TECHNICAL ANALYSIS

1. Materials and inputs

2. Production technology
3. Choice of technology
4. Product Mix
5. Plant capacity
6. Location and site
7. Machinery and equipment
8. Structures and civil works
9. Project charts and layouts
10. Work Schedule

Materials and inputs

1. Raw materials— Raw materials (processed and /or semi-processed)
may be classified into four types:
(i) Agricultural products,
(ii) Mineral products,
(iii) Livestock and forest products,
(iv) Marine products.

2. Processed industrial materials and components –

The following questions needs to be asked
•What are their (Industrial Materials) properties?
•What is the total requirement of the project?
•What quantity would be available from domestic source?
•What quantity would be available from foreign sources?
•How dependable are the supplies?
•What has been the past trend in prices?
•What is the likely future behavior of price

3. Auxiliary materials and factory supplies –Manufacturing

project requires various auxiliary materials and factory supplies, like
chemicals, additives, packaging materials, paints, varnishes, oils, grease,
cleaning materials, etc. The requirements of such auxiliary materials and
supplies should be taken into account in the feasibility study.
4. Utilities —
•Broad assessment of utilizes (power, water, steam, fuel, etc.) may be made
at the time of input study though a detailed assessment can be made only
after formulating the project with respect to location, technology, and plant
selection.
•Following points should be raised whiled conducting the input study:
1. What quantities are required?
2. What are the sources of supply?
3. What would be the potential availability?
4. What are the likely shortages/bottlenecks?
5. What measures may be taken to augment supplies

Production technology
•For manufacturing a product/service often two or more alternative
technologies are available
For example
 Steel can be made either by the Bessemer process or the open hearth
process.
 Cement can be made either by the dry process or the wet process.
 Soda can be made by the electrolysis method or the chemical method.
 Paper, using bagasse as the raw material, can be manufactured by the
kraft process or the soda process or the Simon cursi process.
 Vinyl chloride can be manufactured by using one of the following
reactions: acetylene on acetylene on hydrochloric acid or ethylene or
chlorine.

Choice of technology

Principal inputs— The choice of technology depends on the principal

inputs available for the project. Technology based on indigenous inputs
may be preferable to one based on imported inputs because of
uncertainties characterizing imports, particularly in a country like India.
Investment outlay and production cost— The effect of alternative
technologies of investment outlay and production cost over a period of
time should be carefully assessed.
Use by other units— The technology adopted must be proven by
successful use by other units, preferably in India.
Product mix— The technology chosen must be judged in terms of the
total product-mix generated by it, including saleable by-products.
Latest developments— The technology adopted must be based on
latest development in order to ensure that the likelihood of technological
obsolescence in the near future, at least, is minimized.
Ease of absorption— The ease with which a particular technology can
be absorbed can influence the choice of technology.

Product Mix
•The choice of product mix is guided primarily by market requirements.
•In the production of most of the items variations in size and quality are
aimed the production of most of the items, variations in size and quality
are aimed at satisfying a broad range of customers.
•While planning the production facilities of the firm, some flexibility with
respect to the product mix must be sought.
•Such flexibility enables the firm to alter its product mix in response to
changing market conditions and enhances the power of the firm to survive
and grow under different situations.
•The degree of flexibility chosen may be based on a careful analysis of
the additional investment requirements for different degrees of flexibility.

Plant capacity
1. Technological requirement— For many industrial projects,
particularly in process type industries, there is a certain minimum
economic size determined by the technological factor.
2. Input constraints— There may be constraints on the availability of
certain inputs. Power supply may be limited; basic raw materials may be
scarce; foreign exchange available for imports may be inadequate.
Constraints of these kinds should be borne in mind while choosing the
plant capacity.
3. Investment cost— Typically, the investment cost per unit of capacity
decreases as the plant capacity increases. This relationship may be
expressed as follows
4. Market conditions— The anticipated market for the product/service
has an important bearing on plant capacity.
•If the market for the product is likely to be very strong, a plant of higher
capacity is preferable.
•If the market is likely to be uncertain, it might be advantageous to start
with a smaller capacity.
•If the market, starting from a small base, is expected to grow rapidly, the
initial capacity may be higher than the initial level of demand further
additions to capacity may be affected with the growth of market.
4. Resources of the firm— The resources, both managerial and
financial, available to a firm define a limit on its capacity decision.
5. Governmental policy— The capacity level may be constrained by
governmental policy. Given the level of additional capacity to be created
in an industry, within the licensing framework of the government the
government may decide to distribute the additional capacity among
several firm.

