed that project planning, as well as the control standards, are significantly impacted by the use and utilisation of the related methodology.


The essential characteristics of the EVA analysis are stated as hereinafter mentioned:

  • Identification of the tasks to be completed under the control of the project plan.
  • A critical evaluation and the analysis of the work planned termed as PV or the computing the budgeted cost in relation to the scheduled work.
  • Evaluating the predefined set of learning rules which can also be termed as Metrics for the purpose of quantifying the completed work can also be termed as Earned Value or Budgeted expenditure of work already performed (Mir et al. 2014, p.202).


According to (Grefen et al. 2012, p.771) there exists a large number of complex projects in the context of implementing the concept of EVA analysis consisting of lot many number of features and indicators of cost implications.

Some of the elements of the tool of Earned value Analysis are discussed as hereinafter mentioned:

  • ACWP (Actual Cost of Work Performed): ACWP or Actual Cost of Work Performed refers to the actual of the aggregate amount of expenditure incurred in the context of the project completion or the actual amount of cost incurred till date related to the progress of the project.  Under the tool of ACWP the analysis, the percentage of the completion of the work is computed in order to analyse the amount to be carried forward to the balance of the Profit and Loss Account. The tool of ACWP is best suited for computing of the cost variances. 
  • BCWP: The term BCWP can be abbreviated as Budgeted Cost of Work Performed in the context of project management. Budgeted cost of task performed refers to the budgeted cost of the tasks that has already been performed during the course of the project. The figures of the BCWP are required in order to facilitate the comparison between the actual and the planned results in the process of completion of the project. Under the technique of project management, the related items are identified in the structure of work breakdown which includes all the overhead costs and the other related costs of the project (Wells, 2012, p. 43). The calculation of the BCWP is done by taking into consideration cost of the cumulative baseline. In the process of BCWP, all the estimated time for completion of the project is also computed in order to set the predetermined standards of completion. The figures as derived from the BCWP analysis is compared with the figures of ACWP (Actual Cost of Work Completed) in order to facilitate the variance analysis of the project so that the corrective steps can be undertaken (Meng, 2012, p.188).
  • BCWS: The concept of BCWS can be referred to as the aggregate of the budgets for all the related expenditure that is planned to be incurred in a particular scheduled period which may constitute the related overheads and the prime costs needed for the purpose of completion of the project. BCWS reveals the amount of how much of the budget needed to be spent in the course of the project in the given duration. BCWS helps the company to accordingly plan the expenditures so that the project might be completed in an orderly manner in order to maximise the returns (Hwang and Ng, 2013, p.272). 

Please see the below table for the EVA analysis.

Statement showing planned analysis
Particulars
% of completion
ACWP
BCWP
BCWP
BCWP Based on   completion
Varriance
Varriance%
A
100.00%
8.15
8653600
8.6536
8.6536
0.5036
5.81954331
B
100.00%
7.2
7317920
7.31792
7.31792
0.11792
1.61138684
C
100.00%
2.56
2786080
2.78608
2.78608
0.22608
8.114627
D
100.00%
3.18
2891680
2.89168
2.89168
-0.28832
-9.9706745
E
100.00%
4.43
4159840
4.15984
4.15984
-0.27016
-6.4944806
F
75.00%
4.29
4933920
4.93392
3.70044
-0.58956
-15.932159
G
35.00%
1.67
3185440
3.18544
1.114904
-0.555096
-49.788681
H
90.00%
4.03
3279680
3.27968
2.951712
-1.078288
-36.530935
I
20.00%
0.78
2615680
2.61568
0.523136
-0.256864
-49.100807


b) Presenting the projected date for the completion of the entire project by using the EVA analysis.

