Tuesday, November 12, 2019
Engineering Project Management Essay
Typical Practice Estimating time to undertake design and drafting tasks, such as the crafting of blueprints for the construction of wooden furniture (e.g. stool, desk, chest) by an expert and the creation of blueprints for buildings of commercial establishments by an architect, requires the method of estimating labor costs. After all, cost estimates require time estimates.            Computing the labor cost (technically called as the direct labor cost in management accounting) proceeds by adding the worker’s base rate and indirect payroll costs, such as government securities and insurance. The result is multiplied with the worker’s labor hours. The product of the operation is the labor cost. If labor cost is known and the estimated labor hour is unknown, the manager only has to work around the equation to obtain the estimated time of performing the task. This is the easiest method for the manager, and also the most unreliable because it relies on past data of labor costs. It relies on past data of labor costs because an empirical method is needed, which this method does not include. In such a case, this method is just mere ‘speculation’. It is not an ‘estimation’ in the proper sense of the term because there are no trials and errors done to gather data. From this, there is also a differentiation between ‘past data’ and ‘empirical data’. Past data are also empirical data, but they are gathered in the past, therefore acquiring a less accurate information. Empirical data, after all, require certain use of tools to be obtained. Also, it is unreliable because if the company is new, it cannot use this methodâ€â€there is no recorded information regarding past operations. Only a long-existing company can benefit from this method of estimating labor hours.            One problem in estimating the time and cost in performing design and drafting jobs is that managers can only speculate about the amount of time required by a specific job. For instance, the manager of a firm that designs and produces musical instruments can not know exactly how long in a day can a staff of twenty finishes a certain number of musical instruments. Time is a variable that depends on the quality and quantity of tools, materials, equipment, and workers assigned in performing tasks. In the example of designing musical instruments, the manager should know how long each instrument is designed in its entirety by a specific worker. It would help to get an average rate for this. Afterwards, the average rate will be multiplied to the number of instruments to be designed. If one stops here, this is an incomplete method of computing labor time. The manager should get the time it took the labor to prepare for the task, and how long it took him to bring the musical instrument to the corresponding collectors of the aforementioned products in the management system. Then, the sum is multiplied with the distance of the labor from the shop or wherever he is taking the musical instruments. The resulting product is then added to the product of the average rate and the number of instruments to be designed. Another method in estimating the labor time is by taking the average hours of preceding homogenous tasks. In creating a musical instrument, the manager gets the time it took for a worker to complete one instrument. He then obtains data from the proceeding tasks. By getting the average of the values, we obtain the average hours. Variability and Contingencies The accuracy of the first method is low. First, there is a huge possibility of error in relying past data or performance. A company that designs cars ought to measure the time and cost of labor through direct empirical methods, such as obtaining the rates by which workers accomplish their jobs. However, this method depends on the accuracy of historical data. If historical data are inaccurate, there is a 100% tendency that the result of using this method will produce inaccuracies. This is not recommended for companies because it is not an engineering standard.            The second method is more empirical and far more accurate than the first method. Considering the computation of the average rate, one can not be sure of the precision of this statistical tool. Using the mean, median or mode as a way to produce data for the estimation of the time and cost of labor is inefficient. It is recommended that a variance analysis be conducted so that deviations will be taken into consideration. After all, workers are not robots. They have higher levels of inefficiency and inconsistency of output. A worker has fluctuating labor rates. The time he finishes a job fluctuates in hours or minutes, thereby changing the amount of labor cost. Using the variance analysis as a statistical method in obtaining work rates is more efficient. When this is done, it makes the second estimation method more accurate because deviant cases, or changes in time and labor costs, are taken into consideration. The variance analysis can also be applied on the third method, which also relies on using the mean, median or mode. Since averages are less reliable than doing a variance analysis, the third method can be inaccurate. More statistical methods are needed. Monitoring and Updating As the design and drafting tasks proceed, the practices used to update estimates are the following: regular, intermittent, and periodical recording of average rates in designing and drafting jobs. The practice of having a regular recording system, which requires inputs for every day of labor, is the most accurate but also the most costly. Therefore, it is far from inefficient. Only a huge company can take advantage of this, if there is a high risk involved in not monitoring the time and cost of labor.            An intermittent recording practice entails intermediate accuracy and cost. This requires inputs every week, month or quarter of the year, depending on the needs of the company to monitor the progress of the fluctuations in time and cost of labor.            