Planning Philosophy

BSCE ELECTIVE 2

DEFINITION AND NATURE

OF PLANNING

Planning is the first and foremost function

of management. It is an intellectual process of
thinking resorted to decided a course of action
which helps achieve the pre-determined
objectives of the organization in future.
A manager does not plan about the past
but he is guided by the post performance
in the process of planning it requires
projecting future activities at the
organization. So, we can say that planning is
forecasting and deciding in advance a course
of action to be followed in the future.

DEFINITIONS OF PLANNING
According to Terry,

Planning is the selecting and

relating of facts and the making
and using of assumptions regarding
the future in the visualization and
formulation of proposed activities
believed necessary to achieved
desired results.

H. Fayol says,

Planning is deciding the best

alternatives among others to
perform different managerial
operations in order to achieve
the pre-determined goals.

Planning is the determination

and communication of an
intended course of action
incorporating detailed
methods showing time, place
and the resources required
(CIOB, 2011).

Planning is the creative and

demanding mental activity of
working out what has to be done,
how, and when, by whom, and
with what, i.e. doing the job in the
mind (Neale and Neale, 1989).

Planning is a decision making

process performed in advance of
action which endeavours to design
a desired future and effective
ways of bringing it about (Ackoff,
1970).

Planning is the production of

budgets, schedules, and other
detailed specifications of the
steps to be followed and the
constraints to be obeyed in
project execution (Ballard and
Howell, 1998b; Ballard, 2000).

Whatever definition is chosen it is clear

that the following factors emerge:
Planning precedes execution. (You plan
before you commence work.)
Planning is a process and it is important to
complete all the stages in the process.
Planning is more than an aid to the
successful completion of the project; it is an
essential part of the project.
Planning is a creative and demanding
mental activity.
To plan you need to make decisions.

HISTORY OF
PLANNING
AND
SCHEDULING

FREDERICK WINSLOW
TAYLOR
was the founder of modern scientific
management.
-

His studies in the latter part of the 19th

century formed the basis for management
thinking in the 20th century and continue
through to the present.

Currie (1977) states that Taylors work and

philosophy may be seen in three major
phases:

First, he made improvements in the

management of production. These sprang from
his application of scientific methods.
Second, he introduced systems of pay
designed to produce a fair days work for a
fair days pay.
Third, moving from the individual scale to
the overall scale, he produced his grand
design for an industrial society. He hoped
that this grand design would lead to
improved standards of living.

His detailed, careful analysis of production

tasks and functions led to new machines and
tools, new methods of production control and
stock control and new office procedures.
Taylors
contribution
to
manufacturing
production scheduling was establishing the
planning office in a separate location away from
the production area and the recognition that
planning was a decision making process that
required sharing of information. This and his
other works attracted the attention of many
other industrialists and professionals.

Henry L. Gantt (18611919) a teacher, draughtsman,

management consultant.

engineer

was
and

He was contemporary and protege of

Taylor, and between 1887 and 1893 he worked
with him in his experiments at the Midvale
Steel Works.

His contribution to manufacturing

production management includes the
application of scientific analysis to all
aspects of production, the introduction of
tasks and bonus systems where the bonus
was linked to how well managers taught
employees to improve performance and
the social responsibility of business. Gantt
focused on the motivation of workers and
the application of knowledge to the
advantage of all concerned with a
business.

He developed the Gantt chart, a chart that

allowed supervisors to identify and schedule
the work of each worker and then review and
assess the actual production.
Gantt did not invent the bar chart, the
concept of bar charts pre-date Gantts work
by at least a century. Gantt took existing
methods of visually displaying work tasks and
developed them to produce a new chart to
form a visual statement of productivity. He
also recognized the advantages of reducing
inventory and clean, well laid out workspace
and developed other management techniques

 The objective of planning is to ensure that

things happen successfully.
The output of planning comprises schedules
and budgets and information for others to use.
The results of planning have to be
communicated to others.
Having set in place plans it is necessary to
monitor progress and, in the event of the
unexpected or failing to achieve expected
performance, re-plan.

Critical path method

Pert and cpm

PERT and CPM were developed
independently in the later part of 1950s.
A Techniques, used for planning and
coordinating large scale projects.
The use of PERT began in 1958 through
the joint efforts of Lockheed Aircraft, the
U.S. Navy Special Project Office and the
consulting of Booz, Allen and Hamilton in
the efforts of the U.S. government to
speed up the Polaris Missile Project

 The Polaris Missile project is a large one

involving over 3,000 contractors and 11,000
sub-contractors with several thousands of work
activities. The use of PERT in this large scale
project was proven successful in shortening
the length of the project completion.
In 1956, prior to the development of PERT, the
Critical Path Method was developed by J.E.
Kelly of the Remington Rand Corp. and M.R.
Walker of Du Pont in an effort by commercial
industry to make an advanced scheduling and
cost control methods. By April 1958, CPM in
application was demonstrated in a real
success.

