Project Management Institute

Organising planning and control functions for a large project

D. Antonio Vecchione

of Gerencia. De Proyectos Y Construccio

and Debabrata Kar

of M.N. Dastur&Co.(P) Ltd.

This paper is based on the recent experience of implementing a major expansion programme of Siderurgica del Orinoco, C.A. (Sidor) situated at the confluence of the rivers Orinoco and Caroni at Matanzas in Venezuela. This is the only integrated steel mill which went into production in the year 1961 and is state owned.

Due to the rise in oil income, it was felt that large scale investment should be made in heavy industries, to sustain the present benefits at a time when the oil wealth would perhaps not exist. With plentiful availability of high grade iron ore, practically unlimited source of water with high hydroelectric potentials close to the plant site, abundant supply of natural gas and availability of river transport, the raw material assembly cost at Sidor is one of the cheapest in the world. Taking into consideration these factors, it was decided early in 1974 that the installed capacity of 1.2 million tons of liquid steel be expanded to 4.8 million tons per annum at a cost of about 4 billion US dollars.

Initially, it was planned to commission the major units by the end of 1977 which is about 4 years from the commencement of the project. The project involved about 50 million Cu m of earth to be moved, about 903,000 cu m of concrete to be placed, about 150,000 tons of structural steelwork to be erected and about 265,000 tons of equipment to be installed. For implementing the project, the major plant units were ordered on turnkey basis and infrastructure services were ordered on local contractors or consortiums. In addition, expatriate personnel were brought from various parts of the world, as there was shortage of adequate qualified and skilled local personnel.


The original schedule envisaged commissioning of major plant units in 1977. Subsequently, with the finalisation of project concept and receipt of global bids, the original schedule was found to be unworkable and the programme had to be modified and the first steelmaking facility was commissioned in November 1978. As on date, a number of production facilities have been commissioned. However, work is still in progress and according to present schedule all the major units will be in operation by mid 1980.

Taking early 1974 as the commencement, the project may be broadly divided into three major phases:

Phase 1: Design and Engineering -1974 to April 1977

Phase 2: Engineering and Construction-May 1977 to Oct. 1978

Phase 3: Construction and Commissioning-Nov 1978 to June 1980


In SIDOR’s project control system, the functions of the planning group and the cost control group were isolated. However, both the groups were working under the Chief of Project Control. In this paper an attempt has been made to focus the attention on the functioning of the planning group which was responsible for scheduling and follow-up of the programme.


Figs 1 to 4 show the typical organisation charts. Fig 1 shows the overall plant organisation at head office, and at plant site, wherein the Manager, Project and Construction is the authority responsible for implementation of the Project.



Fig. 2 shows the overall project management organisation under Manager, Project and Construction. The Planning and Control functions are the responsibilities of Assistant Manager, Administration and Project Control.



Fig. 3 shows the overall Project Control Organisation.The group primarily responsible for the planning and control of project is under the Chief of Planning and Control.



Fig 4 shows the planning and control organisation.



The planning department is a two tier set up with the Area Chiefs followed by the Planning Engineers. The 36 data processing section works in close coordination with the Planning Engineers but reports directly to the Department Head. The Planning Engineers are assigned to various projects and have a dual responsibility of reporting to the concerned Project Managers and the Planning Department. The Planning Engineers develop and detail the overall schedules, monitor and update schedules for project progress, locate problem areas and suggest corrective measures, assist in preparation of management reports, maintain close coordination with Project Managers, attend meetings and prepare record notes. The Area Chiefs of Planning supervise, guide and coordinate the work of the Planning Engineers, analyse schedules, evaluate progress, prepare management reports, develop and improve systems, provide support and assistance to Department Head and perform any special duties assigned to them.

Fig 5 shows the staff inter-relationship within the planning department and between planning and projects.




The control system adopted was computerised PERT/ CPM network using precedence diagram method (PDM). Network by precedence diagram was preferred for the following reasons:

i)   Ease in drafting PDM diagrams on standardized sheets with rectangular boxes for activities

ii)   Printing the diagram by the computer using a standard package.

iii)  Ease in following the network logic.

iv)  Convenience for introduction of changes during updating. Moreover, the system is equipped to print out programmes in bar chart form as this form of presentation has wider acceptance at various levels.


The project had an in-house computer installation (IBM 370) with available spare capacity. This is located in the Administrative Building at the plant site with terminals at several locations. It was decided to install an additional computer terminal in the Project and Construction Manager’s office. This terminal, consisting of card punching, verifying, card reading and printing units, was mainly under the control of supervisor data processing (See Fig 4).

Of the available packaged programmes, it was decided to adopt IBM-PROJACS as it had a larger intake and memory for nets, sub-nets and activities, greater variety of options on output report and capability of printing precedence diagram.


A typical work breakdown structure is shown in Fig 6.



The project breakdown structure prepared by the planning engineer is finalised with project, engineering and construction personnel. Based on this, the network is formulated, which is finalised with project personnel, which forms the working network for the project.


The pre-order network and overall project network is developed by Planning Engineers. The detailed network for implementation was developed by the contractors and approved by the project authorities. The contractor was also contractually bound to present monthly progress report including updating of the network.


The updating interval was normally one month. In most cases monthly updating was found to be adequate for effective control and it tied up well with the management reporting which was also at monthly intervals.