Location and site

The choice of location and site follows an assessment of demand, size,
and input requirement.
1. Proximity to raw materials and markets
 A resource-based project like a cement plant or a steel mill should
be located close the source of basic material
 A project based on imported material may be located near a port;
and
 A project manufacturing a perishable product should be close to the
center of consumption.
2. Availability of infrastructure— Availability of power, transportation,
water, and communications should be carefully assessed before a location
decision is made.
3. Governmental policies— Governmental policies have a bearing on
location.
 In the case of public sector projects, location is directly decided by
the government.
 In the case of private sector projects, location is influenced by
certain governmental restrictions and inducements.
4. Other factors— Several other factors have to be assessed before
reaching a location decision: ease in coping with environmental pollution,
labour situation, climatic conditions, and general living conditions

Machinery and equipment

•To determine the kinds of machinery and equipment requirement for a
manufacturing industry, the following procedure may be followed:
(i) Estimate the likely levels of production over time.
(ii) (ii) Define the various machining and other operations.
(iii) Calculate the machine hours required for each type of operation.
(iv) Select machinery and equipment required for each function.
•The equipment required for the project may be classified into the
following types:
(i) plant (process) equipment,
(ii) mechanical equipment,
(iii) electrical equipment,
(iv) instruments,
(v) controls,
(vi) internal transportation system, and
(vii) other machinery and equipment.

•A list should be prepared of spare parts and tools required. (i) spare
parts and tools to be purchased with original equipment(ii) spare parts
and tools required for operational wear and tear.
•Constraints in selecting machinery and equipment –
 there may be a limited availability of power to set up an electricity
intensive plant like, for example, a large electric furnace;
 there may be difficulty in transporting a heavy equipment to a
remote location;
 workers may not be able to operate, at least in the initial periods,
certain sophisticated equipment such as numerically controlled
machines;
 the import policy of the government may preclude the import of
certain types of machinery and equipment.

Structures and Civil works

1. Site preparation and development—This covers the following
 grading and leveling of the site,
 demolition and removal of existing structures,
 relocation of existing pipelines cables, roads, power lines,
etc.,
 reclamation of swamps, draining and removal of standing
water,
 connections for the following utilities from the site to the
public network: electric power (high tension and low tension),
water (use water and drinking water), communications
(telephone, fax, etc.), roads, railway sidings
 other site preparation and developmental work.
2. Buildings— Buildings and structures may be divided into:
 factory or process buildings;
 ancillary buildings required for stores, warehouses,
laboratories, utility supply centers. Warehouses, laboratories,
utility supply centers, maintenance services, and others;
 administrative buildings;
  staff welfare buildings, cafeteria, and medical service
buildings;
 residential buildings.
3. Outdoor works
(i) Supply and distribution of utilities (water, electric power,
communication, steam and gas);
(ii) handling and treatment of emissions, wastages, and
effluents;
(iii) transportation and traffic arrangements (roads, railway
tracks, paths, parking areas, sheds, garages, traffic
signals, etc.):
(iv) outdoor lighting;
(v) landscaping;
(vi) enclosure and supervision (boundary wall, fencing,
barriers, gates, doors, security posts, etc.

Project charts and layouts

 Once data is available on the principal dimension of the
project—market size, plant capacity, required technology,
equipment and civil works, conditions obtaining at plant site,
and supply of inputs to the project charts and layouts may
be prepared.
 These define the scope of the project and provide the basis
for detailed project engineering and estimation of
investment and production costs.

Work Schedule
 The work schedule, as its name suggests, reflects the plan of
work concerning installation as well as initial operation
 The purpose of the work schedule is:
1. To anticipate problems likely to arise during the
installation phase and suggest possible means for
coping with them.
2. To establish the phasing of investments taking into
account availability of finances.
3. To develop a plant of operations covering the initial
period (the running in period
 What are the Types of Projects?

