Methodology Used During The Project Management
This paper describes the methodology used during the project management of project of Steel rolling mill project of United Steel Industries. This paper discusses the tools and techniques, theories and processes of project management that could be used to help with the rolling mill project. The paper firstly suggests the Logical framework approach as a successful tool to help define the project, its strategic objectives, goals, outputs, assumption and activities during the project. It then goes onto the risk factors during the project and describes their mitigation techniques that can be used to mitigate the risks .The paper describes few tools and techniques like Work Breakdown structure and Burn out chart that are tools of successful project management which could be used in this project to achieve the strategic objectives of the refurbishment project. The paper also looks into the monitoring and control of the project. Finally the paper ends with how the change management can successfully achieved in the project.
The United Steel Industries or UNISTEEL is a member of Al Fozan- Group of Companies. The Steel rolling mill project of United Steel Industries is a currently ongoing project in Fujairah Free Economic Zone; U.A.E. is an ambitious project which aims to establish the largest steel rolling mill in the country covering an area of 145,000 square meters. The industrial establishment is set to produce 1 million tons of metal roll annually, mainly straight rebar and wire rods to be sold in Emirate territory and abroad. The project covers an area of 145,000 square meters for both factory and offices. The project started in October 2006 but was paused due to the economic recession in November 2008 and now it is resumed since September 2012. The Turner & Townsend was appointed as the project manager by the United Steel Industries for the construction of steel rolling mill located in the Fujairah Free Economic zone. Turner and Townsend will assist the group in the construction of both the factory and office buildings. The project involves construction of long rolling mill with production capacity of 1 million tons of structural steel. This construction project has been awarded to Siemens Metal Technologies. The steel rolling mill project is going to be the biggest steel manufacturing establishment in U.A.E. as the project is important to generate the interest of the international investors to the local market of the country and to gain back their trust. The project is also important as it will serve as the new support to the whole region’s infrastructure industry which is still in a fragile condition due to the economic scenario all around the globe which still seems to be healing from its fragile situation, Other main reason to postpone the project was issue pertaining to the site affection plan with the local municipality.
At present all the piling work has been complete and approximately a quarter of the erection of the steel structure of the facility has been completed. Turner and Townsend Company was appointed as the project manager in august 2012, now the firm will assist UNISTEEL in the project to complete it in the most efficient and the most timesaving manner. The main challenge Turner and Townsend faces here problems pertaining to the delay of the project due to problems occurred previously, as the cost of an infrastructure project huge like this directly relates to the time spend to establish the full production capable unit. The project delay due to various reasons has already affected the several aspects of the project such as cost which already exceeding the budget and other financial factors, the various resources which tend to decay or deteriorate along the time, the facilities which were hired on time basis etc, these factors are need to be revived and quick action plan needs to be formed to regain the trust of the investors and clients in the project.
Logical Framework Approach
Logical Framework Approach or LOGFRAME is a core technique being used since 1969 in various firms for project management around the world .The logical framework approach is a tool used for object oriented planning for projects as well as for assessing, evaluation and follow up f projects. The logical framework approach was developed for the USAID in 1969 and is found to be a useful tool for project planning (Gosling 2003: pg. 222). According to Kari Ortengren of SIDA the frame work approach is an instrument for logical analysis and structured thinking in project planning or a framework, a battery of questions which, if they are used in a uniform way, provide a structure for dialogue between the different stakeholders in a project. The methods used for the project assessment or other process may differ on the basis of many factors such as the needs of customer, the nature and the scale of the project, the roles of different key partners in the projects and many more.
The logical framework approach consist a number of general steps which leads to a simple table known as PPM or Project Planning Matrix. The Project Planning Matrix shows various factors involved in projects in a more uniform and simple fashion such as objectives of the project, the success measures of the objectives, the verification of the success and the assumptions of risk involved in the project etc.
