Managing Aviation Projects from Concept to Completion

Transcription

1 Managing Aviation Projects from Concept to Completion TRIANT G. FLOURIS & DENNIS LOCK ASHGATE

2 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

3 vi MANAGING AVIATION PROJECTS FROM CONCEPT TO COMPLETION Denning internally funded projects. 44 Documenting the project specification 47 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 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 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 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

4 CONTENTS Project registration and numbering 127 Distribution of project authorization documents 128 Authorizing work without a contract or customer's order / 128 References 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, < Some Key Roles and Stakeholders in the Project Organization 151 The role of senior management in projects 151 The project customer (or owner) 152 Hie 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 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 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 Introduction to Detailed Project Planning 201 A demonstration case example 202

5 MANAGING AVIATION PROJECTS FROM CONCEPT TO COMPLETION Planning the 4J airstrip project by the diary method 204 A simple remedy for the 4J airstrip project 206 Limitations of Gantt charts < 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 Tine 4J airstrip project planned using a precedence diagram 227 Dummy activities in precedence networks 232 References 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 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 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

6 CONTENTS 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 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 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 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 pttrchased goods and equipment 354 Purchase order amendments 355 Stores administration 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

7 M A N A G I N G A V I A T 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 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 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 procedtires 411 Version control for modified drawings and specifications 418 Emergency modifications 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 Managing Project Cash Flows Understanding cash flows Cash flows for internally funded projects Methods for scheduling cash flows Case example: scheduling cash flows for the Loxylene aviation fuel project

8 CONTENTS Using project management software to schedule cash flows 446 Conclusion 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 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