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Project Closedown Checklist - PDF

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					     Contents


List of Figures                                                                         xiii
Acknowledgments                                                                          xix
Foreword by William DeCota                                                               xxi
Foreword by Dr Yiannis Paraschis                                                        xxv
Preface                                                                                xxvii

1     The Nature of Projects and their Management                                         1
      an introduction to project management                                               1
      Four different types of projects                                                    2
      Project life cycles and life histories                                              5
      four principal players in a project life cycle                                     10
      Project management—a matter of common sense, logical reasoning and
      determination                                                                      10
      senior management support                                                          11
      references                                                                         11

2     Factors for Project Success or Failure                                             13
      Success or failure factors in relation to the initial project definition           13
      three primary success or failure factors that are particularly relevant to the
      project execution phase                                                            15
      Trade-offs between the time, cost and performance objectives                       18
      Perceptions of project success or failure beyond the three primary objectives      22
      identifying and ranking the stakeholders                                           23
      Benefits realization from a large aviation project                                 26
      case example: Denver international airport—a project with failure built in
      from the start                                                                     28
      conclusion                                                                         29
      references                                                                         29

3	    Project	Definition	                                                                31
      Aspects of project definition for external and internal projects                   31
      Project definition through the project life cycle                                  32
      Safeguards for projects which are difficult or impossible to define                34
      Checklists as an aid to project definition                                         36
      Defining projects proposed by external clients or customers                        39
      Defining the project scope                                                         44
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     Defining internally funded projects                                                       44
     Documenting the project specification                                                     47

4    Strategic Decisions                                                                       51
     What are strategic decisions?                                                             51
     examples of early strategic questions and the strategic management process                52
     the strategic management process                                                          54
     Questions of project definition and methodology                                           57
     Questions of project resources                                                            58
     Questions of in-house management competence                                               59
     sWot analysis as a tool for considering the competition and business
     environment                                                                               60
     formulating project strategy under uncertainty                                            64
     early dealings with regulatory bodies of the aviation industry                            68
     references                                                                                69

5    Estimating the Project Costs                                                              71
     introduction to cost estimating                                                           71
     cost accounting terms commonly used in project cost estimating and cost
     control                                                                                   73
     accuracy or reliability of cost estimates                                                 75
     Top-down or bottom-up?                                                                    77
     Compiling the project task list for bottom-up estimates                                   78
     Documenting the cost estimates                                                            81
     estimating manufacturing costs                                                            88
     estimating project labor costs                                                            90
     estimates for material and equipment costs                                                93
     Personal estimating characteristics                                                       94
     reviewing the cost estimates                                                              96
     version control of project cost estimates                                                 97

6    Evaluating an Aviation Investment Project and Preparing a Business Case                   99
     Projects carried out by contractors for external customers                                99
     investment projects                                                                      100
     The dimension of time in project financial evaluations                                   101
     Introduction to project financial feasibility analysis                                   101
     case example: an airport visitors’ center building project                               103
     The simple payback method of project financial appraisal                                 107
     Discounting the cash flows                                                               111
     How much confidence can we place in the data?                                            114
     Preparing and presenting a business case                                                 118
     Project funding                                                                          119

7    Project Authorization                                                                    121
     Purposes of a project authorization procedure                                            121
     Project authorization as a chain reaction                                                122
     Many variations on the authorization theme                                               122
     Authorization criteria for multiple projects                                             127
contents                                                                      vii



     Project registration and numbering                                       127
     Distribution of project authorization documents                          128
     Authorizing work without a contract or customer’s order                  128
     references                                                               131

8    Organizing the Project                                                   133
     Organization charts                                                      133
     Introductory observations about organization in project companies        136
     Coordinated matrix organizations                                         137
     Matrix solutions for multiple projects                                   141
     Project team organizations                                               142
     Team or matrix: which organization is best?                              144
     Hybrid organizations                                                     146
     Contract matrix organizations                                            148
     joint venture projects                                                   149