A periodical recording practice is the least costly, but has the risk of being inaccurate because it does not measure everything. It only measures the fluctuations in time and cost of labor between points in time, and not within a span of time. References: Baskette, C. (2006). Avoided cost estimation and post-reform funding allocation for California’s energy efficiency programs. Electricity Market Reform and Deregulation, 31, 1084-1099. Farsi, Mehdi. (2006). Cost efficiency in the Swiss gas distribution sector. Energy Economics, 28, 1050-1062. ASSIGNMENT 2 (Y) Basis for Project Methodology The specific method chosen for a certain project is based on the inherent characteristics of that project. There are as many methods as there are kinds of projects. The basis for choosing a method depends on the variables that differentiate one project from another, like the level of complexity involved in the activity.            The following is the list of factors that may be the basis of project methodology: Project area Level of complexity Type of communication used            One of the many considerations in project methodology decision-making is the project area. Is the project small, medium, or large? Even this question requires some thinking, since the size of a project is arbitrary. It depends on the sizes of other projects the manager or company considers as points of comparison. The area of the project may mean the geographical area concerned. For instance, an electric company that aims to build a network of electric facilities may be one kilometer by 500 meters. Judging whether this is small, medium, or large varies from one project to another. There may have been other similar projects built, requiring only two or three hectares of land. In such cases, this project may be considered large in area.            The area can also be seen in terms of influence. In the example of an electric company building a network of electric facilities, the area may mean the number of households it would serve. Again, judging whether a number of ten-thousand households is small, medium or large depends on other similar projects made.            Another basis is the level of complexity involved in the project. Complexity can be measured by how many interactions among units are required to accomplish a task, and judging the data whether the project system is simple or complex. In the above example, measuring the complexity of building a network of electric facilities may require determining the organization of managers and workers that are involved in the project. Some organizations interact according to hierarchy. These kinds of organizations tend to be simple because there are defined ways on how the units interact among one another. Some, which are more complex, require units to interact in different ways. To put it concretely, let us say that the electric company assigns the maintenance department to be always under the engineering department, which means that the staff would only take commands from the latter. This is a simple scenario. A complex scenario would be when the company assigns the maintenance department to communicate with the other divisions of the company in accomplishing its own task. The connection between complexity and method is that the complexity determines the method. After knowing a project’s level of complexity, the method may then be configured depending on this information.            The third basis is communication. What is the message of the project? What are the kinds of media used? For whom is the message? These are significant things to take in mind when characterizing what sort of communication exists in an activity. Is the electric company making use of an intranet, which simplifies complex interactions? What tools are used for one division to communicate with another? Are telephones preferred over online chatting between departments?            It is also significant to determine the contexts in which communication occurs. Is it one-to-one, one-to-many, or many-to-many? Determining this also affects the level of complexity of the project. A one-to-one communication is simple but slow and inefficient. A one-to-many communication is fast and efficient, but the message reception loses quality. Many-to-many communication is fast and complex, thereby increasing the level of complexity in the project. Decisions regarding matters on communication are only part of choosing what methodology to use. Criteria for Best Project Methodology In order to illustrate how one method is better than another given a specific project, let us take the following popular methods in project management: Waterfall Development, Rational Unified Process, and Extreme Programming (Asrilhant, 2005). These are the best methods in project management because they generally are flexible to different factors, like budget and project size. They compliment each other. One strategy’s weakness is another’s strength.            If the project has high budget, one may say that the Waterfall Development is the best method for it. That is because this method requires little or zero corrections in inputs. This is possible because the planning function of the management is more crucial. A low budget means a high risk to undertake the project. Therefore, quality planning is indispensable.            For instance, if the electric company funds a 5-hectare electric network facility 30% lower than similar projects, the management has to undertake Waterfall Development. This means the planning function is geared on decreasing costs. There will be much labor required on the part of engineers and analysts to increase the level of certainty in inputs. The company cannot afford to do experimentations and much testing. High technical proficiency is required.            If the project entails intermediate risk, and there is an intermediate number of staff who would man it, then the Rational Unified Process may be used as the best methodology. This is because risk management is balanced with a medium amount of budget or allowance for failure in inputs.            If the electric company funds a 10-hectare electric network facility 2% lower than similar projects, the management may afford to increase the costs of testing and experimenting with inputs to produce outputs in electric services.            Finally, if there is a need for regular testing and experimentation of inputs, and corrections in testing failures, then the Extreme Programming may be undertaken as the best methodology. Budget given here is high, and the risks are lower. The population of staff is also considerably higher than the two other methodologies. Here, the management can afford to run the risk of losing resources, albeit with prudence.            