CONTROL TECHNIQUES

There are 2 types of control techniques.

1-Old control technique

2-New control technique

OLD CONTROL TECHNIQUE:

These are those which have long been used by managers. Some of the important techniques under which this category are,

1-Budgeting

2-Cost accounting

3-Break even analysis

4-Financial statement and ratio analysis

5-Auditing

6-Report

7-Rules

8-Personal observation

A Budget is a statement of anticipated results during a designated time period expressed in financial and non financial terms.

ADVANTAGES:

Improved co ordination and communication

Boost motivation and moral

Increase learning from past experience

DISADVANTAGE:

Rigid

Inflexible

Expensive

Curb the initiative of a good manager

NEW CONTROL TECHNIQUES:

These techniques which are of recent origin do not markedly overlap the traditional control devices but provide the kind of information not readily available with the traditional method .It include

PERT (Program Evaluation and Review Techniques)

CPM (Critical Path Method)

Human resources accounting

PERT:

PERT is method to analyses the involved tasks in completing a given project, specially the time needed to complete each task and to identify the minimum time needed to complete the total project .

This project model was the first of its kind, a revival for scientific management, founded by Frederick Taylor (Taylorism) and later refined by Henry Ford (Fordism). DuPont's critical path method was invented at roughly the same time as PERT.

A PERT chart is a tool that facilitates decision making. The first draft of a PERT chart will number its events sequentially in 10s (10, 20, 30, etc.) to allow the later insertion of additional events.

Two consecutive events in a PERT chart are linked by activities, which are conventionally represented as arrows (see the diagram above).

The events are presented in a logical sequence and no activity can commence until its immediately preceding event is completed.

The planner decides which milestones should be PERT events and also decides their “proper” sequence.

A PERT chart may have multiple pages with many sub-tasks.

PERT is valuable to manage where multiple tasks are occurring simultaneously to reduce redundancy.

STEPS INVOLVED IN PERT:

PERT planning involves the following steps:

1. Identify the specific activities and milestones.2. Determine the proper sequence of the activities.3. Construct a network diagram.4. Estimate the time required for each activity.5. Determine the critical path.6. Update the PERT chart as the project progresses.

ADVANTAGES:

PERT chart explicitly defines and makes visible dependencies (precedence relationships) between the WBS elements

PERT facilitates identification of the critical path and makes this visible PERT facilitates identification of early start, late start, and slack for each activity, PERT provides for potentially reduced project duration due to better understanding of

dependencies leading to improved overlapping of activities and tasks where feasible. The large amount of project data can be organized & presented in diagram for use in

decision making.

DISADVANTAGES:

There can be potentially hundreds or thousands of activities and individual dependency relationships

PERT is not easily scalable for smaller projects The network charts tend to be large and unwieldy requiring several pages to print and

requiring special size paper The lack of a timeframe on most PERT/CPM charts makes it harder to show status

although colours can help (e.g., specific colour for completed nodes)

CPM (Critical path method):

The Critical Path Method (CPM) is one of several related techniques for doing project planning. CPM is for projects that are made up of a number of individual "activities." If some of the activities require other activities to finish before they can start, then the project becomes a complex web of activities.

Steps CPM SummaryCPM helps you identify a complex project's critical paths. You can find how long a project will take and which activities must be on time. If you also have information about costs and crash costs and times, CPM helps you determine how long the project should take, and which activities should be sped up ("crashed"). As we are doing it in this class, the steps are:

1. Have a list of the activities.2. Draw the network diagram.3. Put activity names, node numbers, times, and costs in a spreadsheet.4. Use Pathfind to generate code for the paths.5. Put the path information into the spreadsheet.6. Calculate the paths' times.7. Identify the critical paths, and the activities in each path.8. Set up the formula to calculate the project's total cost.9. Fill in the Tools | Solver... form.10. Solve, and fix errors, if any.11. For an economic analysis, change the maximum time constraint and solve again. Repeat until

costs, including penalties and bonuses, start to go up.

ADVANTAGE:

Makes dependencies visible between the project activities; this is done by constructing project network diagrams or precedence diagrams

Organizes large and complex projects, hence allowing a more systematic approach to project planning and scheduling, project execution, and risk management

Enables the calculation of the float (slack) of each activity .The float tells you exactly how long an activity can come in late without it impacting the project schedule.

Encourages the Project Manager to reduce the project duration by optimizing the critical path and using compression techniques as applicable

Increases visibility of impact of schedule revisions, which are usually necessary when major milestones have been missed or when the risk of missing a major milestone looms large

Enables the Project Manager to optimize efficiency by allocating resources appropriately, consequently the overall cost can be reduced

Provides opportunities to respond to the negative risk going over-schedule by identifying the activities that are most critical

DISADVANTAGES:

For large and complex projects, there’ll be thousands of activities and dependency relationships. Without software it can be mighty difficult managing this. To make matters worse, if the plan changes during project execution then the precedence diagram will have to be redrawn. Fortunately, we do have relatively cheap software that can handle this with ease.

One of the advantages of drawing a project precedence diagram is that you can print and stick in the project area. The precedence diagram enables the team to stay focused on project activities. Project team members are always cognizant of the critical path since it is visible everyday. However, for large projects with thousands of activities, it may be difficult to print the project network diagram. You would most definitely need a plotter.