Please take note of the following figures for the purpose of above solution 

Statement showing the required time for completion 
Particulars 
Time Required
Fabricate upper deck
5
5
5
5
5
5
5
5
5
5
5
5
5
5
70
Fabricate cellar deck
Turbine generators
Fuel gas systems
Fabricate flare boom
Cooling systems
Seawater pumping systems
Connect both decks
Install flare boom
Coalescer systems
Gas dehydration systems
Water injection systems
Gas compression systems
Onshore commissioning



c) Suggesting the recommendations regarding the acceptable options and thereby provide the justifications regarding your recommendations. Also suggesting the implications of the plan on the project profitability

The following are the recommendations regarding the project plan to maximize the profitability

  1. To increase the number of labourers
  2. To minimize the cost of overheads.
  3. To Follow the plan of Critical Chain Project Management.


Section B

Presenting a comparative analysis between the two tools of project management i.e. The CPA and the CCPM

CPA or critical path analysis can be referred to as the type of planning in the context of modern business carried out in relation to delivering a project for the purpose of evaluating the outcomes of the project prior to the commencing of the project. The CPA analysis helps the entity to maximise the returns (Pemsel and Wiewiora, 2013, p.31). 


CCPM can be abbreviated as Critical Chain Project Management. The concept of Critical Chain Project Management can be described as the method used for the purpose of planning as well as for managing of the projects and the emphasis is on the essential resources. Under the method of CCPM, the emphasis is put on the essential and the requisite resources for the completion of the project i.e. the people, equipment and the physical resources. The concept of CCPM was developed by professor E.M. Goldratt in the late 20the century. The concept of Critical Chain Project management is distinct from many of the traditional methods of project management like PERT, CPM, etc. The Method of CCPM is much more flexible as compared to the other methods of project and business management (Rozenes, 2013, p.14).


The concept of CCPM is based on the various methods of Algorithms and Constraint theory in relation to project management. Adherence to the policies of Critical Chain Project Management tool assists the management of the entity to achieve the results  20 to 50 % faster than the other methods of Project Management. 


The distinction between the Critical Path Analysis and the Critical Chain Project Management can be discussed as hereinafter mentioned: 

  1. The method of Critical Path was developed in the late 1950s whereas the critical chain management method was developed in the late 1990s.
  2. In Critical Path all the requisite activities needed to accomplish the project is put in an organised sequence in order to facilitate appropriate visualisation of these activities whereas in the context of Critical Chain Project Management all the sequence of the activities are put together in an orderly chain by taking into consideration the minimum of the time (Marle et al. 2013, p.225)
  3. In the method of Critical Path Analysis, all the activities are framed in straightforward sequence in order to promote the familiarity of the tasks. On the other hand in CCPM all the activities are put into an organized chain in order to promote the level of efficiency in the operations.


4.      No kind of project buffers is provided for under the plan of critical path analysis. On the other hand, under Critical Chain Project Management an overall project buffer is provided for and all the requisites are added to in each of the related chains to ensure the necessary protection in the course of the project (Marcella and Rowley, 2015). 

  1. The constraints in the plan of Critical Path Analysis are more than that of the CCPM technique due to the non-availability of the feasible resources under the plan of CPA analysis. 


The reasons for preference of Critical Chain Project Management over the Critical Path Analysis can be discussed as we proceed through the assignment.

Under the method of critical path analysis there is an existence of the Overutilization or over dependencies on the resources which creates a problem in the project network and thereby cause unnecessary delays in completion whereas under the method of CCPM all the resources are organised according to the specified requirements (Pemsel and Wiewiora, 2013, p.31). It has also been observed that under the system of Critical Path Analysis there exists the lack of available optimum solutions due to the reason of the absence of the analytical method for identifying the optimum course of action. Another noticed another the method of Critical Path is that there are high chances of estimates going above the requisite level as compared to the method of CCPM the estimates of the budget are accurate to the point and are also specific to the requirements.


Under the context of CPA analysis, there also exists the problem of lack of project buffer whereas under the plan of CCPM there the ample number of buffers required to accomplish the tasks in an effective manner. It has also been observed that the concept of monitoring is also more effective under the system of Critical Chain Project Management (Uhl and Gollenia, 2016). 


If the management of the entity Washburn Engineering it can be said that the company could benefit if instead of following the method of CPA analysis it would have adhered to the principles of CCPM. The company could have completed the project much earlier and the there would also be no kind of gross loss or revenue leakage.


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