Risk management principles and practices

Summary

This report presents the management of the project the development of software for teaching the design of shell and tube heat exchangers at the undergraduate level. The software will enhance the efficiency of teaching and guide the students through all the main steps of the design and costing of shell and tube heat exchanger. To project manage the project so that the deliverables are met on time and budget, the project work breakdown structure (WBS) is used construct the network diagram. The Program Evaluation and Review Technique (PERT) and the Critical Path Method (CPM) are the project management techniques used to plan, schedule, organise, and coordinate the activities and resources within the project. The techniques are used to identify the critical tasks, the cost of the project, the total length of the project and the floats that can be tolerated. A risk management process model is put in place to mitigate and avoid risk that may impact on the quality of the software, the budget and the duration of the project.

Introduction

This was a final year design project that was carried by a project team of five students. The shell and tube heat exchanger is commonly used in process industries, and its design is an integral part of the undergraduate chemical engineering curricula of most Nigerian Universities. Based on the growing use of computers for design and teaching, the project was proposed to develop software for teaching shell and tube heat exchanger design in the universities in order to bridge the gap between engineering practice and teaching of heat exchanger design at the undergraduate level (Leong and Toh, 1998). The scope of the project include design of the interfaces for the sizes of the shell and tube heat exchanger, estimation of the number of tubes, estimation of pressure drop, costing the heat exchanger, rating of the heat exchanger to check if it will meet the required duty and a tutorial interface for self learning on how to use the software. The input parameters are flow rate, temperatures, heat duty, heat capacities and densities. The software was developed with the visual studio.Net framework using Visual Basic.Net 2005. The software will enhance teaching of the course and relief the students of tedious repetitive design calculations.

However, to manage this project to ensure timely completion the network analysis technique, the critical path method (CPM), and the program evaluation and review technique (PERT) project management tools are used for planning based on the work breakdown structure (WBS), scheduling of individual tasks in the time order in which they have to be performed, monitoring of the project progress and identifying and mitigating possible risk associated with the project. This project management tools will provide a framework for decision making on the project timeline, cost and performance (Gray and Larson, 2008). The entire project life cycle is divided into the following stages: defining, planning, executing and delivering. A risk management process model will be used for identification and mitigation of possible risks that may arise in the cause of the project execution.

Aims and objectives

The aim of this project is to develop software for teaching shell and tube heat exchanger design at the undergraduate level. The project duration was eight months at the cost not exceeding £ 1,000.

Deliverables

The expected outputs over the life span of the project, which is the deliverables to the supervisor and the department of chemical/petroleum engineering, Niger Delta University were:

• End user interface design.
• 20 minutes presentation.
• A written report and design documents.
• Technical manual for the software usage.
• Test prototypes.
• A compiled version of the software in disc (CD-ROM).

The project team

The original project team consist of the project supervisor, team leader and four members as shown in the organisation structure in Fig.1. The key characters of the team were lion, man, people pleaser and two oxen. In order to control the team dynamics and interactions as the team leader, I will create common sense of purpose; establish ground rules and good communication through phone calls, text messages and emails, delegation of role and responsibilities to members, the team members will meet fortnightly and with the project supervisor monthly, draw up the agenda for meetings, set goals and follow-up actions, encourage contributions where necessary, select appropriate venue for meetings, motivation of team members, progress reports, openness to suggestions, responsibilities will be clearly spelt out and written, encourage rotational team leader and team members skills will be match to tasks.

The work breakdown structure (WBS)

In to ensure that the deliverables are met in time and on budget, the plan of the entire project activities will be subdivided into smaller hierarchical work element starting with the final deliverable as shown in the work breakdown structure in Fig.2, and each manageable subunit will be assigned to individual members of the project team based on skills as shown in table 1. The software development project for the design of shell and tube heat exchanger consists of five phases: definition, design, programming (i.e. coding), integration and prototype test and writing of manual. The responsibility matrix in Table 1 summarizes how the tasks to be accomplished in the project will be divided among the team members, the members responsible for each task, the duration of the activities and the cost per week involved. The sequence of activities are: the definition phase involves establishment of project objectives, review of shell and tube heat exchanger design and costing equations, obtaining physical properties of fluids, formation of group and assigning responsibility to group members; the design task involves the design of end user graphical interfaces and the design of database system for the physical properties of some common fluids, the code generation task involves writing Visual Basic.Net programme for shell and tube heat exchanger design equations and debugging, integration and testing involves linking the designed user interfaces, the programme codes, the database system and testing, and the concluding tasks include writing manual and compiling the software in disc (CD-ROM).