A. Based on Project Scope

Based on their scope, which refers to the scale and size of the endeavor, we can
categorize projects. Understanding the project scope management is crucial as it
influences the resources, timelines, and complexity of the project. The scope of a
project can be broadly classified into three categories, namely:

1. Small-Scale Projects
There is typically a limited scope and fewer resources involved in small-scale
projects. Additionally, they are often managed by a small team.
Characteristics:
 Flexibility and Adaptability: These projects often allow for greater flexibility in
making quick decisions and adjustments due to their smaller scale.
 Limited Risks: With a smaller scope, risks are usually more manageable and
more accessible to identify and mitigate.
 Shorter Timelines: Completion timelines are more concise, allowing for quicker
achievement of project goals.
 Direct Communication: Communication within the team is often more natural
due to the smaller team size.
 Cost-Efficiency: Small-scale projects typically involve lower costs compared to
larger endeavors.
 Focused Objectives: These projects typically have particular and narrowly
defined objectives, making it easier to measure success and progress.
 Minimal Bureaucracy: Due to their smaller scale, decision-making processes
are often streamlined, reducing bureaucratic hurdles.
 Team Cohesion: Smaller teams often foster stronger bonds among team
members, enabling closer collaboration and a shared sense of responsibility.
 Quick Adaptation: Changes or adaptations can be implemented rapidly due to
the smaller scale and fewer interconnected processes.
 Local Impact: Small-scale projects have a localized impact on a specific
department, team, or process within an organization.
Examples: Creating a marketing brochure, organizing a local event, or
developing a simple mobile application.
2. Medium-Scale Projects
Medium-scale projects encompass a broader scope than small-scale projects but
are less extensive than large-scale endeavors. Additionally, they require more
resources, time, and coordination among a larger team.
 Characteristics:
 Moderate Complexity: These projects have an average level of
complexity, requiring more planning and coordination than small-scale
projects but less than large-scale ones.
 Diverse Stakeholders: They might involve a broader range of
stakeholders, requiring more communication and collaboration among
different groups or departments.
 Balanced Resources: While more resources are needed than in small-
scale projects, they are usually manageable and less extensive than in
large-scale projects.
 Extended Timelines: Projects might have longer timelines due to
increased scope and complexity.
 Mid-Level Risk Exposure: Risks are more varied and may require a
more detailed project risk management strategy than small-scale projects.
 Project Phases: Medium-scale projects often have distinct phases, each
requiring specific planning and execution, allowing for more structured
types of project management.
 Interdepartmental Coordination: Coordination between different
departments or units within an organization might be necessary, leading to
increased collaboration challenges.
 Scaling Challenges: Balancing the need for more resources against
budget constraints might require effective resource management.
 Quality vs. Speed: There might be a need to balance the delivery speed with
maintaining quality, which can be more challenging than in small-scale projects.
 Stakeholder Management: Managing a broader range of stakeholders and their
varying expectations becomes crucial in medium-scale projects.
Examples: Implementing a new software system within a department,
organizing a regional conference, or developing a medium-sized
infrastructure project.
3. Large-Scale Projects
Large-scale projects are extensive in scope, involving a significant
investment of resources, time, and workforce. Moreover, these projects are
complex and often impact multiple aspects of an organization or community.
Characteristics:
 High Complexity and Integration: These projects are highly complex, involving
multiple interrelated components that require comprehensive planning and
execution.
 Extensive Resources and Budgets: They demand substantial financial,
human, and technological resources, often requiring multi-level approval
processes.
 Long-Term Commitment: Projects of this scale can extend over months or even
years, requiring sustained effort and commitment.
  Impact and Visibility: Large-scale projects have a significant effect on the
organization or community and are usually more visible to a broader audience.
 Comprehensive Risk Management: Identifying and managing risks in large-
scale projects is critical due to their potential impact and investment.
 Strategic Alignment: Ensuring that the project aligns with the organization’s
long-term strategic goals is crucial due to the extensive resources involved.
 Regulatory and Compliance Aspects: Large-scale projects often face more
regulatory scrutiny and compliance requirements, adding complexity and time to
the project.
 Technological Integration: Integrating diverse and complex technologies and
systems may require comprehensive planning and execution strategies.
 External Dependencies: Large-scale projects might depend on external factors
such as market conditions, government regulations, or global events.
 Long-Term Planning: Due to the extended duration, forecasting and planning
for changes in market conditions or technology advancements become essential
for successful outcomes.
Examples: Building a tall urban structure, introducing a comprehensive
software system across a large enterprise, or orchestrating a significant
global event such as the Olympic Games.

