LECTURE 8
DESIGN AND NETWORK ANALYSIS
Meaning and Concept of Network Analysis:
Project formulation and Project implementations are two essential functions of project management. Project formulation ensures the scientific selection of a project whereas project implementation ensures an optimal allocation of time and resources to the project activities. All project design should have contain five elements it should systematically formulates and describe each of the basic elements i.e. inputs, activities, outputs, effects, and impact. Project design should start with defining the desired impact. So we work from the Top down i.e what effects are needed to achieve the desired impact? what outputs are needed to achieve the desired effects? and so on…
Projects should follow this hierarchy. The lowest level in the hierarchy is inputs like finances’, raw material, human resources and time. All projects perform various activities like communication, training, organization, construction and management. These activities convert inputs into outputs and all the activities are carried out for the output of goods and services. Project management is very tough as well as challenging task with many complex responsibilities. Luckily, many tools and techniques are available to support the tasks and performing the responsibilities efficiently. Some require computer knowledge, whereas others can be used manually. It is a duty of the project managers to choose a proper project management tool that best suits their management style. No one tool can serve all project management needs. Project design and network analysis are important tools for effective implementation of the project. They are very useful for development of a detailed work plan of the project and project time profile. A project consists of a numerous activities. It is examined in detail and details are utilized to compile the series wise explanation of the constituent activities of a project. The compilation is known as the project logic. When it is presented in the form of a graphical presentation, it is called the network.
Importance of Network Analysis/Network technique:
A project has divided into many small activities and these activities can be analyzed with the help of network technique to achieve the objectives of the project.
· Network analysis helps management to minimize the total cost and total maintenance time. With the use of network analysis cost of production can be minimized through reducing the maintenance time.
· Network analysis ensures the effective utilization of limited resources. It also ensures the optimal use of resources and help to control the idle resources so that project can be effectively executed within the budgeted costs and scheduled time.
· Network analysis facilitates co-ordination among the activities as well the persons responsible for project.
· Time management plays a crucial role in every project. Sometimes available resources have to be arranged with a view to reduce the total time for the project rather than reducing the cost of the project. Network analysis helps the managers to manage activities without any delay.
· Network analysis is great tool which helps in planning, scheduling and controlling the activities of the project.
· Network analysis also creates inter-relationship as well as inter-dependence of various activities of project. It helps in integrating the project planning and this relationship assists in bringing out the technological inter-dependence of the various activities.
· Network analysis provides the project formulation team an apparent picture of the work elements and also sequential relationship of the project.
PROJECT APPRAISAL
Project appraisal follows the project formulation phase resulting in the preparation of feasibility report (FR). The main objective of project appraisal is to ultimately decide whether the project proposed/sponsored in the FR has to be accepted for Capital Investment, or be rejected. The initial appraisal of the project sponsored also aims at, if need be, recommending the steps or ways in which the project can be redesigned or reformulated with a view to better technical, financial, commercial and economic viabilities; also mitigate or minimize any adverse on negative environmental impact. Thus, project appraisal is an essential tool for judicious investment decision-making, full and complete data and information need to be documented/presented, and analyzed in the FR so as to facilitate the appraisal authorities to carry out:
(i) Demand analysis to establish convincingly the need for the project,
(ii) Check on optimal location,
(iii) Technical analysis to determine whether the specification of technical parameters are sound and realistic,
(iv) Financial analysis to assess whether the project proposal is financially viable,
(v) Commercial analysis to establish the soundness of product or service specifications, marketing plans, organization structure (both project and for operation),
(vi) Socio-economic analysis to determine whether the project is worthwhile to implement from the point of view of the nation that is society at large and the economy as a whole, and
(vii) Environment and physiographical and ecological thresholds analysis which is concerned with the identification of these constraints, and make the evaluation of chances of success (or otherwise) which the project may have to face (these constraints). Internal consistency and external compatibility are two basic attributes of a viable project.
Development oriented administration and forward looking management may have under consideration, at any juncture or time, a number and variety of projects, resources being limited, a choice has to be made. Project appraisal is warranted to assess the material attributes of an investment proposition and to confirm the implications the project will pose for the sponsoring authorities (system) as well as for systems with which it will have to co-exist after its implementation.
TYPES OF APPRAISAL
· Technical appraisal
· Project appraisal
· Legal appraisal
· Environment appraisal
· Commercial and marketing appraisal
· Financial/economic appraisal
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