9    Some Key Roles and Stakeholders in the Project Organization              151
     the role of senior management in projects                                151
     the project customer (or owner)                                          152
     The financial institutions                                               153
     the design engineers and managers                                        153
     the project manager                                                      154
     Director of projects or program manager                                  157
     the project engineer                                                     158
     Project support office                                                   159
     references                                                               160

10   Work Breakdown and Coding                                                161
     the WBs concept                                                          161
     WBs examples                                                             162
     coding systems                                                           165
     examples of coding systems                                               167
     Benefits of a logical coding system                                      172
     choosing a coding system                                                 175
     What happens when the customer says ‘You shall use my coding system!’?   176
     references                                                               177

11   Relating the Project Dimensions of Work, Organization and Cost           179
     Dimensions of a typical aviation project                                 179
     Managing the incomprehensible and creating order out of chaos            180
     introducing the project oBs                                              182
     a project case example                                                   183
     relationship between the project WBs and oBs                             186
     introducing the cBs                                                      188
     case example: cash crisis at jet-u-there                                 189

12   Introduction to Detailed Project Planning                                201
     a demonstration case example                                             202
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       Planning the 4j airstrip project by the diary method                                     204
       a simple remedy for the 4j airstrip project                                              206
       Limitations of Gantt charts                                                              209

13     An Introduction to Critical Path Network Analysis                                        211
       a general introduction to critical path project planning                                 211
       activity-on-arrow network diagrams                                                       215
       the 4j airstrip project planned using an arrow network diagram                           220
       activity-on-node (precedence) network diagrams                                           223
       the 4j airstrip project planned using a precedence diagram                               227
       Dummy activities in precedence networks                                                  232
       references                                                                               233

14     Critical Path Network Analysis in More Practical Detail                                  235
       Making a detailed plan for a new project                                                 235
       level of detail in the project schedule                                                  238
       estimating task durations                                                                241
       rolling wave planning                                                                    242
       use of Pert to resolve uncertainty in estimated task durations                           243
       Hangar restoration project: a case example planned using Pert                            244
       What if the predicted timescale is too long?                                             246
       Time/cost optimization through crashing                                                  247
       fast-tracking to accelerate project delivery without adding cost                         248
       extreme measures                                                                         250
       references                                                                               250

15     Principles of Resource Scheduling                                                        251
       the nature of project resources                                                          252
       resource scheduling without a computer                                                   254
       A Gantt chart resource scheduling case example                                           255
       time-limited and resource-limited schedules                                              261
       The significance of float in resource scheduling                                         262

16     More Advanced Aspects of Resource Scheduling                                             267
       choosing which resources to schedule                                                     267
       specifying resource availability levels                                                  270
       specifying cost rates for labor and materials                                            271
       allocating resource quantities to tasks                                                  272
       scheduling more complex tasks                                                            273
       Using different calendars                                                                274
       Multi-project scheduling                                                                 276
       administration of the multi-project model                                                278
       Project resource scheduling in the corporate context                                     281
       What-if testing using a multi-project model                                              281
       Choice of software                                                                       282
       Case example: The Lox Brothers light aircraft development project                        282
contents                                                             ix



17   Planning For Risk and Uncertainty in Aviation Projects         297
     introduction to project risk management                        297
     uncertainty about time and cost estimates                      298
     identifying the possible risks                                 300
     risk appraisal and analysis                                    303
     Qualitative cause and effect analysis                          303
     Quantitative analysis                                          309
     risk register                                                  311
     Methods for dealing with risks                                 312
     insurance                                                      314
     unique properties of aviation insurance                        319
     obtaining project insurance                                    320
     Planning for crises and emergencies                            321
     references                                                     323

18   Contracts and Terms of Payment                                 325
     contracts                                                      325
     contract payment structures                                    329
     the timing of payments for contracts with external customers   332
     Financial viability of participating organizations             333