Logical Framework approach provides a uniform way of creating a pathway to achieve the objectives of the project by describing them in phases. The phases relate to the various objectives in such a way that short term goals for different phases lead the project to the direction of its ultimate aim by joining the phases as simple steps to complete the whole project.
|GOAL -Manage the construction of the biggest steel rolling mill in U.A.E.||Creating the fully functional production facility as soon as possible||The contract of the building of the mill has been awarded to Siemens Metals Technologies.||The merchant line bar will consist of 21 Rolling stands, heat treatment system, cooling beds etc.|
To establish a long production mill in Fujairah Free Zone.
|Production capacity of up to 950 000 t/y of structural steel.||The Al Fozan Group has appointed Turner and Townsend as project manager.||It will have the capacity to produce one million tonnes of metal roll.|
Provide UNISTEEL group methods to complete the project in a efficient and timesaving process
|Creating the office space and other infrastructures along the production line timeframe||Recovering the project problems due to financial crisis during the year of 2008.||Methods and tools of superior project management will be applying to success the project.|
The rolling mill has set to produce straight rebar and wire rod for the construction industry results in making it biggest rolling mill in the UAE.
|The sector is returning after the financial crisis.||The new rolling mill is schedule to come in operations into mid 2014.||-Maximum rolling speed will be 16m/s.|
-The wire rod mill will produce rods or wire coils.
According to Dr. David Hilson (PMP, HonFAPM)” Risk is effect of uncertainty on objectives of a project.”The possibility of occurrence of unexpected events during a project is completely unpredictable and uncertain. The possibility of occurrence of such sudden and uncertain events is always present in the scenario of a project. These possibilities are considered as risks. Some risks may cause harm to the project but not all risks create a negative impact on the project, some risks such as creating or exploring a new, efficient and more economical method perform a task s also an uncertain event but it may improve the product rather than causing a threat to the project.
The major risks here for the Steel Rolling Mill for UNISTEELL are as followed
-The Economic Meltdown around the globe still has not let the world economy recover appropriately so any economic shock can threaten the project to be shut down or postpone again.
-The problems occurred with the local municipality referring to the site affection plan may also create hurdles in the project as the government policies are also based on the political influence and the industrial ideology of the ruling authorities.
-The delay in the project has already caused the project to lose a huge amount in the budget and to find new and more economical way there is no time for such approaches so the firm has to start the project in less budget and time.
-The economic meltdown has weaken several firms and groups around the world so now some of the previous contractors may not be able to perform the tasks which were allotted to them.
-In the context of the risk discussed above new contractors are to be searched and some new contract may have to be awarded which again may consume time and the questions over the new contractor’s service capability may arise.
-The newer economic scenario may cause the renegotiation of some older contracts which again takes time and may increase the need of capital.
-The completed structure till the date needs to be revised and reanalyzed for further decision making process.
-The new action plan has to be designed in such a way that it honors the completed establishment but still provides the project the freedom to explore new methods to finish the remaining tasks and select the most efficient safe and rapid option from them.
Steps taken to prevent or control a hazard from causing harm and to reduce risk to a tolerable or acceptable level are known as Risk Mitigation. Risk mitigation is a planned strategy to handle the unplanned or unexpected events occurred during the project. Risk mitigation is a quite basic process for a project to prevent any event which may harm the objectives of the project. So the first step for the risk mitigation process is quite simply to identify the risk involved in the project referring to each factor relating to the project. Identification of risk needs be done with an intense care as the risks considered for the project may or may not occur so there is a possibility that the preparation and effort put into preventing a risk may never be utilized. The risk identification process does not focus to limited range of risks, it needs to consider aspects such as political, economical, environmental, local circumstances pertaining to the project as reaction of the local authority’s and community to the project and its establishment etc. Generally Risk Identification starts before starting a project and the projects begin to mature the number of risk may increase depending on the nature of the project. Identification of risks also consist of describe the nature of various risks involved in the project as to understand the risk evaluation relating to project objectives. The process of analyzing the risk takes place after the process of identification of risks. The analysis of the risks is a process which is used for determines the magnitude of the effect of a risk onto the project. This process is also of huge importance as it describes the amount of the efforts needed to put in the preparation to prevent or mitigate a risk. The analysis also determines the resources which will be used to prevent the risks so it needs to consider the in house capabilities of the firm as the newer resources put a direct effect on the budget of the project. Then next step is the process of mitigating or minimizing the effect of a risk. The process of identification, analysis and either acceptance or mitigation of uncertainty in decision making is known as Risk Management.