The project with each sub-project and sub-area is coded as follows:

Example- 831-05 signify, 800-Steel Plant Expansion (Project)
31-Continuous Slab Casting (Sub-project)
05-Concast 3 Civil Fdn (Sub-area)

Each network is coded as follows:

Example- ACPL- Aceria y Colada Continua Planchones (Steelmaking and Continuous Slab Casting)

Each sub-net is coded as follows:

Example-73AC signify, 73- Sub-net on project 873
A- Contractor’s sub-net (denoted by any letter except Z in this position)
C- Denotes serial numbers of the sub-net
59ZA- signify, 59- Sub-net on project 859
Example- 04 036 signify, 04- Sub-area under the concerned project
036- Serial number of the activity


Three types of networks are used to control the project and these are as follows:

1. Subnet -Working programme, contractor / internal
2. Network -Includes sub-nets of specific department / area
3. Master Net -Summarised networks with interfaces

The sub-nets represent contractor’s programme and are not interfaced with other nets with a view to control the progress of individual contracts. To assess the overall situation of the total project (800) from the main networks a master network was developed to include summaries of all the networks by selecting suitable milestones in each net and interfacing them. The results of the master network indicate the overall project status and are meant for the highest level of management. This information is not included in the monthly management report.


The summary of the detail programmes are presented in a master plan bar diagram to show the overall status of each sub-project which is represented by a bar. Each bar indicates the following milestones:

P- Project Start

I- Start Engineering

F- Start Fabrication/Equipment Procurement

C- Start Construction

M- Start Equipment Erection

 -Project Termination

The master plan is updated every month to show delays and a copy included in the management report.

A summarised version of the master plan to include only seventeen bars, one corresponding to each major plant dept/area covered by a network is also included in the report to the top management. The summarised master plan gives a very broad view of the overall project status. Fig 7 shows the various types of programmes and their relationship.




To control and coordinate the fabrication and delivery of imported equipment and materials, the suppliers were required to submit monthly progress reports in standard formats with a copy to the concerned inspection agency indicating the current and previous month’s status on design, engineering, manufacture, fabrication and estimated start and finish dates of major activities. The supplier’s report was verified with respect to the report of the inspection agency and this formed the basis for evaluating the progress. Since this procedure was working well, the contractors were permitted to delete supply activities from their networks which resulted in substantial reduction in the network activities.


In addition to the monthly management reports, special reports are occasionally prepared for the President of the Holding Company, the Investment Fund Committee and the concerned Ministry.

The monthly management report presented the status of each project up to previous month, work done during the current month, overall progress with respect to programme, major problems and suggested remedial measures. A typical problem analysis report identified the problem acitivity, indicated current delay, termination date (actual and programmed), suggested remedial measures required, indicated the unit/person responsible for implementing the action and the date by which action is to be initiated. The problem analysis report is issued up to the level of Project and Construction Manager. A summarised version of the problem analysis report indicating delay and tendency of each project is included in the monthly management report.


The composition of various progress meetings was as shown in Fig 8.



1)   Monthly problem analysis meeting with Manager – all Assistant Managers and Planning Chief to attend.

2)   Monthly progress review meeting with Manager -same as (1) above.

3)   Fortnightly start-up meeting with Manager P&C -All Assistant Managers, Planning Chief and concerned Operation and Maintenance Personnel to attend.

4) and (5) Meeting with Assistant Manager – Concerned Project, Engineering, Construction Personnel and Planning Engineer to attend.

6) and (7) Planning Chief, Area Chief and Planning Engineers to attend. (7) is attended by a representative of the department of Programming of Shipment who reports on latest shipping status.

8) and (9) Contractor’s representative, concerned project, engineering, construction personnel and Planning Engineer.


The system had an active top management support. However, the lower levels were not responsive enough mainly due to lack of knowledge and understanding of the system.

The job of a Planning Engineer in such a system is essentially a skilled one and prior training and adequate experience in construction industry is a pre-requisite. Due to non-availability of sufficient qualified local personnel expatriate personnel were initially hired to start the operation. With a view to effect transfer of technology local fresh engineering graduates were recruited as Trainee Engineers and attached with the expatriates. Gradually on termination of the contract of the expatriates their positions were taken over by local engineers.

Although each contractor had to prepare a network programme for the work under his scope, in reality it was found that many small contractors did not have the expertise to prepare a network. To resolve the situation bar chart programmes were accepted from the small local contractors. The Planning Engineer then prepared an equivalent network which the contractor signed as token of his acceptance and this formed the working programme for his contract.

Frequent breakdowns in the main computer and the project office terminal upset the smooth functioning of the system. In case of breakdown in the terminal data processing was done directly in the main computer.

The remedial measures suggested by planning are seldom taken seriously and rarely implemented. This apparently causes the impression that the whole system is ineffective. Further, the planners are never given the authority to question the responsibility centres about noncompliance with actions suggested. Good result has been obtained by discussing these points in the problem analysis meetings at a higher level.

Style Guide

It is requested that all materials submitted for consideration of publication maintain the following guidelines.

Submit three copies of the manuscript, typed on 8½ × 11 paper, double spaced throughout, with one inch margins. Footnotes should be numbered consecutively and arranged at the end of the manuscript. References should be numbered and listed alphabetically by author at the end of the paper and should follow the form:

3. Wiest, J.D. and F.K. Levy, A Management Guide to PERT/CPM, Prenctice Hall, Inc., 1969.

4. Patterson, J.H., “Alternative Methods of Project Scheduling with Limited Resources,” Naval Logistics Quarterly, December, 1973.

References referred to in the body of the text should be identified by numbers in parentheses, e.g., (1) or (2) p. 118. If more than one reference is referred to the following should be used: (2)(16)(25) pp.214-9.

Tables and figures should be numbered in arabic and should be grouped at the end of the manuscript. Within the body of the manuscript indicate the preferred location. If possible, charts, illustrations and tables should be camera ready; all photographs should be black and white, glossy. The author is reminded that all tables, figures, charts, etc. will be printed either 3-1/3 or 7 inches in width; superfluous figures etc. will be excluded at the discretion of the editor.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.



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