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Lesson - Project and Operational Control

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Project Control The stages of project planning and control initially take place before the actual project. The project control stage deals with the management activities which take place during the execution of the project. Project control is the essential link between the planning and doing. The process of project control involves three sets of decisions: 1. How to monitor the project in order to check on its progress. 2. How to assess the performance of the project by comparing monitored observations of the project with the project plan. 3. How to intervene in the project in order to make the changes that will bring it back to plan.

From your understanding of the last lesson, what do you think are the key stages of project planning?

Project planning involves five key stages:

1. 2. 3. 4. 5.

Identifying the activities within a project. Estimating times and resources for the activities. Identifying the relationship and dependencies between the activities. Identifying the schedule constraints. Fixing the schedule.

There are particularly important when complexity of the project is high. The interrelationship between activities, resources and times in most projects, especially complex ones, is such that unless they are carefully planned, resources can become seriously overloaded at times during the project.

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Controlling activities Project managers have first to decide what they should be looking for as the project progresses. Usually a variety of measures are monitored. Figure 3.1.1 shows some typical monitored measures and the main performance objectives which they affect.

Figure 3.1.1 - Monitoring measures and their effect Note how some of these monitored measures affect cost, some mainly time, but that when something affects the quality of the project, there are also time and cost implications. This is because quality problems in project planning and control usually have to be solved in a limited amount of time. The monitored measures of project performance at any point in time need to be assessed so that project management can make a judgement concerning overall performance. A typical planned cost profile of a project through its life is shown in Figure 3.1.2.

Figure 3.1.2 - Comparing planned cost and actual expenditure At the beginning of a project some activities can be started, but most activities will be dependant on finishing. Eventually, only a few activities will remain to be completed. This pattern of a slow start followed by a faster pace with an eventual tail-off of activity holds true for almost all projects, which is why the rate of total expenditure follows an S-shaped curve, as shown in Figure 3.1.2, even when the cost curves for the individual activities are linear. It is against this curve that actual costs can be compared in order to check whether the project's costs are being incurred to plan. Back Next Return to the top of page.

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Using appropriate sources, research the concept of project control and how this can be achieved.

In summary:

The process of project control involves three sets of decisions: how to monitor the project in order to check its progress, how to assess the performance of the project by comparing monitored observations to the project plan, and how to intervene in the project in order to make the changes which will bring it back to plan. Earned-value control assesses the performance of the project by combining cost and time; it involves plotting the actual expenditure on the project against the value of the work completed, both in the form of what was planned and what is actually happening. Both cost and schedule variances can then be detected.

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Goal achievement In an organisation, the planning process starts with a formal mission statement that defines the basic purpose of the organisation, especially for external audiences. The mission statement is the basis for the strategic level of goals and plans, which in turn shapes the tactical level and the operational level. Top managers are typically responsible for establishing strategic goals and plans that reflect a commitment to both organisational efficiency and effectiveness, as described earlier in Unit 1. Tactical goals and plans are the responsibility of middle managers, such as the heads of major divisions or functional units. A division manager will formulate tactical plans that focus on the major actions the division must take to fulfil its part in the strategic plan set by top management. Operational plans identify the specific procedures or processes needed at lower levels of the organisation, such as individual departments and employees. Front-line managers and supervisors develop operational plans that focus on specific tasks and processes and that help to meet tactical and strategic goals. Planning at each level supports other levels.

Figure 3.1.3 - Typical operational goals Back Next Return to the top of page.

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Different levels of goals are related to different time scales. Strategic goals and plans usually address long-range issues involving time periods of five or more years. The period varies somewhat depending upon the industry. When the environment changes rapidly, long-range planning may focus on periods of less than five years. When the environment is relatively stable (such as that of the utility industry), long-range planning may extend to periods of 10 or even 20 years. Tactical goals and plans typically address medium-range issues involving periods that vary from one to five years. Operational goal and plans, however, deal mainly with short-range issues that span periods of a year or less.

