MG 623

Lecture No. 8
Self study

Project Resources Management

2021
Scope of the Session
• Project Resources
• Resources allocation;
• Resource Loading – Resource Histograms;
• Resources Costs and Project Budgeting;
• Resources Levelling.
• Multi-project scheduling and resources loading
PM Definition Re-visited
• Project management is the discipline of planning,
organizing and managing resources to bring
about the successful completion of specific project
goals and objectives.
• The same applies for managing construction
projects.
PM Challenge

• The primary challenge of project management is to

achieve all of the project goals and objectives while
honouring the project constraints. Typical constraints
are scope, time and budget. The secondary — and
more ambitious—challenge is to optimize the
allocation and integration of inputs/resources
necessary to meet pre-defined objectives.
• Source: wikipedia, 2009
Objectives of resources management
• Project Resource Management includes the processes to
identify, acquire, and manage the resources needed for the
successful completion of the project.
• These processes help ensure that the right resources
(appropriate, right quality and quantity) will be available
to the project manager and project team at the right time
and place.
Project Resource Management Processes
• The Project Resource Management processes are:
• Plan Resource Management—The process of defining how to
estimate, acquire, manage, and utilize physical and team
resources.
• Estimate Activity Resources—The process of estimating team
resources and the type and quantities of material, equipment, and
supplies necessary to perform project work.
• Acquire Resources—The process of obtaining team members,
facilities, equipment, materials, supplies, and other resources
necessary to complete project work.
Project Resource Management Processes
• Develop Team—The process of improving competencies, team
member interaction, and the overall team environment to
enhance project performance.
• Manage Team—The process of tracking team member
performance, providing feedback, resolving issues, and
managing team changes to optimize project performance.
• Control Resources—The process of ensuring that the physical
resources assigned and allocated to the project are available as
planned, as well as monitoring the planned versus actual use of
resources, and performing corrective action as necessary.
Typical Project Resources
• Time
• Manpower
• Machines
• Materials
• Money
• Information
• Expertise
Typical Project Resources……
• Manpower directly involved in the project:
• Supervisory staff;
• Skilled workers;
• Unskilled workers.
• Other staff:
• Management staff
• Support staff – security, office attendants,
drivers
Resource Allocation Problem
• Time allocation is called scheduling;
• Related to time is allocating other resources
• Altering schedules can alter the need for resources and
timing of resource needs;
• Planning networks can be used to determine different
resources allocation plans to meet the existing resources
constraints or changing project environment;
Example 1
• Consider a simple project with only three activities as
indicated in the next slide and draw a manpower
histogram for early and late start schedules
Example 1……
Early Start Bar Resources Histogram
Early Start Bar Chart
Days
Activity 1 2 3 4 5
A 2 2
B 4 4 4 4 4
C 2 2 2
TOTAL 8 8 6 4 4
Late Start Labour Histogram
Late Start Bar Chart
Days
Activity 1 2 3 4 5
A 2 2
B 4 4 4 4 4
C 2 2 2
TOTAL 4 4 6 8 8
10
8
6
4
2
0
1 2 3 4 5
Labour Histogram
Steps to Allocate Resources
 Perform forward and backward;
 Identify the critical path;
 Translate into early start bar chart;
 Allocate manpower on activities
 Determine total manpower against project time for early
start;
 Draw the respective histogram;
 Repeat for late start schedule.
 What are the implications for the two histograms?
 The Resource Allocation Problem
• A shortcoming of most scheduling procedures is that they do
not address the issues of resource utilization and availability
• Scheduling procedures tend to focus on time rather than
physical resources
• Time itself is always a critical resource in project
management, one that is unique because it can neither be
inventoried nor renewed

Chapter 9-5
 The Resource Allocation Problem

• Schedules should be evaluated not merely in terms of

meeting project milestones, but also in terms of the timing
and use of scarce resources
• A fundamental measure of the project manager’s success in
project management is the skill with which the trade-offs
among performance, time, and cost are managed

Chapter 9-6
 The Resource Allocation Problem
• The extreme points of the relationship between
time use and resource use are these:
• Time Limited: The project must be finished by a
certain time, using as few resources as possible. But
it is time, not resource usage, that is critical
• Resource Limited: The project must be finished as
soon as possible, but without exceeding some
specific level of resource usage or some general
resource constraint
Chapter 9-7
The Resource Allocation Problem

• If all three variables - time, cost, specifications -

are fixed, the project manager has lost all
flexibility to perform the trade-offs that are so
necessary to the successful completion of
projects
• A system-constrained task requires a fixed
amount of time and known quantities of
resources
Chapter 9-8
 Resource Loading
• Resource loading describes the amounts of individual
resources an existing schedule requires during specific
time periods
• The loads (requirements) of each resource type are
listed as a function of time period
• Resource loading gives a general understanding of the
demands a project or set of projects will make on a
firm’s resources
• See earlier example of project cost budgeting
Chapter 9-9
 Resource Loading
• Is an excellent guide for early, rough project
planning
• Because the project action plan is the source of
information on activity precedences, durations,
and resources requirements, it is the primary input
for both the project schedule and its budget
• The action plan links the schedule directly to
specific demands for resources
Chapter 9-10
 Resource Loading