19   Purchasing—Part 1: Principles and Initial Ordering             335
     introduction to aviation project purchasing                    335
     the purchasing cycle                                           336
     requests for quotations                                        336
     Bid receipt procedures for high-priced goods and services      338
     Bid evaluation procedures                                      339
     terms of trade used in international business (incoterms)      339
     Purchase requisitions and orders                               341
     Purchase orders                                                342
     timing of orders and deliveries                                344

20   Purchasing—Part 2: The Supply Chain                            347
     Simplest supply chain organizations                            347
     complex supply chains in international project purchases       348
     expediting                                                     349
     shortages                                                      354
     receipt of purchased goods and equipment                       354
     Purchase order amendments                                      355
     stores administration                                          355

21   Managing Project Start-up                                      359
     Preliminary organization of the project                        359
     correspondence and other documents                             361
     engineering standards and procedures                           365
     Physical preparations and organization                         366
x      M a n a g i n g av i at i o n P r o j e c t s f r o M c o n c e P t t o c o M P l e t i o n



     Getting work started                                                                     368
     issuing detailed planning and work instructions                                          371
     references                                                                               374

22   Managing Progress                                                                        375
     Progress management as a closed loop control system                                      375
     Progress management styles                                                               377
     updating drawing and purchase schedules and records                                      380
     updating the project network diagram and work schedules                                  380
     collecting progress information                                                          382
     statistical checks                                                                       384
     Managing the progress and quality of bought-in materials and equipment                   385
     Managing sub-contractors and agency employees                                            385
     routine priority allocation in manufacturing projects                                    388
     When the news is bad                                                                     389
     corrective measures                                                                      390
     Meetings                                                                                 394
     Progress reports                                                                         399
     references                                                                               400

23   Managing Changes                                                                         401
     special reasons for managing changes in aviation projects                                401
     the impact of changes in relation to the project life cycle                              402
     Origin and classification of changes                                                     402
     Authorization arrangements                                                               405
     general administration of project changes                                                408
     forms and procedures                                                                     411
     Version control for modified drawings and specifications                                 418
     Emergency modifications                                                                  419

24   Managing Project Costs                                                                   423
     establishing and maintaining project cost budgets                                        423
     Principles of cost control                                                               425
     controlling direct costs                                                                 426
     Controlling fixed costs and overhead cost recovery                                       427
     additional cost control factors                                                          428
     the total cost approach                                                                  429
     a checklist of cost management factors                                                   431
     transactions in foreign currencies                                                       432
     cost collection methods                                                                  432
     audits and fraud prevention measures                                                     437
     conclusion                                                                               438

25   Managing Project Cash Flows                                                              439
     Understanding cash flows                                                                 439
     Cash flows for internally funded projects                                                441
     Methods for scheduling cash flows                                                        441
     Case example: scheduling cash flows for the Loxylene aviation fuel project               443
contents                                                                           xi



      Using project management software to schedule cash flows                    446
      conclusion                                                                  449

26    Reporting Progress and Costs                                                451
      Milestone analysis                                                          451
      earned value analysis                                                       457
      case example: using earned value analysis on a project to renew perimeter
      fencing at an airport                                                       458
      Effect of project changes on earned value analysis                          464
      Predicting and reporting profitability for a whole project                  465
      Post-mortem                                                                 468
      case example: atM project                                                   468

27    Project Closedown                                                           477
      reasons for closing a project                                               477
      formal project closure                                                      478
      Authorizing post-project expenditure                                        479
      final project cost records                                                  481
      Disposal of surplus materials                                               481
      Final project as-built definition: the end of a continuous process          481
      as-built records of ground-based projects                                   482
      as-built condition of a project that is interrupted before completion       484
      Additional as-built record requirements for flight-based projects           484
      traceability                                                                486

Bibliography                                                                      491
Index                                                                             493

				
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