Figure 3.1.4 - Time period goals

There is a vast amount of information relating to goal setting in organisations and how this supports the planning function. For an alternative approach to goal setting, go to: http://www.ezinearticles.com/.../?Goal-Setting-or-How-Being-SMART-Isnt-Always-the-Right-Objective&id=23165

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Operational Control Managers in all organisations face important issues relating to the control function. Controlling is the process of regulating operations activities so that actual performance conforms to expected standards and goals. As the definition suggests, controlling means that the managers develop appropriate standards, compare ongoing performance against those standards, and take steps to ensure that corrective actions are taken when necessary. Since most organisational activities ultimately depend on human behaviour, controlling is largely geared towards ensuring that employees behave in ways that facilitate the reaching of the operational goals. As you might imagine, the control function if closely allied to the other three major functions of management; planning, organising and leading. It builds most directly on the planning function by providing the means for monitoring and making adjustments in performance so that plans can be realised. During the control process, managers set up control systems. A control system is a set of mechanisms designed to increase the probability of meeting organisational standards and goals. Control systems can be developed to regulate any area that a manager considers important. They may pertain to such areas as quantity produced, resources expended, profit margins, quality of products or services, client satisfaction, timeliness of deliveries, or specific activities that are performed in producing a product or service. For example, McDonald's has a seven-step procedure that workers must rigidly follow when cooking and bagging French fries to ensure quality. This procedure is one of the operations that corporate evaluation teams check during their unannounced inspections of outlets.

Figure 3.1.5 - Quality control process

Quality control can be applied to particular products, to processes which produce the products or the output of the whole organisation in terms of overall quality performance.

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The best form of controls are those which are put in place at key stages throughout the life-cycle of the activity. These may take the form of sensors, human inspection or information controls depending upon the type of system in operation. Refer to Figure 3.1.6 which shows that if there are no quality controls whatsoever in place then all outputs are the result of chance and not design. The more controls that are in place the more likelihood of consistent quality being achieved.

Figure 3.1.6 - Development of quality controls Back Next Return to the top of page.

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Describe any control systems that are apparent in your organisation, or one that you are familiar with. How significant do you consider these systems?

Using appropriate sources, describe how Statistical Process Control (SPC) and acceptance sampling help quality planning and control.

Statistical Process Control and Acceptance Sampling are proven QA procedures for effective control and are summarised below: Statistical Process Control

Statistical process control (SPC) involves using control charts to track the performance of one or more quality characteristic in the operation. The power of control charting lies in its ability to set control limits derived from the statistics of the natural variation of processes. These control limits are often set at + 3 standard deviations of the natural variation of the process samples. Control charts can be used for either attributes or variables. An attribute is a quality characteristic which has two states (for example, right or wrong). A variable is one which can be measured on a continuously variable scale. Process control charts allow operations managers to distinguish between the 'normal' variation inherent in any process and the variations which could be caused by the process going out of control.

Acceptance Sampling

Acceptance sampling helps managers to understand the risks they are taking when they make decisions about a whole batch of products on the basis of a sample taken from that batch. The risks of any particular sampling plan are shown on its operating characteristic (OC) curve. Some of the assumptions within acceptance sampling (most notably that a certain level of defects is 'acceptable') are not looked on favourably by proponents of total quality management.

There is a vast amount on information available on the web regarding different types of quality control systems. A particularly useful generic site can be found at http://www.praxiom.com/how.htm which provides templates to design a quality management system.

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Setting standards of performance In the control process, standards are essential because they spell out specific criteria for evaluating performance and related employee behaviour. Often such standards are incorporated into the goals when the latter are set in the planning process, so they merely need to be reiterated. Sometimes, however, they may need to be developed during the control process. Generally, standards serve three major purposes:

They enable employees to understand what is expected and how their work will be evaluated. They provide a basis for detecting project difficulties based on lack of training, ability or experience. They help to reduce the potential negative effect of goal incongruence - a condition in which there are major incompatibilities between the goals of an organisation member or section, and those of the organisation as a whole.

