Project Management in for a Steel Project...

Project Management in for a Steel Project Project consists of a group of tasks, performed in a definable time period, in order to meet a specific set of objectives. It is a temporary activity. It is a one-time program hence different from operations where tasks are repeated in a routine way. Every project has a life cycle, with a specific start and end. The work scope of a project can be categorized into definable tasks. Project has a budget within which it is required to be completed. During the execution of the project, there is likely requirement of multiple resources. Many of these resources can be scarce and may have to be shared with others. Steel project like any other project has a life cycle (Fig 1) which includes (i) initiation, (ii) planning, (iii) execution, (iv) monitoring and control, (v) commissioning and handing over, and (vi) closing of the project activities. Fig 1 Project life cycle Steel project has four components namely (i) performance, (ii) cost, (iii) time, and (iv) scope. All these four components are interrelated and dependent on each other. Performance is the quality of the work being done. Cost is the expenditure made on the project work and is directly related to the human and physical resources applied. Time is the schedule which is required to be met for completing the work. Scope is the magnitude of the work to be performed. One of the key ingredients for successful project management in a steel project is having the right people on the job and managing them appropriately. Both of the two elements ‘having the right people’ and ‘managing people appropriately’ are important for the project success. However, in practice both conditions are frequently violated. There are several groups of activities in...

Estimation of Project Cost for a Green Field Steel Project...

Estimation of Project Cost for a Green Field Steel Project Estimation of the project cost for a green field steel project is essential for ensuring that the available resources for the project are used effectively and wisely. The basic requirements of the project cost estimates are that these estimates are to be prepared on an ‘unlikely to be exceeded but not excessively conservative’ basis for various stages of the project life cycle to provide confidence in project priority, affordability and strategic fit. An accurate estimate goes a long way toward supporting a successful project. Quality cost estimates are also necessary in maintaining stakeholders’ confidence and trust throughout the life of the project. Hence, cost estimates are to reflect an overall accuracy which is indicative of the level of information available at the time the estimates are being developed. Cost increases over and above project budget are a constant concern of the stakeholders and the senior management. Reliable cost estimates are necessary for responsible financial management at every stage of the project. Unreliable cost estimates cause significant problems during the project implementation. Unreliable cost estimates can also lead to staffing and budgeting decisions which can result into incorrect and inefficient use of the available resources. The ‘project cost estimate’, as used during the project development process, includes all capital outlay costs, including right-of-way, structures and landscaping. Project cost estimates are never to be artificially reduced to stay within the funding limits, nor they are to be reduced for the purpose of making the funds available for the project. Likewise, project cost estimates are not to be artificially raised beyond the contingency percentages necessary for the project unless the increase is adequately justified. Project cost estimates are prepared for a planned project implementation schedule. Any delay...

AMR Schemes

AMR Schemes  Acronym AMR stands for additions, modifications and replacements. In a steel plant which is operating for a number of years, implementation of AMR schemes is a necessity if the efficiency and productivity of the plant is to be maintained over a large numbers of years. Expenditures on AMR schemes are capital in nature and usually these expenditures are not very large and they are small in nature. However these expenditures change the capital structure of the organization. This is in contrast to the maintenance activity in the steel plant where equipment parts or equipments are replaced and the expenditures incurred during maintenance are part of the operating expenses of the plant. Necessity of AMR schemes in an operating steel plant occurs due to the following reasons. The design deficiencies become visible once the steel plant has been operated for a number of years. These deficiencies come in the way of plant being operated at the desired efficiency and productivity levels. For removal of these design deficiencies, some additional equipment may be needed or some modifications in the process may be necessary. May be some equipment need replacement with different but similar equipment. AMR schemes help management in removing design deficiencies and bring back the steel plant to the designed efficiency and productivity levels. All the steel plant equipments donot have the same expected life. Some equipment has a long life while life of some other equipment can be enhanced by replacing some worn out components during maintenance. But in some the life is not long, nor can it be increased by maintenance. Such equipment become  a weak link in obtaining the desired efficiency levels and the productivity levels of the process since the break downs in these equipment increase drastically once their...

Project Evaluation Review Technique (PERT) and Critical Path Method (CPM)...

Project Evaluation Review Technique (PERT) and Critical Path Method (CPM) Pert evaluation review technique (PERT) and critical path method (CPM) are two management techniques which are used to plan, schedule, budget and control different activities normally associated with a project. These techniques were developed in 1950s. PERT was developed by US Navy for the planning and control of Polaris missile programme while CPM was developed by DuPont and the emphasis was on the trade-off between the cost of the project and its overall completion time. PERT was originally designed to examine projects from the stand points of uncertainty while the CPM was designed to examine projects from the standpoint of costs. These techniques have been combined over time. Both the techniques rely heavily on the use of networks to help plan and display the coordination of all the activities of a project. In PERT activities are shown as a network of precedence relationships using activity on arrow network construction and using probabilistic activity time estimates. In CPM, activities are shown as network of precedence relationships using activity on node network construction and using time estimates which can be predicted with considerable certainty due to the existence of past experience. Comparison of PERT and CPM is given in Table 1. Tab 1 Comparison of PERT and CPM PERT CPM 1. PERT uses event oriented network 1. CPM uses activity oriented network 2. Estimates of time for activities are  not so accurate and definite 2.Duration of activity can be estimated with a fair degree of accuracy 3. It is used mostly in projects of non repititive nature 3.It is used extensively in construction projects 4. Probabilistic model concept is used 4. Deterministic concept is used. 5. PERT is basically a tool for planning 5. CPM can...