Based on Industry or Sector

Depending on the industry or sector, each project presents unique
challenges, requirements, and specialized knowledge. The following are the
specifics of various types of projects in different industries:
1. IT and Software Development Projects
 Dynamic and Iterative: IT and software projects often follow iterative
development methodologies, requiring constant adaptation to evolving
technology and client needs.
 Technology-Centric: These types of projects heavily rely on technology,
requiring a deep understanding of coding, development
methodologies, and technological trends.
 Emphasis on Scalability and Security: Scalability and security are
paramount, especially when developing systems to handle increasing
user loads and protect sensitive information.
 Collaborative Development: Teams often work collaboratively, utilizing
version control systems and agile methodologies to ensure
synchronized and efficient development processes.
 Rapid Evolution: Technology advances rapidly, necessitating project
teams to stay updated with the latest and the best project
management tools and techniques for efficient development.
2. Construction Projects
 Phased Development: Construction projects often follow distinct phases such
as planning, design, procurement, construction, and maintenance.
 Compliance and Regulations: Compliance with building codes, safety
standards, and regulatory requirements is crucial throughout the project lifecycle.
 Resource and Time Management: These types of projects involve managing
diverse resources such as materials, labor, equipment, and timelines, often
facing weather and logistical challenges.
 Collaboration and Coordination: Effective collaboration among architects,
engineers, contractors, and subcontractors is vital for successful completion.
 Risk Mitigation: Construction projects face various risks like budget overruns,
design changes, and unexpected delays, requiring robust risk management
strategies.
2. Healthcare Projects
 Regulatory Compliance: Healthcare projects must adhere to strict
regulatory standards and compliance requirements related to patient
safety, privacy, and quality standards.
 Interdisciplinary Collaboration: Involving multiple healthcare
professionals like doctors, nurses, administrators, and IT specialists,
requiring effective communication and coordination.
 Technology Integration: Healthcare projects often involve integrating
complex medical technologies and systems that ensure accuracy,
efficiency, and patient care improvement.
 Patient-Centric Approach: Focused on patient outcomes, these types of
projects demand a human-centric approach, considering the impact on
patient well-being and care delivery.
 Sensitivity and Ethical Considerations: Due to the sensitive nature of
healthcare, ethical considerations, patient confidentiality, and data security
are crucial.

. Marketing and Advertising Projects

 Creativity and Innovation: Marketing and advertising projects heavily

emphasize creativity, demanding innovative strategies and campaigns to
capture audience attention.
 Market Analysis and Audience Segmentation: Extensive market
research and audience segmentation are fundamental for successful
campaigns.
 Multi-Channel Strategies: These types of projects often involve
managing campaigns across various platforms like social media,
traditional media, and digital advertising.
 Tight Deadlines and Rapid Changes: Marketing projects often have tight
deadlines and require adaptability to changing market trends and
consumer behaviors.
  Measurable Outcomes: Emphasis on measuring campaign success
through metrics like conversion rates, click-through rates, and return on
investment (ROI).

Based on Purpose or Objective

Organizations can also categorize projects according to their primary
objective or purpose. The following is an elaboration on these types:
1. Research and Development Projects
 Innovation and Creativity: These types of projects are focused on innovation,
exploring new ideas, and creating novel products, services, or solutions.
 Long-Term Vision: Research and development projects often have longer
timeframes, aiming for future growth and advancement.
 Risk and Uncertainty: These projects entail a higher degree of uncertainty due
to the nature of exploring new concepts or technologies, requiring a higher risk
tolerance.
 Experimentation and Testing: The projects involve extensive experimentation,
prototyping, and testing to refine concepts and ideas.
 Cross-Disciplinary Collaboration: Collaboration among diverse specialists and
experts is essential to bring varied perspectives and expertise together for
successful outcomes.

Implementation Projects
 Execution and Application: Implementation projects focus on applying existing
solutions, strategies, or products into operational environments.
 Defined Objectives and Specifications: Clear and defined objectives, often
derived from previous research or planning, guide the project’s implementation
process.
 Timeline and Efficiency: These types of projects often have a relatively shorter
timeline with a strong emphasis on efficiency and swift execution.
 Change Management: Implementations often require change
management within the organization, including training and adaptation to new
systems or processes.
 Quality Assurance: Ensuring the quality of implementation is vital to meet the
specified objectives and expectations.