• The PERT/CPM network technique can be modified to generate

time-phased resource requirements
• The project manager must be aware of the flows of usage for
each input resource throughout the life of the project
• It is the project manager’s responsibility to ensure that the
required resources, in the required amounts, are available when
and where they are needed

Chapter 9-11
Resource Loaded Schedule
• Resource Loaded Schedule is a project-related schedule
that consists of a timeline with details on allocated
resources, planned activities and preset milestones.
• It is a time management document that explains how
project resources (people, funds, materials) are supposed
to be consumed throughout scheduled project time and
whether allocation rules appear to be effective to ensure
appropriate resource consumption and use.
 • Example 2: PDM Network with labour resources

B F
4 (9) 5 (9)

A D G Z
2(10) 3 (11) 9 (11) 4(14)

E H
6 (9) 4 (9)

a) Determine the critical path.

b) Determine the resource loading for the project assuming that the figure in brackets
represent skilled labour requirements
 • Example 2: PDM Network with labour resources
B (4) F (5)
2 6 6 11
8 12 12 17

A (2) D (3) G (9) Z (4)

0 2 2 5 8 17 17 21
0 2 5 8 8 17 17 21

E (6) H (4)
2 8 8 12
2 8 13 17

a) Critical path is A-E-G-Z.

b) Project Duration is 21 days
 Early Start Bar Chart with Resource Loads
Days
Activity Days 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

A 2
2 2

B 4
9 9 9 9

D 3
11 11 11

E 6 9 9 9 9 9 9

F 5
9 9 9 9 9

G 9
11 11 11 11 11 11 11 11 11

H 4
9 9 9 9

Z 4
14 14 14 14
TOTAL
2 2 29 29 29 18 18 18 29 29 29 20 11 11 11 11 11 14 14 14 14
 Early Start Resources Histogram
35
Labour Histogram - Early Start
30

25

20

15

10

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Activity Days 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

A 2
2 2

B 4
9 9 9 9

D 3
11 11 11

E 6 9 9 9 9 9 9

F 5
9 9 9 9 9

G 9
11 11 11 11 11 11 11 11 11

H 4
9 9 9 9

Z 4
14 14 14 14
TOTAL
2 2 9 9 9 20 20 20 20 20 20 20 20 29 29 29 29 14 14 14 14
35
Labour Histogram - Late Start
30

25

20

15

10

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
35
30 Labour Histogram - Early Start
25
20
15
10
5
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

40
Labour Histogram - Late Start
30

20

10

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
 Resource Leveling

• Resource leveling aims to minimize the period-by-period

variations in resource loading by shifting tasks within their
slack allowances
• The purpose is to create a smoother distribution of
resource usage
• Several advantages include:
• Less hands-on management is required
• May be able to use a “just-in-time” inventory policy

Chapter 9-12
 Resource Leveling
• When resources are leveled, the associated costs also
tend to be leveled
• The project manager must be aware of the cash flows
associated with the project and of the means of shifting
them in ways that are useful to the parent firm
• Resource leveling is a procedure that can be used for
almost all projects, whether or not resources are
constrained

Chapter 9-13
Resource Leveling – Example 1
 Multi-project Scheduling and Resource Allocation

• The most common approach to scheduling and allocating

resources to multiple projects is to treat the several projects
as if they were each elements of a single large project
• Another way of attacking the problem is to consider all
projects as completely independent
• To describe such a system properly, standards are needed
by which to measure scheduling effectiveness

Chapter 9-21
Multi-project Scheduling and Resource Allocation
• Three important parameters affected by project scheduling are:
• Schedule slippage
• Resource utilization
• In-process inventory

• The organization (or the project manager) must select the

criterion most appropriate for its situation.

Chapter 9-22
 Multi project Scheduling and Resource Allocation
• Schedule slippage, often considered the most important of
the criteria, is the time past a project’s due date or delivery
date when the project is completed
• Resource utilization is of particular concern to industrial firms
because of the high cost of making resources available
• The amount of in-process inventory concerns the amount of
work waiting to be processed because there is a shortage of
some resource

Chapter 9-23
 Multi-project Scheduling and Resource Allocation

• All criteria cannot be optimized at the same time

• As usual, the project manager will have to make trade-offs
among the criteria
• A firm must decide which criterion to evaluate its various
scheduling and resource allocation options

Chapter 9-24
Class exercise (to be done at own time)

 Consider a second example of the network as shown in

the next slide and the tasks to be performed;
• Consider a project with the following network:

7 8 6

6 6

5 7 8
Estimated Human Resources of Each Activity
• Using MS Excel or MS Project prepare the following:
• Early and late start schedules using Gantt Charts;
• Prepare a labour resource histogram for skilled and unskilled
labour
• Perform resource levelling for skilled labour.
• Draw the corresponding histogram for unskilled labour.
Assume that weekly rates are as follows:
Skilled labour: Tshs. 160,000 Tshs
Unskilled labour: Tshs. 70,000 Tshs
Materials: 125% of total labour costs
Equipment: 45% of labour costs
Project Overheads: Constant at 15% of direct total cost
Assume that the expenditure pattern for each activity is uniform, develop a
cumulative project budget for early and later start schedules;
What is the implications of each?
Make assumptions of more realistic expenditure patterns of the activities and
repeat the exercise.