Risk mitigation process consist quite basic steps identifying the risk, avoiding the risk, mitigate the risk, sharing or transferring the risk and accepting the risk. This mitigation process seems to be quite simple process but it needs planning with a deep research.
The tool for Risk Mitigation which can be used is in the case of Steel Rolling Mill can be used is the technique of transferring or sharing the risk by involving other firms or groups in both financial risk and infrastructural planning risks. For financial risk the best solution is to insure the project, the insurance not only provide a much promising solution for the Financial Risk but also can attract newer clients to get more capital for the project. Here another idea to reduce the risk of exceeding the budget can be handled by the concept of buying the raw material and other construction goods orders which were terminated during the Global Economic Recession previously.
Tools and Techniques
There are several tools or methods are used by different organizations around the world for managing the projects. The methods used for project management depends on the nature and size of project, but basic fundamentals may remain same for many projects even if they don’t belong to same domain of nature or size. The methods used for the project management mainly based on the approach used for the project by the project management team. Some project management techniques are described as followed
Work Breakdown Structure
It is a popular method used for managing projects in which can be used logical breaking a generally described objective into more comprehensive and detailed tasks to achieve the ultimate aim of the project. The Work Breakdown Structure can be simply understood as the process of breaking or dividing the phases or steps of the project into a large number of more detailed tasks which create a visual pathway which leads to the ultimate objectives of the project.
According to Gavirel Salvendy a work breakdown structure helps define the project objectives into a list of activities, enables smooth communication of the work involved for the stakeholders and is an effective tool for resource allocation in a project (Salvendy 2007: pg. 1271). A Work Breakdown Structure may comprise several levels with each level adding more detail about the task described in the previous levels. A WBS helps project managers to visualize the detailed process of the smaller tasks to achieve the objectives of the project. The smaller tasks are much easy to be managed and control, But it requires a massive effort to build a Work Breakdown Structure and the nature of structure of WBS is quite rigid to add a sudden change. The Steel Rolling Mill project of UNISTEEL can be divided into many smaller activities which can be allotted to smaller groups which can easily manage the task and larger objectives can be achieved.
The project can be divided into different phases such as the production line construction and work place construction which can be worked upon at the same time by dividing both tasks in several more detailed levels which connect both the lines in their finishing levels. The disadvantages associated with WBS approach are that dividing all the objectives into detailed levels also requires a tiresome and industrious effort. The structure of the WBS is also poses a problem referring to the rigidity, which does not approve sudden changes to incorporate to the described framework very easily. The WBS doesn’t show the timeline along the project and does not show the budget and time left or consumed to complete the various stages associated to the project, yet still WBS is a suitable management tool for huge projects such as Steel Rolling project as it can help to develop a much suitable procedure to complete the project.
Burn charts are graphical presentation of the relation between work and the time referring to a project of any nature. The advantage of burn chart is that it provides the basic information about the time of each task ultimately clarifies the time constraint of the whole project. Burn charts are of two types
-Burn Down Chart
-Burn Up Chart
Both charts are used for representing the relation of the amount of the work left and the time (In case of burn down chart) or work completed and the time (in case of burn up chart). Burn charts are effectively used in project management due to the easy presentation of time factor related to the work which provides logical and promising predictions about the time frame of project. The use of any of both charts is completely a case of the nature of the project and the approach of the management team to the project objectives and aspects. For the Steel Rolling Mill of UNISTEEL the burn up chart is more suitable due its better presentation of information needed to understand to understand the scope shift or scope creep. The project has already been postponed earlier so the work scope is critical here to understand the requirements of the project relating to the resources planning to better to suit the deadline. Here to face the challenge to meet the deadline the understanding of the scope is critical to create better communication between the client and the contractors, but in case of many projects both charts have been used at the same time to keep the track along both factors. The choice is simply based on the requirement of information (burn up chart) or simplicity (burn down chart).