Maintenance and Support Projects

 Sustaining Operations: These types of project management revolve around
maintaining, enhancing, or supporting existing systems, products, or services.
  Continual Improvement: The focus is on ensuring the smooth functioning of
existing systems, and implementing updates, and improvements to meet evolving
needs.
 Troubleshooting and Problem-Solving: Projects involve resolving issues,
bugs, or operational challenges that arise in ongoing systems or products.
 User Support and Training: Projects often include user support, training, and
documentation to aid efficient system usage.
 Cost-Efficiency and Reliability: Emphasizing cost-efficient maintenance and
reliable support systems is essential to ensure operational continuity.

Based on Organizational Structure

Projects can be classified according to the organizational setup in which they
function. Also, varied organizational structures can notably influence the
management and implementation of projects. The following is an explanation
of these types:
1. Functional Projects
 Hierarchical Structure: In functional projects, teams are organized based on the
traditional hierarchical structure where employees report to functional managers.
 Specialized Expertise: Team members possess specialized skills and
knowledge within their functional areas, such as marketing, finance, or
operations.
 Limited Project Focus: Employees work on the project part-time while
continuing their functional roles, limiting their dedication and focus on the project.
 Departmental Silos: Projects might face challenges due to departmental silos or
conflicting priorities among different functional units.
 Clear Reporting Lines: Reporting lines are clear, as team members report to
both their functional managers and the project manager.
2. Matrix Projects
 Dual Reporting Structure: Matrix projects have a dual reporting structure where
employees report both to a functional manager and a project manager.
 Enhanced Communication: This structure facilitates better communication and
coordination across various functions as team members have a direct link to both
managers.
 Resource Pooling: Resources are shared among projects and functional areas,
allowing for more efficient resource utilization.
 Balanced Focus: Employees can balance their commitment between project
tasks and their functional responsibilities.
 Potential Conflict: Matrix structures may lead to power struggles or conflicts
between functional and project managers, demanding strong conflict resolution
skills.
3. Projected Projects
 Project-Centric Structure: In projectized organizations, teams are dedicated
solely to the project for its duration, with project managers having full authority
and control.
 Dedicated Resources: Team members are fully committed to the project,
ensuring a higher level of focus and dedication to project goals.
 Clear Accountability: Project managers have complete authority over resources
and decision-making, providing clear accountability for project success or failure.
 Adaptability and Flexibility: The structure allows for quick adaptation to
changes in project requirements or priorities.
 High Collaboration: Projected structures often promote a high level of
collaboration and teamwork among project members.

E. Based on the Life Cycle

Based on their life cycle or the approach used to manage them, we can
categorize projects. The following is an explanation of the two prominent
approaches:
1. Predictive or Waterfall Projects
 Sequential Phases: The waterfall approach follows a linear, sequential
progression through distinct phases like conception, initiation, analysis, design,
construction, testing, implementation, and maintenance.
 Detailed Planning: Extensive planning is done at the project’s outset, with
defined requirements and objectives set before moving to the next phase.
 Minimal Change Scope: Changes to the initial requirements are challenging
and costly to implement once the project progresses to later stages.
 Rigid Structure: The process is structured and follows a fixed sequence, with
each phase depending on the completion of the previous phase.
 Suitability for Stable Requirements: Best suited for projects where
requirements are well understood and unlikely to change significantly throughout
the project duration.
2. Adaptive or Agile Projects
 Iterative and Flexible: Agile projects involve iterative cycles, where work is
divided into smaller, manageable increments or sprints, promoting flexibility and
adaptability.
 Emphasis on Collaboration: Collaboration and adaptability are central, with a
focus on responding to change rather than sticking strictly to a predefined plan.
 Frequent Inspection and Adaptation: Agile projects encourage continuous
inspection and adaptation of requirements, allowing for flexibility in
accommodating changes.
 Quick Deliverables: Regular delivery of functional components or increments
ensures continuous feedback and allows for immediate adjustments.
 Suited for Evolving Requirements: Ideal for projects with evolving or unclear
requirements, where the ability to adapt to change is paramount for success.