Once standards are determined, the next step is measuring performance. For a given standard, a manager must decide both how to measure actual performance and how often to do so. One of the more popular techniques used to help set standards and co-ordinate the measurement of performance is by management by objectives.

What are the key stages in management by objectives?

Management by objectives includes the following key steps:

Develop overall organisational goals. Establish specific goals for various departments, sub-units and individuals. Formulate action plans. Implement and maintain self-control. Review progress periodically. Appraise performance.

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Quality assurance systems Quality assurance (QA) concerns the total system needed to assure customers that certain minimum quality standards will be met within the supplying firm. Formal QA standards have been drafted by various bodies (including the British Standards Institution's BS5750) which specify that supplying firms implement definite procedures for ensuring that appropriate 'quality environments' are maintained, e.g. that the tools used on certain jobs be of a particular type, and that only qualified and certified staff be employed on certain projects. Often, QA is implemented through checklists issued to various departments asking them to scrutinise their procedures and confirm that certain measures have been undertaken. Typically, a checklist question will ask, "What have you done to ensure that...?", and then ask the respondent to detail the measures applied. A QA system might invite supplying firms to improve as well as provide contracted items, and to initiate alterations in the appearance, design or durability of requisitioned products. The quality of a good involves its fitness for the purpose for which it is intended as well as its physical conditions on despatch. Suppliers need therefore to know the purposes of the articles they are invited to produce, and the operational circumstances of their use. Hence, a clear statement of purpose - leaving technical details (including perhaps the choice of input materials) to the discretion of the supplying firm - might have greater long-term value than precise and detailed specifications of weights, sizes, machine tolerance, etc.

Carry out appropriate research and make notes relating to:

1. ISO 9000 2. BS 5750

Discuss how these 'quality marks' relate to the concept of TQM.

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Corrective action Corrective action provides the feedback loop in the control cycle. As such it refers to the systematic pattern of activities designed specifically to:

Trace a problem to its cause. Produce solutions for the recurrence of a problem. Implement change. Monitor that the change has been successful.

Good practice dictates that there should be established and well-maintained documentation relating to procedures for implementing corrective action against non-conformance.

Corrective action cannot be undertaken against every non-conformance but should be judged on the magnitude of the problem and the risks involved. However, before managers take any form of action it is suggested that they find answer to the following questions: 1. 2. 3. 4. 5. 6. 7. What is the problem? Has the problem been confirmed? What are the consequences if we do nothing? What is the preferred solution? What are the cost implications for the solution? What are the alternatives solutions and associated costs? What is the time frame before the effects have a negative impact on business?

Once you have analysed these questions and identified that corrective action needs to take place, this should be recorded as a Corrective Action Report, and any change in procedure as a result recorded on a Change Request Form. An example of a Change Request Form with supporting notes can be found at: http://www.epmbook.com/scope.htm Back Next Return to the top of page.

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Preventative action This relates to the detection of any deterioration in quality standards so that potential causes of non-conformance can be eliminated and to provide a means by which management can be alerted to the need to take any corrective action. To do this requires that you have data for analysis. If you do not have data, then there is no way that you will be able to know if your processes are under control, if your customers are satisfied, if staff are carrying out their duties effectively, etc.

Collect data on things you intend to analyse. Analyse data with the intention of discovering problems. Provide solutions to real problems. Implement solutions that will improve performance.

Check your own systems for corrective and preventative action by answering the following questions. Plan remedial actions where appropriate. 1. Do you have documents relating to the recording of corrective action and preventative action procedures? 2. In what ways do you ensure that the action required is commensurate with the magnitude of the problem and the risks encountered? 3. In what ways do you handle customer complaints? 4. How do you handle complaints of non-conformance? 5. What actions do you have in place to eliminate non-conformance? 6. What sources of information do you use/gather to help you eliminate possible non-conformities? 7. What controls do you have in place to ensure the effectiveness of any preventative actions? 8. In what ways are preventative actions submitted for a management review?

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To complete this knowledge check activity, please log on to the Virtual Learning Environment.

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