 CPM was designed as a tool for planning,

scheduling, and control of construction work. Its
emphasis was on the work or activities to be
managed. The network diagram defined and
focused attention on the job to be accomplished.
The schedule derives the earliest and the latest
times for their start and finish.
PERT was developed as a result of looking for an
improved method of planning and evaluating
progress of a large scale research and development
program. It was designed to provide the
management a periodic reporting of current status
and an outlook for the future on meeting approved
plans and schedules. It answers the questions such
as: Is this a feasible schedule? And what are the
probabilities of making it?

 PERT/CPM is a tool for defining the

parts of construction job and then
putting them together in a network
form.
It serves the project manager to see
the whole picture of the entire job.
Provides an accurate measure of
progress.

Pert/cpm project requirements

Under Presidential Decree (PD) 1594, Prescribing
Policies, Guidelines, Rules and Reguations for the
government infrastructure contracts provides that:
The program of work shall include, among others
things, estimates of the work items, quantities, costs
and a PERT/CPM network of the project activitiesin
the preparation of the bidding documents, the
government shall make and estimate of the actual
numberr of working days required to complete the
project through PERT/CPM analysis of the project
activities and corrected for holidays and weekends.

 On January 27 1968, president Ferdinand E.

Marcos issued Memorandum Circular No. 153
which provides that:
In order that the performance discipline on the
field could be controlled and easy reporting
system could be made to facilitate the
monitoring, evaluation, inspection completion
of infrastructure projects, all heads of
departments and chief of bureaus and offices
concerned are hereby required to change the
old system of preparing the work programs of
said projects from the Gantt Chart(Bar type) to
the PERT/CPM network. Strict compliance
herewith is enjoined.

 On June 19, 1968, the Executive Committee

for Infrastructure Program implemented the
Presidential Order on a letter to all
implementing agencies to wit:
Your attention is invited to a Presidential Order
requiring the preparation of a PERT/CPM
diagram for every major project prior to their
actual construction.
Section 6 of R.A 5979 requires the application
of PERT/CPM technique to all projects with an
estimated cost of 100,00 pesos or more. Thus,
PERT/CPM now has become an integral part as
requirement of project construction
management.

 Using PERT/CPM, the project

manager can obtain the ff:
1. Graphical display of project
activities
2. An estimate of how long will the
project last
3. Determine which activities are the
most critical to timely project
completion.
4. Delaying how long any activity can
be delayed without lenghtening the
project.

Three phases of PERT/CPM

Planning
Scheduling
Control/Monitor

Planning phase, input

1. Network Diagram for all activities
2. Duration of activities
3. Cost estimates of activities for
monitoring cost, cash flow
requirements
4. Resource estimates
5. Trade Indicators(responsibility) for
activity grouping

Scheduling Phase, output

1. The schedule of activities in the network
2. Bar Chart or time scaled network(arrow
diagram)
3. Resource Analysis showing the number
and kind of resources, man power,
equipment and others.
4. Cash Requirement prediction indicating
how much cash to be disbursed for the
job and the amount of money that will
be collected as a result of work
accomplishment.

Control Monitor Phase

1. Additions to the project
2. Deletion from the project
3. Changes as to duration, description,
trade indicators, cost estimates or
resource estimates.
4. Actual starting dates
5. Actual finishing dates

Output phase
1. Time status report
2. Revised schedules
3. Revised Bar Charts/ Arrow Diagram
4. Revised resource analysis
5. Revised cash flow predictions
6. Cost status reports

 The PERT/CPM should be updated

periodically to account for:
1. Time Discrepancies
2. Deliveries
3. Weather
4. Change orders
5. Unexpected events or conditions
. Three major reasons for construction failure:
1. Unbalanced organization due to lack of
planning and scheduling.
2. Lack of financial planning
3. Poor cost control

Impacts
of
Personal
Computers

The introduction of the personal computer/micro

computer provided cheap local computing
power for every office and every construction
site.

The bar chart was no longer out of date before you

pinned it to the wall (Reiss, 1995).

The success of the IBM PC

The Essential Nature or

Characteristics of
Planning

1. Primary of Planning
The functions of management
includes:
Planning
Organizing
staffing
directing and
Controlling

It is most basic management

function.
All other function of management
largely depends upon planning.

2. An intellectual
activity
Planning involves choosing the proper course of
action from among alternatives & calls for
decision-making which is an intellectual process
Change in environment bring opportunities, and
involved risk as well.
It is the task of planner to take advantage of
opportunities and minimize the risk.

3. A continuous
function
Management is a dynamic process
and planning as its function cannot
be an exception to it.
plans beget a number of sub-plans
and since plans have to be revised in
the light of changing environment,
planning becomes a continuous

4. Planning is flexible
while planning, any one of the
available alternatives is selected.
Planning selects the best
alternatives based on certain
assumptions.

5. For all managerial

functions

Planning is a pervasive function of management.

It is found at all levels and all departments of an
organization.
Top management looks after strategic planning. It
involves choosing the future course of action from
among alternatives.