Monitoring and Control
Monitoring is the continuous assessment of the project implementation in relation to agreed schedule, and use of inputs, infrastructure and services by project beneficiaries. Monitoring provides managers and other stakeholders with continuous feedback on implementation; it identifies actual or potential successes and problems as early as possible timely adjustments to project operation. Once a baseline plan for the project is decided, a process to achieve the objectives of the project by following the plan is supervised, analyzed and controlled by the team to assure the success of the standard plan. This process is called Monitoring and Control, this process plays huge role in the success of the project as this process assures that the involved groups and people follow the very standard instructions to complete the task to finish the project. Monitoring incorporates the certain parameters determined by project planning team for each phase of the project and project monitoring team assures that the process of each task follows the set parameters for every aspect of project. Monitoring process
There are various tools which can serve for monitoring purpose very suitably for the Steel Rolling Mill project are Gantt charts, Stage gate review, Earn Value analysis etc.
Stage Gate review
The Stage gate review is a process comprised of series of various stages and gates where each stage is defined by a set of specific parameters and gates are checkpoints where decisions are based on the previously set standard criteria. Stages are elements of project where the sole objective of the stage is gain or develop the project further. Each stage consists of several parameters based on various aspects of the project such as cost, time, staff, amount of work done and many more. The objective of a stage to gain technical progress and to gather information required to move the project further through the next gate. Information gathered in each stage also help the researchers and managers in decision making to make more logical and information biased decision to face the risks and unexpected events more firmly. These gates provide a system for the project through which each step or stage is analyzed at different levels to assure the better fulfillment of the objectives of the project.
The gates can be considered as the check points for verification of completed stages of the project which decides to move the project forward. Each gate has following set of criteria which may also differ on the basis of nature of project or stage being analyzed
- -A set of parameters to decide the progress of a stage
- -A decision to make that to whether the project should proceed, be postponed or dropped. (Turner & Townsend sees return to health for UAE construction)
- – Approval of funding for following stage and the timeframe for the next stage.
- -A path forward for the next stage along with decided parameters for the next stage.
- Each gate also checks some general criteria to determine the whether to further proceed the project
- -Has the project met the critical objectives previously decided by the team?
- -Has the stage been completed in budget and time allotted to the management team?
- -Does the stage posses the key aspects to fulfill the requirements of the following stage?
And many more parameters are used for judging the stage at the gates. This process is quite feasible for the monitoring and control of huge projects such as the Steel Rolling Mill of UNISTEEL GROUP .
Implementation of Change
An organization takes on a project to implement a change, usually a successful change. However many projects fail due to poor change management.
According to Jim Riley change management is also a vital part of the control and monitoring as the changes should be applied as a well planned process rather than being immediate decisions.
This process comprises many steps as followed identifying the change, determining major issues referring the change, identifying the obstacles, identifying the major resources required for the change and persuading the key stakeholders by winning their trust.
The Steel Rolling Mill project of UNISTEEL is an ongoing project in Fujairah Free Economic ZONE in U.A.E., Turner & Townsend have been appointed as the project manager by UNISTEEL. The contract to construct the straight rolling mill has been awarded to the Siemens Metal Technologies. The project started in October 2006 but was paused due to the economic recession in November 2008 and now it is resumed since September 2012. The project management team faces the challenge to complete the project as soon as possible. The project is not only going to be the biggest constructional steel project covering an area of 145,000 square meters but also important to regain the interest of the investors and clients from the global economic scenario to the nation. The delay in the project has already created the problem of reduced time and limited budget. But here using the latest management techniques to plan, monitor, control and manage the project it’s still possible to achieve some satisfactory results for the project. I would recommend the use methods such as WBS and BURN CHARTS the project. The techniques of Stakeholder Management are also recommended. Here the control and monitoring of the project can be efficiently performed by Stage Gate Review method which puts a controlling and monitoring efforts almost together which may help to find quick developments with accuracy to the project in more risk proof manner. The idea of renegotiation and buying canceled orders by other firms due to economic break down may help the management team to keep the budget to acceptable limits but need a deeper research.
The project is ambitious and it also has great potential to support the infrastructure and real-estate development sector of the region to huge extent. The structural steel production line and the workspace can be developed along each other and will be helpful to the local and national economy positively and firms Turner & Townsend and Siemens Metal Technologies can help the Al-Fozan group to develop the project as its latest achievement which will also help the group to regain a the trust of world economy to attract the international capital flow to the group. I would like to research the local economical and environmental scenario of the region to suggest better options to manage the project. I would also suggest the use of modern management tools to be used to work the production line and the workspace at the same instant