ENGR 281
Engineering Scholars
Program
Project Management
Overview
K. F. Reinschmidt
J. L. Frank / Marathon Ashland
Petroleum LLC Chair in Engineering
Project Management
kreinschmidt@civil.tamu.edu
Projects exist to add value
•For society.
•For your client or customer.
•For your firm.
•For you.
Project managers maximize
project value.
Three Basic Things You Will Find
Useful to Know:
•How your client or customer makes money.
•How your firm succeeds by adding value to
your client or customer.
•How your project succeeds by adding value
to your firm and to your client or customer.
Know how to read your customer.
Elements of a Project
Opportunity
Recognition
Project
Definition
Front-End
Engineering
Approval
Detail/
Engineering
Procurement
Construction
Installation
Operation/
Production
Value
Capture
Project Life Cycle Overview
Identify an opportunity to provide a product, a
service, or a capital project.
Define the project conceptually.
Form the initial project development team.
Write a business plan for the firm, project,
product, or service.
Define the project Statement of Work (SOW).
Identify the required or estimated completion date.
Identify project milestones and prepare a
management-level schedule with decision points.
Project Life Cycle Overview
Estimate project development costs – top-down,
parametrically, by analogy, etc.
Forecast project benefits (tangible and intangible),
revenues, etc.
Forecast project operating costs – labor,
materials, other variable factors.
Develop a financial plan.
Forecast cash flows and cash requirements
throughout the project life cycle.
Identify project risks – business, technological,
regulatory, etc.
Project Life Cycle Overview
Assess risks qualitatively; identify potential
showstoppers.
Identify methods to avoid or mitigate any
showstoppers – or terminate the project.
Calculate project net Present Value, Internal Rate
of Return or other measures of success.
Repeat above steps until the project is
economically feasible – or terminate it.
Identify off-ramps – how to exit the project.
– If the project is successful.
– If the project is not going to be successful.
Project Life Cycle Overview
Identify sources of project funding – clients,
personal equity, corporate, banks, venture
capitalists, etc.
Obtain funding – or revise the project and the
financial plan as necessary to get funding.
Form an Integrated Project Team for project
execution.
Set up timely accounting and reporting methods
to report costs and progress (earned value).
Project Life Cycle Overview
Update and refine the SOW.
Determine level of engineering, design, and other
resources needed.
Revise the conceptual cost estimate.
Set cost and schedule contingencies
(management reserves) based on risks.
Develop a sense of common purpose in the
project team
Project Life Cycle Overview
Assemble the engineering – design team.
Define the Work Breakdown Structure (WBS) and
WBS Dictionary.
Institute a change control (configuration
management) process.
Prepare the project network schedules.
Determine the project critical path or paths.
Assess remaining risks quantitatively and identify
major risks or common causes.
Project Life Cycle Overview
Identify risk mitigation and risk management
actions. Prepare the project Risk Management
Plan.
Determine the project organizational structure
(fully projectized, functional, matrix, etc.)
Prepare the Project Execution Plan.
Identify available resources and resource
constraints.
Set up the project Quality Assurance Program and
issue the Quality Assurance Plan (QAP).
Establish metrics for quality control (Six Sigma).
Project Life Cycle Overview
Perform preliminary engineering design and
bottom-up engineering estimate based on WBS.
Integrate the WBS cost estimate with the network
schedules (resource load the networks).
Forecast the Budgeted Cost of Work Scheduled
(BCWS) for the project duration.
Obtain quotes or bids from vendors, suppliers,
and subcontractors. Perform make or buy
calculations.
Identify delivery dates for significant equipment.
File for and obtain all necessary permits.
Project Life Cycle Overview
Pass periodic management decision points based
on updated costs, benefits, and financials.
Assure that all project participants communicate.
Establish approved Budget at Completion (BAC)
(plus management reserve or contingency).
Manage by walking around.
Review vendor drawings and specifications.
Project Life Cycle Overview
Assure that all supplier and subcontractor
networks interface to the master project network.
Revise networks to meet cash flow, equipment
delivery, and other resource constraints.
Assure that engineering, procurement, and
manufacturing (or construction) work together to
develop a feasible plans, schedules, and
information interfaces
Project Life Cycle Overview
Monthly or weekly during the project life cycle:
Recompute critical path and floats. Follow up if
there are negative floats.
Determine earned value and Budgeted Cost of
Work Performed (BCWP), Schedule Variance
(SV) or Schedule Performance Index. Follow up if
SV < 0 or SPI < 1.
Determine accrued costs and Actual Cost of Work
Performed (ACWP), Cost Variance (CV) or Cost
Performance Index (CPI). Follow up if CV < 0 or
CPI < 1.
Project Life Cycle Overview
Monthly or weekly during the project life cycle:
Forecast Estimated Cost at Completion (ECAC).
Follow up if ECAC > BAC + management reserve.
Conduct weekly or monthly project review
meetings with the integrated project team (IPT),
client, vendors, and subcontractors.
Daily during the project life cycle:
Assure that all project members are
communicating.
Project Life Cycle Overview
Perform detailed engineering design and revise
engineering cost estimates.
Prepare bid packages for subcontractors and
suppliers.
Review bids and select vendors.
Expedite vendors as required to meet the
schedule.
Disperse funds (accounts payable).
Prepare startup plan and turnover schedule.
Project Life Cycle Overview
Prepare punch lists.
Start up facility and turn over to users/operators.
Complete project cost accounts.
Prepare as-built drawings and documents for
turnover.
Conduct post mortem on lessons learned.
Collect final payment.
Close out project.
Celebrate.
Start new project.
New:
Certificate Program in
Project Management
Certificate Program in Project
Management
Requirement:
Complete 12 semester credit hours
On Graduation:
Receive Bachelor of Science degree from home
engineering department.
Receive Certificate in Project Management.
Certificate Program in Project
Management
Course in Engineering College:
CVEN 333 – ISEN 333 – MEEN 333 (cross-listed)
– Project Management for Engineers
Course in Mays College of Business
MGMT 363 – The Management Process
Certificate Program in Project
Management
Approved Technical Electives (Select 1 or 2)
 CVEN 349 – Civil Engineering Project Management
 CVEN 405 – Managing Construction Projects and Project Risks
 CVEN 473 – Engineering Project Estimating and Planning
 CPSC 431 – Software Engineering
 CPSC 437 – Engineering Software Projects

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
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INEN 303 – Engineering Economic Analysis
INEN 411 – Engineering Management Techniques
INEN 489 – Decision Making for Engineers
PETE 400 – Reservoir Description
PETE 403 - Petroleum Project Evaluation
Certificate Program in Project
Management
Approved Business Electives (Select 0 or 1)
MGMT 372 – Managing Organizational Behavior
MGMT 373 – Managing Human Resources
MGMT 424 – Organizational Design, Change and
Development
MGMT 452 – International Management
MGMT 460 – Managing Projects
Certificate Program in Project
Management
Other Courses as Approved
For more information, contact:
Project Management Certificate Program
Coordinator
Engineering Academic Programs Office
Any questions ?
Project Life Cycle
Overview
K. F. Reinschmidt