Determining which method is best for a project requires measuring the amount of risks associated with the project, the budget allocated for the activity, the number of participants in the staff, and the affordability of the project to receive failing outputs. References: Asrilhant, Boris. (2005). On the strategic project management process in the UK indutrial sector. Omega, 35, 89-103. ASSIGNMENT 3 Alternative Classification            The rationale of having a new project classification is to respond against the inefficiencies of the older classifications. The project method concerns itself much on the processes and ways on how tasks are carried out in the activity. However, it is too formalistic and technical. It is formalistic because it is focused on empirical observations. It is too technical because it does not leave room for speculation and theorizing. There is a huge chance that it will lose sight of the project’s objectives.            The project end-product, being goal-oriented, is weak on the part of specific matters. It may lose sight on technical issues such as the method of computation to use in estimating labor costs. If a firm that manufactures cars undertake an activity in which the project is classified as belonging under the project end-product, the managers will fall short on practicality. Important details are missed, like the choosing of a certain metal as a material in making automobiles. There may be one end-product but there are many methods in which inputs can be processed into outputs. These methods determine the level of costs associated with the production. If a company is too concerned about output, it loses sight on the possibility of gaining productivity by merely choosing the method. This is to say that a new classification is neededâ€â€a new classification that would account for the weaknesses of project methodology and project end-product. Since the two classifications do not take into consideration certain factors of production and labor, which are important determinants of the success of a project, a new chosen classification is labeling projects according to the types of constraints. The traditional constrains in a project are the following: Time Cost Production Labor These variables define the shape or form of the project. Changing one variable changes the whole project in its entirety. To illustrate, assume that an automobile manufacturing company undertakes a project of creating fifty units of luxury cars. The time constraint associated with the project makes it different from all the other projects with similar methods and end-products. For instance, this project is similar to five other projects whose goals are also to create fifty units of luxury cars. The only hypothetical difference is the amount of days required to accomplish it. This is to say that a project is different from another when there is a significant time interval between the required time to accomplish one project and the required time to accomplish another.            However, it is too trivial if the manager only relies on the time constraint. Costs are also important contributors of project type determination. The amount of money allotted for a budget determines the influence of the project on the area it is being undertaken, and on the unit is serving. This is an indispensable category because the cost also gives way to knowing the area and quality of the project.            If the car company gives a budget to a car-manufacturing project which is 50% lower than that of another project with similar end-product, then the two projects are different because the former is constrained in using resources. It must tap the planning function of the management at its best, because it cannot afford high risks and high expenses.            Production is a consequence of the cost constraint. The number of cars to be produced by the company depends on the allotted budget in producing these cars. Consequently, this is also related to labor in the sense that, if the budget is low and the production is high, then the labor must be intensive. It is empirically impossible to increase labor if the budget remains the same.            In short, projects can be classified according to the variability of their traditional constraints. They be classified as the following: Long-term undertaking, high-budgeted, labor intensive. Mid-term undertaking, with intermediate budget, intermediate production, and medium labor intensiveness. Short-term undertaking, low-budgeted, small production, and low concentration in labor. This is not to say that there are only three ways to classify projects. There are different permutations of classifying them because a project can be both long-term and low-budgeted, short-term and high-budgeted, and the like. There are twenty-seven combinations possible for the project manager. It is helpful for the project manager because there are varied choices to be undertaken with this typology. Enhancement            This classification gives an enhanced understanding of project management because the inefficiencies of project end-product and project method are revealed and solved. The old classification system is poor because there are only small categories where projects fall under. In logic, the lesser concepts there are to stand for heterogeneous things, the more abstract the ideas become. By taking into consideration the traditional constraints of a project, and basing from it to form a new project classification, one achieves a more concrete and detailed description of the different projects that are to be executed. Project classification, through this kind of classification, becomes more useful not only as a mere science of classification. It also helps management keep an improved system of managing the projects, thereby increasing productivity and output quality. This project classification also enhances the understanding on the content of projects. Project method concerns itself with the processed item but not the one being processed. Project end-product concerns itself with the output but not the materials or inputs that led to its creation. This classification gives a new lens through which projects are seen by the manager. References: Project management. Retrieved September 4, 2006, from http://en.wikipedia.org/wiki/Project_management#Project_systems
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