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The project network analysis

The project network diagram in Fig.3 shows the logical sequences, interrelationships and the dependencies of the activities, the start and finish times for the activities and the critical path involves the following activities A, C, E, F, G and H which must not be delayed so that the project will be completed on schedule as planned. Based on the critical path (CPM) of the network, the total length of the project is 27 weeks. The project network diagram will be used to assess the impact of activity and resource delay on the project cost and duration and facilitate decision making.

The PERT and CPM of the project will be used as a planning, scheduling, controlling and monitoring tool. In its planning function, the network diagram is used to estimate the length of time it will take to complete the project, and to identify bottleneck activities whose delay have critical effect on the project completion date as shown in table 2. The following activities definition, interface designs, programming, integration and testing, prototype test and compiling of the software are critical to the completion of project, while the database design has total float of eleven (11) weeks and manual writing a total float of ten (10) that can be delayed without effecting the completion of the project on schedule as planned. The project network will also be used to monitoring progress, identification and mitigation of risk, evaluation of performance and identification of milestones. The PERT in table 2 will be used as a checklist to manage, monitor and control project progress and deal with uncertainty in activity completion time.

Project cost curve

Accurate estimation of time, cost and resource is necessary for correct project planning, scheduling and controlling to avoid failure. To ensure this, the cost and time estimate for each task will be done by team members with relevant experience and/or knowledge of the task. Total cost of the project is £ 970 from the project spend curve in Fig.4 below. However, if this project was to be repeated, it will be crashed to reduce the length of the critical path by reducing the duration of the critical activities with the addition of resources to minimise cost and reduce the project duration.

Risk management

Every project has an inherent risks associated with. Risks are uncertain event or condition that, if it occurs, has a negative or positive impact on the project completion, quality and cost (Gray and Larson, 2008). Boehm (1991) and Kwak and Stoddard (2004) identified some risks associated software development projects:

• Personnel shortfalls
• Unrealistic schedules and budgets
• Developing the wrong user interface
• Developing the wrong software functions and properties.
• Adding more functionality and features than is necessary
• Risk associated with external pressures.
• Computer malfunction

Therefore, to minimise and mitigate risk the above identified risks that may arise in the cause of the execution of this project the following risk management process model in Fig.5 will used to identify, monitor, control and manage potential and unforeseen risk that may impact on the project completion, quality, schedule and cost. The network diagram in Fig.3 and PERT analysis in table 2 will be used to assess the impact of time delay on the project duration and budget.

As shown in Fig.5, the risk management process involves four-step process model which specify stepwise tasks for managing risks. The risk management process model in Fig.5 will guide and direct actions for avoidance, mitigation and acceptance of risks in the cause of executing the project (Bannerman, 2008). The risk response strategies begin by identifying possible sources of risks based on past projects on software development and assessing the impact of the identified risk on the project using the network diagram in Fig.3. The response strategies are; mitigating risk by reinforcing actions to reduce the likelihood and/or potential impact of the risks on the project, avoiding risk by changing the project plan to eliminate risk, sharing the proportion of the risk to different members of the project team and developing contingency plan. Finally, implementing the risk response strategy and monitoring the events that trigger risk while looking out for new source of risks.

Conclusion

This report has reviewed the application of the project management technique the network analysis, PERT and CPM to project manage the development of software for teaching shell and tube heat exchanger design at the undergraduate level. It was found that the PERT and CPM are good management tool for planning, scheduling, controlling and monitoring the project progress to ensure that the deliverables are met in time and on budget. In order to manage risks arising in the cause of the project execution, a risk management process model was adopted for identifying risk sources, assessing their impact and mitigating risks that may impact negatively on the project completion time and budget.

References

• Bannerman L. Paul, (2008), Risk and risk management in software projects: A reassessment, The Journal of Systems and Software, 81, 2118 – 2133.
• Boehm B.W., (1991), Software risk management principles and practices, IEE Software, 8 (1), 32 – 41.
• Gray F. Clifford and Larson W. Erik, (2008), Project management, McGraw-Hill, London, pp. 103 – 171.
• Kwak Y.H. and Stoddard J., (2004), Project risk management: lessons learned from software development environment, Technovation, 24, 915 – 920.
• Leong K.C and Toh K.C, (1998), Shell and tube heat exchanger design software for educational applications, Int. J. Engng. Ed. Vol. 14 (3), pp. 217 – 224.