Planning requires
decisions concerning:

The overall strategy of how the work process

is to be broken down for control
How control is to be managed
How design will be undertaken and by whom
The methods to be used for construction
The strategy for subcontracting and
procurement
The interfaces between the various
participants
The zones of operation and their interface

Maximising efficiency of the project strategy

with respect to cost and time
The management of risk and opportunity
Having reached these decisions, scheduling is
the process by which plans are prepared and
presented to all those involved in the project.
Scheduling involves answering new questions
and making new decisions such as:
i. When will the work be carried out?
ii. How long will it take?
iii. What level of resources will be required?

Scheduling is concerned with

sequencing and timing.
A good schedule (Pilcher, 1992):
i.
ii.

iii.
iv.

v.

more than simply a good graphical representation of activities and

events
It must provide the basis for analysis and production. It must expose
difficulties likely to occur in the future and facilitate re-organisation to
overcome them
must enable the unproductive time of both labour and machines to be
minimized
must be suitable for use as a control tool against which progress may be
measured. The schedule must be sufficiently accurate to enable its use
for forecasting material, manpower, machines and money requirements
It must show an efficient work method based on an optimal cost, bearing
in mind the availability of the resources

Differences Between
Planning And Scheduling

Planning may be an iterative process but the

tasks of planning and scheduling should not
be attempted concurrently.
Planning should precede scheduling.
Scheduling should never precede planning
It is not good practice to plan whilst
scheduling. It is not a good practice to
schedule whilst planning. Planning and
scheduling therefore requires timing,
organisation and discipline.

On larger projects, where planning and scheduling will be

separate tasks undertaken by different people, it is easier to
differentiate between the two tasks, and the tendency to
confuse the roles of planning and scheduling tasks is less
likely to arise. However, for all of us it is always tempting,
particularly when using computer-based tools, to start drawing
up the schedule before having fully thought through the key
elements, the relationships between them and the information
that you wish to communicate. Avoiding this temptation will
enable you to plan faster and produce better schedules.

ELEMENTS OF PLANING
- According to the usage and nature
of planning, components of planning
or elements of planning are divided
into the following categories:

1.Purposes or Mission
-Every company or a organized group activity has a
purpose of business in generally the production and
distribution of Economics goods and services. It is
difficult to establish meaningful plans unless an
organization has a clear and definite mission at a
business.

2. Objectives
- It represent the end towards which all other activities
of management are directed. Objectives must be
clearly defined and properly communicated.

3.Policies
-Policies are guide to think in decision-making. It lays
down the course of action selected to guide &
determine present and future decisions.

4. Procedures
-Every plan must also lay down the procedures or way in
which it is to be implemented, specifying the chronological
sequence for the future activities.

5. Budgets
-Budget is a single use plan containing expected results
in the numerical terms. Budget making is primarily a
planning process where as its primarily a planning process
where as its administration is part of controlling.

The Cost
and
Benefits
of
Planning

Mawdesley et al. (1997)

review the costs and benefits
of planning. They stress that
all parties to the project can
benefit from planning.

nefits of Plann

Established deadline dates for the release of information on

the project
The ability to forecast resource requirements and resource
costs
The ability to forecast the expenditure and payment schedules
The ability to forecast the staffing levels
The ability to provide information to the public and other thirdparties
Improved co-ordination of the work of the project team
Co-ordination of the project with work on other projects within
the clients/ architects portfolio

Predicting the timing of activities

and their sequence
Predicting the total construction
period
Full consideration of the safety,
quality and environmental impact of
the construction work
Evaluating risks and opportunities
Providing a basis for the estimate
Providing a basis for monitoring and

Predicting the contract cash flow and return on

capital
Providing a basis for claims
Identifying when materials are required
Minimizing materials wastage
Determining average and peak levels of
materials demand
Predicting labour, staff and plant resource levels

Cost of
Plannin
g

Planning requires time.

Planning requires experience. Experienced
planners are an expensive overhead to
construction costs.
To plan and communicate effectively
requires a minimum commitment to
computer equipment, software and
technical support.
Good planning requires communication (via
methods of working etc.), schedules, report,
estimates, monitoring and control.

Whilst the benefits of

planning are widely
recognised and the cost of
little or no planning may be
disruption, delay and late
completion the issue of how
much planning (and hence the
cost of planning) is always a
question for the project
manager. Therefore, when
committing resources to
planning it is essential to have

PLANNING PROCESS

 ESTABLISHING OBJECTIVES - The

first and primary step in planning
process
EXTERNAL ENVIRONMENT - Refers
to variables that are outside the
organization
INTERNAL ENVIRONMENT Organizational activities within a firm
DETERMINING SECONDARY
PLANS - It flows from the primary or

 DETERMINING ALTERNATIVE COURSES The next logical step in planning is to

determine and evaluate alternative courses of
action
EVALUATION OF ALTERNATIVES - Each
alternative must be analyzed and evaluated in
terms of its value, cost, and risk characteristics
SELECTING COURSE OF ACTION - A course
of action is determining according to the
circumstances prevailing

 FORMULATION OF ACTION PROGRAMME The term action programme includes fixing

time limit for performance, allocation of work
to individuals and work schedule
PLANNING PREMISES - Predictions and
assumptions about the future are known as
planning premises
SECURING PARTICIPATION OF EMPLOYEES
- The successful execution of any plan depends
upon the extent of participation of employees